(13) Leases
The Company primarily leases office space under non-cancellable operating leases expiring on various dates from March 2026 through October 2032. The leases provide for increasing annual base rents and oblige the Company to fund its proportionate share of operating expenses and, in certain cases, real estate taxes. The Company also leases various types of office and production related equipment under non-cancellable operating leases expiring on various dates from June 2026 through September 2028.
The components of operating lease expense were as follows:
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| 2023 | | 2024 | | 2025 |
| Operating lease cost | $ | 8,868 | | | $ | 8,590 | | | $ | 8,772 | |
| Short-term lease cost | 301 | | | 568 | | | 1,378 | |
| Variable lease cost | 5,358 | | | 4,614 | | | 4,871 | |
| Total lease costs | $ | 14,527 | | | $ | 13,772 | | | $ | 15,021 | |
Operating lease cost excludes $4,283 in lease exit gains recorded during the year ended June 30, 2024.
The classification of the Company’s operating lease right-of-use assets, operating lease liabilities and other supplemental information related to the Company’s operating leases were as follows:
| | | | | | | | | | | |
| June 30, |
| 2024 | | 2025 |
| Operating lease right-of-use assets | $ | 33,792 | | | $ | 35,997 | |
| Accrued expenses | $ | 7,634 | | | $ | 8,621 | |
| Long-term operating lease liabilities | $ | 46,814 | | | $ | 46,772 | |
| Weighted-average remaining lease term (years) | 7.0 | | 6.3 |
| Weighted-average discount rate | 4.62 | % | | 4.88 | % |
The following table summarizes supplemental cash flow information related to the Company’s operating leases:
| | | | | | | | | | | | | | | | | |
| Year Ended June 30, |
| 2023 | | 2024 | | 2025 |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 10,958 | | | $ | 9,855 | | | $ | 9,850 | |
| Operating lease assets obtained in exchange for new liabilities | $ | 1,264 | | | $ | 1,059 | | | $ | 8,437 | |
The undiscounted cash flows for future maturities of the Company’s operating lease liabilities and the reconciliation to the balance of operating lease liabilities reflected on the Company’s balance sheet were as follows as of June 30, 2025:
| | | | | |
| Fiscal 2026 | $ | 10,993 | |
| Fiscal 2027 | 10,550 | |
| Fiscal 2028 | 10,393 | |
| Fiscal 2029 | 9,202 | |
| Fiscal 2030 | 8,892 | |
| Thereafter | 14,545 | |
| Total undiscounted cash flows | 64,575 | |
| Less: Present value discount | (9,182) | |
| Total operating lease liabilities | $ | 55,393 | |
The table above excludes $1,157 of undiscounted future minimum lease payments for operating lease liabilities for office space that had not yet commenced for a term of seven years.
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.