LeasesComponents of operating lease costs are as follows:
| | | | | | | | | | | | | | | | | | | | |
| (in millions) | | | | | | |
| Year Ended December 31, | | 2025 | | 2024 | | 2023 |
| Operating lease cost | | $ | 3.0 | | | $ | 2.9 | | | $ | 3.4 | |
| Sublease income | | (0.3) | | | (0.5) | | | — | |
| Net lease cost | | $ | 2.7 | | | $ | 2.4 | | | $ | 3.4 | |
Lease term and discount rate are as follows:
| | | | | | | | | | | | | | |
| As of December 31, | | 2025 | | 2024 |
| Weighted-average remaining lease term (years) | | 4.0 | | 3.6 |
| Weighted-average discount rate | | 6.1 | % | | 5.4 | % |
In April 2025, the Company commenced an amendment of an operating lease for office space in Arizona, and recorded a $4.0 million ROU asset and $4.0 million of corresponding operating lease liabilities. The amendment expires in 2030. The amendment includes options for extension or early termination of the lease, neither of which options are certain to be exercised by the Company and, accordingly, are excluded from the calculations of ROU assets and lease liabilities recognized.
In December 2023, the Company entered into a sublease agreement for a portion of the Company’s office space in San Francisco. The sublease expired concurrently with the corresponding head lease, but did not relieve the Company of its obligations under the head lease. The Company determined that the sublease arrangement was an operating lease at inception, and recognized sublease income on a straight-line basis over the sublease term as a reduction of rent expense. As a result of the sublease, the Company evaluated the associated head lease ROU asset and sublease-related furniture and fixtures and leasehold improvements for impairment, as the change in circumstances indicated that the carrying amount of such assets may not be recoverable. The Company estimated the fair value of these assets as of the effective date of the sublease agreement using an income approach based on expected future cash flows from the subleased property. The Company recognized impairment charges of $1.6 million related to the sublease which are included in general and administrative expense on the consolidated statements of operations, including a $1.4 million impairment of ROU asset and $0.2 million of loss on disposal of sublease-related furniture and fixtures and leasehold improvements, in 2023.
ROU assets were $7.1 million and $5.3 million as of December 31, 2025 and 2024, respectively.
The maturities of lease liabilities as of December 31, 2025 are as follows:
| | | | | | | | |
| (in millions) | | |
| Years Ending December 31, | | Amount |
| 2026 | | $ | 2.4 | |
| 2027 | | 2.3 | |
| 2028 | | 2.3 | |
| 2029 | | 1.5 | |
2030 | | 0.5 | |
| Total undiscounted cash flows | | $ | 9.0 | |
| Less: imputed interest | | (1.0) | |
| Present value of lease liabilities | | $ | 8.0 | |
| Less: lease liabilities, current | | (1.9) | |
| Total lease liabilities, noncurrent | | $ | 6.1 | |
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.