Leases
The following table summarizes the ROU assets and lease liabilities recorded on the Company’s consolidated balance sheets as of December 31, 2025 and 2024:
| | | | | | | | | | | | | | |
| | As of December 31, |
| | 2025 | | 2024 |
| ROU assets | | $ | 91,372 | | | $ | 93,920 | |
| Lease liabilities: | | | | |
| Operating leases, current | | 17,186 | | | 19,268 | |
| Operating leases, non-current | | 113,824 | | | 116,668 | |
| Total lease liabilities | | $ | 131,010 | | | $ | 135,936 | |
The following table summarizes the activity recorded within the Company’s consolidated statements of operations for the year ended December 31, 2025, the six months ended December 31, 2024, and the years ended June 30, 2024 and 2023:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Line Item in the Company’s Consolidated Statements of Operations | | Year Ended December 31, | | Six Months Ended December 31, | | Years Ended June 30, |
| | | 2025 | | 2024 | | 2024 | | 2023 |
| Operating lease cost | | Direct operating expenses | | $ | 4,988 | | | $ | 3,124 | | | $ | 3,984 | | | $ | 1,676 | |
| Operating lease cost | | Selling, general and administrative expenses | | 14,745 | | | 6,864 | | | 14,549 | | | 15,925 | |
| Variable lease cost | | Direct operating expenses | | 1,500 | | | 750 | | | 1,740 | | | — | |
| Variable lease cost | | Selling, general and administrative expenses | | 267 | | | — | | | 28 | | | 1 | |
| Total lease cost | | $ | 21,500 | | | $ | 10,738 | | | $ | 20,301 | | | $ | 17,602 | |
The Company excluded its ground lease with a subsidiary of Venetian Venue Propco, LLC (“The Venetian”) associated with Sphere in Las Vegas from its ROU assets and lease liabilities balances as the ground lease does not have any fixed rent. If certain return objectives are achieved, The Venetian will receive 25% of the after-tax cash flow in excess of such objectives in the form of variable rent. In connection with this lease, The Venetian paid the Company $75,000 to help fund the construction costs, including the cost of a pedestrian bridge that links Sphere to The Venetian Expo. The 50-year fixed term commenced on July 14, 2023.
Supplemental cash flow information related to operating leases is as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Year Ended December 31, | | Six Months Ended December 31, | | Years Ended June 30, |
| | 2025 | | 2024 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of operating lease liabilities | | $ | 20,992 | | | $ | 10,049 | | | $ | 19,000 | | | $ | 12,332 | |
| Lease assets obtained in exchange for new lease obligations | | 8,394 | | | — | | | 33,900 | | | 6,435 | |
For the six months ended December 31, 2024, and the year ended June 30, 2024, the Company received $1,581 and $5,833, respectively, of tenant incentives from a landlord for capital expenditures on behalf of the Company. There were no tenant incentives received in the years ended December 31, 2025 and June 30, 2023, respectively.
As of December 31, 2025, maturities of operating lease liabilities were as follows:
| | | | | | | | |
| | As of December 31, 2025 |
| Year ending December 31, 2026 | | $ | 18,200 | |
| Year ending December 31, 2027 | | 17,082 | |
| Year ending December 31, 2028 | | 17,170 | |
| Year ending December 31, 2029 | | 17,276 | |
| Year ending December 31, 2030 | | 17,510 | |
| Thereafter | | 89,812 | |
| Total lease payments | | 177,050 | |
| Less imputed interest | | 46,040 | |
| Total lease liabilities | | $ | 131,010 | |
The weighted average remaining lease term and weighted average discount rate for our operating leases as of December 31, 2025 and 2024 were as follows:
| | | | | | | | | | | | | | |
| | As of December 31, |
| | 2025 | | 2024 |
| Weighted average remaining lease term (in years) | | 10.4 | | 11.3 |
| Weighted average discount rate | | 5.86 | % | | 5.82 | % |
As of December 31, 2025, the Company’s existing operating leases, which are recorded on the accompanying financial statements, have remaining lease terms ranging from 0.3 years to 16.1 years.
Lessor Arrangements
The Company has sublease arrangements for office and storage spaces where the operating lease revenue is recognized on a straight-line basis over the lease term. The Company had sublease revenues of $1,822, $1,447, $3,028 and $2,610 for the year ended December 31, 2025, the six months ended December 31, 2024, and the years ended June 30, 2024 and 2023, respectively.
The maturities of operating lease cash flows to be received on an undiscounted basis for non-cancelable subleases are $1,026 through the year ending December 31, 2026.