LEASES
The Company leases real estate, computer hardware, and vehicles for use in its operations under operating leases. The Company’s leases have remaining lease terms ranging from a few months to five years. Most of these leases are non-cancelable and typically have a defined initial lease term, and some provide options to renew at the Company’s election for specified periods of time. Some leases require the Company to pay taxes, insurance, and maintenance expenses associated with the leased assets. The lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company did not have any finance leases as of December 31, 2025.
Supplemental disclosure related to operating and finance leases included on our consolidated balance sheets is set forth as follows:
| | | | | | | | | | | | | | |
| | December 31, |
| (in thousands) | Classification on Consolidated Balance Sheets | 2025 | | 2024 |
| Noncurrent assets: | | | | |
| Operating lease right-of-use assets | Operating lease right-of-use assets | $ | 1,513 | | | $ | 8,412 | |
| Finance lease right-of-use assets | Property and equipment, net | — | | | 23 |
| Total | $ | 1,513 | | | $ | 8,435 | |
| Current liabilities: | | | | |
| Operating lease liabilities | Current portion of operating lease liabilities | $ | 585 | | | $ | 1,431 | |
| Finance lease liabilities | Accrued liabilities | — | | | 23 | |
| Noncurrent liabilities: | | | | |
| Operating lease liabilities | Noncurrent portion of operating lease liabilities | 1,279 | | | 8,278 | |
| Total | $ | 1,864 | | | $ | 9,732 | |
The following table sets forth operating lease cost, finance lease cost, and variable lease cost for the years ended December 31, 2025 and 2024:
| | | | | | | | | | | | | | |
| | For the Year Ended December 31, |
| (in thousands) | Classification on Statement of Operations | 2025 | | 2024 |
| Operating lease cost | Selling, general, and administrative expenses | $ | 3,187 | | | $ | 2,432 | |
| Cost of services | 301 | | | 932 | |
| Total operating lease cost | $ | 3,488 | | | $ | 3,364 | |
| | | | |
| Finance lease cost: | | | | |
| Amortization of leased assets | Depreciation and amortization | $ | 27 | | | $ | 125 | |
| Interest on lease liabilities | Interest expense | 1 | | | 6 | |
| Total finance lease cost | $ | 28 | | | $ | 131 | |
| | | | |
| Variable lease cost | Selling, general, and administrative expenses | $ | 605 | | | $ | 639 | |
The following table sets forth cash paid for amounts included in the measurement of operating and finance lease liabilities for the years ended December 31, 2025 and 2024:
| | | | | | | | | | | |
| For the Year Ended December 31, |
| (in thousands) | 2025 | | 2024 |
| Operating leases | $ | 1,349 | | | $ | 1,491 | |
| Finance leases | 24 | | | 101 | |
The weighted-average remaining lease term and the weighted-average discount rate of our leases were as follows:
| | | | | | | | | | | | | | |
| | December 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term: | | | | |
| Operating leases | | 3.4 years | | 6.5 years |
| Finance leases | | 0.0 years | | 0.3 years |
| Weighted average discount rate: | | | | |
| Operating leases | | 9.8 | % | | 8.0 | % |
| Finance leases | | — | % | | 5.1 | % |
The following table sets forth the future minimum lease payments under operating and finance leases subsequent to December 31, 2025:
| | | | | |
| (in thousands) | Operating Leases |
| 2026 | $ | 736 | |
| 2027 | 621 | |
| 2028 | 464 | |
| 2029 | 219 | |
| 2030 | 153 | |
| Thereafter | 13 | |
| Total minimum lease payments | $ | 2,206 | |
| Interest | (342) | |
| Total | $ | 1,864 | |
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.