Effective January 1, 2022 the Company adopted ASC 842, which requires recognition of right of use (“ROU”) assets and lease liabilities on the balance sheet, based on the present value of the future minimum rental payments for existing operating leases. The Company adopted the provisions of ASC 842 on January 1, 2022 using a modified retrospective approach through a cumulative effect adjustment to retained earnings as of the beginning of the period of adoption in line with the new transition method allowed under ASU 2018-11. ASC 842 provides a number of optional practical expedients in transition. The Company elected the “package of practical expedients” which permits the Company not to reassess under the new standard its prior conclusions about lease identification, lease classification, and initial direct costs. The Company did not elect the use-of-hindsight and elected the practical expedient pertaining to land easements. The new standard also provides practical expedients for an entity’s ongoing accounting for leases. The Company elected the short-term lease exemption for all leases that qualify, meaning the Company will not recognize ROU assets or lease liabilities for leases with terms shorter than twelve months. The Company also elected the practical expedient to not separate lease and non-lease components for a majority of its asset classes, including real estate and most equipment.

The Company measures the ROU assets and liabilities based on the present value of the future minimum lease payments over the lease term at the commencement date. Minimum lease payments include the fixed lease and non-lease components of the agreement, as well as any variable rent payments that depend on an index, initially measured using the index at the lease commencement date. The ROU assets are adjusted for any initial direct costs incurred less any lease incentives received, in addition to payments made on or before the commencement date of the lease. The Company recognizes lease expense for leases on a straight-line basis over the lease term.

As the implicit rate is not readily determinable for most of the Company’s lease agreements, the Company uses an estimated incremental borrowing rate to determine the initial present value of lease payments.

The Company determines if a contract is or contains a lease at inception. The Company has operating and finance leases for office space, data centers, and equipment. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company enters into lease contracts ranging from 1 to 9 years with a majority of the Company’s lease terms ranging from 3 to 5 years.

Some leases include one or more options to renew, with renewal terms that can extend the lease term from 1 to 5 years or more. The exercise of these lease renewal options is at the Company’s sole discretion. The depreciable life of assets and leasehold improvements are limited by the expected lease term.

Certain of our leases include rental payments that will adjust periodically for inflation or certain adjustments based on step increases. An insignificant number of our leases contain residual value guarantees and none of our agreements contain material restrictive covenants. Variable rent expenses consist primarily of maintenance, property taxes, and charges based on usage.

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


	Three Months Ended June 30, 2022			Six Months Ended June 30, 2022
Operating lease costs
Fixed	$	1,828		$	3,587
Short-term		55			113
Variable		8			14
Sub-leases		(12	)		(12	)
Total operating lease costs	$	1,878		$	3,701

Finance lease costs
Amortization of leased assets	$	190		$	400
Interest on lease liabilities		10			21
Total finance lease costs	$	200		$	421
Total lease cost	$	2,078		$	4,122

Supplemental balance sheet information related to leases is as follows (in thousands):


	Classification	June 30, 2022
Assets
Operating leases
Right of use operating lease assets	Other assets	$	16,008
Finance leases
Property and equipment, gross	Property and equipment, net		5,098
Accumulated depreciation	Property and equipment, net		(4,706	)
Property and equipment, net	Property and equipment, net		392
Total lease assets		$	16,400

Liabilities
Operating leases
Other current	Current portion of operating lease liability	$	6,070
Non-current	Operating lease liability, less current portion		11,514
Total operating liabilities			17,584
Finance leases
Other current	Accrued liabilities		502
Non-current	Other liabilities		30
Total finance liabilities			532
Total lease liabilities		$	18,116

Maturities of lease liabilities are as follows (in thousands):


Years Ending December 31,
	Finance Leases			Operating Leases			Total
2022 (excluding the six months ended June 30, 2022)	$	435		$	3,919		$	4,354
2023		108			6,153			6,261
2024		—			5,357			5,357
2025		—			2,096			2,096
2026		—			1,584			1,584
Thereafter		—			402			402
Total minimum lease payments	$	543		$	19,511		$	20,054
Less: Imputed interest		(11	)		(1,511	)
Present value of minimum lease payments	$	532		$	18,000

For additional information regarding the Company’s Commitments and Contingencies as of December 31, 2021 as disclosed for capital and operating leases, see Note 12 in its 2021 Annual Report filed on Form 10-K.

Lease term and discount rates are as follows:


	June 30, 2022
Weighted average remaining lease term
Operating leases	3.2 Years
Finance leases	0.7 Years

Weighted average discount rate
Operating leases		4.81	%
Finance leases		5.39	%

Supplemental cash flow information related to leases was as follows (in thousands):


	Six Months Ended June 30, 2022
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows from operating leases	$	3,906
Operating cash flows from finance leases		20
Financing cash flows from finance leases		459
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	19,783
Finance leases		—
Amortization:
Amortization of right-of-use operating lease assets (1)	$	3,200

(1)

Amortization of right of use operating lease assets during the period is reflected in operating lease liabilities on the condensed consolidated statements of cash flows.