Leases

9 Months Ended

Nov. 02, 2025

We lease office and data center facilities under non-cancelable operating lease agreements expiring through July 2032. Our lease agreements do not contain any material residual value guarantees or restrictive covenants.

We also lease certain engineering test equipment under financing agreements. These finance leases have a lease term of three to five years and contain a bargain purchase option that we have exercised or expect to exercise at the end of the respective lease terms.

The components of lease costs during the periods presented were as follows (in thousands):


	Third Quarter of Fiscal				First Three Quarters of Fiscal
	2025		2026		2025		2026
Fixed operating lease cost	$	12,930	$	15,096	$	35,467	$	41,370

Variable lease cost (1)	3,905		2,592		10,699		8,374
Short-term lease cost (12 months or less)	1,160		1,239		3,014		3,542

Finance lease cost:
Amortization of finance lease right-of-use assets	1,100		582		3,300		1,719
Interest on finance lease liabilities	16		39		141		89
Total finance lease cost	$	1,116	$	621	$	3,441	$	1,808

Total lease cost	$	19,111	$	19,548	$	52,621	$	55,094

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(1) Variable lease cost predominantly included common area maintenance charges.

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


	At the End of
	Fiscal 2025			Third Quarter of Fiscal 2026
Operating leases:
Weighted-average remaining lease term (in years)	4.9			4.9
Weighted-average discount rate	7.4		%	6.5		%

Finance leases:


Finance lease right-of-use assets, net (1)	$	5,555		$	5,707

Finance lease liabilities, current (2)	$	387		$	564
Finance lease liabilities, non-current (3)	—			2,289
Total finance lease liabilities	$	387		$	2,853
Weighted-average remaining lease term (in years)	1.0			4.5
Weighted-average discount rate	3.3		%	5.5		%

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(1) Included in the condensed consolidated balance sheets within property and equipment, net.

(2) Included in the condensed consolidated balance sheets within accrued expenses and other liabilities.

(3) Included in the condensed consolidated balance sheets within other liabilities, non-current.

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


	First Three Quarters of Fiscal
	2025		2026
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	37,380	$	43,691
Financing cash outflows for finance leases	$	4,818	$	1,115
Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	56,813	$	80,373
Finance leases	$	—	$	3,059

Future lease payments under our non-cancelable leases at the end of the third quarter of fiscal 2026 are as follows (in thousands):


Fiscal Years Ending	Operating Leases		Finance Leases
Remainder of 2026	$	14,786	$	—
2027	51,715		704
2028	57,709		704
2029	49,119		704
2030	46,172		704
Thereafter	45,037		410
Total future lease payments	264,538		3,226
Less: imputed interest	(38,991)		(373)
Present value of total lease liabilities	$	225,547	$	2,853

Lessor Arrangement

We, as a lessor, have entered into non-cancelable arrangements to lease our data management and storage solutions and subscription services. The arrangements include multiple seven-year leases that either commenced during fiscal 2025 or in the third quarter of fiscal 2026 with total net consideration of $258.6 million. The arrangements provide an end-of-term option to purchase the leased assets for a pre-determined price.

We determined, at inception of the respective arrangements, that each of the leases include sales-type leases, an operating lease, and non-lease components. The non-lease components are comprised primarily of subscription support services and professional services. The total net consideration for each lease was allocated to these components based on relative standalone selling price. The amounts allocated to the lease and non-lease components are accounted for in accordance with ASC 842 and ASC 606, respectively.

We recognized $15.2 million in product revenue related to the sales-type lease components during the first three quarters of fiscal 2025. The associated profit was $11.4 million, based on the product revenue recognized less certain costs, during the first three quarters of fiscal 2025. No product revenue was recognized during the third quarter of fiscal 2025. We recognized $27.9 million in product revenue related to the sales-type lease components during both the third quarter and first three quarters of fiscal 2026. The associated profit was $23.6 million, based on the product revenue recognized less certain costs, during both the third quarter and first three quarters of fiscal 2026. Subscription services revenue related to the operating lease and non-lease components recognized was $2.7 million and $7.5 million during the third quarter of fiscal 2025 and 2026 and $4.8 million and $19.5 million during the first three quarters of fiscal 2025 and 2026.

Future minimum gross lease payments allocated to the sales-type leases and operating lease components are as follows (in thousands). The remaining lease payments of $154.6 million allocated to the non-lease components are excluded from the table below.


Fiscal Years Ending	Sales-Type Leases		Operating Lease
Remainder of 2026	$	5,007	$	3,124
2027	14,057		9,341
2028	16,978		7,451
2029	20,626		1,742
2030	23,399		—
Thereafter	45,137		—
Total future lease payments to be received	$	125,204	$	21,658