Operating Leases
The Company leases office space under non-cancelable operating leases with various expiration dates through 2027, some of which include options to extend the leases for up to 5 years. The Company does not assume renewals in the determination of the lease term unless the renewals are deemed to be reasonably certain.
For the years ended December 31, 2025 and December 31, 2024, the Company recognized $2.4 million and $3.0 million of ROU asset impairments associated with the Company’s termination of its lease space in Palo Alto, California, and abandonment of leased space used in the Company’s business operations, respectively. The Company recognized operating lease expenses of $1.7 million, $3.2 million, and $6.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The weighted average remaining lease term and the weighted average discount rate for operating leases as of December 31, 2025 were as follows:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Weighted average remaining lease term | 1.50 | | 2.14 |
| Weighted average discount rate | 4.9% | | 4.2% |
Maturities of operating lease liabilities by fiscal year as of December 31, 2025 are as follows:
| | | | | |
| Operating Leases |
| (in millions) |
| 2026 | $ | 3.1 | |
| 2027 | 1.4 | |
| 2028 | 0.1 | |
| 2029 | — | |
| Thereafter | — | |
| Total undiscounted lease payments | 4.6 | |
| Less: Imputed interest | (0.1) | |
| Present value of lease payments | $ | 4.5 | |
The following table presents supplemental cash flow information about the Company’s operating leases:
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2025 | | 2024 | | 2023 |
| (in millions) |
| Cash paid for operating lease liabilities | $ | 4.1 | | | $ | 5.7 | | | $ | 5.7 | |
| Cash paid for termination fee | 1.4 | | | — | | | — | |
| Right-of-use assets obtained in exchange for new operating liabilities | 0.8 | | | 0.7 | | | — | |
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.