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Leases
12 Months Ended
Dec. 31, 2023
Leases [Abstract]  
Leases Leases
Lease Portfolio Overview
The Company’s operating lease obligations consist of various leases for office space in areas that include, among others, Austin, Texas; Boston, Massachusetts; Dallas, Texas; Trevose, Pennsylvania; Amsterdam, Netherlands; Barcelona, Spain; Limassol, Cyprus; and Prague, Czech Republic. The company has lease terms which expire at various times through 2028. Certain leases include extension options, rent escalations, and non-cancellable terms.
Prior to the adoption of ASC 842, the Company categorized leases at their inception as either operating or capital leases. On certain lease arrangements, the Company may have received rent holidays or other incentives. The Company recognized lease costs on a straight‑line basis once it achieved control of the space, without regard to deferred payment terms, such as rent holidays, that deferred the commencement date of required payments or escalating payment amounts. The Company recorded the difference between required lease payments and rent expense as deferred rent. Additionally, incentives received were treated as a reduction of costs over the term of the agreement, as they were considered an inseparable part of the lease agreement.
Subsequent to the adoption of ASC 842, the Company categorizes leases at commencement as either operating or finance leases. The Company has operating leases for data centers and facilities and finance leases for certain equipment. The leases have remaining lease terms of less than a year to 6 years, some of which include options to extend the leases for up to 10 years. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. Variable costs, which are based on actual usage, are not included in the measurement of ROUAs and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. Amortization expense of the ROUA for finance leases is recognized on a straight-line basis over the lease
term and interest expense for finance leases is recognized based on the effective interest method using an incremental borrowing rate.
Adoption of ASC 842 resulted in the recording of $12,366 in ROUAs and $12,579 in lease liabilities as of January 1, 2022. Incremental borrowing rates as of January 1, 2022, the date the new standard was adopted, were used to calculate the present value of the Company’s lease portfolio as of that date. The Company determines its incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. There was no impact on retained earnings or other components of equity from the adoption. The Company elected to apply ASC 842 at the beginning of the period of adoption through a cumulative adjustment in accordance with ASC 842-10-65-1(c)(2).
The Company elected the three practical expedients as a package and applied them consistently to all leases, which allowed it to forgo reassessing whether any expired or existing contract contain leases, the classification for any expired or existing leases, and the initial direct costs for existing leases. The Company also made an accounting policy election to not recognize a lease liability or right-of-use asset on its consolidated balance sheet for leases with an initial term of twelve months or less, and instead recognizes such lease payments in the consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term.
The components of lease expense were as follows:
Year Ended December 31,
20232022
Operating lease cost$4,523 $3,936 
Short-term lease cost1,631 1,128 
Variable lease cost5,491 7,340 
Total lease cost$11,645 $12,404 
Year Ended December 31,
20232022
Amortization of lease assets$2,282 $2,106 
Interest on lease liabilities83 115 
Total finance lease cost$2,365 $2,221 
Weighted-average remaining lease term and discount rate were as follows:
As of December 31,
20232022
Weighted-average remaining lease term (in years)
     Operating leases3.63.9
     Finance leases1.11.6
Weighted-average discount rate
     Operating leases5.30 %5.08 %
     Finance leases4.99 %3.69 %
Future minimum amounts payable as of December 31, 2023 were as follows:
Year Ending December 31,Operating LeasesFinance
Leases
2024$4,748 $667 
20254,321 194 
20263,736 — 
20272,098 — 
2028 and thereafter998 — 
Total lease payments15,901 861 
Less: imputed interest(1,296)(70)
Total lease liabilities$14,605 $791 
As of December 31, 2023 the Company had one additional operating lease with future lease payments of $567 that has not yet commenced in Belgrade, Serbia. The lease is expected to commence in June 2024. As of December 31, 2023, the Company had no finance leases that had not yet commenced.
Rent expense related to the Company’s office facilities was $5,195, $5,064, and $3,817 for the years ended December 31, 2023, 2022, and 2021, respectively.
Leases Leases
Lease Portfolio Overview
The Company’s operating lease obligations consist of various leases for office space in areas that include, among others, Austin, Texas; Boston, Massachusetts; Dallas, Texas; Trevose, Pennsylvania; Amsterdam, Netherlands; Barcelona, Spain; Limassol, Cyprus; and Prague, Czech Republic. The company has lease terms which expire at various times through 2028. Certain leases include extension options, rent escalations, and non-cancellable terms.
Prior to the adoption of ASC 842, the Company categorized leases at their inception as either operating or capital leases. On certain lease arrangements, the Company may have received rent holidays or other incentives. The Company recognized lease costs on a straight‑line basis once it achieved control of the space, without regard to deferred payment terms, such as rent holidays, that deferred the commencement date of required payments or escalating payment amounts. The Company recorded the difference between required lease payments and rent expense as deferred rent. Additionally, incentives received were treated as a reduction of costs over the term of the agreement, as they were considered an inseparable part of the lease agreement.
Subsequent to the adoption of ASC 842, the Company categorizes leases at commencement as either operating or finance leases. The Company has operating leases for data centers and facilities and finance leases for certain equipment. The leases have remaining lease terms of less than a year to 6 years, some of which include options to extend the leases for up to 10 years. The Company recognizes lease expense for operating leases on a straight-line basis over the lease term. Variable costs, which are based on actual usage, are not included in the measurement of ROUAs and lease liabilities but are expensed when the event determining the amount of variable consideration to be paid occurs. Amortization expense of the ROUA for finance leases is recognized on a straight-line basis over the lease
term and interest expense for finance leases is recognized based on the effective interest method using an incremental borrowing rate.
Adoption of ASC 842 resulted in the recording of $12,366 in ROUAs and $12,579 in lease liabilities as of January 1, 2022. Incremental borrowing rates as of January 1, 2022, the date the new standard was adopted, were used to calculate the present value of the Company’s lease portfolio as of that date. The Company determines its incremental borrowing rate for each lease based on the rate of interest that the Company would have to pay to borrow an amount equal to the lease payments on a collateralized basis over a similar term. There was no impact on retained earnings or other components of equity from the adoption. The Company elected to apply ASC 842 at the beginning of the period of adoption through a cumulative adjustment in accordance with ASC 842-10-65-1(c)(2).
The Company elected the three practical expedients as a package and applied them consistently to all leases, which allowed it to forgo reassessing whether any expired or existing contract contain leases, the classification for any expired or existing leases, and the initial direct costs for existing leases. The Company also made an accounting policy election to not recognize a lease liability or right-of-use asset on its consolidated balance sheet for leases with an initial term of twelve months or less, and instead recognizes such lease payments in the consolidated statements of operations and comprehensive income (loss) on a straight-line basis over the lease term.
The components of lease expense were as follows:
Year Ended December 31,
20232022
Operating lease cost$4,523 $3,936 
Short-term lease cost1,631 1,128 
Variable lease cost5,491 7,340 
Total lease cost$11,645 $12,404 
Year Ended December 31,
20232022
Amortization of lease assets$2,282 $2,106 
Interest on lease liabilities83 115 
Total finance lease cost$2,365 $2,221 
Weighted-average remaining lease term and discount rate were as follows:
As of December 31,
20232022
Weighted-average remaining lease term (in years)
     Operating leases3.63.9
     Finance leases1.11.6
Weighted-average discount rate
     Operating leases5.30 %5.08 %
     Finance leases4.99 %3.69 %
Future minimum amounts payable as of December 31, 2023 were as follows:
Year Ending December 31,Operating LeasesFinance
Leases
2024$4,748 $667 
20254,321 194 
20263,736 — 
20272,098 — 
2028 and thereafter998 — 
Total lease payments15,901 861 
Less: imputed interest(1,296)(70)
Total lease liabilities$14,605 $791 
As of December 31, 2023 the Company had one additional operating lease with future lease payments of $567 that has not yet commenced in Belgrade, Serbia. The lease is expected to commence in June 2024. As of December 31, 2023, the Company had no finance leases that had not yet commenced.
Rent expense related to the Company’s office facilities was $5,195, $5,064, and $3,817 for the years ended December 31, 2023, 2022, and 2021, respectively.