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LEASES | 9 Months Ended
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Dec. 31, 2024
Leases [Abstract] |
LEASES | LEASES The components of lease expense were as follows (in thousands):
| Three Months Ended December 31, |  | Nine Months Ended December 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Operating lease expense | $ | 2,869 |  |  | $ | 2,948 |  |  | $ | 8,907 |  |  | $ | 8,057 |
Variable lease expense | $ | 960 |  |  | $ | 808 |  |  | $ | 3,008 |  |  | $ | 2,947 |
The supplemental cash flow information related to leases was as follows (in thousands):
| Three Months Ended December 31, |  | Nine Months Ended December 31,
| 2024 |  | 2023 |  | 2024 |  | 2023
Cash outflows from operating leases | $ | 3,639 |  |  | $ | 3,670 |  |  | $ | 11,034 |  |  | $ | 10,949 |
Right-of-use assets obtained in exchange for operating lease obligations | $ | — |  |  | $ | — |  |  | $ | 1,954 |  |  | $ | 2,311 |
Short-term lease expense was immaterial during the nine months ended December 31, 2024 and 2023. The following table presents supplemental lease information:
| December 31, 2024 |  | March 31, 2024
Weighted average remaining lease term | 5.5 years |  | 6.2 years
Weighted average discount rate | 4.5% |  | 4.3%
The following table presents maturity of lease liabilities under the Company's non-cancellable operating leases as of December 31, 2024 (in thousands):
Remainder of fiscal year 2025 | $ | 3,542 |
2026 | 13,567 |
2027 | 12,088 |
2028 | 10,667 |
2029 | 10,471 |
Thereafter | 18,428 |
Total lease payments | 68,763 |
Less: imputed interest | (7,535) |
Present value of lease liabilities | $ | 61,228 |
The Company continues to evaluate its leases for potential impairments, noting no further impairments during the nine months ended December 31, 2024. During the three months ended December 31, 2023, in support of the Company's office-home hybrid workforce model, the Company's board of directors authorized the cessation of use of approximately 42% of leased space at the Company’s headquarters at 675 Creekside Way, Campbell, CA (the “Company’s Headquarters”). The Company ceased use of the space on November 2, 2023, and plans to continue to hold this space available for sublease. Additionally, the Company partially ceased use of office space for a certain international lease and does not plan to hold this available for sublease. During the three months ended December 31, 2023, the Company reviewed the recoverability of the related right-of-use assets and determined the changes in the intended use of these locations represented an impairment indicator, as these events indicated the carrying value of the right-of-use assets may not be recoverable. In connection with partially ceasing use of the Company’s Headquarters and an international office space, the Company recorded impairment charges of $9.9 million and $1.1 million, respectively, as the carrying amount of the right-of-use assets related to the leases exceeded its fair value based on the Company’s estimate of future discounted cash flows under the income approach. The fair value represented a Level 3 measurement and utilized certain unobservable inputs which required significant judgment and estimates, including estimated sublease income, temporary idling periods, discount rates and future cash flows based on the Company’s experience and assessment of existing market conditions. The estimation of sublease income is subject to uncertainty due to various factors, including market conditions, demand for the Company’s leased headquarters, the future financial stability of potential subtenants, market rent, any related free rent periods and uncertainties regarding demand for the commercial real estate market. Temporary idling periods are difficult to predict accurately and may arise due to unforeseen circumstances, such as availability of new tenants, economic downturns, or changes in commercial real estate market conditions. The estimated discount rate of 11% is influenced by various factors, including prevailing interest rates, credit risk, tenor, and sub-lease specific characteristics. The estimated future cash flows were calculated by factoring in the approximated sublease income, temporary idling periods, and discount rates to determine the Level 3 fair value measurement. The Company performed a sensitivity analysis and determined that variations in the aforementioned assumptions do not materially impact the Company’s fair value measurement. During the three and nine months ended December 31, 2023, the non-cash charge of $11.0 million was recorded as an impairment of long-lived assets on the consolidated statements of operations and consisted of an $11.0 million impairment of operating lease right-of-use assets.

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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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