Leases

9 Months Ended

Sep. 30, 2025

Our lease portfolio primarily consists of operating leases for office space and our leases have remaining lease terms of less than 1 year to 4 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 September 30, 2025, we expect to generate a total of $11.0 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 Condensed Consolidated Statements of Comprehensive Loss.

We test right-of-use assets when impairment indicators are present in accordance with the asset impairment provisions of ASC 360, Property, Plant and Equipment. As a result of becoming a remote first workplace, we have assessed our occupied leased office space to identify excess space to vacate and potentially sublease. We have also periodically reassessed current market conditions in our previously vacated leased office spaces that have not yet been subleased. In instances where we determined impairment indicators were present at that time of our reassessment, we tested our right-of-use assets, including leasehold improvements, for impairment. We utilized an income approach to value the asset groups by performing a discounted cash flow analysis and determined that for certain leases the net carrying values exceeded the estimated discounted future cash flows expected to be derived from the properties based on Level 3 inputs, including current sublease market rent, future sublease market conditions and the discount rate. During the three and nine months ended September 30, 2025, we recorded $0.5 million and $0.9 million, respectively, of impairment charges related to our operating lease right-of-use assets in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss. There were no impairment charges related to our operating lease right-of-use assets and property, plant and equipment for the three months ended September 30, 2024. We recorded $7.4 million of impairment charges related to our operating lease right-of-use assets and property, plant and equipment in the “Impairment, restructuring and other charges” line in our Condensed Consolidated Statements of Comprehensive Loss for the nine months ended September 30, 2024. See Note 11 – Impairment, Restructuring and Other Charges for further discussion about our asset impairment charges.

The components of operating lease costs for the three and nine months ended September 30, 2025 and 2024 were as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Operating lease expense	$	1,304	$	1,255	$	3,720	$	4,424
Operating sublease income	(689)		(646)		(2,067)		(1,860)
Total operating lease cost	$	615	$	609	$	1,653	$	2,564

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


	Nine Months Ended September 30,
	2025			2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	6,836		$	6,663


	September 30, 2025			December 31, 2024
Weighted-average remaining lease term (in years) of operating leases	3.3			3.9
Weighted-average discount rate used to recognize operating lease right-of-use-assets	5.7		%	5.7		%

As of September 30, 2025, maturities of our operating lease liabilities are as follows (in thousands):


Year ending December 31,
2025 (remainder)	$	2,279
2026	8,372
2027	6,950
2028	4,998
2029	3,008
Thereafter	196
Total lease payments (1)	$	25,803
Less imputed interest	(2,494)
Total	$	23,309

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(1)Non-cancellable sublease proceeds for the remainder of 2025 and the years ending December 31, 2026, 2027, 2028, 2029 and thereafter of $0.7 million, $3.1 million, $3.2 million, $3.3 million, $1.4 million, and $0.1 million, respectively, are not included in the table above.