TANDEM DIABETES CARE INCTNDM
TANDEM DIABETES CARE INC Leases Disclosure
Leases
The Company’s leases consist of operating leases for facility space to support general office, research and development, manufacturing and warehouse facilities, and equipment. These non-cancellable operating leases have initial lease terms from two years to thirteen years.
Headquarters Lease
In September 2021, the Company entered into a lease agreement for 181,949 square feet of general administrative, laboratory, and research and development office space (the Premises) located on High Bluff Drive in San Diego, California (Headquarters Lease). The Headquarters Lease term expires in April 2035.
In December 2023, the Company entered into an agreement to sublease the Phase II portion of the leased premises under the Headquarters Lease, from January 2025 through March 2029, for which accounting commenced in January 2025.
The Company recognizes the sublease income on a straight-line basis over the term of the sublease which is classified in the Company’s consolidated statements of operations and comprehensive loss as a reduction of rent expense in selling, general and administrative expense (SG&A). The difference between sublease income recognized and cash received from the subtenant accrues as a deferred rent receivable.
Operating Lease Impairment Charges
As part of our evaluation of the sublease agreement related to the Headquarters Lease, the Company compared the estimated undiscounted sublease income to the net book value of the underlying right of use asset. Because the expected sublease income was less than the net book value of the sublease assets, the Company recorded a $3.6 million impairment charge in operating expenses in 2025 by reducing the net book value of the subleased assets to their estimated fair value, which is determined by discounting the estimated sublease income using the estimated incremental borrowing rate of the subtenant.
Additionally, in 2025, the Company transferred certain development activities from its Lausanne, Switzerland location to the United States. In connection with this relocation, the Company evaluated the impact on related fixed assets and operating lease arrangements. The Company also reviewed its assumptions for estimated future sublease income for its Vista Sorrento lease. As a result, the Company recorded a $3.1 million impairment charge in operating expenses in 2025, comprised of operating lease impairment charges and write-offs of fixed assets consisting primarily of leasehold improvements.
In 2023, the Company consolidated facilities by moving the administrative functions and other operations from the leased space on Vista Sorrento Parkway in San Diego, California (Vista Sorrento Lease) to the Company’s new headquarters, located on High Bluff Drive in San Diego, California. In connection with permanently ceasing use of the Vista Sorrento Lease, the Company recorded a $14.1 million impairment charge as the carrying amount of the assets related to the Vista Sorrento Lease exceeded its fair value based on the Company’s estimate of future discounted cash flows related to the leased facility. The $14.1 million charge was comprised of an $11.2 million impairment of operating lease right-of-use assets and a $2.9 million write-off of fixed assets, and was recorded as a component of selling, general and administrative expenses in the consolidated statements of operations.
Supplemental Lease Disclosure Information
The Company’s lease costs recorded in the consolidated statements of operations were as follows (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
Operating lease cost (excluding sublease income) | $ | 17,135 | $ | 14,276 | $ | 15,971 | |||||||||||
| Short-term lease cost | 162 | 87 | 108 | ||||||||||||||
Loss on lease termination and right-of-use asset impairment charges | 6,697 | — | 11,224 | ||||||||||||||
Sublease income | $ | (2,263) | $ | — | $ | — | |||||||||||
| Total lease cost | $ | 21,731 | $ | 14,363 | $ | 27,303 | |||||||||||
Maturities of operating lease liabilities as of December 31, 2025 were as follows (in thousands):
| Years Ending December 31, | |||||
| 2026 | $ | 19,472 | |||
| 2027 | 21,865 | ||||
| 2028 | 18,401 | ||||
| 2029 | 16,553 | ||||
| 2030 | 17,063 | ||||
| Thereafter | 80,062 | ||||
| Total undiscounted lease payments | 173,416 | ||||
| Less: amount representing interest | (38,977) | ||||
| Present value of operating lease liabilities | 134,439 | ||||
| Less: current portion of operating lease liabilities | (19,472) | ||||
| Operating lease liabilities - long-term | $ | 114,967 | |||
The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Weighted-average remaining lease term (in years) | 8.6 | 9.2 | |||||||||
| Weighted-average discount rate used to determine operating lease liabilities | 5.8 | % | 5.3 | % | |||||||
Cash amounts paid included in the measurement of lease liabilities, representing operating cash flows, were $20.2 million, $17.9 million, and $13.9 million for the years ended December 31, 2025, 2024, and 2023, respectively.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 21, 2024 | |
| 2022 | Feb 22, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 24, 2020 | |
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.