Leases

12 Months Ended

Dec. 31, 2023

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of less than 1 to 6 years. Certain of these leases have free or escalating rent payment provisions. We recognize lease expense on a straight-line basis over the terms of the leases, although actual cash payment obligations under certain of these agreements fluctuate over the terms of the agreements. Most leases include options to renew, and the exercise of these options is at our discretion.

Subsequent to becoming a remote first workplace in the third quarter of 2022, we executed several subleases of our office space in the United States. The subleases run through the remaining term of the primary leases. As of December 31, 2023, we expect to generate a total of $14.2 million in future sublease income through January 31, 2030. Sublease income is recorded on a straight-line basis as a reduction of lease expense in our Consolidated Statements of Comprehensive Loss.

We test right-of-use assets when impairment indicators are present in accordance with the asset impairment provisions of Accounting Standards Codification 360, Property, Plant and Equipment (“ASC 360”). Our decision to sublease or to vacate a number of our leased office space triggered impairment testing for the underlying right-of-use assets. We evaluated these right-of-use assets, including leasehold improvements, furniture and fixtures and computer equipment for impairment under ASC 360. For our impairment tests, we utilized an income approach to value the asset group by performing a discounted cash flow analysis and determined that the net carrying value exceeded the estimated discounted future cash flows based on current market conditions. As a result, we recorded an $11.8 million impairment charge related to operating lease right-of-use assets and property, plant and equipment, which was reflected in the “Impairment, restructuring and other charges” line in our Consolidated Statements of Comprehensive Loss for the year ended December 31, 2022. See Note 11 — Impairment, Restructuring and Other Charges for further discussion about our asset impairment charges. We recorded no impairment charge related to operating lease right-of-use assets and property, plant and equipment during the years ended December 31, 2023 and 2021.

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


	Year Ended December 31,
	2023		2022		2021
Operating lease expense	$	7,912	$	7,782	$	7,650
Operating sublease income	(2,210)		(1,048)		(1,222)
Total operating lease cost	$	5,702	$	6,734	$	6,428

Supplemental information related to our leases are as follows (in thousands):


	Year Ended December 31,
	2023		2022
Cash paid for amounts included in the measurement of operating lease liabilities	$	9,489	$	7,697
Non-cash investing activities relating to operating lease right-of-use assets	$	1,285	$	3,493


	December 31, 2023		December 31, 2022
Weighted-average remaining lease term of operating leases	4.8 years		5.7 years
Weighted-average discount rate used to recognize operating lease right-of-use-assets	5.7	%	5.6	%

As of December 31, 2023, maturities of our operating lease liabilities are as follows (in thousands):


Year ending December 31,
2024	$	8,904
2025	9,110
2026	7,771
2027	6,773
2028	4,998
Thereafter	3,204
Total lease payments(1)	40,760
Less imputed interest	(5,357)
Total	$	35,403

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(1)Non-cancellable sublease rent payments for the years ending December 31, 2024, 2025, 2026, 2027, 2028 and thereafter of $2.4 million, $2.6 million, $2.7 million, $2.8 million, $2.8 million, and $1.0 million, respectively, are not included in the table above.