Leases

12 Months Ended

Dec. 31, 2024

The Company, acting as a lessee, has operating leases and finance leases primarily relating to office space, data centers and office equipment. The leases have remaining lease terms of 0.3 years to 14.6 years, some of which include options to extend the leases in 0.1 to 10 year increments for up to 15 years. Renewal periods are included in the lease term only when renewal is reasonably certain, which is a high threshold and requires management to apply judgment to determine the appropriate lease term. Certain leases also include periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and, where relevant, variable rental payments tied to an index, such as the Consumer Price Index. Payments for leases in place before the date of adoption of ASC 842, Leases were determined based on previous leases guidance. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement is recognized as incurred. Interest expense on finance leases is recognized using the effective interest method over the lease term.

Pursuant to the accounting policy election, leases with an initial term of twelve months or less are not recognized on the balance sheet. The short-term lease expense over the period reasonably reflects the Company’s short-term lease commitments.

ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or cancellation provisions, and determining the discount rate.

The Company determines whether an arrangement is a lease or includes a lease at the contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from, and can direct the use of, the identified asset for a period of time, the Company accounts for the identified asset as a lease. The Company has elected the practical expedient to not separate lease and non-lease components for all leases other than real estate leases. The primary non-lease component that is combined with a lease component represents operating expenses, such as utilities, maintenance or management fees.

As the rate implicit in the lease is not usually available, the Company used an incremental borrowing rate based on the information available at the adoption of ASC 842 in determining the present value of lease payments for existing leases. The Company has elected to use a portfolio approach for the incremental borrowing rate, applying corporate bond rates to the leases. The Company calculated the appropriate rates with reference to the lease term and lease currency. The Company uses information available at the lease commencement date to determine the incremental borrowing rate for any new leases.

The Company subleases certain real estate to its affiliates and to third parties. The value of these commitments is not material to the Company’s Consolidated Financial Statements.

As of December 31, 2024, the Company did not have any leases that have not yet commenced but that create significant rights and obligations.

After evaluating the Company’s leases, the Company determined that the carrying value of a certain asset was no longer recoverable and in fact was impaired. The fair value of the asset was based on expected future cash flows under ASC 842, and approximately $1.4 million of impairment charges were booked for the year ended December 31, 2024. Impairment charges are included in Occupancy and equipment in the Company’s Consolidated Statements of Operations.

Supplemental information related to the Company’s operating and financing leases is as follows (in thousands):


	Classification in Consolidated Statements of Financial Condition	December 31, 2024		December 31, 2023
Assets
Operating lease ROU assets	Other assets	$	114,456	$	124,165
Finance lease ROU assets	Fixed assets, net	$	2,959	$	4,264
Liabilities
Operating lease liabilities	Accounts payable, accrued and other liabilities	$	135,825	$	149,640
Finance lease liabilities	Accounts payable, accrued and other liabilities	$	3,249	$	4,721


	December 31, 2024		December 31, 2023
Weighted-average remaining lease term
Operating leases (years)	6.8		7.3
Finance leases (years)	2.4		3.4
Weighted-average discount rate
Operating leases	5.5	%	5.0	%
Finance leases	4.4	%	4.3	%

The components of lease expense are as follows (in thousands):


		Year Ended December 31,
	Classification in Consolidated Statements of Operations	2024		2023		2022
Operating lease cost1	Occupancy and equipment	$	33,884	$	35,894	$	36,894
Finance lease cost
Amortization on ROU assets	Occupancy and equipment	$	1,305	$	1,305	$	753
Interest on lease liabilities	Interest expense	$	168	$	219	$	116

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1Short-term lease expense was not material for the years ended December 31, 2024, 2023 and 2022.

The following table shows the Company’s maturity analysis of its lease liabilities as of December 31, 2024 (in thousands):


	December 31, 2024
	Operating leases		Finance leases
2025	$	29,722	$	1,520
2026	24,078		1,290
2027	22,743		627
2028	16,390		—
2029	12,505		—
2030 and thereafter	67,169		—
Total	$	172,607	$	3,437
Interest	(36,782)		(188)
Total	$	135,825	$	3,249

The following table shows cash flow information related to lease liabilities (in thousands):


	Year Ended December 31,
Cash paid for amounts included in the measurement of lease liabilities	2024		2023
Operating cash flows from operating lease liabilities	$	36,420	$	37,008
Operating cash flows from finance lease liabilities	$	168	$	219
Financing cash flows from finance lease liabilities	$	1,280	$	1,228