Leases

12 Months Ended

Dec. 31, 2024

NOTE 10 – LEASES

The Company leases office and research facilities, data centers and office equipment under operating leases with various expiration dates through 2030. Certain leases offer the option to renew for up to ten years and to terminate before the expiration date.

The Company subleases certain real estate to third parties. The sublease portfolio consists of operating leases for previously exited office space. Certain subleases include variable payments for operating costs. The subleases are generally co-terminus with the head lease, or shorter. Subleases do not include any residual value guarantees or restrictions or covenants imposed by the leases. Income from subleases is recognized as a reduction to selling, general and administrative expenses.

The Company began the effort of optimizing its global real estate footprint and decided to vacate and sublease certain offices following the Spin-Off in October 2022. Due to the change in how the office facilities were being used, a significant decrease in the expected market price of the operating lease ROU assets, and expected delays in subleasing the space based on the condition of the commercial real estate market, the Company recorded impairment charges of $1.5 million, $1.7 million and $7.7 million in the years ended December 31, 2024, 2023 and 2022, respectively, to reduce the carrying amount of certain operating lease ROU assets, including the related leasehold improvements.

The components of operating lease costs were as follows (in thousands):


	Year Ended December 31,
	2024			2023			2022
Fixed lease cost (1)	$	16,966		$	20,306		$	20,581
Variable lease cost		4,164			5,130			5,365
Less: sublease income		(8,192	)		(9,896	)		(9,498	)
Total operating lease cost	$	12,938		$	15,540		$	16,448

(1)

Includes short-term leases expensed on a straight-line basis.

The following table presents supplemental cash flow information arising from lease transactions (in thousands):


	Year Ended December 31,
	2024		2023		2022
Cash payments included in the measurement of operating lease liabilities	$	17,669	$	19,968	$	20,307
Operating ROU assets obtained in exchange for lease obligations	$	5,975	$	11,563	$	14,360

The weighted-average remaining term of the Company’s operating leases and the weighted-average discount rate used to measure the present value of the operating lease liabilities are as follows:


	December 31,
	2024			2023
Weighted-average remaining lease term (in years)		2.9			3.4
Weighted-average discount rate		5.5	%		5.3	%

Future minimum lease payments and related lease liabilities as of December 31, 2024 were as follows (in thousands):


	Operating Lease Payments (1)			Sublease Income			Net Operating Lease Payments
2025	$	16,941		$	(6,333	)	$	10,608
2026		11,184			(1,563	)		9,621
2027		5,249			(368	)		4,881
2028		3,019			(379	)		2,640
2029		1,841			(291	)		1,550
Thereafter		277			—			277
Total lease payments		38,511		$	(8,934	)	$	29,577
Less: imputed interest		(3,226	)
Present value of operating lease liabilities:	$	35,285

Less: operating lease liabilities, current portion		(15,353	)
Noncurrent operating lease liabilities	$	19,932

(1)

Future minimum lease payments exclude short-term leases as well as payments to landlords for variable common area maintenance, insurance and real estate taxes.