LEASES

12 Months Ended

Dec. 31, 2025

Leases [Abstract]

LEASES

17.LEASES

We have operating leases for facilities used for manufacturing, research and development, sales and distribution, and office space, as well as leases for manufacturing and office equipment, vehicles, and land. Our leases have remaining terms ranging from less than one year to approximately 24 years. A number of our lease agreements contain options to renew at our discretion for periods of up to 15 years and options to terminate the leases within one year. The lease term used to calculate right-of-use assets and lease liabilities includes renewal and termination options that are deemed reasonably certain to be exercised. Lease agreements with lease and non-lease components are generally accounted for as a single lease component. We do not have any bargain purchase options in our leases. For leases with an initial term of one year or less, we do not record a right-of-use asset or lease liability on our consolidated balance sheet.

From time to time, we enter into agreements to sublease a portion of our facilities to third parties. Such sublease income is not material. We also lease certain hardware consoles to customers and record rental revenue as a component of net sales. Rental revenue under such console leasing arrangements for the years ended December 31, 2025, 2024 and 2023 was not significant.

The following was included in our consolidated balance sheet as of December 31, 2025 and 2024 (in thousands):

	December 31, 2025		December 31, 2024
Assets
Right-of-use operating lease assets	$	87,600	$	65,508
Liabilities
Short-term operating lease liabilities	$	10,876	$	10,331
Long-term operating lease liabilities		76,658		54,783
Total operating lease liabilities	$	87,534	$	65,114

We recognize lease expense for operating leases on a straight-line basis over the term of the lease. Net lease cost for the years ended December 31, 2025, 2024 and 2023 was $17.2 million, $15.4 million, and $14.4 million, respectively. The components of lease costs for the years ended December 31, 2025, 2024 and 2023 were as follows, in thousands:

Lease Cost	Classification	2025		2024		2023
Operating lease cost (a)	Selling, general and administrative expenses	$	17,467	$	15,885	$	14,879
Sublease (income) (b)	Selling, general and administrative expenses		(265)		(462)		(488)
Net lease cost		$	17,202	$	15,423	$	14,391

(a)	Includes expense related to short-term leases and variable payments, which were not significant.
(b)	Does not include rental revenue from leases of hardware consoles to customers, which was not significant.

Supplemental cash flow information for the years ended December 31, 2025, 2024 and 2023 was as follows, in thousands:

	2025		2024		2023
Cash paid for amounts included in the measurement of lease liabilities	$	15,607	$	14,529	$	13,804
Right-of-use assets obtained in exchange for lease obligations	$	32,684	$	9,947	$	8,891

Generally, our lease agreements do not specify an implicit rate. Therefore, we estimate our incremental borrowing rate, which is defined as the interest rate we would pay to borrow on a collateralized basis, considering such factors as length of lease term and the risks of the economic environment in which the leased asset operates. As of December 31, 2025, 2024 and 2023, our lease agreements had the following remaining lease term and discount rates:

	December 31, 2025	December 31, 2024	December 31, 2023
Weighted average remaining lease term	12.2 years	9.6 years	9.6 years
Weighted average discount rate	7.2%	3.5%	3.4%

As of December 31, 2025, maturities of operating lease liabilities were as follows, in thousands:

Year ending December 31,	Amounts due under operating leases
2026	$	15,227
2027		13,834
2028		11,111
2029		9,522
2030		8,436
Thereafter		84,613
Total lease payments		142,743
Less: Imputed interest		(55,209)
Total	$	87,534