Leases
The Company entered into operating leases primarily for office facilities and finance leases primarily for computer and network equipment purchases. These leases have terms generally ranging from 3 years to 12 years. The Company’s lease agreements generally do not contain any material variable lease payments, residual value guarantees or restrictive covenants.
In 2023, the Company ceased using a portion of its then-headquarters space and recorded impairment charges of $1.5 million on its headquarters lease, primarily on the operating ROU assets due to vacating the sublease space. See Note 16 for additional information.
The balance sheet classification of the Company’s right-of-use assets and lease liabilities as of the periods presented was as follows (in thousands):
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| Leases | | Classification | | December 31, 2025 | | December 31, 2024 |
| Non-Current Assets | | | | | | |
| Finance lease assets | | Property, plant and equipment, net | | $ | 116 | | | $ | — | |
| Operating lease assets | | Operating right-of-use asset | | 5,335 | | | 2,297 | |
| Total lease assets | | | | $ | 5,451 | | | $ | 2,297 | |
| | | | | | |
| Current Liabilities | | | | | | |
| Finance | | Accrued and other current liabilities | | $ | 28 | | | $ | — | |
| Operating | | Operating lease liabilities, current | | 710 | | | 2,372 | |
| | | | | | |
| Non-Current Liabilities | | | | | | |
| Finance | | Other long-term liabilities | | 90 | | | — | |
| Operating | | Operating lease liabilities | | 4,864 | | | 1,016 | |
| Total lease liabilities | | | | $ | 5,692 | | | $ | 3,388 | |
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The components of lease cost were as follows (in thousands):
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| | | | Year Ended December 31, |
| Lease Cost | | Classification | | 2025 | | 2024 | | 2023 |
| Finance lease cost | | | | | | | | |
| Amortization of right-of-use assets | | Depreciation and amortization | | $ | 5 | | | $ | 67 | | | $ | 547 | |
| Interest on finance lease liabilities | | Interest expense | | 1 | | | — | | | 35 | |
Operating lease cost(1) | | Selling, general and administrative expenses | | 1,719 | | | 1,735 | | | 1,955 | |
| Variable lease cost | | Selling, general and administrative expenses | | 504 | | | 590 | | | 483 | |
| Total lease cost | | | | $ | 2,229 | | | $ | 2,392 | | | $ | 3,020 | |
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(1)Operating lease cost does not include the impairment charges of $1.2 million incurred in 2023 on the operating ROU assets related to the Company’s headquarters lease.
The undiscounted future lease payments under the lease liabilities as of December 31, 2025 were as follows (in thousands):
| | | | | | | | | | | |
| Maturity of Lease Liabilities | Finance Lease | | Operating Lease |
| 2026 | $ | 29 | | | $ | 1,069 | |
| 2027 | 29 | | | 1,576 | |
| 2028 | 29 | | | 1,309 | |
| 2029 | 29 | | | 1,152 | |
| 2030 | 22 | | | 1,186 | |
| Thereafter | — | | | 304 | |
| Total lease payments | 138 | | | 6,596 | |
| Less imputed interest | (20) | | | (1,022) | |
| Present value of lease liabilities | $ | 118 | | | $ | 5,574 | |
| | | |
The weighted-average lease term and discount rate as of the periods presented were as follows:
| | | | | | | | | | | | | | |
| | December 31, 2025 |
| | | | |
| | Finance Lease | | Operating Lease |
| Weighted-average remaining lease term | 4.8 years | | 4.7 years |
| Weighted-average discount rate | 6.98 | % | | 6.93 | % |
| | | | | | | | | | | | | | |
| | December 31, 2024 |
| | Finance Lease | | Operating Lease |
| Weighted-average remaining lease term | — | | | 1.8 years |
| Weighted-average discount rate | — | % | | 5.20 | % |
Supplemental cash flow information was as follows (in thousands):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | |
| Operating cash flows used by operating leases | $ | 2,569 | | | $ | 2,861 | | | $ | 2,933 | |
| Financing cash used by finance leases | 3 | | | 127 | | | 1,533 | |
| Right-of-use assets obtained in exchange for new lease liabilities: | | | | | |
| | | | | |
| Operating leases | 4,426 | | | 867 | | | 224 | |
| Finance leases | 121 | | | — | | | — | |
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.