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Leases | 3 Months Ended
--- | ---
Mar. 31, 2026
Leases [Abstract] |
Leases | Leases Finance Leases The Company generally enters into finance lease arrangements to obtain hard drives and other infrastructure equipment for its data center operations. The terms of these agreements generally range from three to five years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price. Finance leases are generally secured by the underlying leased equipment. The Company’s finance leases have original lease periods expiring between 2026 and 2031. Financing lease right-of-use assets are included in property and equipment, net in the Company’s condensed consolidated balance sheets. Operating Leases The Company leases data center spaces and office space under non-cancelable operating leases with various expiration dates. Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise. These options are not reasonably certain to be exercised and therefore are not factored in the determination of lease payments. Contingent rental payments are generally not included in the Company’s lease agreements. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's leases have original lease periods expiring between 2026 and 2033. Summary of Lease Information The weighted average remaining lease terms and discount rates as of March 31, 2026 and December 31, 2025 were as follows:
| March 31, 2026 |  | December 31, 2025
| Operating leases |  | Finance Leases(1) |  | Operating leases |  | Finance Leases(1)
Remaining lease term | 5.3 years |  | 2.7 years |  | 5.4 years |  | 2.5 years
Discount rate | 6.9 | % |  | 12.9 | % |  | 6.9 | % |  | 12.6 | %
________________ (1) Includes lease financing obligation costs. The following table presents the components of lease expense (in thousands):
| Three Months Ended March 31, |  |
| 2026 |  | 2025 |  |  |  |
Finance lease costs |  |  |  |  |  |  |
Depreciation expense(1) | $ | 2,336 |  |  | $ | 2,840 |  |  |  |  |
Interest expense | $ | 1,099 |  |  | $ | 755 |  |  |  |  |
Lease financing obligation costs |  |  |  |  |  |  |
Depreciation expense(1) | $ | 213 |  |  | $ | 609 |  |  |  |  |
Interest expense | $ | 13 |  |  | $ | 98 |  |  |  |  |
Operating lease costs |  |  |  |  |  |  |
Rental expense related to lease components | $ | 1,645 |  |  | $ | 1,186 |  |  |  |  |
Rental expense related to non-lease components(2) | 1,232 |  |  | 1,100 |  |  |  |  |
Variable lease costs | 908 |  |  | 1,092 |  |  |  |  |
Total operating lease costs | $ | 3,785 |  |  | $ | 3,378 |  |  |  |  |
Total included in cost of revenue | $ | 3,744 |  |  | $ | 3,186 |  |  |  |  |
Total included in general and administrative expense | $ | 41 |  |  | $ | 192 |  |  |  |  |
________________ (1) Substantially all of the depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its condensed consolidated statements of operations and comprehensive loss. (2) Non-lease components represent non-tangible utilities and services associated with the Company’s co-location lease agreements and are not recorded on the Company’s condensed consolidated balance sheets. The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these lease agreements, such as the price of utilities as compared to its tangible data center footprint within each facility. The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):
| Three Months Ended March 31,
| 2026 |  | 2025
Operating cash flows |  |  |
Cash paid for interest on finance lease and lease financing obligations | $ | 1,111 |  |  | $ | 829 |
Cash paid for operating lease liabilities | $ | 2,227 |  |  | $ | 1,241 |
Non-cash items |  |  |
Equipment acquired through finance leases | $ | 6,907 |  |  | $ | 7,513 |
The future minimum commitments for finance leases and lease financing obligations as of March 31, 2026 were as follows (in thousands):
Year Ending December 31, | Finance leases |  | Lease financing obligations |  | Total
Remainder of 2026 | $ | 14,443 |  |  | $ | 339 |  |  | $ | 14,782 |
2027 | 15,631 |  |  | — |  |  | 15,631 |
2028 | 7,808 |  |  | — |  |  | 7,808 |
2029 | 6,854 |  |  | — |  |  | 6,854 |
2030 | 1,653 |  |  | — |  |  | 1,653 |
Thereafter | 123 |  |  | — |  |  | 123 |
Total future minimum lease and financing commitments | 46,512 |  |  | 339 |  |  | 46,851 |
Less imputed interest | (8,032) |  |  | (11) |  |  | (8,043) |
Total finance lease and lease financing obligation liabilities | $ | 38,480 |  |  | $ | 328 |  |  | $ | 38,808 |
As of March 31, 2026, the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):
Year Ending December 31, | Operating leases |  | Non-lease components |  | Total
Remainder of 2026 | $ | 4,535 |  |  | $ | 3,226 |  |  | $ | 7,761 |
2027 | 5,586 |  |  | 3,063 |  |  | 8,649 |
2028 | 5,246 |  |  | 3,069 |  |  | 8,315 |
2029 | 4,149 |  |  | 2,552 |  |  | 6,701 |
2030 | 3,163 |  |  | 1,351 |  |  | 4,514 |
Thereafter | 5,525 |  |  | 108 |  |  | 5,633 |
Total future minimum operating lease commitments | 28,204 |  |  | $ | 13,369 |  |  | $ | 41,573 |
Less imputed interest | (4,658) |  |  |  |  |
Total liability | $ | 23,546 |  |  |  |  |
In June 2025, we amended an existing lease for a data center facility to (i) extend the non-cancellable term of the original lease and (ii) expand into additional infrastructure designed to support multiple-storage offerings. The extension of the original lease commenced in June 2025. The expansion is expected to commence in the second quarter of 2026 and includes a non-cancellable lease term of approximately seven years. The undiscounted future lease payments associated with this expansion are approximately $17.5 million.
Lessee, Operating Leases | Leases Finance Leases The Company generally enters into finance lease arrangements to obtain hard drives and other infrastructure equipment for its data center operations. The terms of these agreements generally range from three to five years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price. Finance leases are generally secured by the underlying leased equipment. The Company’s finance leases have original lease periods expiring between 2026 and 2031. Financing lease right-of-use assets are included in property and equipment, net in the Company’s condensed consolidated balance sheets. Operating Leases The Company leases data center spaces and office space under non-cancelable operating leases with various expiration dates. Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise. These options are not reasonably certain to be exercised and therefore are not factored in the determination of lease payments. Contingent rental payments are generally not included in the Company’s lease agreements. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's leases have original lease periods expiring between 2026 and 2033. Summary of Lease Information The weighted average remaining lease terms and discount rates as of March 31, 2026 and December 31, 2025 were as follows:
| March 31, 2026 |  | December 31, 2025
| Operating leases |  | Finance Leases(1) |  | Operating leases |  | Finance Leases(1)
Remaining lease term | 5.3 years |  | 2.7 years |  | 5.4 years |  | 2.5 years
Discount rate | 6.9 | % |  | 12.9 | % |  | 6.9 | % |  | 12.6 | %
________________ (1) Includes lease financing obligation costs. The following table presents the components of lease expense (in thousands):
| Three Months Ended March 31, |  |
| 2026 |  | 2025 |  |  |  |
Finance lease costs |  |  |  |  |  |  |
Depreciation expense(1) | $ | 2,336 |  |  | $ | 2,840 |  |  |  |  |
Interest expense | $ | 1,099 |  |  | $ | 755 |  |  |  |  |
Lease financing obligation costs |  |  |  |  |  |  |
Depreciation expense(1) | $ | 213 |  |  | $ | 609 |  |  |  |  |
Interest expense | $ | 13 |  |  | $ | 98 |  |  |  |  |
Operating lease costs |  |  |  |  |  |  |
Rental expense related to lease components | $ | 1,645 |  |  | $ | 1,186 |  |  |  |  |
Rental expense related to non-lease components(2) | 1,232 |  |  | 1,100 |  |  |  |  |
Variable lease costs | 908 |  |  | 1,092 |  |  |  |  |
Total operating lease costs | $ | 3,785 |  |  | $ | 3,378 |  |  |  |  |
Total included in cost of revenue | $ | 3,744 |  |  | $ | 3,186 |  |  |  |  |
Total included in general and administrative expense | $ | 41 |  |  | $ | 192 |  |  |  |  |
________________ (1) Substantially all of the depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its condensed consolidated statements of operations and comprehensive loss. (2) Non-lease components represent non-tangible utilities and services associated with the Company’s co-location lease agreements and are not recorded on the Company’s condensed consolidated balance sheets. The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these lease agreements, such as the price of utilities as compared to its tangible data center footprint within each facility. The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):
| Three Months Ended March 31,
| 2026 |  | 2025
Operating cash flows |  |  |
Cash paid for interest on finance lease and lease financing obligations | $ | 1,111 |  |  | $ | 829 |
Cash paid for operating lease liabilities | $ | 2,227 |  |  | $ | 1,241 |
Non-cash items |  |  |
Equipment acquired through finance leases | $ | 6,907 |  |  | $ | 7,513 |
The future minimum commitments for finance leases and lease financing obligations as of March 31, 2026 were as follows (in thousands):
Year Ending December 31, | Finance leases |  | Lease financing obligations |  | Total
Remainder of 2026 | $ | 14,443 |  |  | $ | 339 |  |  | $ | 14,782 |
2027 | 15,631 |  |  | — |  |  | 15,631 |
2028 | 7,808 |  |  | — |  |  | 7,808 |
2029 | 6,854 |  |  | — |  |  | 6,854 |
2030 | 1,653 |  |  | — |  |  | 1,653 |
Thereafter | 123 |  |  | — |  |  | 123 |
Total future minimum lease and financing commitments | 46,512 |  |  | 339 |  |  | 46,851 |
Less imputed interest | (8,032) |  |  | (11) |  |  | (8,043) |
Total finance lease and lease financing obligation liabilities | $ | 38,480 |  |  | $ | 328 |  |  | $ | 38,808 |
As of March 31, 2026, the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):
Year Ending December 31, | Operating leases |  | Non-lease components |  | Total
Remainder of 2026 | $ | 4,535 |  |  | $ | 3,226 |  |  | $ | 7,761 |
2027 | 5,586 |  |  | 3,063 |  |  | 8,649 |
2028 | 5,246 |  |  | 3,069 |  |  | 8,315 |
2029 | 4,149 |  |  | 2,552 |  |  | 6,701 |
2030 | 3,163 |  |  | 1,351 |  |  | 4,514 |
Thereafter | 5,525 |  |  | 108 |  |  | 5,633 |
Total future minimum operating lease commitments | 28,204 |  |  | $ | 13,369 |  |  | $ | 41,573 |
Less imputed interest | (4,658) |  |  |  |  |
Total liability | $ | 23,546 |  |  |  |  |
In June 2025, we amended an existing lease for a data center facility to (i) extend the non-cancellable term of the original lease and (ii) expand into additional infrastructure designed to support multiple-storage offerings. The extension of the original lease commenced in June 2025. The expansion is expected to commence in the second quarter of 2026 and includes a non-cancellable lease term of approximately seven years. The undiscounted future lease payments associated with this expansion are approximately $17.5 million.

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- Definition The entire disclosure for finance leases of lessee. Includes, but is not limited to, description of lessee's finance lease and maturity analysis of finance lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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- Definition The entire disclosure for operating leases of lessee. Includes, but is not limited to, description of operating lease and maturity analysis of operating lease liability. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 842 -SubTopic 20 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/842-20/tableOfContent + Details
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