LEASES
The Company has entered into operating leases primarily for commercial buildings and a finance lease for equipment. As of December 31, 2025, no operating or finance lease agreements contain economic penalties for the Company to extend the lease, and it is not reasonably certain the Company will exercise these extension options. Additionally, lease agreements do not contain material residual value guarantees or material restrictive covenants.
The Company has made the accounting policy election to use certain ongoing practical expedients made available by ASC 842 to: (i) not separate lease components from nonlease components for real estate; and (ii) exclude leases with an initial term of 12 months or less (“short-term” leases) from the Consolidated Balance Sheets and will recognize related lease payments in the consolidated statements of operations on a straight-line basis over the lease term. For leases that do not have a readily determinable implicit rate, the Company uses its estimated secured incremental borrowing rate based on the information available at the lease commencement date to determine the present value of lease payments.
Rent expense, including short-term lease cost, was $2.3 million and $2.6 million for the fiscal years ended December 31, 2025 and 2024, respectively. In addition to rent payments, the Company’s leases include real estate taxes, common area maintenance, utilities, and management fees, which are not fixed. The Company accounts for these costs as variable payments and does not include such costs as a lease component. Total variable expense was $0.1 million and $0.3 million for the fiscal years ended December 31, 2025 and 2024, respectively.
In December 2025, the Company entered into non-cancelable operating leases for office and R&D space in Santa Clara, California and Shanghai, China. The leases have a non-cancelable term of 26 months and 36 months, respectively. As of December 31, 2025, the Company has not recognized right-of-use assets or lease liabilities related to these leases as the premises were not yet available for use. The payments for these leases are approximately $0.1 million and $0.4 million for the year, respectively, beginning in 2026.
Information related to the Company’s right-of-use assets and related operating and finance lease liabilities were as follows (in thousands):
| | | | | | | | | | | |
| Year Ended |
| Operating Leases | 2025 | | 2024 |
| Cash paid for operating lease liabilities | $ | 2,067 | | $ | 2,288 |
| Right-of-use assets obtained in exchange for new operating lease liabilities | $ | 215 | | $ | 650 |
| | | | | | | | | | | |
| Year Ended |
Finance Lease | 2025 | | 2024 |
Cash paid for principal portion of finance lease | $ | 180 | | $ | — |
Right-of-use assets obtained in exchange for new finance lease liabilities | $ | 985 | | $ | — |
| | | | | | | | | | | |
| Operating Leases | | Finance Lease |
| Weighted-average remaining lease term in years | 3.14 | | 2.33 |
| Weight-average discount rate | 4.9% | | 5.0% |
| | | | | | | | | | | |
| Year Ended |
| 2025 | | 2024 |
| Operating lease expense | $ | 2,031 | | | $ | 2,323 | |
| Finance lease amortization | $ | 219 | | | $ | — | |
| Finance lease interest expense | $ | 29 | | | $ | — | |
| | | | | | | | | | | | | |
| Maturities of operating and finance lease liabilities are as follows (in thousands): |
| Fiscal Year Ending December 31, | Operating Leases | | Finance Lease | | |
| 2026 | $ | 2,095 | | | $ | 353 | | | |
| 2027 | 1,861 | | | 353 | | | |
| 2028 | 1,711 | | | 118 | | | |
| 2029 | 459 | | | — | | | |
| 6,126 | | | 824 | | | |
| Less imputed interest | (433) | | | (45) | | | |
| Total lease liabilities | $ | 5,693 | | | $ | 779 | | | |