Leases
Operating Leases
Teladoc Health has operating leases for facilities, hosting co-location facilities, and certain equipment under non-cancelable leases in the U.S. and various international locations. The leases have remaining lease terms of less than one to ten years, with options to extend the lease term from one to five years. At the inception of an arrangement, the Company determines whether the arrangement is, or contains, a lease based on the terms covering the right to use property, plant, or equipment for a stated period of time. As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available on the commencement date to determine the present value of lease payments. The Company separately allocates the lease (e.g., fixed lease payments for right-to-use land, building, etc.) and non-lease components (e.g., common area maintenance) for its leases.
The components of lease expense reflected in the consolidated statements of operations were as follows (in thousands):
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| Year Ended December 31, |
| Lease cost | 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 13,308 | | | $ | 13,259 | | | $ | 15,458 | |
| Short-term lease cost | 108 | | | — | | | — | |
| Total lease cost | $ | 13,416 | | | $ | 13,259 | | | $ | 15,458 | |
In determining the present value of the lease payments, the Company has elected to utilize its incremental borrowing rate based on the original lease term and not the remaining lease term. Supplemental information related to operating leases was as follows (dollars in thousands):
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| Year Ended December 31, |
| Consolidated Statements of Cash Flows | 2025 | | 2024 | | 2023 |
| Operating cash flows used for operating leases | $ | 13,472 | | $ | 13,957 | | $ | 16,265 |
| Operating lease liabilities arising from obtaining right-of-use assets | $ | 11,242 | | $ | 2,108 | | $ | 14,437 |
| | | | | |
| Other Information | | | | | |
| Weighted-average remaining lease term (in years) | 5.44 | | 4.98 | | 5.54 |
| Weighted-average discount rate | 6.19 | % | | 6.37 | % | | 6.33 | % |
The Company leases office space under non-cancelable operating leases in the U.S. and various international locations. The future minimum lease payments under non-cancelable operating leases were as follows (in thousands):
| | | | | |
| As of |
| December 31, |
| Operating Leases: | 2025 |
| 2026 | $ | 13,304 | |
| 2027 | 10,097 | |
| 2028 | 7,956 | |
| 2029 | 6,435 | |
| 2030 | 6,163 | |
| 2031 and thereafter | 9,572 | |
| Total future minimum payments | 53,527 | |
| Less: imputed interest | (8,286) | |
| Present value of lease liabilities | $ | 45,241 | |
| |
| Accrued expenses and other current liabilities | $ | 11,037 | |
| Operating lease liabilities, net of current portion | $ | 34,204 | |
The Company rents certain virtual care platforms to selected qualified customers under arrangements that qualify as either sales-type lease or operating lease arrangements. Leases have terms that generally range from two to five years.
The Company recorded certain restructuring costs related to lease impairments and the related charges due to the abandonment and/or exit of excess leased office space. However, the lease liabilities related to these spaces remain an outstanding obligation of the Company as of December 31, 2025. See Note 13. “Restructuring” for further information.