Leases

9 Months Ended

Sep. 30, 2024

6. Leases

The Company applies the guidance under Topic 842 for leases of real estate facilities under non-cancelable operating leases.

During the second quarter of 2024, new leasing activities resulted in additional operating lease right-of-use assets of $9.8 million. These activities primarily consisted of extensions to lease terms for real estate facilities through fiscal year 2029. The longest remaining lease term, relating to the Company’s San Francisco headquarters, also has a five-year renewal option not included in the lease term as it was not reasonably certain of being exercised at the time of renewal.

As part of these activities, the Company is entitled to receive $2.1 million in tenant incentives for future leasehold improvements to be constructed by the Company, which was still outstanding as of September 30, 2024. The amount of cash restricted in connection with certain new and renewed lease agreements was also reduced by $2.5 million.

The components of lease costs, supplemental cash flow information, lease term, and discount rate for operating leases are as follows (in thousands, except for percentages and years):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease costs	$	1,123	$	1,519	$	3,928	$	4,753
Variable lease costs	$	187	$	271	$	740	$	816
Cash paid for amounts included in the measurement of operating lease liabilities					$	5,024	$	5,481


	September 30,		December 31,
	2024		2023
Weighted average remaining term (years)	3.5		1.3
Weighted average discount rate	5.7	%	3.9	%

Future minimum lease payments (net of expected tenant incentives) under noncancellable operating leases with initial lease terms in excess of one year as of September 30, 2024, were as follows (in thousands):


Remainder of 2024	$	1,027
2025	3,014
2026	4,072
2027	2,231
2028	2,298
2029	1,166
Gross lease payments	13,808
Less imputed interest	(1,695)
Present value of operating lease liabilities	$	12,113