Leases

12 Months Ended

Dec. 31, 2024

9.Leases

We determine whether a contract is or contains a lease at inception. At the lease commencement date, we record a liability for the lease obligation and a corresponding asset representing the right to use the underlying asset over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and are recognized in expense using a straight-line basis for all asset classes. Variable lease payments are expensed as incurred, which primarily include maintenance costs, services provided by the lessor, and other charges reimbursed to the lessor.

We lease office space and data center facilities with remaining lease terms ranging from one year to 10 years, some of which contain renewal options. The exercise of these options is at our sole discretion.

Certain of our leases contain lease and non-lease components. For leases held on or after January 1, 2022, we have elected the practical expedient under ASC 842-10-15-37 for all asset classes which allows companies to account for lease and non-lease components as a single lease component.

Our leases do not contain an implicit rate of return; therefore, an incremental borrowing rate was determined. We assessed which rate would be most reflective of a reasonable rate we would be able to borrow based on credit rating and lease term.

Finance lease right-of-use assets of zero and $16.0 million as of December 31, 2024 and 2023, respectively, are included in property and equipment, net on the consolidated balance sheet. Due to the relocation of one of our offices (see Note 7), we reduced the useful life of the related finance lease right-of-use asset, which represented $14.9 million of incremental depreciation (excluding accelerated depreciation on leasehold improvements) for the year ended December 31, 2024. We also reduced the useful life of the related operating lease right-of-use asset, which represented $1.2 million of additional operating lease cost for the year ended December 31, 2024.

The following table presents components of lease expense for the years ended December 31, 2024, 2023, and 2022, respectively (in thousands):


	Years ended December 31,
	2024		2023		2022
Finance lease cost
Amortization of right-of-use assets	$	15,993	$	1,586	$	1,586
Interest on lease liabilities		751		797		843
Operating lease cost		5,004		3,780		3,554
Variable lease cost		412		360		1,020
Short-term lease		634		781		1,795
Total lease cost	$	22,794	$	7,304	$	8,798

Maturities of lease liabilities as of December 31, 2024 are as follows (in thousands):


	Operating Leases		Finance Leases
2025	$	6,342	$	1,604
2026		5,486		1,641
2027		3,191		1,678
2028		2,868		1,714
2029		1,404		1,752
Thereafter		1,360		7,557
Total future minimum lease payments		20,651		15,946
Less: Interest		1,927		3,752
Total	$	18,724	$	12,194

Supplemental cash flow information related to leases for the years ended December 31, 2024, 2023, and 2022 are as follows (in thousands):


	Years ended December 31,
	2024		2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	5,423	$	5,400	$	4,671
Financing cash flows for financing leases		1,572		1,547		1,547
Right-of-use assets obtained in exchange for new lease liabilities:
Operating leases	$	4,642	$	2,284	$	875

Supplemental balance sheet information related to leases as of December 31, 2024 and 2023 are as follows:


	Year ending December 31,
	2024	2023
Weighted average remaining lease term (years):
Operating leases	4.1	4.9
Financing leases	9.1	10.1
Weighted average discount rate:
Operating leases	4.7	4.4
Financing leases	5.9	5.9