Note 12. Leases as Lessee

Operating Leases

As of March 31, 2026, the Company had operating leases primarily for its various offices, the manufacturing facilities of ESS Metron and E4A Solutions, and the Kentucky Facility, all of which expire on various dates through July 2035.

As of March 31, 2026 and December 31, 2025, operating lease right-of-use assets were $35.5 million and $26.7 million, respectively, and operating lease liabilities were $35.0 million and $26.0 million, respectively.

Finance Lease

In 2025, the Company entered into a lease for equipment located at the Kentucky Facility. Title to the leased equipment will be transferred to the Company at the conclusion of the lease, which expires on December 31, 2029.

As of March 31, 2026, the finance lease right-of-use asset was $3.4 million and there was no remaining lease liability.

The following table presents the components of the Company’s lease expense. Ground and facilities lease expenses are included in Cost of revenue, office lease expenses are included in Selling, general, and administrative, and finance leases are amortized into Depreciation and amortization on the Condensed Consolidated Statements of Operations:

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The following table presents supplemental lease information:

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The following table presents the Company’s future minimum operating lease payments as of March 31, 2026:

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