Leases

9 Months Ended

Sep. 30, 2025

7. Leases

The Company leases office space in North America, Europe, Asia, South America, the Middle East, Africa and Australia. These spaces are primarily used for office and administrative purposes by the Company’s employees in performing professional services. These leases are classified as operating leases and expire between years 2025 through 2036. The Company’s finance leases are immaterial.

Lease costs are recognized in the Unaudited Consolidated Statements of Operations over the lease term on a straight-line basis. Leasehold improvements are depreciated on a straight-line basis over the lesser of the term of the related lease or the estimated useful life of the asset.

Some of the Company’s leases include options to extend or renew the leases through 2044. The renewal and extension options are not included in the lease term as the Company is not reasonably certain that it will exercise its option.

From time to time, the Company enters into sublease arrangements with unrelated third parties. These subleases are classified as operating leases and expire between years 2025 and 2032. Sublease income is recognized over the lease term on a straight-line basis. Currently, the Company subleases office space in North America and Europe.

The discount rate used for leases accounted for under the FASB’s Accounting Standards Codification 842 (“ASC 842”) is the Company’s collateralized credit adjusted borrowing rate.

The following table presents lease costs and other quantitative information for the three and nine months ended September 30, 2025 and 2024:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Lease Cost:	(dollars in thousands)
Operating lease cost	$	17,133	$	18,589	$	51,208	$	58,237
Variable lease cost	5,465		6,528		16,610		18,354
Sublease rental income	(2,029)		(2,001)		(6,325)		(6,416)
Total lease cost	$	20,569	$	23,116	$	61,493	$	70,175
Additional information:
Cash paid for amounts included in the measurement of lease liabilities for operating leases
Operating cash flows	$	19,208	$	21,588	$	59,375	$	65,407

Right-of-use lease assets obtained in exchange for operating lease liabilities and other non-cash adjustments	$	11,686	$	3,311	$	33,322	$	16,449

As of September 30, 2025, the weighted average remaining lease term was 5.5 years, and the weighted average discount rate was 5.8%.

Operating lease expense is included in Office and general expenses in the Unaudited Consolidated Statements of Operations. The Company’s lease expense for leases with a term of 12 months or less was immaterial.

For the three and nine months ended September 30, 2025, the Company recognized an impairment charge of $0.5 million to reduce the carrying value of two of its right-of-use lease assets within the Communications and The Marketing Cloud segments.

As of September 30, 2025, the Company had entered into one operating lease for which the commencement date had not yet occurred because the premises were being prepared for occupancy by the landlords. Accordingly, this lease represents obligations of the Company that was not reflected within the Unaudited Consolidated Balance Sheets as of September 30, 2025. The aggregate future liability related to this lease was $11.3 million as of September 30, 2025.

The following table presents minimum future rental payments under the Company’s leases as of September 30, 2025 and their reconciliation to the corresponding lease liabilities:


	Maturity Analysis
	(dollars in thousands)
2025	$	14,474
2026	70,773
2027	63,036
2028	54,421
2029	49,038
Thereafter	83,156
Total	334,898
Less: Present value discount	(50,584)
Lease liability	$	284,314