System1, Inc.SST

System1, Inc. Leases Disclosure

10-KFiled Mar 11, 20261 min read
Leases
We lease office facilities under non-cancelable operating lease agreements. During the years ended December 31, 2025 and 2024, we had leases for office facilities in Los Angeles, California; Bellevue, Washington; and Guelph, Canada. Our United States leases were re-negotiated during the second half of 2025.

The components of lease expense consisted of the following (in thousands):

For the Year Ended
December 31, 2025
December 31, 2024
Operating lease expense
$
2,194
$
2,396
Short-term lease expense
145
126
Variable lease expense
311
286
Sublease income
(129)
—
Total lease expense
$
2,521
$
2,808

Variable lease expense is primarily attributable to amounts paid to lessors for common area maintenance and utility charges under our real estate leases.

Supplemental information related to leases was as follows:
December 31, 2025
Weighted average remaining lease terms (in years)
5.5
Weighted average discount rate
7.1%
Maturities of our operating leases liabilities by fiscal year are as follows (in thousands):
December 31, 2025
2026
$
2,036 
2027
2,199 
2028
2,262 
2029
2,336 
2030
2,226 
Thereafter
380 
Total lease payments
11,439 
Less: Imputed interest
(1,829)
Present value of operating lease liabilities
$
9,610 

Historical Timeline

Fiscal YearFiled
2025Mar 11, 2026Showing above
2024Mar 10, 2025
2023Mar 15, 2024
2022Jun 6, 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

Income TaxesRevenueEarnings Per ShareFair ValuePP&EGoodwill & IntangiblesSegmentsDebtCommitmentsStock CompensationNew StandardsPay vs Performance