Leases
We lease our corporate headquarters, which includes approximately 151,000 square feet of executive offices, R&D, and business operations, in Hayward, California. We also lease approximately 109,000 square feet of office space in Brisbane, California. Both leases: are non-cancelable; extend through 2031; have two options, at our sole discretion, to extend each lease term for a period of eight years; and require monthly lease payments that are subject to annual increases throughout the lease term.
Subleases
We subleased approximately 31,000 square feet of our Brisbane office to a third-party which commenced in October 2023. This sublease included a tenant improvement allowance to be paid by us of $9 million which was fully paid. This sublease is non-cancelable and extends through 2028, with the sublessee having options to extend the lease term.
We have also subleased approximately 19,000 square feet of our Brisbane office to a third-party which commenced in December 2024. This sublease is non-cancelable and extends through 2031.
We will receive payments from our subleases of approximately $3 million per year through 2028, which is then reduced to approximately $1 million per year through 2031.
Income from our subleases is recognized on a straight-line basis as reduction of rent expense within G&A. For the years ended December 31, 2025 and 2024, we recorded gross sublease income totaling $4 million and $3 million, respectively.
Operating leases
At December 31, 2025 and 2024, our lease portfolio had a weighted average remaining term of 6 years and 7 years, respectively, and a weighted average discount rate of 5.2% for both periods.
The following table summarizes information related to our leases, all of which are classified as operating (in millions):
| | | | | | | | | | | | | | |
| | As of December 31, |
| Location in Consolidated Balance Sheets | | 2025 | | 2024 |
| Assets: | | | | |
| Other noncurrent assets - right-of-use assets | | $ | 58 | | | $ | 65 | |
| Liabilities: | | | | |
| Other current liabilities - net current operating lease liabilities | | $ | 13 | | | $ | 12 | |
| Other noncurrent liabilities - noncurrent operating lease liabilities | | $ | 86 | | | $ | 99 | |
In 2024, we evaluated our plans for a portion of our office space that we expected to sublease, and identified indicators of impairment to certain right-of-use assets associated with the leased space where the asset value was determined to be non-recoverable based upon a discounted cash flow analysis, resulting in an impairment charge of $20 million for the year ended December 31, 2024.
For each of the years ended December 31, 2025 and 2024, we incurred lease expense of $17 million. For the year ended December 31, 2023, we incurred lease expense of $18 million. Lease costs include rent expense, which consists primarily of our proportionate share of operating expenses, property taxes, and insurance which we have elected to include in lease costs.
The following table summarizes our cash and non-cash information related to our operating leases (in millions):
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in measurement of lease liabilities | $ | 17 | | | $ | 17 | | | $ | 15 | |
| Cash received from tenant improvement allowances | $ | — | | | $ | — | | | $ | 9 | |
| Recognition of tenant improvement allowance receivable included in Other current liabilities | $ | — | | | $ | — | | | $ | 4 | |
The following table summarizes our future minimum lease payments at December 31, 2025 (in millions):
| | | | | | | | |
| Year Ending December 31, | | Operating Leases |
| 2026 | | $ | 18 | |
| 2027 | | 18 | |
| 2028 | | 19 | |
| 2029 | | 19 | |
| 2030 | | 20 | |
| Thereafter | | 22 | |
| Total undiscounted future minimum lease payments | | $ | 116 | |
| Less: Imputed interest | | (17) | |
| Total present value of lease liabilities | | $ | 99 | |
As of December 31, 2025, we have provided deposits for letters of credit totaling $3 million to secure our obligations under our leases, which are included in Other noncurrent assets on the Consolidated Balance Sheets.