Leases

3 Months Ended

Mar. 31, 2024

4. Leases

As of March 31, 2024, our lease portfolio consists entirely of operating leases for corporate offices. Our operating leases have remaining lease terms with various expiration dates through 2031, and some leases include options to extend the term for up to an additional 10 years.

Lease Costs

Expense for operating leases is recognized on a straight-line basis over the lease term as an operating expense. We have lease agreements which require payments for lease and non-lease components (i.e., common area maintenance) that are accounted for as a single lease component. Variable lease payment amounts that cannot be determined at the commencement of the lease such as maintenance costs, utilities, and service charges, are not included in right-of-use (“ROU”) assets or lease liabilities but rather are expensed as incurred and recorded as variable lease expense. We often receive customary incentives from our landlords such as tenant improvement allowances (“TIAs”) and rent abatement periods, which effectively reduce total lease payments owed for the leases.

The following table sets forth the components of lease expense for the three months ended March 31, 2024 and 2023 (in thousands, exclusive of sublease income):


	Three Months Ended March 31,
	2024		2023
Operating lease cost	$	2,411	$	2,146
Short-term lease cost	332		365
Variable lease cost	1,313		1,026
Total	$	4,056	$	3,537

Sublease income totaled $0.3 million for each of the three months ended March 31, 2024 and 2023.

Supplemental Lease Information

Supplemental balance sheet information related to operating leases as of March 31, 2024 and December 31, 2023 is presented in the following table (in thousands, except for lease term and discount rate):


	As of
	March 31, 2024			December 31, 2023
Right-of-use assets for operating leases	$	39,074		$	39,975

Operating lease liabilities, current	$	12,219		$	11,698
Operating lease liabilities, net of current portion	57,357			59,067
Total operating lease liabilities	$	69,576		$	70,765

Weighted average remaining lease term (in years)	7.2			7.4

Weighted average discount rate	9.4		%	9.4		%

Supplemental cash flow and expense information related to operating leases for the three months ended March 31, 2024 and 2023 is shown below (in thousands):


	Three Months Ended March 31,
	2024		2023
Operating cash outflows for operating leases	$	2,643	$	1,132

Amortization of operating lease right-of-use assets	783		652
Interest expense on operating lease liabilities	1,629		1,495

There were no TIA reimbursements for the three months ended March 31, 2024, while TIA reimbursements totaled $0.6 million for the three months ended March 31, 2023.

A summary of our future minimum lease commitments under non-cancellable leases as of March 31, 2024 is shown below (in thousands):


	Operating Leases
2024 (excluding the three months ended March 31, 2024)	$	9,521
2025	12,963
2026	13,283
2027	13,535
2028	12,450

Thereafter	34,840
Total lease payments	96,592
Less: imputed interest	(27,016)
Total	$	69,576