Leases
The Company leases various office and research and development facilities under operating lease agreements that expire at various dates through October 2073 and generally contain periodic rent increases and various renewal and termination options. Under the terms of the agreements, the Company is responsible for certain insurance, property taxes and maintenance expenses. In fiscal year 2022, the Company adopted ASC 842, recognizing operating lease right-of-use asset and liabilities on the consolidated balance sheet and continuing accreting rent expense on a straight-line basis over the term of the operating leases. Rent expense for 2025, 2024 and 2023 was $9.8 million, $7.7 million and $7.0 million, respectively.
Supplemental balance sheet information related to leases was as follows (in thousands, except lease term and discount rate):
| | | | | | | | | | | |
| December 31, 2025 | | December 31, 2024 |
| Operating leases | | | |
| Assets | | | |
| Operating lease right-of-use assets | $ | 31,837 | | | $ | 28,689 | |
| Liabilities | | | |
| Operating lease liabilities, current | $ | 8,404 | | | $ | 5,031 | |
| Operating lease liabilities, non-current | 26,167 | | | 26,178 | |
| Total operating lease liabilities | $ | 34,571 | | | $ | 31,209 | |
| | | |
| Finance leases | | | |
| Assets | | | |
| Financing lease right-of-use assets | $ | 15,809 | | | $ | 11,351 | |
| Accumulated amortization | (5,680) | | | (3,860) | |
| Financing lease right-of-use assets, net | $ | 10,129 | | | $ | 7,491 | |
| Liabilities | | | |
| Finance lease liabilities, current | $ | 2,254 | | | $ | 2,579 | |
| Finance lease liabilities, non-current | 7,447 | | | 3,859 | |
| Total finance lease liabilities | $ | 9,701 | | | $ | 6,438 | |
| | | | | | | | |
| December 31, 2025 | December 31, 2024 |
| Weighted-average remaining lease term (years) | | |
| Operating leases | 10.8 years | 9.5 years |
| Finance leases | 2.9 years | 3.4 years |
| | |
| Weighted-average discount rate | | |
| Operating leases | 6.9 | % | 6.6 | % |
| Finance leases | 5.2 | % | 7.5 | % |
| | |
Interest rates for the finance leases have ranged from 4.0% to 15.0% per annum.
Maturities of lease liabilities were as follows:
| | | | | | | | | | | |
| December 31, 2025 |
| Operating Leases | | Finance Leases |
| 2026 | $ | 10,909 | | | $ | 2,362 | |
| 2027 | 8,961 | | | 3,957 | |
| 2028 | 7,067 | | | 3,359 | |
| 2029 | 3,725 | | | 98 | |
| 2030 | 2,468 | | | — | |
| 2031 and thereafter | 18,384 | | | — | |
| Total undiscounted lease payments | $ | 51,514 | | | $ | 9,776 | |
| Less: imputed interest | (16,943) | | | (75) | |
| Total lease liabilities | $ | 34,571 | | | $ | 9,701 | |
Lease Costs
The table below presents certain information related to the lease costs:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 8,506 | | | $ | 6,613 | | | $ | 5,760 | |
| | | | | |
| Finance Leases | | | | | |
| Amortization of right-of-use assets | 1,820 | | | 1,787 | | | 1,063 | |
| Interest on lease liabilities | 396 | | | 389 | | | 243 | |
| | | | | |
| Other Lease Costs | | | | | |
| Short-term lease cost | 2,548 | | | 2,583 | | | 2,342 | |
Variable lease cost(1) | 3,411 | | | 2,579 | | | 2,414 | |
| Total lease cost | $ | 16,681 | | | $ | 13,951 | | | $ | 11,822 | |
(1) Consist primarily of common-area maintenance, taxes and utilities | | | | | |
The table below presents certain supplemental information related to the cash flows for operating and finance leases recorded on the consolidated statements of cash flows:
| | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 |
| Cash paid for amounts included in the measurement of lease liabilities | | | |
| Operating cash flows used for operating leases | $ | (8,528) | | | $ | (6,446) | |
| Operating cash flows used for finance leases | $ | (396) | | | $ | (389) | |
| Finance cash flows used for finance leases | $ | (1,486) | | | $ | (2,156) | |
| | | |
| Right-of-use assets obtained in exchange for lease obligations: | | | |
| Operating lease liabilities | $ | 4,215 | | | $ | 5,115 | |
| Finance lease liabilities | $ | 4,424 | | | $ | 2,537 | |
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.