Purple Innovation, Inc. Leases Disclosure
7. Leases
The Company leases its manufacturing and distribution facilities, corporate offices, Purple showrooms and certain equipment under non-cancelable operating leases with various expiration dates through 2036. The Company’s office and manufacturing leases provide for initial lease terms up to 16 years, while Purple showrooms have initial lease terms of up to 10 years. Certain leases may contain options to extend the term of the original lease. The exercise of lease renewal options is at the Company’s discretion. Any lease renewal options are included in the lease term if exercise is reasonably certain at lease commencement. The Company also leases vehicles and other equipment under both operating and finance leases with initial lease terms of three to five years. The ROU asset for finance leases was $0.6 million and $1.0 million as of December 31, 2025 and 2024, respectively.
The following table presents the Company’s lease costs (in thousands):
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Operating lease costs | $ | 18,412 | $ | 19,460 | $ | 19,466 | ||||||
| Variable lease costs | 4,275 | 4,338 | 4,121 | |||||||||
| Short-term lease costs | 264 | |||||||||||
| Total lease costs | $ | 22,951 | $ | 23,798 | $ | 23,587 | ||||||
The table below reconciles the undiscounted cash flows for each of the first five years and total remaining years to the operating lease liabilities recorded on the consolidated balance sheet at December 31, 2025 (in thousands):
| Year ended December 31, | ||||
| 2026 | $ | 19,996 | ||
| 2027 | 20,195 | |||
| 2028 | 19,846 | |||
| 2029 | 17,024 | |||
| 2030 | 11,510 | |||
| Thereafter | 24,108 | |||
| Total operating lease payments | 112,679 | |||
| Less – lease payments representing interest | (19,698 | ) | ||
| Present value of operating lease payments | $ | 92,981 | ||
As of December 31, 2025 and 2024, the weighted-average remaining term of operating leases was 6.3 years and 6.8 years, respectively, and the weighted-average discount rate was 6.79% and 6.09%, respectively, for operating leases recognized on the consolidated balance sheets.
The following table provides supplemental information related to the Company’s consolidated statement of cash flows (in thousands):
| Years Ended December 31, | ||||||||||||
| 2025 | 2024 | 2023 | ||||||||||
| Cash paid for amounts included in present value of operating lease liabilities (b) | $ | 22,319 | $ | 23,033 | $ | 20,817 | ||||||
| ROU assets obtained in exchange for operating lease liabilities | 7,305 | 8,516 | 8,435 | |||||||||
| (b) | – Operating cash flows paid for operating leases are included within the change in operating leases, net within the Consolidated Statements of Cash Flows offset by non-cash ROU asset amortization and lease liability accretion. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 14, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 22, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 11, 2021 | |
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.