Pattern Group Inc.PTRN

Pattern Group Inc. Leases Disclosure

10-KFiled Mar 6, 20262 min read
7. Operating Leases
The Company has entered into various non-cancelable operating lease agreements, primarily for the use of office and warehouse space, expiring at various dates through 2037. The Company’s right-of-use assets and lease liability include options to extend or terminate the lease when it is reasonably certain they will be exercised. The Company considers these options in determining the lease term on a lease-by-lease basis. The Company separately accounts for lease components and non-lease components. None of the Company’s lease agreements contain material non-lease components, residual value guarantees or restrictive covenants. The Company has elected an accounting policy to not recognize short-term leases, which have a lease term of twelve months or less, on the consolidated balance sheets. The Company does not have any material short-term lease cost or leases with variable lease costs. Lease expense primarily related to operating lease costs and were included within operations, general and administrative and sales and marketing expenses in the consolidated statements of operations. The Company recorded lease expense of $5.6 million, $7.1 million and $9.3 million for the years ended December 31, 2023, 2024 and 2025, respectively.
Lease Term and Discount Rate
The weighted-average remaining lease term (in years) and discount rate related to the operating leases were as follows:
December 31,
20242025
Weighted-average remaining lease term7.8 years6.0 years
Weighted-average discount rate6.13 %6.44 %
Maturity of Lease Liabilities
The future minimum lease payments under the Company’s operating lease liabilities as of December 31, 2025 is as follows:
(in thousands)Amount
2026$10,498 
20276,601 
20284,787 
20293,773 
20302,097 
Thereafter10,761 
Total undiscounted lease payments38,517 
Less: imputed interest7,682 
Present value of lease liabilities30,835 
Less: operating lease liabilities, current(8,826)
Operating lease liabilities, non-current$22,009 
The following table provides a summary of supplemental cash flow information related to our operating leases:
Year Ended December 31,
(in thousands)202320242025
Cash payments included in operating cash flows for lease arrangements$6,119 $7,410 $9,102 
Right-of-use assets obtained in exchange for new operating lease liabilities$1,013 $17,372 $9,420 
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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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