Leases

9 Months Ended

Sep. 30, 2022

The Company has operating leases for real estate and co-located data centers. During the three and nine months ended September 30, 2022, operating lease expense was approximately $25.0 million and $63.6 million, respectively, compared to approximately $13.9 million and $38.7 million during the three and nine months ended September 30, 2021, respectively. Variable lease cost, short-term lease cost and sublease income were immaterial during the three and nine months ended September 30, 2022 and 2021.

As of September 30, 2022, $64.6 million of our operating lease liabilities was included in accrued expenses and other current liabilities and $426.0 million as long-term operating lease liabilities.

The following table presents maturity of lease liabilities under the Company’s non-cancelable operating leases as of September 30, 2022 (in thousands):



Remainder of 2022	$	18,579
2023	56,384
2024	98,494
2025	87,564
2026	74,055
Thereafter	286,514
Total lease payments	$	621,590
Less: interest(1)	131,022
Present value of lease liabilities	$	490,568

(1)Calculated using the interest rate for each lease.

In addition, the Company has executed operating leases for data center and facilities which have not commenced as of September 30, 2022. The legally binding minimum lease payments for these leases is $378.2 million with lease terms ranging between three to twelve years.

Of the above amount, approximately $212.5 million pertains to a lease signed by the Company in San Mateo, California, on March 11, 2022 for office space of approximately 218,554 square feet, with a term of approximately 12 years and two renewal options of 5 years each. The Company expects to obtain possession of the office space in the second quarter of 2023. In addition, the Company expects to receive $22.9 million in tenant improvement allowance for the office space.

The following table presents supplemental information for leases that have commenced as of and for the nine months ended September 30, 2022 (in thousands, except for weighted average and percentage data):



Weighted average remaining lease term	8.12
Weighted average discount rate	5.0%
Cash paid for amounts included in the measurement of lease liabilities(1)	$	47,546
Lease liabilities arising from obtaining new ROU assets(2)	$	279,712

(1)Excludes $1.2 million of leasehold incentives received from the landlord.

(2)Includes $125.5 million in line with the original commitment, relating to office space in San Mateo, California, for which possession was obtained during the second quarter of 2022, with a term of approximately 13 years, with two renewal options of 5 years each.