Victory Capital Holdings, Inc. Leases Disclosure
NOTE 17. LEASES
The Company determines if a contract is a lease at inception. We have leases primarily for office facilities and information technology equipment. All of our leases are classified as operating leases.
Supplemental balance sheet information related to the Company’s operating leases as of December 31, 2025 and 2024 is as follows:
|
|
December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
(1) |
|
$ |
48,650 |
|
|
$ |
19,839 |
|
Current portion of operating lease liabilities(2) |
|
|
7,711 |
|
|
|
2,932 |
|
Noncurrent portion of operating lease liabilities(2) |
|
|
37,899 |
|
|
|
17,939 |
|
(3) |
|
$ |
45,610 |
|
|
$ |
20,871 |
|
|
|
2025 |
|
|
2024 |
|
||
Weighted-average remaining lease term |
|
6.4 years |
|
|
8.3 years |
|
||
Weighted-average discount rate |
|
|
6.1 |
% |
|
|
6.7 |
% |
The components of lease expense and other lease information for the years ended December 31, 2025 and 2024 are as follows:
|
|
Year Ended December 31, |
|
|||||
(in thousands) |
|
2025 |
|
|
2024 |
|
||
Operating lease cost |
|
$ |
8,955 |
|
|
$ |
5,052 |
|
Short-term lease cost |
|
|
— |
|
|
|
— |
|
Variable lease cost |
|
|
4,076 |
|
|
|
1,671 |
|
Gross lease cost |
|
|
13,031 |
|
|
|
6,723 |
|
Sub-lease income |
|
|
(65 |
) |
|
|
(604 |
) |
Net lease cost |
|
$ |
12,966 |
|
|
$ |
6,119 |
|
|
|
|
|
|
|
|
||
Other lease information |
|
|
|
|
|
|
||
Cash paid for amounts included in measurement of lease liabilities |
|
|
|
|
|
|
||
Operating cash flows for operating leases |
|
$ |
8,363 |
|
|
$ |
5,517 |
|
In general, our leases have remaining lease terms of approximately 1 year to 11 years. These leases generally contain renewal options for periods ranging from to five years. Because the Company is not reasonably certain to exercise these renewal options, the options are not considered in determining the lease term and associated potential option payments are excluded from lease payments. Expenses associated with operating leases are recorded in general and administrative expenses on the Consolidated Statement of Operations. Variable lease costs, such as utilities and common area maintenance charges, are excluded from lease liabilities and expensed as incurred. The variable lease costs are determined based on terms in the lease contracts and primarily relate to usage of the ROU asset and services received from the lessor.
Future undiscounted cash flows related to our operating leases and the reconciliation to operating lease liabilities as of December 31, 2025 are shown in the table below.
(in thousands) |
|
As of December 31, 2025 |
|
||
2026 |
|
$ |
|
10,197 |
|
2027 |
|
|
|
9,093 |
|
2028 |
|
|
|
8,582 |
|
2029 |
|
|
|
8,267 |
|
2030 |
|
|
|
7,094 |
|
Thereafter |
|
|
|
12,738 |
|
Total undiscounted lease payments |
|
|
|
55,971 |
|
Less: imputed interest |
|
|
|
10,361 |
|
Total lease liabilities |
|
$ |
|
45,610 |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 6, 2023 | |
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.