Operating Leases

6 Months Ended

Mar. 31, 2023

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expenses that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right to use (ROU) assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the three and six months ended March 31, 2023 and 2022, operating lease expense and cash payments on lease liabilities were as follows:


	Three Months Ended March 31,				Six Months Ended March 31,
in thousands	2023		2022		2023		2022
Operating lease expense	$	956	$	979	$	1,957	$	1,978
Cash payments on lease liabilities	$	1,103	$	1,090	$	2,244	$	2,176

At March 31, 2023 and 2022, the weighted-average remaining lease term and discount rate were as follows:


	As of March 31,
	2023	2022
Weighted-average remaining lease term	7.3 years	4.6 years
Weighted-average discount rate	5.79%	4.42%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of March 31, 2023:


Fiscal Years Ending September 30,
in thousands
2023(a)	$	2,005
2024	3,598
2025	3,233
2026	2,599
2027	1,683
Thereafter	8,220
Total lease payments(b)	21,338
Less: imputed interest	4,664
Total operating lease liabilities	$	16,674

(a) Remaining lease payments are for the period beginning April 1, 2023 through September 30, 2023.

(b) Lease payments excludes $3.7 million legally binding minimum lease payments for an office lease signed but not yet commenced. The related ROU asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of March 31, 2023.