Leases
The Company is a lessee in various non-cancelable operating leases, primarily real estate facilities for office space. As of March 31, 2026, the Company's lease arrangements are comprised of operating leases with various expiration dates through August 31, 2036. The lease term for all of the Company’s leases includes the non-cancelable period of the lease. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised and therefore are not factored into the Company's determination of the duration of the lease arrangement. The Company's leases do not contain any material residual value guarantees.
The total operating lease costs including short-term lease costs were $19.1 million, $19.3 million and $19.5 million for the years ended March 31, 2026, 2025, and 2024, respectively. Total variable lease costs were not material during the years ended March 31, 2026, 2025 and 2024. The total operating and variable lease costs were included in cost of goods sold, marketing and selling, research and development, and general and administrative in the Company's consolidated statements of operations.
Supplemental cash flow information related to operating leases (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Years Ended March 31, |
| | 2026 | | 2025 | | 2024 |
| Cash paid for amounts included in the measurement of operating lease liabilities | | $ | 18,056 | | | $ | 16,847 | | | $ | 13,489 | |
| ROU assets obtained in exchange for operating lease liabilities | | $ | 6,902 | | | $ | 26,767 | | | $ | 8,593 | |
Future lease payments included in the measurement of operating lease liabilities as of March 31, 2026 for the following five fiscal years and thereafter are as follows (in thousands):
| | | | | |
| Years Ending March 31, | |
| 2027 | $ | 18,222 | |
| 2028 | 14,786 | |
| 2029 | 14,242 | |
| 2030 | 12,261 | |
| 2031 | 10,496 | |
| Thereafter | 29,549 | |
| Total lease payments | $ | 99,556 | |
| Less: imputed interest | (11,401) | |
| Present value of lease liabilities | $ | 88,155 | |
Weighted-average lease terms and discount rates were as follows:
| | | | | | | | | | | | | | |
| | Years Ended March 31, |
| | 2026 | | 2025 |
| Weighted-average remaining lease terms (in years) | | 6.9 | | 7.6 |
| Weighted-average discount rate | | 3.6 | % | | 3.6 | % |
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.