Leases

3 Months Ended

Sep. 30, 2024

The Company leases offices, warehouses and other premises, vehicles and certain equipment under non-cancelable operating leases. Operating lease expense recognized and supplemental cash flow information related to operating leases for the three months ended September 30, 2024 and 2023 were as follows (in thousands):


	Three Months Ended September 30,
	2024		2023
Operating lease expense (including expense for lease agreements with related parties of $165 and $139 for the three months ended September 30, 2024 and 2023, respectively)	$	3,226	$	2,184
Cash payments for operating leases (including payments to related parties of $165 and $128 for the three months ended September 30, 2024 and 2023, respectively)	$	2,863	$	2,083
New operating lease assets obtained in exchange for operating lease liabilities	$	17,782	$	9,177

During the three months ended September 30, 2024 and 2023, the Company’s costs related to short-term lease arrangements for real estate and non-real estate assets were immaterial. Non-lease variable payments expensed in the three months ended September 30, 2024 and 2023 were immaterial.

As of September 30, 2024, the weighted average remaining lease term for operating leases was 6.1 years and the weighted average discount rate was 5.2%. As of September 30, 2023, the weighted average remaining lease term for operating leases was 3.5 years and the weighted average discount rate was 4.1%. The short-term portion of the lease liability is included in accrued liabilities and the long-term portion of the lease liability is included in other long-term liabilities on the condensed consolidated balance sheets. Maturities of operating lease liabilities under non-cancelable operating lease arrangements as of September 30, 2024 were as follows (in thousands):


Fiscal Year:	Maturities of operating leases (1)
Remainder of 2025	$	7,233
2026	10,394
2027	9,488
2028	8,241
2029	7,598
2030 and beyond	19,496
Total future lease payments	62,450
Less: Imputed interest	(10,951)
Present value of operating lease liabilities	51,499
Less: Current portion	(10,654)
Long-term portion of operating lease liabilities	$	40,845

(1) The table does not include amounts pertaining to leases that have not yet commenced.

Lease executed but not commenced

In June 2024, the Company entered into a lease agreement for a 21 megawatt data center co-location space located in Vernon, California (the “Data Center Space”) that will expire on August 31, 2035. As this lease has not yet commenced, it is not reflected in the condensed consolidated balance sheets or in the table above. Concurrently, the Company sublicensed this space to an unrelated party (the “Sublicensee”) for the same term expiring on August 31, 2035, which also has not yet commenced. Pursuant to the sublicense, the Company will sublicense the Data Center Space lease to the Sublicensee, and the Sublicensee will assume all rights and obligations with respect to the Data Center Space lease. The Company expects to account for the lease as an operating lease and the sublicense as a sublease under ASC 842. The future undiscounted fixed non-cancelable payment obligation pertaining to the data center lease is approximately $411.8 million and future minimum sublicense receipts are approximately $436.5 million.

The Company holds an equity investment of $42.5 million in the sublicensee, which is classified under investments in privately held companies and recorded in Other assets on the condensed consolidated balance sheets. The sublicensee does not meet the criteria of a related party. Additionally, the sublicensee has been a customer of the Company, and the Company concluded that equity investment agreements and sub-licensing agreement are separate from revenue contracts as all transactions have been recorded at the respective fair values.

Related party leases

The Company has entered into lease agreements with related parties. See Note 9, "Related Party Transactions" for further discussion.