LEASES
The Company leases and subleases certain office spaces with lease terms ranging from 2 to 7 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional five years. These optional periods have not been considered in the determination of the ROU assets or lease liabilities associated with these leases as the Company did not consider the exercise of these options to be reasonably certain.
The Company performed evaluations of its contracts and determined each of its identified leases are operating leases. For the years ended December 31, 2024, 2023, and 2022, the Company incurred $4.0 million, $4.2 million and $2.8 million, respectively, of rent expense included in operating expenses in the consolidated statements of operations in relation to its operating leases, inclusive of short-term and variable lease expense which was immaterial. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2024, 2023, and 2022 was $2.8 million $2.9 million and $1.6 million, respectively, and was included in net cash used in operating activities in the Company’s consolidated statements of cash flows.
As of December 31, 2024, future payments associated with the Company’s operating lease liabilities were as follows (in thousands):
| | | | | |
| Operating Leases |
| 2025 | $ | 3,754 | |
| 2026 | 4,345 | |
| 2027 | 4,437 | |
| 2028 | 3,772 | |
| 2029 | 1,908 | |
| Thereafter | 809 | |
| Total lease payments | 19,025 | |
| Less: imputed interest | (2,931) | |
| Total operating lease liability future lease payments | $ | 16,094 | |
Reported as of December 31, 2024 and 2023 (in thousands):
| | | | | | | | | | | |
| December 31, |
| 2024 | | 2023 |
Current portion of operating lease liabilities included within other current liabilities | $ | 2,758 | | | $ | 2,950 | |
| Non-current portion of operating lease liabilities | 13,336 | | | 10,455 | |
| Total | $ | 16,094 | | | $ | 13,405 | |
The following summarizes additional information related to operating leases:
| | | | | | | | | | | |
| December 31, |
| 2024 | | 2023 |
| Weighted average remaining operating lease term (in years) | 4.5 | | 4.6 |
| Weighted average discount rate | 7.0 | % | | 5.7 | % |
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.