9. Leases

As of December 31, 2025, 2024 and 2023, the Company’s contracts that contained a lease consisted of real estate, equipment and vehicle leases.

The Company leases real estate for office and warehouse space under non-cancelable operating and finance leases that expire at various dates through 2036, subject to the Company’s option to renew certain leases for an additional five to fifteen years. The Company also leases other equipment and vehicles primarily under non-cancelable operating and finance leases that expire at various dates through 2030.

The following table presents the components of the Company’s lease cost, lease term and discount rate during the years ended December 31, 2025, 2024 and 2023 (in thousands, except years and percentages):


	Year Ended December 31,
	2025			2024			2023
Lease Cost
Operating lease cost	$	24,087		$	23,541		$	22,955
Finance lease cost:
Amortization of right-of-use assets	3,581			3,539			3,350
Interest on lease liabilities	1,281			1,340			1,375
Variable lease cost(1)	11,389			11,222			10,835
Total lease costs	$	40,338		$	39,642		$	38,515

Weighted Average Remaining Lease Term
Operating leases	10.5 years			11.6 years			12.5 years
Finance leases	8.5 years			9.5 years			10.3 years
Weighted Average Discount Rate
Operating leases	5.18		%	5.09		%	5.07		%
Finance leases	5.50		%	5.42		%	5.37		%

(1) Variable lease costs represent payments that are dependent on usage, a rate or index. Variable lease cost primarily relates to common area maintenance charges for its real estate leases as the Company does not separate lease from non-lease components.

During 2021, the Company signed a lease for approximately thirteen years for additional space located at 620 Roseville Parkway, Roseville, California. Per the terms of the lease, improvements were constructed and permanently affixed to the property in two phases. Phase 1 of the 620 Roseville Parkway Lease commenced once the Phase 1 premises were made ready and available for their intended use, which occurred during the first quarter of 2022. During the fourth quarter of 2025, Phase 2

of the 620 Roseville Parkway Lease commenced and the premises were made ready and available for their intended use. The Company determined that the 620 Roseville Parkway Lease is a non-cancelable operating lease which will expire in 2035.

The following table is a schedule, by years, of maturities of the Company's operating and finance lease liabilities as of December 31, 2025 (in thousands):


	Operating Lease Payments		Finance Lease Payments
Year Ending December 31:
2026	$	23,536	$	3,590
2027	23,123		3,438
2028	22,783		3,384
2029	22,691		3,223
2030	23,055		3,025
Thereafter	142,237		12,350
Total undiscounted lease payments	257,425		29,010
Less imputed interest	(60,833)		(5,903)
Present value of lease liabilities	$	196,592	$	23,107

Supplemental cash flow information related to leases during the years ended December 31, 2025, 2024 and 2023 are 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 from operating leases	$	22,584	$	21,707	$	19,662
Financing cash flows from finance leases	$	2,485	$	2,276	$	1,981

Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	9,512	$	2,388	$	9,339
Finance leases	$	1,540	$	464	$	1,118

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.

Penumbra Inc Leases Disclosure

About Leases Disclosures

Other Available Disclosures