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Leases

3 Months Ended

Mar. 31, 2026

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

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

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

________________

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