PROCEPT BioRobotics CorpPRCT

PROCEPT BioRobotics Corp Leases Disclosure

10-KFiled Feb 26, 20262 min read
Leases
Facility Leases
In December 2021, the Company entered into a lease for two existing buildings, comprising approximately 158,221 square feet of space, located in San Jose, California. The lease commenced in July 2022, and will continue for 122 months following thereafter, with two five year options to extend the term of the lease.
The Company began operations at this facility in September 2023. The lease provides for annual base rent of $4.3 million for the first year, which increases on a yearly basis up to $5.6 million for the tenth year, for an aggregate of $49.2 million. Under the terms of the lease, the Company received an allowance of up to $7.9 million from the landlord to be applied to the Company’s construction of tenant improvements following the landlord’s delivery of the two buildings to the Company. During the year ended December 31, 2022, the Company recorded both a right-of-use asset and liability of $22.7 million related to the lease. The lease agreement provides for an escalation of rent payments each year and the Company records rent expense on a straight-line basis over the term of the lease. Rent is payable monthly. Rent expense recognized under the leases, includes additional rent charges for utilities, parking, maintenance and real estate taxes.
The following table presents supplemental lease information (in thousands, except for weighted-average amounts):
Year Ended December 31,
202520242023
Operating lease expense$4,531 $5,284 $7,118 
Variable lease expense2,076 1,804 1,282 
Total lease expense$6,607 $7,088 $8,400 
Cash paid for amounts included in the measurement of operating lease liabilities$4,297 $4,172 $5,610 
Weighted-average lease term7.2 years8.2 years9.2 years
Weighted-average discount rate8.6%8.6%8.5%

Future minimum annual operating lease payments are as follows (in thousands):
Fiscal Year
Amount
2026$4,426 
20274,808 
20284,952 
20295,101 
20305,254 
Thereafter11,942 
Total minimum payments36,483 
Less: amount representing interest/tenant improvement allowance
(9,615)
Present value of future payments$26,868 
As of December 31, 2025 and 2024, the Company’s security deposit is in the form of, and recorded as, restricted cash.
Lessor Information for Robotic Systems
Contractual maturities of gross lease receivables as of December 31, 2025 are as follows (in thousands):
Fiscal Year
Amount
2026$1,397 
20271,275 
20281,274 
20291,137 
2030 and thereafter746 
Total
$5,829 
Leases receivable relating to sales-type lease arrangements are presented on the Company’s consolidated balance sheets as follows (in thousands):
December 31,
20252024
Reported as:
Accounts receivable
$905 $157 
Other assets
3,896 1,514 
Net investment in sales-type leases
$4,801 $1,671 
December 31,
20252024
Gross receivables
$5,829 $2,097 
Unearned interest income
(1,028)(426)
Net investment in sales-type leases
$4,801 $1,671 
The components of income from sales-type leases are as follows:
December 31,
202520242023
Sales-type lease revenue
$3,017 $1,357 $417 
Interest income
$187 $28 $— 

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Feb 28, 2024
2022Feb 28, 2023

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.

Other Available Disclosures

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