9. Leases
Operating Leases
The Company currently leases office space under operating leases that expire between 2024 and 2029. The terms of the Company's non-cancelable operating lease arrangements typically contain fixed rent increases over the term of the lease, rent holidays and provide for additional renewal periods. Rent expense on these operating leases is recognized over the term of the lease on a straight-line basis.
Lease Expense
Total office rent expense for the years ended December 31, 2024, 2023 and 2022 were approximately $1.4 million, $1.4 million and $2.5 million, respectively. The $2.5 million office rent expense in 2022 includes approximately $1.1 million of transformation charges in conjunction with the closures of the BA Insight and Objectif Lune offices as we continue to consolidate and integrate these acquisitions.
The Company has entered into sublease agreements related to excess office space as a result of the Company's transformation activities related to its acquisitions. The Company’s current sublease agreements terminate in 2027. For the years ended December 31, 2024, 2023 and 2022, the Company recognized rental income on subleases, as offsets to rental expense, of $0.8 million, $1.8 million and $1.4 million, respectively. Operating lease obligations in the future minimum payments table below do not include the impact of future rental income of $0.5 million related to these subleases as of December 31, 2024.
The components of lease expense were as follows (in thousands): | | | | | | | | | | | |
| | Year Ended December 31, |
| 2024 | | 2023 |
| Operating lease cost | $ | 2,195 | | | 3,243 | |
| | | |
| | | |
| | | |
| Sublease income | (797) | | | (1,762) | |
| Total lease expense | $ | 1,398 | | | 1,481 | |
Other information about lease amounts recognized on our consolidated financial statements is summarized as follows: | | | | | | | | | | | |
| | Year Ended December 31, |
| 2024 | | 2023 |
Cash paid for amounts included in the measurement of lease liabilities (in thousands): | | | |
Operating cash flows from operating leases | $ | 2,483 | | | $ | 3,908 | |
| | | |
| | | |
Right-of-use assets obtained in exchange for lease obligations (in thousands): | | | |
Operating leases | $ | 212 | | | $ | 653 | |
| Weighted average remaining lease term (in years): | | | |
Operating leases | 1.9 | | 2.2 |
| | | |
| Weighted average discount rate | | | |
Operating leases | 6.2% | | 6.2% |
| | | |
As of December 31, 2024, the Company no longer had any finance lease agreements. Future minimum payments for operating lease obligations and purchase commitments are as follows (in thousands): | | | | | | | | | |
| | | Operating
Leases |
| 2025 | | | $ | 1,130 | |
| 2026 | | | 564 | |
| 2027 | | | 120 | |
| 2028 | | | 50 | |
| 2029 | | | 12 | |
| Thereafter | | | — | |
| Total minimum lease payments | | | 1,876 | |
| Less amount representing interest | | | (114) | |
| Present value of lease liabilities | | | $ | 1,762 | |
| | | |
| | | |
| Operating lease liabilities, current | | | 1,000 | |
| Operating lease liabilities, noncurrent | | | 762 | |
| | | |
| Total lease liabilities | | | $ | 1,762 | |
Subsequent to December 31, 2024, the Company entered into an operating lease for its new corporate offices in Austin, Texas. The Company’s existing lease agreement for its corporate office space expires in June 2025. The new lease term begins in July 2025 and expires in January 2033 with an option to renew the lease for an additional three years. Total commitments under this lease are approximately $1.8 million, net of lease incentives of $0.6 million.
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.