LEASES The Company leases office space throughout the United States and India under operating and short-term lease agreements. These lease agreements have terms not exceeding 11 years and some contain multi-year renewal options or early termination options that are not considered reasonably certain of exercise except as discussed below. The Company also leases equipment under immaterial finance lease agreements.
Components of lease costs for the years ended the December 31, 2025, 2024, and 2023, are as follows (in millions):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 4 | | | $ | 8 | | | $ | 11 | |
| Variable lease cost | — | | | 1 | | | 1 | |
| Short-term lease cost | 1 | | | — | | | 1 | |
| Sublease income | (1) | | | (1) | | | (2) | |
| Net lease cost | $ | 4 | | | $ | 8 | | | $ | 11 | |
The following table presents supplemental lease information (in millions):
| | | | | | | | | | | | | | | | | |
| December 31, | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | (4) | | | $ | (13) | | | $ | (14) | |
| Right-of-use assets obtained in exchange for new or acquired lease liabilities | $ | 3 | | | $ | 4 | | | $ | 1 | |
In May 2025, the Company amended its Tempe, Arizona office lease to terminate the Company’s obligation with respect to a portion of the leased premises (“Partial Lease Termination”). The Partial Lease Termination resulted in a decrease of undiscounted, future lease payments of $10 million. The Company recognized a loss of $1 million, as a result of the reduction of right-of-use assets by $8 million and lease liabilities by $7 million, and an additional $2 million in other associated costs, both of which are recognized within Restructuring on the consolidated statements of operations. See “Note 20 — Restructuring” for further discussion. There were no other material lease modifications for the year ended December 31, 2025.
In December 2024, certain operating leases were terminated early by the Company, which resulted in a decrease of undiscounted, future lease payments of $8 million. These early terminations resulted in the reduction of right-of-use assets and lease liabilities of approximately $13 million. The Company paid $4 million in early termination fees associated with these leases and recognized $3 million in total lease termination costs which are recognized in Restructuring on the consolidated statements of operations. See “Note 20 — Restructuring” for further discussion.
The weighted average lease term and the weighted average discount rate are as follows:
| | | | | | | | | | | |
| December 31, | 2025 | | 2024 |
| Weighted average remaining lease term for operating leases (in years) | 4.5 | | 5.5 |
| Weighted average discount rate for operating leases | 12.1 | % | | 13.2 | % |
Maturity of operating lease liabilities as of December 31, 2025 are as follows (in millions):
| | | | | |
| 2026 | $ | 2 | |
| 2027 | 2 | |
| 2028 | 2 | |
| 2029 | 2 | |
| 2030 | 1 | |
| Thereafter | — | |
| Total undiscounted future cash flows | $ | 9 | |
| Less: Imputed interest | 2 | |
| Total lease liabilities | $ | 7 | |