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Leases
 12 Months Ended
Dec. 31, 2021
Lessee Disclosure [Abstract]  
Leases LeasesThe Company leases real estate property under operating leases. The Company also leases networking equipment under arrangements with certain providers of IT infrastructure services which were accounted as finance leases or short-term operating leases.
The Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company determines its incremental borrowing rate based on the rate of interest it would have to pay to borrow on a collateralized basis with an equal lease payment amount, over a similar term, and in a similar economic environment.
Operating Leases—The Company has entered into various non-cancelable operating leases primarily for our office facilities. The most significant leases are related to the Company's corporate headquarters in Palo Alto, California. As of December 31, 2021, the remaining lease terms varied from 2 months to 8.2 years. For certain leases the Company has an option to extend the lease term for periods varying from 2 to 5 years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. For leases with an initial term greater than 12 months, the Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payments.
Further, the Company leases certain networking equipment, colocation space and office space under lease arrangements with terms 12 months or less, which are classified as short-term leases.
The table below presents the operating lease-related assets and liabilities (in thousands):
Year Ended December 31,
20212020Balance Sheet Classification
Operating lease right-of-use assets$70,975$84,336Operating lease right-of-use assets
Current operating lease liabilities$18,392$22,206Operating lease liabilities
Non-current operating lease liabilities$62,498$71,755Operating lease liabilities, non-current
Weighted-average remaining term (years)5.33.7
Weighted-average discount rate5.0%4.7%
The table below presents certain information related to the lease costs for operating leases which are allocated to cost of revenue, sales and marketing, research and development, and general and administrative expenses (in thousands):
Year Ended December 31,
202120202019
Operating lease cost$28,676 $17,372 $3,520 
Short-term lease cost9,683 8,196 3,231 
Variable lease cost7,862 2,147 479 
Total lease cost$46,221 $27,715 $7,230 
Cash paid for amounts included in the measurement of operating lease liabilities was $25.5 million, $23.8 million and $3.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. Right-of-use assets acquired under operating leases was $6.1 million , $10.8 million and $7.4 million for the years ended December 31, 2021 , 2020 and 2019, respectively.
Finance Leases—The Company has entered into various non-cancelable finance leases primarily for networking equipment with weighted average remaining lease term of approximately 2.5 years. The Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payments.
The table below presents the finance lease-related assets and liabilities (in thousands):
Year Ended December 31,
20212020Balance Sheet Classification
Finance lease right-of-use assets$44,575 $5,067 Property and equipment, net
Current finance lease liabilities$21,999 $2,821 Accrued liabilities
Non-current finance lease liabilities$24,085 $2,340 Other non-current liabilities
Weighted-average remaining term (years)2.50.6
Weighted-average discount rate5.0 %6.0 %
The Company recognized depreciation expenses related to finance lease of networking equipment of $17.8 million, $8.4 million and $5.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. The Company recognized interest expenses related to finance lease of networking equipment of $1.5 million, $0.3 million, and $0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Cash paid for amounts included in the measurement of finance lease liabilities was $15.3 million, $9.7 million and $5.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.
One of the Company’s 2020 acquired companies entered into a sublease agreement in 2017. This agreement is with an unrelated third party to occupy approximately 104,852 square feet of the Company’s office space. We recorded rent expense on a straight-line basis for the lease, net of sublease income. For the years ended December 31, 2021 and 2020 we have the following operating sublease information (in thousands):
Year Ended December 31,
20212020
Fixed sublease expense$9,524 $5,769 
Variable sublease expense1,421 836 
Sublease income(9,421)(5,678)
Variable sublease income(1,407)(836)
Net Loss$117 $91 
Undiscounted cash flow—The tables below reconcile the undiscounted cash flows for each of the first five years and total of the remaining years to the operating and finance lease liabilities recorded in the consolidated balance sheets (in thousands):
As of December 31, 2021
Operating
Leases		Finance
Leases		Total
202221,683 23,561 45,244 
202315,143 15,163 30,306 
202413,655 6,237 19,892 
202513,648 2,885 16,533 
202612,310 975 13,285 
Thereafter15,365 — 15,365 
Total lease payments91,804 48,821 140,625 
Less: amount representing interest10,914 2,737 13,651 
Present value of future lease payments80,890 46,084 126,974 
Less: current obligations under leases18,392 21,999 40,391 
Non-current lease obligations$62,498 $24,085 $86,583 
In addition, the Company will receive $5.5 million and $0.6 million of sublease income from its real estate leases in 2022 and 2023 respectively.
As of December 31, 2021, we did not have any additional significant lease that had not yet commenced.
Leases LeasesThe Company leases real estate property under operating leases. The Company also leases networking equipment under arrangements with certain providers of IT infrastructure services which were accounted as finance leases or short-term operating leases.
The Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate to discount the lease payments based on information available at lease commencement. The Company determines its incremental borrowing rate based on the rate of interest it would have to pay to borrow on a collateralized basis with an equal lease payment amount, over a similar term, and in a similar economic environment.
Operating Leases—The Company has entered into various non-cancelable operating leases primarily for our office facilities. The most significant leases are related to the Company's corporate headquarters in Palo Alto, California. As of December 31, 2021, the remaining lease terms varied from 2 months to 8.2 years. For certain leases the Company has an option to extend the lease term for periods varying from 2 to 5 years. These renewal options are not considered in the remaining lease term unless it is reasonably certain that the Company will exercise such options. For leases with an initial term greater than 12 months, the Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payments.
Further, the Company leases certain networking equipment, colocation space and office space under lease arrangements with terms 12 months or less, which are classified as short-term leases.
The table below presents the operating lease-related assets and liabilities (in thousands):
Year Ended December 31,
20212020Balance Sheet Classification
Operating lease right-of-use assets$70,975$84,336Operating lease right-of-use assets
Current operating lease liabilities$18,392$22,206Operating lease liabilities
Non-current operating lease liabilities$62,498$71,755Operating lease liabilities, non-current
Weighted-average remaining term (years)5.33.7
Weighted-average discount rate5.0%4.7%
The table below presents certain information related to the lease costs for operating leases which are allocated to cost of revenue, sales and marketing, research and development, and general and administrative expenses (in thousands):
Year Ended December 31,
202120202019
Operating lease cost$28,676 $17,372 $3,520 
Short-term lease cost9,683 8,196 3,231 
Variable lease cost7,862 2,147 479 
Total lease cost$46,221 $27,715 $7,230 
Cash paid for amounts included in the measurement of operating lease liabilities was $25.5 million, $23.8 million and $3.2 million for the years ended December 31, 2021, 2020 and 2019, respectively. Right-of-use assets acquired under operating leases was $6.1 million , $10.8 million and $7.4 million for the years ended December 31, 2021 , 2020 and 2019, respectively.
Finance Leases—The Company has entered into various non-cancelable finance leases primarily for networking equipment with weighted average remaining lease term of approximately 2.5 years. The Company has recorded a right-of-use asset and lease liability representing the fixed component of the lease payments.
The table below presents the finance lease-related assets and liabilities (in thousands):
Year Ended December 31,
20212020Balance Sheet Classification
Finance lease right-of-use assets$44,575 $5,067 Property and equipment, net
Current finance lease liabilities$21,999 $2,821 Accrued liabilities
Non-current finance lease liabilities$24,085 $2,340 Other non-current liabilities
Weighted-average remaining term (years)2.50.6
Weighted-average discount rate5.0 %6.0 %
The Company recognized depreciation expenses related to finance lease of networking equipment of $17.8 million, $8.4 million and $5.5 million for the years ended December 31, 2021, 2020 and 2019, respectively. The Company recognized interest expenses related to finance lease of networking equipment of $1.5 million, $0.3 million, and $0.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
Cash paid for amounts included in the measurement of finance lease liabilities was $15.3 million, $9.7 million and $5.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.
One of the Company’s 2020 acquired companies entered into a sublease agreement in 2017. This agreement is with an unrelated third party to occupy approximately 104,852 square feet of the Company’s office space. We recorded rent expense on a straight-line basis for the lease, net of sublease income. For the years ended December 31, 2021 and 2020 we have the following operating sublease information (in thousands):
Year Ended December 31,
20212020
Fixed sublease expense$9,524 $5,769 
Variable sublease expense1,421 836 
Sublease income(9,421)(5,678)
Variable sublease income(1,407)(836)
Net Loss$117 $91 
Undiscounted cash flow—The tables below reconcile the undiscounted cash flows for each of the first five years and total of the remaining years to the operating and finance lease liabilities recorded in the consolidated balance sheets (in thousands):
As of December 31, 2021
Operating
Leases		Finance
Leases		Total
202221,683 23,561 45,244 
202315,143 15,163 30,306 
202413,655 6,237 19,892 
202513,648 2,885 16,533 
202612,310 975 13,285 
Thereafter15,365 — 15,365 
Total lease payments91,804 48,821 140,625 
Less: amount representing interest10,914 2,737 13,651 
Present value of future lease payments80,890 46,084 126,974 
Less: current obligations under leases18,392 21,999 40,391 
Non-current lease obligations$62,498 $24,085 $86,583 
In addition, the Company will receive $5.5 million and $0.6 million of sublease income from its real estate leases in 2022 and 2023 respectively.
As of December 31, 2021, we did not have any additional significant lease that had not yet commenced.