Leases

12 Months Ended

Dec. 31, 2025

4. Leases

As of December 31, 2025, our lease portfolio consists entirely of operating leases for corporate offices. Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

Right-of-Use (“ROU”) Assets and Lease Liabilities

At the inception of an arrangement, we determine whether the arrangement is or contains a lease based on the unique facts and circumstances present and the classification of the lease. Operating leases with a term greater than one year are recognized on the consolidated balance sheets as ROU assets, lease liabilities, and long-term lease liabilities. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. We have elected not to recognize on our consolidated balance sheets leases with a term of one year or less.

Lease liabilities and their corresponding ROU assets are recorded based on the present value of lease payments over the expected lease term. The implicit rates within most of our leases are generally not determinable; therefore, we estimate our incremental borrowing rate to determine the present value of lease payments. The determination of our incremental borrowing rate requires judgment and is estimated for each lease based on the rate we would have to pay for a collateralized loan with the same terms as the lease. We consider various factors, including our level of collateralization, estimated credit rating, and the currency in which the lease is denominated. Operating lease ROU assets also include any lease prepayments, offset by lease incentives. Certain of our leases include options to extend or terminate the lease. An option to extend the lease is considered in connection with determining the ROU asset and lease liability when it is reasonably certain we will exercise that option.

Lease Costs

Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as maintenance costs, utilities, and service charges are not included in ROU assets or operating lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the years ended December 31, 2025, 2024, and 2023 (in thousands, exclusive of sublease income):


	Year Ended December 31,
	2025		2024		2023
Operating lease cost	$	9,582	$	9,519	$	9,056



Short-term lease cost	994		1,513		1,444
Variable lease cost	5,968		5,238		4,230
Total	$	16,544	$	16,270	$	14,730

Sublease income totaled $1.2 million, $1.3 million, and $1.3 million for the years ended December 31, 2025, 2024, and 2023 respectively.

Lease Impairment Charges

In 2024, we initiated actions to reduce the footprint of our leased office spaces. For the year ended December 31, 2024, we recorded non-cash lease impairment charges of $5.5 million within general and administrative expenses in our consolidated statements of operations related to two separate floors within our corporate headquarters facility. The non-cash lease impairment charges represented the amount the carrying value of the two asset groups exceeded their estimated fair values. The fair values of the two asset groups were measured using discounted cash flow models based on market rents and sublease incomes projected over the remaining lease terms.

During the year ended December 31, 2025, we recognized an incremental $0.8 million lease impairment charge related to one of the floors within our corporate headquarters that we ceased use of during 2024. The impairment charge represents the amount the carrying value of the underlying asset exceeded its estimated fair value, which was determined by utilizing a discounted cash flow approach that incorporated lower than previously expected sublease income assumptions based on current market conditions.

No impairment charges were incurred during the year ended December 31, 2023.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of December 31, 2025 and 2024 is presented in the following table (in thousands, except for lease term and discount rate):


	As of December 31,
	2025			2024
Right-of-use assets for operating leases	$	28,075		$	31,081

Operating lease liabilities, current	$	13,181		$	12,378
Operating lease liabilities, net of current portion	45,693			52,189
Total operating lease liabilities	$	58,874		$	64,567

Weighted average remaining lease term (in years)	5.5			6.5

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the years ended December 31, 2025, 2024, and 2023 is shown below (in thousands):


	Year Ended December 31,
	2025		2024		2023

Operating cash outflows for operating leases	$	13,167	$	12,179	$	8,865



Amortization of operating lease ROU assets	3,800		3,179		2,676
Interest expense on operating lease liabilities	5,782		6,340		6,380

No tenant improvement allowance reimbursements were received during the years ended December 31, 2025 and 2024. For the year ended December 31, 2023, TIA reimbursements totaled $2.6 million.

A summary of our future minimum lease commitments under non-cancellable operating leases as of December 31, 2025 is shown below (in thousands):


	Year Ended December 31,
2026	$	13,808
2027	13,996
2028	12,871
2029	12,411
2030	12,364
Thereafter	10,543
Total lease payments	75,993
Less: imputed interest	(17,119)
Total	$	58,874