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LEASES

12 Months Ended

Dec. 31, 2024

The Company has entered into various non-cancellable operating and finance lease agreements for certain of the Company’s offices, manufacturing and warehouse facilities, retail and service locations, equipment and vehicles, worldwide. The Company has determined if an arrangement is a lease, or contains a lease, including embedded leases, at inception and records the leases in the Company’s financial statements upon lease commencement, which is the date when the underlying asset is made available for use by the lessor.

Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our assessed lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Certain operating leases provide for annual increases to lease payments based on an index or rate. The Company estimates the annual increase in lease payments based on the index or rate at the lease commencement date. Differences between the estimated lease payment and actual payment are expensed as incurred. Lease expense for finance lease payments is recognized as amortization expense of the finance lease ROU asset and interest expense on the finance lease liability over the lease term.

In August 2022, the Company entered into a four-year agreement (“Lease Agreement”) to lease land in Casa Grande, Arizona adjacent to our manufacturing facility. The Company classifies this lease as a finance lease because the Lease Agreement contains a purchase option which the Company is reasonably certain to exercise. As of December 31, 2024 and 2023, assets associated with the finance lease were $79.3 million. As of December 31, 2024 and 2023, liabilities associated with the finance lease were $80.0 million and $80.6 million, respectively.

Contemporaneously with the execution of the Lease Agreement, the Company entered into a sale agreement, pursuant to which the Company sold certain parcels of land for $31.7 million to the lessor and leased back these parcels of land under the Lease Agreement. The sale of the land and subsequent lease did not result in change in the transfer of control of the land; therefore, the sale-leaseback transaction is accounted for as a failed sale and leaseback financing obligation. The Company recorded $31.7 million of sales proceeds received as a financial liability within other long-term liabilities in the consolidated balance sheets as of December 31, 2024 and 2023.

The balances for the operating and finance leases where the Company is the lessee were presented as follows within the Company’s consolidated balance sheets (in thousands):


	December 31, 2024		December 31, 2023
Operating leases:
Right-of-use assets	$	211,886	$	221,508

Other current liabilities	$	35,596	$	28,431
Other long-term liabilities	229,835		244,122
Total operating lease liabilities	$	265,431	$	272,553

Finance leases:
Property, plant and equipment, net	$	82,823	$	85,055
Total finance lease assets	$	82,823	$	85,055

Finance lease liabilities, current portion	$	6,788	$	8,202
Finance lease liabilities, net of current portion	76,096		77,653
Total finance lease liabilities	$	82,884	$	85,855

The components of lease expense were as follows within the Company’s consolidated statements of operations and comprehensive loss (in thousands):


	Year Ended December 31,
	2024		2023		2022
Operating lease expense:
Operating lease expense (1)	$	62,119	$	55,307	$	44,617
Variable lease expense	1,948		1,770		1,712

Finance lease expense:
Amortization of leased assets	$	3,009	$	5,252	$	4,812
Interest on lease liabilities	4,665		4,867		2,453
Total finance lease expense	$	7,674	$	10,119	$	7,265
Total lease expense	$	71,741	$	67,196	$	53,594

(1) Excluded short-term leases, which were not material.

Other information related to leases where the Company is the lessee was as follows:


	December 31, 2024		December 31, 2023
Weighted-average remaining lease term (in years):
Operating leases	6.2		6.8
Finance leases	1.6		2.6

Weighted-average discount rate:
Operating leases	11.87	%	11.01	%
Finance leases	5.73	%	5.59	%

Supplemental cash flow information related to leases where the Company is the lessee was as follows (in thousands):


	Year Ended December 31,
	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	59,131	$	44,965	$	15,482
Operating cash flows from finance leases (interest payments)	5,261		5,430		509
Financing cash flows from finance leases	3,166		5,425		4,977
Leased assets obtained in exchange for new operating lease liabilities	23,111		32,558		73,502
Leased assets obtained in exchange for new finance lease liabilities	1,062		—		84,392

As of December 31, 2024, the maturities of the Company’s operating and finance lease liabilities (excluding short-term leases) were as follows (in thousands):


	Operating Leases		Finance Leases
2025	$	64,308	$	6,953
2026	66,035		82,822
2027	57,530		371
2028	53,923		39
2029	47,570		8
Thereafter	93,101		—
Total minimum lease payments	382,467		90,193
Less: Interest	(117,036)		(7,309)
Present value of lease obligations	265,431		82,884
Less: Current portion	(35,596)		(6,788)
Long-term portion of lease obligations	$	229,835	$	76,096

As of December 31, 2024, the Company entered into additional leases for facilities and equipment that have not yet commenced with undiscounted future lease payments of $41.1 million. The leases are expected to commence in 2025 and 2026.

LEASES