HUBSPOT INC Leases Disclosure
4. Leases
The Company leases office facilities under non-cancelable operating leases that expire at various dates through February 2035.
The Company uses its estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of operating lease payments. To determine the estimated incremental borrowing rate, the Company uses publicly available credit ratings for peer companies. The Company estimates the incremental borrowing rate using yields for maturities that are in line with the duration of the lease payments.
The following table provides weighted average remaining lease terms and weighted average discount rate for operating leases:
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|
Year ended December 31, |
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|
|
2025 |
|
2024 |
Weighted-average remaining lease term: |
|
7.1 years |
|
7.8 years |
Weighted-average discount rate: |
|
4.7% |
|
4.7% |
Operating lease expense, variable lease expense and cash payments related to operating lease liabilities for the 2025, 2024, and 2023 are as follows:
|
|
Year ended December 31, |
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|
|
2025 |
|
|
2024 |
|
|
2023 |
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|||
|
|
(in thousands) |
|
|||||||||
Operating lease expense |
|
$ |
41,389 |
|
|
$ |
39,536 |
|
|
$ |
42,826 |
|
Variable lease expense |
|
$ |
6,165 |
|
|
$ |
6,176 |
|
|
$ |
5,730 |
|
Cash payments |
|
$ |
47,664 |
|
|
$ |
56,548 |
|
|
$ |
55,322 |
|
The following table provides a reconciliation between non-cancelable lease commitments and lease liabilities as of December 31, 2025 (in thousands):
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|
Operating leases |
|
|
|
Lease commitments (Note 12) |
|
$ |
313,384 |
|
|
Less: Legally binding minimum lease payments for leases signed but not yet commenced |
|
|
— |
|
|
Less: Operating leases with a duration of 12 months or less |
|
|
(2,952 |
) |
|
Less: Present value discount |
|
|
(48,127 |
) |
|
Total lease liabilities |
|
$ |
262,305 |
|
|
The Company subleases some of its unused spaces to third parties. Operating sublease income generated under all operating lease agreements is as follows:
|
|
Year ended December 31, |
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|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
|
|
(in thousands) |
|
|||||||||
Operating sublease income |
|
$ |
7,062 |
|
|
$ |
6,653 |
|
|
$ |
7,796 |
|
During the year ended December 31, 2023, the Company terminated and abandoned various leases of office spaces in connection with the Restructuring Plan. Refer to Note 18 for more information.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 11, 2026 | Showing above |
| 2024 | Feb 12, 2025 | |
| 2023 | Feb 14, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 14, 2022 | |
| 2020 | Feb 16, 2021 | |
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.