Leases

9 Months Ended

Sep. 30, 2024

Leases

The Company enters into lease agreements that are primarily used for office space. These leases are accounted for as operating leases, with lease expense recognized on a straight-line basis over the term of the lease. The Company occasionally assumes equipment lease agreements through business acquisitions. These leases are accounted for as finance leases.

Included in a portion of the Company's current leases are options to extend or cancel the lease term. The exercise of such options is solely at the Company's discretion. The lease liability recorded in the unaudited Consolidated Balance Sheets includes lease payments related to options to extend or cancel the lease term if the Company determined at the inception date that the lease was expected to be renewed or extended. The Company, in determining the present value of lease payments, utilized the average rate over a 10-year term based upon the Moody's seasoned Aaa corporate bond yields, as explicit rates of interest were not readily determinable in the lease contracts. The Company does not carry debt; thus no incremental borrowing rate was available to the Company.

Lease expense is included in office and technology expenses in the unaudited Consolidated Statements of Operations. Information regarding the Company’s leases follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Operating leases	$	650	$	663	$	2,015	$	2,139
Finance leases:
Amortization of lease assets	64		74		196		182
Lease expense	$	714	$	737	$	2,211	$	2,321
Sub-lease income	(51)		—		(172)		—
Lease cost	$	663	$	737	$	2,039	$	2,321

Components of the lease liability presented on the unaudited Consolidated Balance Sheets are as follows:


(in thousands)	As of September 30, 2024		As of December 31, 2023
Current:
Operating lease liabilities	$	2,265	$	2,201
Finance lease liabilities	224		170
Non-current:
Operating lease liabilities	3,171		3,792
Finance lease liabilities	428		286
Total lease liabilities	$	6,088	$	6,449

The future minimum lease payments for leases that have initial or remaining noncancelable lease terms in excess of one year as of September 30, 2024, are summarized as follows:


Year Ended (in thousands)	Operating Leases		Finance Leases		Total
2024	$	2,430	$	247	$	2,677
2025	1,613		215		1,828
2026	840		156		996
2027	297		80		377
2028	264		—		264
Thereafter	366		—		366
Total undiscounted payments	$	5,810	$	698	$	6,508
Less: present value adjustment	(374)		(46)		(420)
Lease liabilities	$	5,436	$	652	$	6,088

Supplemental lease information is as follows:


	As of September 30, 2024		As of December 31, 2023
Weighted average remaining lease term (years)
Operating leases	3.33		3.07
Finance leases	3.03		2.93
Weighted average discount rate
Operating leases	4.0	%	3.8	%
Finance leases	4.4	%	3.7	%

The Company does not have any material pending operating or financing lease agreements that become effective in future periods.