Leases
The Company leases office space under non-cancelable operating lease agreements, which are classified as operating leases. The most significant lease relates to the Company’s headquarters in Oakland, California (the “Oakland Lease”). Lease payments consist primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses that exceed the amount of base operating expenses as defined in the original lease agreement.
Oakland Headquarters Lease
In the fourth quarter of 2024, the Company decided to permanently cease using two leased floors of its Oakland headquarters. This decision represented a triggering event that required the Company to test the related asset group, consisting primarily of the right-of-use asset and leasehold improvements, for impairment. As a result of this assessment, the Company recognized an impairment charge of $1.4 million, which was included within Occupancy expense in the Consolidated Statement of Operations and Comprehensive (Loss) Income for the year ended December 31, 2024. The estimated fair value of the right-of-use asset was measured on a nonrecurring basis determined using Level 3 inputs under the income approach, incorporating probability-weighted discounted cash flow projections over the remaining lease term.
In the second quarter of 2025, the Company amended its Oakland Lease, extending the term for certain retained floors by 24 months. The lease modification was not accounted for as a separate contract, and the extension has been accounted for as an operating lease. Accordingly, the Company recorded an increase to the Operating lease right-of-use assets, net and Operating lease liabilities, net of current portion in the Consolidated Balance Sheet of approximately $3.5 million, representing the present value of the additional lease payments associated with the 24-month extension.
TransactPay Assumed Leases
In connection with the acquisition of TransactPay (see Note 4, “Business Combinations,” for further details), the Company assumed two operating leases for office space in Malta and Gibraltar expiring in October 2029 and October 2035, respectively. These lease arrangements consist primarily of fixed rental payments in exchange for the right to use the underlying leased assets over the respective lease terms, with no significant variable lease payments or purchase options. As of the acquisition date, the Company recognized right-of-use assets and corresponding operating lease liabilities of $2.5 million based on the present value of the remaining lease payments.
The Company's operating lease costs are as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 2,596 | | | $ | 3,372 | | | $ | 3,372 | |
| Variable lease cost | 633 | | | 643 | | | 490 | |
| Short-term lease cost | 836 | | | 483 | | | 247 | |
| Operating lease impairment | — | | | 1,443 | | | — | |
| Total lease cost | $ | 4,065 | | | $ | 5,941 | | | $ | 4,109 | |
The Company does not have any sublease income and the Company’s lease agreements do not contain any residual value guarantees or material restrictive covenants.
The weighted average remaining operating lease term and the weighted average discount rate used in the calculation of the Company's lease assets and lease liabilities were as follows:
| | | | | | | | | | | |
| December 31,
2025 | | December 31,
2024 |
| Weighted average remaining operating lease term (in years) | 4.1 | | 1.1 |
| Weighted average discount rate | 4.5% | | 7.6% |
Maturities of operating lease liabilities by year are as follows as of December 31, 2025:
| | | | | | | | |
| | |
| | |
| | |
| 2026 | | $ | 3,391 |
| 2027 | | 2,898 |
| 2028 | | 1,195 |
| 2029 | | 348 |
2030 and thereafter | | 1,626 |
| Total lease payments | | $ | 9,458 |
| Less imputed interest | | (901) |
| Total operating lease liabilities | | $ | 8,557 |