Operating Leases
The Company’s leases primarily include office space for its corporate headquarters. The Company’s former headquarters lease expired in October 2025. In November 2024, the Company executed a noncancelable operating lease for a new headquarters space that expires in February 2036. The new headquarters lease commenced during 2025, and the Company recognized an initial long-term lease liability of $24.2 million, an operating lease asset of $11.0 million, and a lease incentive receivable of $13.2 million. The lease incentive receivable is the amount for which the landlord will reimburse the Company for certain leasehold improvements provided for under the lease agreement. The new lease includes options to extend through 2056 that the Company is not reasonably certain to exercise and are excluded from the lease term. The lease also contains provisions for variable property-related costs for which the Company is responsible, including common area maintenance, property taxes, and insurance.
The components of lease cost are as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 2,788 | | | $ | 1,078 | | | $ | 1,078 | |
| Short-term lease cost | 60 | | | 36 | | | 34 | |
| Variable lease cost | 1,358 | | | 1,277 | | | 1,267 | |
| Total lease cost, net | $ | 4,206 | | | $ | 2,391 | | | $ | 2,379 | |
Supplemental cash flow information related to operating leases was as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows for operating leases | $ | 1,616 | | | $ | 1,908 | | | $ | 1,854 | |
| Right-of-use assets obtained in exchange for lease obligations | $ | 10,951 | | | $ | — | | | $ | — | |
Supplemental balance sheet information related to operating leases was as follows (in thousands, except weighted average information):
| | | | | | | | | | | | | | | | | |
| | | December 31, |
| Classification | | 2025 | | 2024 |
| Assets: | | |
| |
|
| Right-of-use assets – current | Prepaid expenses and other current assets | | $ | — | | | $ | 831 | |
| Lease incentive receivable | Prepaid expenses and other current assets | | 520 | | | — | |
| Right-of-use assets – long-term | Operating lease assets | | 9,901 | | | — | |
| Total lease assets | | | $ | 10,421 | | | $ | 831 | |
| Liabilities: | | |
| |
|
| Operating lease liabilities – current | Other current liabilities | | $ | 268 | | | $ | 1,549 | |
| Operating lease liabilities – long-term | Operating lease liabilities, long-term | | 25,501 | | | — | |
| Total lease liabilities | | | $ | 25,769 | | | $ | 1,549 | |
The weighted average remaining lease term and discount rate were as follows:
| | | | | |
| December 31, 2025 |
| Weighted average remaining lease term (in years) | 10.2 |
| Weighted average discount rate | 6.70 | % |
Future maturities of lease liabilities as of December 31, 2025 are as follows:
| | | | | |
| Year ending December 31, | In thousands |
| 2026 | $ | 1,997 | |
| 2027 | 2,805 | |
| 2028 | 3,581 | |
| 2029 | 3,671 | |
| 2030 | 3,762 | |
| Thereafter | 20,991 | |
| Total minimum lease payments | 36,807 | |
| Less: imputed interest | 11,038 | |
| Present value of lease liabilities | $ | 25,769 | |
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.