LEASES
The Company has entered into agreements under which we lease various real estate spaces in North America, Europe and Asia Pacific, under non-cancellable leases that expire on various dates through fiscal 2036. Some of our leases include options to extend the term of such leases for a period from 12 months to 60 months, and/or have options to early terminate the lease. As of June 30, 2025, we included such options in determining the lease terms for certain of our leases as we were reasonably certain that we would exercise those options. Most of our leases require us to pay certain operating expenses in addition to base rent, such as taxes, insurance and maintenance costs.
The following table summarizes our lease costs for fiscal years ended June 30, 2025 and 2024 (in thousands): | | | | | | | | | | | | | | | | | | | | |
| | | | June 30, |
| | | | 2025 | | 2024 |
| Operating lease costs: | | Financial Statement Classification | | | | |
| Fixed lease costs | | Operating expenses | | $ | 11,846 | | | $ | 11,671 | |
| Fixed lease costs | | Cost of revenues | | 4,605 | | | 4,038 | |
| Variable lease costs | | Operating expenses | | 631 | | | 655 | |
| Variable lease costs | | Cost of revenues | | 907 | | | 807 | |
| Total lease costs | | | | $ | 17,989 | | | $ | 17,171 | |
The operating lease costs in the table above include costs for long-term and short-term leases. Total short-term costs for fiscal years June 30, 2025 were immaterial and 2024 were $0.2 million, respectively. Variable lease costs primarily include maintenance, utilities and operating expenses that are incremental to the fixed base rent payments and are excluded from the calculation of operating lease liabilities and ROU assets. For fiscal years June 30, 2025 and 2024, the cash paid for amounts associated with our operating lease liabilities were approximately $17.8 million and $17.3 million, respectively. Cash paid for amounts associated with the Company's operating lease liabilities were classified as operating activities in the consolidated statement of cash flows.
The following table shows our undiscounted future fixed payment obligations under our recognized operating leases and a reconciliation to the operating lease liabilities as of June 30, 2025:
| | | | | | | | |
| Fiscal 2026 | | $ | 14,010 |
| Fiscal 2027 | | 9,670 |
| Fiscal 2028 | | 7,481 |
| Fiscal 2029 | | 5,468 |
| Fiscal 2030 | | 4,371 |
| Thereafter | | 11,721 |
| Total future fixed operating lease payments | | $ | 52,721 |
| | |
| Less: Imputed interest | | $ | 4,862 |
| Total operating lease liabilities | | $ | 47,859 |
| | |
| Weighted-average remaining lease term - operating leases | | Six years |
| Weighted-average discount rate - operating leases | | 4.1 | % |
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.