Leases The Company has various operating lease arrangements for office and laboratory spaces located in California and Switzerland with contractual lease periods expiring at various dates through 2035. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain lease agreements also provide the Company with the option to renew for five years or the option to terminate the lease early. These options are not considered in the lease term unless it is reasonably certain that the Company will exercise such options, upon which the ROU assets and lease liabilities are remeasured. Throughout the term of the lease agreements, the Company is responsible for paying certain operating costs, in addition to rent, such as common area maintenance, taxes, utilities and insurance. These additional charges are considered variable lease costs and are recognized in the period in which the costs are incurred. The discount rate used to determine the present value of the lease payments is our estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as we generally cannot determine the interest rate implicit in the leases.
The following table contains a summary of the lease costs recognized under ASC 842 and additional information related to operating leases (in thousands, except weighted average amounts):
| | | | | | | | | | | | | | | | | |
| Years Ended December 31, |
| 2025 | | 2024 | | 2023 |
| Operating lease cost | $ | 10,444 | | | $ | 11,446 | | | $ | 13,934 | |
| Variable lease cost | 8,007 | | | 10,306 | | | 10,996 | |
| Total lease cost | $ | 18,451 | | | $ | 21,752 | | | $ | 24,930 | |
| Other Information | | | | | |
| Weighted average remaining lease term (in years) | 8.1 | | 9.0 | | 8.9 |
| Weighted average incremental borrowing rate (%) | 5.4 | | | 5.2 | | | 5.1 | |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ | 13,603 | | | $ | 28,566 | | | $ | 19,584 | |
The maturity of the Company’s operating lease liabilities as of December 31, 2025 was as follows (in thousands):
| | | | | |
| Amounts |
| 2026 | $ | 13,792 | |
| 2027 | 14,079 | |
| 2028 | 14,432 | |
| 2029 | 14,702 | |
| 2030 | 15,071 | |
| Thereafter | 49,321 | |
| Total lease payments | 121,397 | |
| Less: imputed interest | (23,545) | |
| Present value of operating lease liabilities | $ | 97,852 | |
The following amounts were recorded in the consolidated balance sheets as of December 31, 2025 and 2024 (in thousands) for various operating leases:
| | | | | | | | | | | |
| December 31, |
| 2025 | | 2024 |
| Operating ROU assets | $ | 62,099 | | | $ | 59,680 | |
| | | |
| Accrued and other liabilities | $ | 8,798 | | | $ | 7,752 | |
| Operating lease liabilities, noncurrent | 89,054 | | | 90,139 | |
| Total operating lease liabilities | $ | 97,852 | | | $ | 97,891 | |
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.