Leases
We enter into lease arrangements for real estate, construction equipment and information technology equipment in the normal course of business. Real estate leases accounted for most of our right-of-use assets as of June 30, 2025. Most real estate and information technology equipment leases generally have fixed payments that follow an agreed upon payment schedule and have remaining lease terms ranging from less than a year to 11 years. Construction equipment leases generally have "month-to-month" lease terms that automatically renew as long as the equipment remains in use.
The components of lease expense in the Consolidated Statements of Income are as follows:
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| | | | Fiscal Years Ended |
| | | | June 30, 2025 | | June 30, 2024 | | June 30, 2023 |
| Lease expense | | Location of Expense in Consolidated Statements of Income | | (in thousands) |
| Operating lease expense | | Cost of revenue and selling, general and administrative expenses | | $ | 5,167 | | | $ | 5,994 | | | $ | 6,635 | |
Short-term lease expense(1) | | Cost of revenue | | 20,932 | | | 21,414 | | | 29,598 | |
| Total lease expense | | | | $ | 26,099 | | | $ | 27,408 | | | $ | 36,233 | |
(1)Primarily represents the lease expense of construction equipment that is subject to month-to-month rental agreements with expected rental durations of less than one year.
The future undiscounted lease payments, as reconciled to the discounted operating lease liabilities presented in our Consolidated Balance Sheets, were as follows:
| | | | | | | | |
| | June 30, 2025 |
| Maturity Analysis: | | (in thousands) |
| Fiscal 2026 | | $ | 5,848 | |
| Fiscal 2027 | | 5,501 | |
| Fiscal 2028 | | 4,602 | |
| Fiscal 2029 | | 3,815 | |
| Fiscal 2030 | | 2,800 | |
| Thereafter | | 3,357 | |
| Total future operating lease payments | | 25,923 | |
| Imputed interest | | (4,496) | |
| Net present value of future lease payments | | 21,427 | |
| Less: current portion of operating lease liabilities | | 4,441 | |
| Non-current operating lease liabilities | | $ | 16,986 | |
The following is a summary of the weighted average remaining operating lease and term and weighted average discount rate:
| | | | | | | | | | | | | | |
| | Fiscal Years Ended |
| | June 30, 2025 | | June 30, 2024 |
| | (in thousands) |
| Weighted-average remaining lease term (in years) | | 5.2 years | | 6.1 years |
| Weighted-average discount rate | | 6.7 | % | | 6.3 | % |
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Cash flow information related to leases is as follows:
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| Fiscal Years Ended |
| June 30, 2025 | | June 30, 2024 | | June 30, 2023 |
| (in thousands) |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating lease payments | $ | 5,444 | | | $ | 5,761 | | | $ | 6,618 | |
| Right-of-use assets obtained in exchange for lease liabilities: | | | | | |
| Operating leases | $ | 2,490 | | | $ | 1,956 | | | $ | 5,383 | |
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.