Leases
We determine whether a contract is or contains a lease at inception. At the lease commencement date, we record a liability for the lease obligation and a corresponding asset representing the right to use the underlying asset over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are recognized in expense using a straight-line basis for all asset classes. Variable lease payments are expensed as incurred, which primarily include maintenance costs, services provided by the lessor, and other charges reimbursed to the lessor.
We lease office space and data center facilities with remaining lease terms ranging from one year to five years, some of which contain renewal options. The exercise of these options is at our sole discretion.
Certain of our leases contain lease and non-lease components. For leases held on or after January 1, 2022, we have elected the practical expedient under ASC 842-10-15-37 for all asset classes which allows companies to account for lease and non-lease components as a single lease component.
Our leases do not contain an implicit rate of return; therefore, an incremental borrowing rate was determined. We assessed which rate would be most reflective of a reasonable rate we would be able to borrow based on credit rating and lease term.
Finance lease right-of-use assets were zero as of both December 31, 2025 and 2024. Due to the relocation of one of our offices (see Note 8), we reduced the useful life of the related finance lease right-of-use asset, which represented $14.9 million of incremental depreciation (excluding accelerated depreciation on leasehold improvements) for the year ended December 31, 2024. We also reduced the useful life of the related operating lease right-of-use asset, which represented $1.2 million of additional operating lease cost for the year ended December 31, 2024. Subsequently during the year ended December 31, 2025, we reached a settlement agreement to terminate the prior lease of the aforementioned
office that was relocated. The total settlement was $15.0 million and resulted in a loss on lease termination totaling $0.8 million, which is recorded in general and administrative expense within our consolidated statements of operations for the year ended December 31, 2025.
The following table presents components of lease expense for the years ended December 31, 2025, 2024, and 2023, respectively (in thousands):
| | | | | | | | | | | | | | | | | |
| Years ended December 31, |
| 2025 | | 2024 | | 2023 |
| Finance lease cost | | | | | |
| Amortization of right-of-use assets | $ | — | | | $ | 15,993 | | | $ | 1,586 | |
| Interest on lease liabilities | 531 | | | 751 | | | 797 | |
| Operating lease cost | 4,832 | | | 5,004 | | | 3,780 | |
| Variable lease cost | 46 | | | 412 | | | 360 | |
| Short-term lease | 797 | | | 634 | | | 781 | |
| Total lease cost | $ | 6,206 | | | $ | 22,794 | | | $ | 7,304 | |
Maturities of lease liabilities as of December 31, 2025 are as follows (in thousands):
| | | | | | | | | | | |
| Operating Leases | | Finance Leases |
| 2026 | $ | 6,794 | | | $ | — | |
| 2027 | 4,584 | | | — | |
| 2028 | 4,270 | | | — | |
| 2029 | 2,849 | | | — | |
| 2030 | 1,283 | | | — | |
| Thereafter | — | | | — | |
| Total future minimum lease payments | 19,780 | | | — | |
| Less: Interest | 1,757 | | | — | |
| Total | $ | 18,023 | | | $ | — | |
Supplemental cash flow information related to leases for the years ended December 31, 2025, 2024, and 2023 are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Years ended December 31, |
| | 2025 | | 2024 | | 2023 |
| Cash paid for amounts included in the measurement of lease liabilities: | | | | | | |
| Operating cash flows for operating leases | | $ | 6,634 | | | $ | 5,423 | | | $ | 5,400 | |
| Financing cash flows for financing leases | | 16,336 | | | 1,572 | | | 1,547 | |
| Right-of-use assets obtained in exchange for new lease liabilities: | | | | | | |
| Operating leases | | $ | 6,154 | | | $ | 4,642 | | | $ | 2,284 | |
Supplemental balance sheet information related to leases as of December 31, 2025 and 2024 are as follows:
| | | | | | | | | | | |
| Year ending December 31, |
| 2025 | | 2024 |
| Weighted average remaining lease term (years): | | | |
| Operating leases | 3.5 | | 4.1 |
| Financing leases | 0 | | 9.1 |
| Weighted average discount rate: | | | |
| Operating leases | 5.0 | | | 4.7 | |
| Financing leases | — | | | 5.9 | |