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Operating Leases

3 Months Ended

Mar. 31, 2024

6.Operating Leases

The Company has various lease agreements for its offices and service delivery centers and has determined that the risks and benefits related to these leased properties are retained by the lessors. Accordingly, these are accounted for as operating leases. Lease agreements with a term of less than one year are treated as short-term leases and are accounted for separately as shown in the table below.

Most of these lease agreements are renewable at the mutual consent of the parties to the contract. These lease agreements are for terms ranging from three to eleven years and, in most cases, provide for rent escalations ranging from 1.75% to 15%.

The table below summarizes the amounts recognized in the condensed consolidated financial statements related to operating leases for the periods presented (in thousands):


	For the Three Months Ended
	March 31,
	2024		2023
Rent expense for long-term operating leases	$	314	$	309
Rent expense for short-term leases		47		95
Total rent expense	$	361	$	404

The following table presents the maturity profile of the Company’s operating lease liabilities based on the contractual undiscounted payments with a reconciliation of these amounts to the remaining net present value of the operating lease liability reported in the condensed consolidated balance sheet as of March 31, 2024 (in thousands):


Year	Amount
2024	$	966
2025		1,307
2026		1,338
2027		1,336
2028		964
2029 and thereafter		871
Total lease payments		6,782
Less: Interest		(1,509)
Net present value of lease liabilities	$	5,273

Current portion	$	804
Long-term portion		4,469
Total	$	5,273

The weighted average remaining lease terms and discount rates for all of the Company’s operating leases as of March 31, 2024 were as follows:


Weighted-average lease term remaining	60 months
Weighted-average discount rate	9.39	%