Leases
The Company has long-term, non-cancelable operating leases for campuses and other administrative facilities. These leases generally range from 3 years to 15 years and may include renewal options to extend the lease term. In addition, the leases commonly include lease incentives in the form of rent abatements and tenant improvement allowances. The Company subleases certain portions of unused building space to third parties.
The components of lease costs were as follows for the years ended December 31, 2023, 2024, and 2025 (in thousands)
| | | | | | | | | | | | | | | | | |
| | 2023 | | 2024 | | 2025 |
| Lease Cost: | | | | | |
Operating lease cost(1) | $ | 29,897 | | | $ | 19,012 | | | $ | 26,563 | |
| Short-term lease cost | 360 | | | 429 | | | 311 | |
| Sublease income | (906) | | | (389) | | | (303) | |
| Total lease costs | $ | 29,351 | | | $ | 19,052 | | | $ | 26,571 | |
___________________________________________________________
(1)During the years ended December 31, 2023, 2024, and 2025, operating lease cost includes $5.1 million, $0.7 million, and $4.7 million of right-of-use lease asset impairment charges, respectively, related to redundant leased space that was vacated during the year. During the years ended December 31, 2023, 2024 and 2025, operating lease cost includes $0.1 million, $6.2 million, and $0.4 million, respectively, of net benefits related to the early termination of leases. These net benefits reflect the reduction of the lease liability for payments that will no longer be required and the corresponding adjustment to the related right-of-use asset, if any, net of cash payments made in connection with the early termination.
The following table provides a summary of the Company’s average lease term and discount rate as of December 31, 2024 and 2025:
| | | | | | | | | | | |
| As of December 31, 2024 | | As of December 31, 2025 |
| Weighted average remaining lease term (years) | 6.8 | | 6.7 |
| Weighted average discount rate | 4.88 | % | | 4.98 | % |
Supplemental information related to the Company’s leases for the years ended December 31, 2023, 2024, and 2025 (in thousands):
| | | | | | | | | | | | | | | | | |
| Year ended December 31, 2023 | | Year ended December 31, 2024 | | Year ended December 31, 2025 |
| Cash paid for amounts included in the measurement of lease liabilities | $ | 30,742 | | | $ | 30,348 | | | $ | 28,523 | |
| Right-of-use assets obtained in exchange for operating lease liabilities | $ | 17,921 | | | $ | 10,299 | | | $ | 8,133 | |
Maturities of lease liabilities (in thousands):
| | | | | |
| Year Ending December 31, | |
| 2026 | $ | 17,892 | |
| 2027 | 20,315 | |
| 2028 | 19,220 | |
| 2029 | 17,913 | |
| 2030 | 14,525 | |
| Thereafter | 41,215 | |
Total lease payments(1) | 131,080 | |
| Less: interest | (21,959) | |
| Present value of lease liabilities | $ | 109,121 | |
___________________________________________________________
(1)Excludes approximately $4.3 million of legally binding minimum lease payments for leases that were signed but had not yet commenced as of December 31, 2025.