GRAIL, Inc.GRAL

GRAIL, Inc. Leases Disclosure

10-KFiled Mar 12, 20262 min read
LEASES
The Company has entered into operating leases for facilities utilized for commercial and research and development. Operating leases have remaining lease terms which range from less than 1 year to 8 years, and often include one or more options to renew. These renewal terms can extend the lease term from 5 to 15 years and are included in the lease term when it is reasonably certain that the option will be exercised. The exercise of lease renewal and termination options are at the sole discretion of the Company. The Company also has variable lease payments that are primarily comprised of common area maintenance and utility charges.
The components of lease costs are as follows:
Year Ended
(in thousands)
December 31,
2025
December 31,
2024
December 31,
2023
Operating lease costs$17,767 $18,577 $24,357 
Variable lease costs4,061 4,666 3,676 
Total lease costs$21,828 $23,243 $28,033 
The Company’s weighted average remaining lease term and weighted average discount rate for operating leases were as follows:
As of December 31,
2025
2024
Weighted-average remaining lease term6.9 years7.3 years
Weighted average discount rate2.6 %2.5 %
Future undiscounted lease payments under operating leases as of December 31, 2025 were as follows:
(in thousands)
Amount
2026$13,590 
20278,442 
20288,232 
20298,448 
20308,260 
Thereafter23,871 
Total undiscounted lease payments
70,843 
Less: Imputed interest
(6,290)
Less: Tenant improvement allowance*
(9,690)
Total operating lease liabilities
$54,863 
*Tenant improvement allowance is estimated to be received as follows: approximately $0.3 million in 2026 and $9.4 million thereafter.
Excluded from the lease obligation table above is a commercial lease agreement (the “Lease”) entered into by and between the Company and Sunnyvale Office Acquisition, LLC, as of September 11, 2025, pursuant to which the Company agreed to lease an aggregate of approximately 75,556 square feet for a new corporate headquarters in Sunnyvale, California, which will be recognized as an operating lease upon the lease commencement date. The actual timing of lease commencement for accounting purposes, as well as the Company’s obligation to begin making payments and recognizing rental and other expenses, is dependent upon when the space is made available to the Company and the Company obtains control of the underlying asset. The Company’s current estimate of the total estimated undiscounted lease payments, excluding the renewal option and option to expand into additional space, for this leased office space is approximately $61.7 million.

Historical Timeline

Fiscal YearFiled
2025Mar 12, 2026Showing above
2024Mar 5, 2025

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

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