Leases

3 Months Ended

Mar. 31, 2026

Note 8—Leases

The Company recognizes ROU Assets and lease liabilities for automobiles, office buildings, IT equipment and small storage units for the temporary storage of operational equipment. The Company’s leases have remaining lease terms ranging from less than 1 year to 5 years. The Company recognizes extension options as part of the initial lease term for ROU Assets and lease liabilities when it is reasonably certain that the Company will exercise the extension option upon the completion of the initial lease term. Most leases include the option to terminate the lease within 1 year.

The Company uses practical expedients offered under the ASC 842 - Leases (“ASC 842”) to combine lease and non-lease components within leasing arrangements and to recognize the payments associated with short-term leases in earnings on a straight-line basis over the lease term, with the cost associated with variable lease payments recognized when incurred. These accounting policy elections impact the value of the Company’s ROU Assets and lease liabilities. The value of the Company’s ROU Assets is determined as the carrying value of its leasing arrangements and is recorded in “Property and equipment, net” on the Company’s Consolidated Balance Sheets. The value of the Company’s lease liabilities is the present value of fixed lease payments not yet paid, which is discounted using either the rate implicit in the lease contract if that rate can be determined or the Company’s incremental borrowing rate (“IBR”). The Company’s IBR is determined as the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term in an amount equal to the lease payments in a similar economic environment.

Any future lease payments that are not fixed based on the terms of the lease contract, or fluctuate based on a factor other than an index or rate, are considered variable lease payments and are not included in the value of the Company’s ROU Assets or lease liabilities. The Company’s variable lease payments are mostly incurred from automobile leases and relate to miscellaneous transportation costs including repair costs, insurance, and terminal rental adjustment payments due at lease settlement. Such rental adjustment payments can result in a reduction to the Company’s total variable lease payments.

Components of lease expense are presented below for the three months ended March 31, 2026 and 2025.


	Three Months Ended March 31,
	2026		2025
	(in thousands)
Lease cost
Operating lease cost	$	1,702	$	2,103
Short-term lease cost	96		174
Variable lease cost	1,106		530
Total lease cost	$	2,904	$	2,807

Supplemental information is presented below for the three months ended March 31, 2026 and 2025.


	Three Months Ended March 31,
	2026			2025
	(dollar amounts in thousands)
Other information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1,578		$	2,210
Weighted-average remaining lease term — operating leases	5.5 years			2.6 years
Weighted-average discount rate — operating leases	6.4		%	6.9		%

During the three months ended March 31, 2026, the Company’s ROU Assets and lease liabilities were reduced by $0.4 million. due to lease cancellations. During the three months ended March 31, 2025, the Company's ROU Assets and lease liabilities were reduced by $1.3 million, due to lease cancellations.

The following is a schedule by calendar year of future minimum lease payments under operating leases that have remaining terms as of March 31, 2026:


Period/Year	Operating Leases
	(in thousands)
April 1 to December 31, 2026	$	4,242
2027	4,005
2028	2,074
2029	1,289
2030	1,235
2031 and thereafter	4,605
Total minimum lease payments	$	17,450
Less: imputed interest	2,796
Present value of lease liabilities	$	14,654