Leases

12 Months Ended

Dec. 31, 2024

On January 1, 2022, the Group adopted ASC Topic 842 by applying the effective date method under the modified retrospective approach to all lease contracts existing as of January 1, 2022. Under the effective date method, results for reporting periods beginning on or after January 1, 2022 are presented under ASC Topic 842. Additionally, the Group used the package of practical expedients that allows the Group not to reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any existing leases. The Group has elected the hindsight practical expedient to determine the reasonably certain lease term for existing leases.

The Group considers various factors such as market conditions and the terms of any renewal options that may exist to determine whether it will renew or replace the lease. In the event the Group is reasonably certain to exercise the option

to extend a lease, the Group will include the extended terms in the measurement of operating lease right-of-use asset and operating lease liability.

The operating lease right-of-use assets and the amortization were as follows:


	As of December 31,
	2023	2024
	RMB	RMB
Operating lease right-of-use assets	172,643	188,844
Less: accumulated amortization	(47,438)	(56,194)
Total	125,205	132,650

The components of lease costs were as follows:


	Year ended December 31,
	2022	2023	2024
	RMB	RMB	RMB

Operating lease costs	47,163	47,828	51,536
Short-term lease costs	4,234	3,675	3,210
Total	51,397	51,503	54,746

The lease cost was allocated as follows:


	Year ended December 31,
	2022	2023	2024
	RMB	RMB	RMB
Selling, General and administrative expenses	20,359	28,272	31,246
Research and development expenses	31,038	23,231	23,500
Total	51,397	51,503	54,746


	As of December 31,
	2023		2024
Weighted average remaining lease term (years):
Operating leases	6.14		5.59

Weighted average discount rate:
Operating leases	8.65	%	8.06	%

Future minimum lease payments as of December 31, 2024, including rental payments for lease renewal options the Group is reasonably certain to exercise were as follows:


			As of December 31,
			2024
			RMB
2025			44,594
2026			40,165
2027			30,133
2028			26,129
2029			20,357
2030 and thereafter			40,248
Total lease payments			201,626
Less imputed interest			(39,288)

Present value of lease liabilities			162,338
Operating lease liabilities, current			40,918
Operating lease liabilities, non-current			121,420

Supplemental cash flow information related to operating leases was as follows:


	Year ended December 31,
	2022	2023	2024
	RMB	RMB	RMB
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	40,173	31,218	39,012

Right-of-use assets obtained in exchange for lease obligations
Operating leases	51,621	56,098	28,484