7. Leases

Informa TechTarget determines if any arrangement is, or contains, a lease at its inception based on whether or not Informa TechTarget has the right to control the asset during the contract period. Informa TechTarget is a lessee in any lease contract when Informa TechTarget obtains the right to control the asset. Informa TechTarget’s leases are comprised of property related leases. As of the Acquisition Date, Informa TechTarget assumed $12.3 million in operating lease right-of-use assets and a related operating lease liabilities of $15.3 million.

Informa TechTarget determines the lease term by assuming the exercise of renewal options that are reasonably certain to be exercised. The Company has leases with renewal options within its portfolio and includes the renewal periods in the lease term if it is reasonably certain to be exercised. Leases with a lease term of 12 months or less at inception are not reflected in Informa TechTarget’s consolidated balance sheets and those lease costs are expensed on a straight-line basis over the respective term. For leases with a term greater than 12 months, operating lease right-of-use (ROU) assets are presented within non-current assets, the current portion of operating lease liabilities are presented within current liabilities and the non-current portion of operating lease liabilities are presented within non-current liabilities on the consolidated balance sheets.

ROU assets represent Informa TechTarget’s right to use an underlying asset during the lease term and the lease liabilities represent Informa TechTarget’s obligation to make the lease payments arising during the lease. ROU assets and lease liabilities are recognized at commencement date based on the net present value of fixed lease payments over the lease term. As the implicit interest rate in the leases is generally not known, Informa TechTarget uses an incremental borrowing rate as the discount rate for purposes of determining the present value of lease liabilities. Where a discount rate is not implicit in the lease, Informa TechTarget calculates an incremental borrowing rate reflecting the risk profile of the underlying asset and the term of the lease length. The determination of the incremental borrowing rate takes into consideration the expected term of the lease, the effect of the currency in which the lease is denominated, and the rate of interest Informa TechTarget expects to incur on a collateralized debt instrument.

Operating lease expense is recognized on a straight-line basis over the lease term. During the years ended December 31, 2024, 2023 and 2022, operating lease costs were $2.2 million, $2.7 million and $1.6 million, respectively. Expenses associated with short-term leases were $4.0 million, $4.1 million and $1.2 million for the years ended December 31, 2024, 2023 and 2022, respectively. There were no material expenses associated with variable leases for the years ended December 31, 2024, 2023 and 2022.

Operating lease right-of-use assets impairment review

Informa TechTarget recognized $2.0 million and $0.6 million of impairment to operating lease right-of-use assets, including related leasehold improvement and equipment assets, in the years ended December 31, 2024 and 2023, respectively, due to Informa TechTarget vacating certain leased properties. Lease right-of-use asset impairments are recorded in impairment of long-lived assets in the consolidated statements of income (loss) and comprehensive income (loss).