Everpure, Inc.P
Everpure, Inc. Leases Disclosure
Leases
We lease office and data center facilities under non-cancelable operating lease agreements expiring through July 2032. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. During the first quarter of fiscal 2027, we entered into several lease agreements primarily related to our headquarter office and data center. The duration of these leases range from 4 to 10 years and are expected to commence between fiscal 2027 and fiscal 2031. As such, aggregate lease payments of approximately $408.1 million are excluded from our future lease payments tabular disclosure below.
During the second quarter of fiscal 2024, we ceased use of our former corporate headquarters that resulted in certain impairment and abandonment charges during fiscal 2024 and 2025. Refer to Note 9—Restructuring and Impairment for further information.
We also lease certain engineering test equipment under financing agreements. These finance leases have a lease term of to five years and contain a bargain purchase option that we have exercised or expect to exercise at the end of the respective lease terms.
The components of lease costs during the periods presented were as follows (in thousands):
| Fiscal Year Ended | |||||||||||||||||
| 2024 | 2025 | 2026 | |||||||||||||||
| Fixed operating lease cost | $ | 48,158 | $ | 48,392 | $ | 55,037 | |||||||||||
Variable lease cost (1) | 10,840 | 13,789 | 11,828 | ||||||||||||||
| Short-term lease cost (12 months or less) | 4,284 | 4,073 | 4,704 | ||||||||||||||
| Finance lease cost: | |||||||||||||||||
| Amortization of finance lease right-of-use assets | 4,400 | 3,510 | 2,297 | ||||||||||||||
| Interest on finance lease liabilities | 406 | 144 | 129 | ||||||||||||||
| Total finance lease cost | $ | 4,806 | $ | 3,654 | $ | 2,426 | |||||||||||
| Total lease cost | $ | 68,088 | $ | 69,908 | $ | 73,995 | |||||||||||
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(1) Variable lease cost predominantly included common area maintenance charges.
Supplemental information related to leases is as follows (in thousands):
At the End of Fiscal | |||||||||||
| 2025 | 2026 | ||||||||||
| Operating leases: | |||||||||||
| Weighted-average remaining lease term (in years) | 4.9 | 4.7 | |||||||||
| Weighted-average discount rate | 7.4 | % | 6.5 | % | |||||||
| Finance leases: | |||||||||||
Finance lease right-of-use assets, net (1) | $ | 5,555 | $ | 5,129 | |||||||
Finance lease liabilities, current (2) | $ | 387 | $ | 572 | |||||||
Finance lease liabilities, non-current (3) | — | 2,321 | |||||||||
| $ | 387 | $ | 2,893 | ||||||||
| Weighted-average remaining lease term (in years) | 1.0 | 4.2 | |||||||||
| Weighted-average discount rate | 3.3 | % | 5.5 | % | |||||||
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(1) Included in the consolidated balance sheets within property and equipment, net.
(2) Included in the consolidated balance sheets within .
(3) Included in the consolidated balance sheets within .
Supplemental cash flow information related to leases is as follows (in thousands):
| Fiscal Year Ended | |||||||||||
| 2025 | 2026 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash outflows for operating leases | $ | 51,949 | $ | 58,302 | |||||||
| Financing cash outflows for finance leases | $ | 5,155 | $ | 1,207 | |||||||
| Right-of-use assets obtained in exchange for lease liabilities: | |||||||||||
| Operating leases | $ | 56,813 | $ | 81,968 | |||||||
| Finance leases | $ | — | $ | 3,059 | |||||||
Future lease payments under our non-cancelable leases at the end of fiscal 2026 are as follows (in thousands):
| Fiscal Years Ending | Operating Leases | Finance Leases | |||||||||
| 2027 | $ | 52,429 | $ | 704 | |||||||
| 2028 | 58,123 | 704 | |||||||||
| 2029 | 49,412 | 704 | |||||||||
| 2030 | 46,458 | 704 | |||||||||
| 2031 | 34,889 | 410 | |||||||||
| Thereafter | 10,377 | — | |||||||||
| Total future lease payments | $ | 251,688 | $ | 3,226 | |||||||
| Less: imputed interest | (35,545) | (333) | |||||||||
| Present value of total lease liabilities | $ | 216,143 | $ | 2,893 | |||||||
Lessor Arrangement
We, as a lessor, have entered into non-cancelable arrangements to lease our storage and data management solutions and subscription services. The arrangements include multiple seven-year leases that commenced during fiscal 2025 and 2026, or will commence in the first quarter of fiscal 2027, with total net consideration of $340.3 million. The arrangements provide an end-of-term option to purchase the leased assets for a pre-determined price.
We determined, at inception of the respective arrangements, that each of the leases include sales-type leases, an operating lease, and non-lease components. The non-lease components are comprised primarily of subscription support services and professional services. The total net consideration for each lease was allocated to these components based on relative standalone selling price.
We recognized $47.4 million and $27.9 million in product revenue related to the sales-type lease components during fiscal 2025 and 2026. The associated profit was $36.1 million and $23.6 million, based on the product revenue recognized less certain costs, during fiscal 2025 and 2026. Subscription services revenue related to the operating lease and non-lease components recognized during fiscal 2025 and 2026 was $7.2 million and $26.3 million.
Future minimum gross lease payments allocated to the sales-type leases and operating lease components are as follows (in thousands). The remaining lease payments of $148.8 million allocated to the non-lease components, are excluded from the table below.
| Fiscal Years Ending | Sales-Type Leases | Operating Leases | |||||||||
| 2027 | $ | 15,793 | $ | 10,384 | |||||||
| 2028 | 16,978 | 7,451 | |||||||||
| 2029 | 20,626 | 1,742 | |||||||||
| 2030 | 23,399 | — | |||||||||
| 2031 | 23,399 | — | |||||||||
| Thereafter | 21,738 | — | |||||||||
Total future lease payments to be received | $ | 121,933 | $ | 19,577 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Mar 25, 2026 | Showing above |
| 2025 | Mar 27, 2025 | |
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.