Leases

12 Months Ended

Dec. 31, 2024

The Company has entered into various operating lease agreements for its offices and co-location sites and related equipment. The Company has also entered into sublease agreements with tenants of various offices previously vacated by the Company. These operating leases have lease periods expiring between 2025 and 2034. The Company’s operating lease costs for the years ended December 31, 2024, 2023 and 2022 were as follows (in thousands):


	Real Estate Arrangements		Co-location Arrangements		Total
2024
Operating lease cost	$	67,757	$	225,145	$	292,902
Short-term lease cost	660		25,288		25,948
Variable lease cost	26,122		67,728		93,850
Sublease income	(31,722)		—		(31,722)
Total operating lease costs	$	62,817	$	318,161	$	380,978

2023
Operating lease cost	$	74,054	$	179,552	$	253,606
Short-term lease cost	133		23,565		23,698
Variable lease cost	25,860		62,084		87,944
Sublease income	(32,024)		—		(32,024)
Total operating lease costs	$	68,023	$	265,201	$	333,224

2022
Operating lease cost	$	82,761	$	152,215	$	234,976
Short-term lease cost	52		21,741		21,793
Variable lease cost	25,167		35,025		60,192
Sublease income	(25,743)		—		(25,743)
Total operating lease costs	$	82,237	$	208,981	$	291,218

Lease costs for real estate arrangements are included in general and administrative expenses in the consolidated statements of income. Lease costs for co-location arrangements are primarily included in cost of revenue.

Weighted average remaining lease terms and discount rates related to the Company's operating leases as of December 31, 2024 and 2023 were as follows:


	December 31, 2024				December 31, 2023
	Real Estate Arrangements		Co-location Arrangements		Real Estate Arrangements		Co-location Arrangements
Weighted average remaining lease term (in years)	9.1		4.6		9.9		4.6
Weighted average discount rate	3.5	%	4.3	%	3.5	%	4.2	%

Maturities of operating lease liabilities as of December 31, 2024 were as follows (in thousands):


	Real Estate Arrangements		Co-location Arrangements
2025	$	67,939	$	195,152
2026	67,334		134,556
2027	61,036		113,227
2028	56,355		80,465
2029	54,556		66,100
Thereafter	261,818		73,094
Total lease payments	569,038		662,594
Less: imputed interest	81,745		61,093
Total lease liabilities	$	487,293	$	601,501

The table above excludes $182.5 million of future sublease income that is expected to be recognized through 2034. As of December 31, 2024, the Company had additional operating leases for co-location sites that had not yet commenced of $197.0 million, of which a majority will commence in 2025, with lease terms of one year to ten years. Additionally, during the fourth quarter of 2024, the Company entered into an operating lease with a data center operator for space in the Virginia area that is expected to commence beginning in the third quarter of 2025. The lease is for a datacenter with gross payments of approximately $750.0 million over a 12 year lease term. The Company has contemporaneously entered into a sublease with the affiliate of a large social media customer for the use of the space on substantially similar terms. The operating lease costs and associated sublease income will be recorded as general and administrative expense in the consolidated statements of income and are expected to substantially offset each other.

As of December 31, 2024, the Company had outstanding letters of credit in the amount of $4.0 million, primarily related to operating leases. The letters of credit remain in effect until the Company fulfills its obligations under these leases or as such obligations expire under the terms of the letters of credit.