NOTE 17. LEASES
The Company has operating leases for office spaces and warehouses. Certain leases include termination options, which are factored into the Company's determination of lease payments when appropriate.
Operating lease cost for the years ended December 31, 2025, 2024 and 2023 were $3,394, $3,478 and $3,663, which excluded cost of short-term contracts. Short-term lease cost for the years ended December 31, 2025, 2024 and 2023 were $181, $458 and $435.
As of December 31, 2025, the weighted average remaining lease term was 8.7 years and weighted average discount rate was 5.1% for the Company's operating leases.
Supplemental cash flow information of the leases were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash payments for operating leases | $ | 3,485 | | | $ | 3,459 | | | $ | 3,633 | |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 1,108 | | | $ | 2,368 | | | $ | 5,725 | |
Maturity of operating lease liabilities are as follows:
| | | | | |
| As of December 31, 2025 |
| 2026 | $ | 3,569 | |
| 2027 | 2,940 | |
| 2028 | 2,019 | |
| 2029 | 1,782 | |
| 2030 | 1,782 | |
| Thereafter | 9,061 | |
| Total future lease payments | $ | 21,153 | |
| Discount to present value | $ | (3,889) | |
| Present value of operating lease liabilities | $ | 17,264 | |
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.