Leases

12 Months Ended

Dec. 31, 2023

The Company enters into operating leases primarily for real estate to support research and development ("R&D") sites and general office space in North America, with additional locations in Europe, China, and Canada. The Company does not currently have any finance leases. Certain of our leases include options to extend the lease at our discretion at the end of the lease term, or terminate the lease early subject to certain conditions and penalties. We do not include any renewal options in our lease terms for calculating our lease liabilities, as the renewal options allow us to maintain operational flexibility and we are not reasonably certain we will exercise these options.

At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the specific facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in lease contracts is typically not readily determinable, and, as such, the Company utilizes its incremental borrowing rate as the discount rate based on information available on the lease commencement date. Our incremental borrowing rate represents the rate we would incur to borrow on a collateralized basis over a similar term for an amount equal to the lease payments in a similar economic environment. The table below includes the balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2023 and 2022 (in thousands):


	Balance Sheet Classification	December 31, 2023		December 31, 2022
Assets

Operating lease right-of-use assets, net	Other non-current assets, net	$	15,746	$	18,034
Total Lease Assets		15,746		18,034

Liabilities
Operating lease liabilities - Current	Other accrued expenses	2,879		3,167
Operating lease liabilities - Noncurrent	Other long-term liabilities	17,385		19,923
Total Lease Liabilities		$	20,264	$	23,090

The components of lease costs which were included within operating expenses in our consolidated statement of income were as follows (in thousands):


	For the Year Ended December 31,
	2023		2022		2021
Operating lease cost	$	3,821	$	6,243	$	5,188
Short-term lease cost	388		343		442
Variable lease cost	1,316		1,522		1,625

For the years ended December 31, 2023 and 2022, sublease income was insignificant. Cash paid for amounts included in the measurement of operating lease liabilities for the year ended December 31, 2023 and 2022 was $4.4 million and $5.2 million, respectively, and was included in net cash provided by operating activities in our consolidated statement of cash flows. As of December 31, 2023, the weighted average remaining operating lease term was 6.1 years and the weighted average discount rate used to determine the operating lease liabilities was 6.2%. As of December 31, 2023, we have entered into one lease that has not yet commenced, with commencement expected in first quarter 2024.

The maturities of our operating lease liabilities as of December 31, 2023, excluding short-term leases with terms less than 12 months, were as follows (in thousands):


Maturity of Operating Lease Liabilities
2024	$	4,027
2025	4,189
2026	4,005
2027	3,868
2028	3,290
Thereafter	4,938
Total lease payments	24,317
Less: Imputed interest	(4,053)
Present value of lease liabilities	$	20,264