Leases, Codification Topic 842

9 Months Ended

Sep. 26, 2026

– Leases

The Company’s leases consist primarily of operating leases of data centers, research and development facilities and equipment that expire through fiscal year 2038. These include leases for general corporate purposes and data centers, including data center leases related to the development of SI infrastructure that have been subleased or are expected to be assigned or subleased to commercial partners.

Total net lease expense, which includes variable lease expense, was $112 million and $280 million for the three and nine months ended September 26, 2026, respectively, and $78 million and $217 million for the three and nine months ended September 27, 2025, respectively. Variable lease expense, primarily operating expenses and property taxes for leased facilities, was not material. Certain leases contain payment escalations based on changes in the consumer price index. The Company’s finance and short-term leases are not material.

For the nine months ended September 26, 2026 and September 27, 2025, cash paid for operating leases included in operating cash flows was $189 million and $131 million, respectively.

Supplemental information related to the Company’s operating leases were as follows:


	September 26, 2026		December 27, 2025
Weighted-average remaining lease term in years	9.08		6.95
Weighted-average discount rate	5.00	%	4.74	%

Future minimum lease payments under non-cancellable operating lease liabilities as of September 26, 2026 were as follows:


Fiscal Year	Remainder of 2026		2027		2028		2029		2030		2031 and thereafter		Total
	(In millions)
Minimum lease payments	$	112	$	349	$	283	$	285	$	281	$	1,357	$	2,667
Less: imputed interest													(535)
Present value of minimum lease payments													2,132
Less: current portion													(295)
Total long-term operating lease liabilities													$	1,837

The table above excludes leases that have not yet commenced. See Note 11 – Commitments and Contingencies. As of September 26, 2026 and December 27, 2025, operating lease right-of-use assets were $2.2 billion and $790 million, respectively, and are recorded within Other non-current assets on the Company's Condensed Consolidated Balance Sheets. The current portion of operating lease liabilities is recorded within Other current liabilities on the Company's Condensed Consolidated Balance Sheets.

Subleases

The Company subleases certain data center facilities to commercial partners under operating leases that expire through fiscal year 2036 and remains as the primary obligor under the original leases. Sublease income, recorded as a reduction of lease expense within operating expenses, was not material for the three and nine months ended September 26, 2026 and September 27, 2025.

Future lease payments to be received under noncancellable operating subleases as of September 26, 2026 were as follows (in millions):


Fiscal Year	Remainder of 2026		2027		2028		2029		2030		2031 and thereafter		Total
Future sublease payments to be received	$	—	$	80	$	83	$	86	$	88	$	559	$	896