Leases

12 Months Ended

Dec. 31, 2023

The Company has entered into various operating lease agreements for office space, data center, lab and warehouse use, with remaining terms ranging from 0.75 to 9.5 years, some of which include one or more options to renew. As leases approach maturity, the Company considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew the lease, as such, the Company does not include renewal options in its lease terms for calculating its lease liability, as the renewal options allow it to maintain operational flexibility and the Company is not reasonably certain it will exercise these renewal options at the time of the lease commencement. In July 2020, the Company entered into two lease agreements for additional office space in Palo Alto, California, or the Palo Alto Lease, and in San Diego, California, or the San Diego Lease, and took possession of these facilities in March 2021. The San Diego Lease has a term of 8 years, and the Palo Alto Lease has a term of 12 years with an option to renew the lease term for an additional 10 years which has not been considered in the determination of ROU asset or lease liability as the Company does not consider it reasonably certain of exercising the renewal option. Both leases consist of fixed and variable payments and are being accounted for as operating leases. The Company estimated the incremental borrowing rate to determine the present value of lease payments for the San Diego and Palo Alto leases using trading data of the Company's convertible debt adjusted for credit rating and market yield curves.

Operating lease expense for the years ended December 31, 2023, 2022 and 2021, was $29.7 million, $28.6 million and $24.7 million, respectively, which includes both lease and non-lease components (primarily common area maintenance charges and property taxes).


	As of December 31,
	2023		2022

Weighted-average remaining lease term (in years)	8.3		9.1
Weighted-average discount rate	3.87	%	3.93	%

The following table summarizes the Company's future principal contractual obligations for operating lease commitments as of December 31, 2023:


Year Ending December 31,
	(in thousands)
2024	$	35,460
2025	33,237
2026	28,166
2027	24,479
2028	23,321
2029 and thereafter	101,835
Total operating lease payments	$	246,498
Less: imputed interest	(32,700)
Total operating lease liabilities	$	213,798

Finance leases are not material to the Company's consolidated financial statements.