We have operating and finance leases for datacenters, corporate offices, research and development facilities, Microsoft Experience Centers, and certain equipment. Our leases have remaining lease terms of less than 1 year to 20 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year.

The components of lease expense were as follows:


(In millions)	Three Months Ended December 31,					Six Months Ended December 31,


		2025		2024		2025		2024

Operating lease cost	$	1,742	$	1,293	$	3,397	$	2,453


Finance lease cost:
Amortization of right-of-use assets	$	1,277	$	830	$	2,450	$	1,524
Interest on lease liabilities		615		337		1,161		611


Total finance lease cost	$	1,892	$	1,167	$	3,611	$	2,135

Supplemental cash flow information related to leases was as follows:


(In millions)	Three Months Ended December 31,					Six Months Ended December 31,


		2025		2024		2025		2024

Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,506	$	962	$	3,161	$	2,169
Operating cash flows from finance leases		615		319		1,161		594
Financing cash flows from finance leases		701		480		1,340		1,282

Right-of-use assets obtained in exchange for lease obligations:
Operating leases		1,477		3,098		2,894		4,991
Finance leases		6,330		6,435		15,477		10,767

Supplemental balance sheet information related to leases was as follows:


(In millions, except lease term and discount rate)


	December 31, 2025			June 30, 2025

Operating Leases

Operating lease right-of-use assets	$	25,103		$	24,823


Other current liabilities	$	5,520		$	5,424
Operating lease liabilities		17,345			17,437


Total operating lease liabilities	$	22,865		$	22,861


Finance Leases

Property and equipment, at cost	$	73,201		$	53,876
Accumulated depreciation		(12,556	)		(9,861	)


Property and equipment, net	$	60,645		$	44,015


Other current liabilities	$	3,738		$	3,172
Other long-term liabilities		56,413			43,000


Total finance lease liabilities	$	60,151		$	46,172


Weighted Average Remaining Lease Term

Operating leases		6 years			6 years
Finance leases		13 years			13 years

Weighted Average Discount Rate

Operating leases		3.6%			3.5%
Finance leases		4.3%			4.2%

The following table outlines maturities of our lease liabilities as of December 31, 2025:


(In millions)


Year Ending June 30,	Operating Leases			Finance Leases

2026 (excluding the six months ended December 31, 2025)	$	3,248		$	3,059
2027		5,811			6,404
2028		4,078			6,467
2029		2,891			5,829
2030		2,361			5,718
Thereafter		7,192			53,590


Total lease payments		25,581			81,067
Less imputed interest		(2,716	)		(20,916	)


Total	$	22,865		$	60,151

As of December 31, 2025, we had additional leases, primarily for datacenters, that had not yet commenced of $155.1 billion. These leases will commence between fiscal year 2026 and fiscal year 2031 with lease terms of 1 year to 20 years.