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Note 13 - Leases | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Lessee, Operating Leases [Text Block] | 13. Leases We lease datacenters, corporate offices, warehouses and fiber-optic cables under operating leases. The Company does not have any leases classified as finance leases. Our leases have remaining lease terms of 1 year to 20 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to terminate the leases within 1 year. The components of lease expense were as follows (Dollar amounts in thousands of U.S. dollars):
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Operating lease expense (leases with a total term greater than 12 months) |  | $ | 2,793 |  |  | $ | 1,800 |  |  | $ | 7,545 |  |  | $ | 5,158 |
Short-term lease expense (leases with a total term of 12 months or less) |  |  | 15 |  |  |  | 9 |  |  |  | 28 |  |  |  | 25 |
Variable lease expense |  |  | 162 |  |  |  | 560 |  |  |  | 537 |  |  |  | 1,734 |
Total lease expense |  | $ | 2,970 |  |  | $ | 2,369 |  |  | $ | 8,110 |  |  | $ | 6,917 |
Lease expense is presented in general and administrative expenses and network expenses within our Condensed Consolidated Statements of Operations and Comprehensive Loss. Variable lease payments are determined based on specific terms and conditions outlined in the lease agreements. These may include payments for utilities, which are based on actual usage, and maintenance costs, which are determined based on expenses incurred. Information related to leases was as follows (Dollar amounts in thousands of U.S. dollars):
|  | For the Three Months Ended September 30, |  |  | For the Nine Months Ended September 30, |
Supplemental cash flow information: |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Operating lease - operating cash flows (fixed payments) |  | $ | 2,610 |  |  | $ | 1,927 |  |  | $ | 6,706 |  |  | $ | 5,565 |
Operating lease - operating cash flows (liability reduction) |  | $ | 1,556 |  |  | $ | 1,506 |  |  | $ | 4,428 |  |  | $ | 4,406 |
New right of use assets - operating leases |  | $ | 15,263 |  |  | $ | 6,290 |  |  | $ | 28,209 |  |  | $ | 10,397 |
Supplemental balance sheet information related to leases: |  | September 30, 2025 |  |  | December 31, 2024 |
Incremental borrowing rate |  |  | 8.69 | % |  |  | 8.09 | %
Weighted average remaining lease term |  | 15.11 yrs |  |  | 14.60 yrs |
Maturity of lease liability as of September 30, 2025 (Dollar amounts in thousands of U.S. dollars):
|  | September 30, 2025 |
Remaining of 2025 |  | $ | 2,488 |
2026 |  |  | 9,549 |
2027 |  |  | 8,494 |
2028 |  |  | 7,810 |
2029 |  |  | 8,171 |
Thereafter |  |  | 64,769 |
Total future lease payments |  |  | 101,281 |
Less imputed interest |  |  | 47,124 |
Total |  | $ | 54,157 |
Operating lease payments include payments under the non-cancellable term, without any additional amounts related to options to extend lease terms that are reasonably certain of being exercised. We have agreements with several third-party network partners who construct and operate fiber networks used to deliver our internet services. Under these arrangements, the partners build and activate new serviceable addresses each month. The financial terms of these arrangements may include fixed fees, variable fees, or a combination of both. The partners control and manage the construction. We do not control the construction process and are therefore not considered the owner during buildout. The leases for these addresses will commence once the lessor makes the underlying assets available for our use, to deliver services to our customers. During the second quarter of 2025, the Company identified an immaterial error in the application of lease accounting for a long-term fiber network access agreement. Upon reassessment, the Company determined that only the initial three-year exclusive-use period under the agreement met the definition of a lease under ASC 842. The remaining term represents a service arrangement and should not have been included in the ROU asset or operating lease liability calculation. As a result, the Company recorded a cumulative adjustment in Q2 2025 to reduce previously recognized ROU assets and operating lease liabilities, and to recognize a catch-up lease expense totaling $3.0 million with a corresponding reduction in the ROU asset. The adjustment was recorded in the current period as the error was not material to previously issued financial statements. The Company has elected to use the single exchange rate approach when accounting for lease modifications. Under the single exchange rate approach, the entire right of use asset is revalued at the date of modification in the Company’s functional currency provided the re-measurement is not considered a separate contract or if the re-measurement is related to change the lease term or assessment of a lessee option to purchase the underlying asset being exercised. Impairment of ROU asset During the quarter ended September 30, 2025, the Company recognized an impairment loss of $0.7 million related to two warehouse related ROU assets that were written down to their fair value. Management concluded that these assets met the definition of ‘assets disposed of by abandonment’ under ASC 360-10. In accordance with ASC 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The impairment loss is recorded within “Impairment of property and equipment” in the Condensed Consolidated Statement of Operation and Comprehensive Loss and the related lease liabilities remain on the balance sheet and continue to be measured using the effective interest method.

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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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