Leases

12 Months Ended

Sep. 30, 2023

The majority of the Company's operating lease payments relate to its corporate headquarters in Seattle, Washington, which includes approximately 515,000 square feet of office space. The lease commenced in April 2019 and expires in 2033 with an option for renewal. The Company also leases additional office and lab space for product development and sales and support personnel in the United States and internationally. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

The components of the Company's operating lease expenses for the years ended September 30, 2023, 2022, and 2021 were as follows (in thousands):


	Fiscal year ended September 30,
	2023		2022		2021
Operating lease expense	$	47,036	$	47,302	$	47,993
Short-term lease expense	2,986		2,465		2,953
Variable lease expense	23,139		23,209		25,200
Total lease expense	$	73,161	$	72,976	$	76,146

Variable lease expense primarily consists of common area maintenance, real estate taxes and parking expenses.

Supplemental balance sheet information related to the Company's operating leases was as follows (in thousands, except lease term and discount rate):


	September 30,
	2023			2022
Operating lease right-of-use assets, net	$	195,471		$	227,475

Operating lease liabilities, current1	41,421			42,523
Operating lease liabilities, long-term	239,565			272,376
Total operating lease liabilities	$	280,986		$	314,899

Weighted average remaining lease term (in years)	8.6			9.2
Weighted average discount rate	2.77		%	2.66		%

(1)Current portion of operating lease liabilities is included in accrued liabilities on the Company's consolidated balance sheets.

As of September 30, 2023, the future operating leases payments for each of the next five years and thereafter is as follows (in thousands):


Fiscal Years Ending September 30:	Operating Lease Payments
2024	$	48,709
2025	41,095
2026	31,559
2027	30,394
2028	28,340
Thereafter	138,797
Total lease payments	318,894
Less: imputed interest	(37,908)
Total lease liabilities	$	280,986

Operating lease liabilities above do not include sublease income. As of September 30, 2023, the Company expects to receive sublease income of approximately $14.7 million, which consists of $7.3 million to be received in fiscal year 2024 and $7.4 million to be received over the two fiscal years thereafter.

During the year ended September 30, 2023, the Company recorded an impairment of $3.5 million against the operating lease right-of-use asset related to its third quarter of fiscal 2023 restructuring plan, see Note 13, Restructuring Charges. There were no impairments against right-of-use assets for the year ended September 30, 2022. During the year ended September 30, 2021, the Company recorded an impairment of $23.5 million against the operating lease right-of-use asset related to the exit of six floors in its corporate headquarters. The Company also recorded an impairment of $6.7 million against the right-of-use asset related to the integration of the former Shape headquarters in Santa Clara, California.

As of September 30, 2023, the Company had no significant operating leases that were executed but not yet commenced.