Mastech Digital, Inc. Leases Disclosure
The Company rents certain office facilities and equipment under noncancelable operating leases. As of December 31, 2025, approximately 94,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is 3.9 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one-year to 3.8 years with a weighted average of 2.3 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.
Leases Right-of-use (“ROU”) assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Since most of the Company’s leases do not have an implicit borrowing rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. Our leases may include options allowing us in our sole discretion to extend or terminate the lease, and when it is reasonably certain that we will exercise those options, we will include those periods in our lease term. Variable costs, such as payments for insurance and tax payments, are expensed when the obligation for those payments is incurred.
The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:
|
|
December 31, 2025 |
|
|
December 31, 2024 |
|
||
|
|
(in thousands) |
|
|||||
Assets: |
|
|
|
|
|
|
||
Long-term operating lease right-of-use assets |
|
$ |
2,534 |
|
|
$ |
3,832 |
|
Liabilities: |
|
|
|
|
|
|
||
Short-term operating lease liability |
|
$ |
1,283 |
|
|
$ |
1,265 |
|
Long-term operating lease liability |
|
|
1,138 |
|
|
|
2,486 |
|
Total Liabilities |
|
$ |
2,421 |
|
|
$ |
3,751 |
|
Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:
|
|
Amount as of |
|
|
|
|
December 31, 2025 |
|
|
|
|
(in thousands) |
|
|
2026 |
|
$ |
1,390 |
|
2027 |
|
|
752 |
|
2028 |
|
|
259 |
|
2029 |
|
|
196 |
|
2030 |
|
|
- |
|
Thereafter |
|
|
- |
|
Total |
|
$ |
2,597 |
|
Less: Imputed interest |
|
|
(176 |
) |
Present value of operating lease liabilities |
|
$ |
2,421 |
|
The weighted average discount rate used to calculate the present value of future lease payments was 5.7%.
We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the years ended December 31, 2025, 2024 and 2023 totaled $1.6 million, $1.5 million and $1.7 million, respectively.
Total cash paid for lease liabilities for the years ended December 31, 2025 totaled $1.4 million, $1.5 million and $1.6 million, respectively.
There were no new leases entered into during the year ended December 31, 2025 or 2024. New leases entered into during the years ended December 31, 2023 totaled $2.7 million . New leases are considered non-cash transactions.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 18, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 15, 2024 | |
| 2022 | Mar 27, 2023 | |
| 2021 | Mar 14, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 30, 2020 | |
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.