Leases

9 Months Ended

Sep. 30, 2023

Note 5 — Leases

All of the Company’s leases are operating leases, the majority of which are for office space. Operating lease right-of-use (“ROU”) assets and non-current operating lease liabilities are included as individual line items in the Consolidated Balance Sheets, while short-term operating lease liabilities are recorded within accrued expenses and other current liabilities. Leases with an initial term of twelve months or less are not recorded in the Consolidated Balance Sheets and are not material.

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


	For the Three Months Ended September 30,
	2023			2022
Operating lease cost	$	3,068		$	3,546
Short-term lease cost		228			214
Variable lease cost		1,257			1,000
Sublease income		(130	)		(192	)
Total lease cost	$	4,423		$	4,568


	For the Nine Months Ended September 30,
	2023			2022
Operating lease cost	$	9,622		$	10,798
Short-term lease cost		747			526
Variable lease cost		3,113			4,013
Sublease income		(391	)		(575	)
Total lease cost	$	13,091		$	14,762

Additional lease information is summarized in the following table (in thousands, except lease term and discount rate):


	For the Nine Months Ended September 30,
	2023			2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	10,442		$	9,556
Operating lease ROU assets obtained in exchange for lease obligations	$	1,110		$	172
Weighted-average remaining lease term - operating leases (years)		4.5			5.3
Weighted-average discount rate - operating leases		4.3	%		4.3	%

Future minimum lease payments under non-cancelable leases and estimated future sublease cash receipts from non-cancelable arrangements as of September 30, 2023 are as follows (in thousands):


	Operating Lease			Sublease
	Payments			Cash Receipts
2023 (remainder)	$	4,009		$	153
2024		15,900			625
2025		13,816			—
2026		12,320			—
2027		5,659			—
Thereafter		8,764			—
Total lease payments and estimated sublease cash receipts		60,468		$	778
Less imputed interest		(5,510	)
Present value of lease liabilities	$	54,958

Lease balances as of September 30, 2023 are as follows (in thousands):


Operating lease ROU assets	$	42,021

Short-term operating lease liabilities (1)	$	14,115
Non-current operating lease liabilities		40,843
Total operating lease liabilities	$	54,958

(1)

Included in accrued expenses and other current liabilities in the Consolidated Balance Sheets.

The Company’s leases do not contain residual value guarantees, material restrictions, or covenants.

During the nine months ended September 30, 2023, the Company recorded ROU asset impairments of $0.8 million related to closing one floor of its offices located in San Francisco and one other smaller office location. The impairments are included in restructuring and related costs in the Consolidated Statements of Operations. As a result of the impairments, the ROU assets were required to be recorded at their estimated fair values as Level 3 non-financial assets. The fair values of the asset groups were determined using a discounted cash flow model, which required the use of estimates, including projected cash flows for the related assets, the selection of a discount rate used in the model, and regional real estate industry data.