Leases

9 Months Ended

Sep. 30, 2024

The Company leases office space under non-cancelable operating leases with various expiration dates through 2029. The Company accounts for leases under Accounting Standards Update 2016-02, Leases (Topic 842) (“ASC 842”) by recording right-of-use assets and liabilities. The right-of-use asset represents the Company’s right to use underlying assets for the lease term and the lease liability represents the Company’s obligation to make lease payments under the lease. The Company determines if an arrangement is, or contains, a lease at contract inception and exercises judgment and applies certain assumptions when determining the discount rate, lease term, and lease payments. ASC 842 requires a lessee to record a lease liability based on the discounted unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, the incremental borrowing rate. Generally, the Company does not have knowledge of the rate implicit in the lease and, therefore, uses its incremental borrowing rate for a lease. The lease term includes the non-cancelable period of the lease plus any additional periods covered by an option to extend that the Company is reasonably certain to exercise. The Company’s lease agreements generally do not contain any material residual value guarantees or material restrictive covenants. Certain of the Company’s lease agreements include escalating lease payments. Additionally, certain lease agreements contain renewal provisions and other provisions which require the Company to pay taxes, insurance, or maintenance costs.

The Company subleases certain leased office space to third parties when it determines there is excess leased capacity. On July 8, 2022, the Company entered into a sublease with a third party with respect to substantially all of the Company’s then-existing corporate headquarters. The sublease commenced on August 26, 2022 and expires on May 30, 2026, unless terminated sooner in accordance with the provisions of the sublease. Pursuant to the terms of the sublease, the subtenant pays a fixed monthly rent of $0.8 million, subject to periodic increases. In-lieu of a cash security deposit, the Company received a letter of credit from Citibank for approximately $4.5 million. On February 21, 2024, in connection with the Disposition, the Company licensed the use of office space in the Company’s corporate headquarters. Refer to Note 19 herein for further details on this arrangement.

Sublease rent income is recognized as an offset to rent expense on a straight-line basis over the lease term. In addition to sublease rent, other costs such as common-area maintenance, utilities, and real estate taxes are charged to subtenants over the duration of the lease for their proportionate share of these costs.

The following illustrates the lease costs for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Operating lease cost	$	6,041	$	7,557	$	18,334	$	22,620
Sublease income	(4,410)		(3,926)		(12,932)		(11,778)
Total lease cost	$	1,631	$	3,631	$	5,402	$	10,842

All components of total lease cost are recorded within general and administrative expenses within the condensed consolidated statement of operations. The Company does not have material short-term or variable lease costs.

The following amounts were recorded in the Company’s condensed consolidated balance sheets related to operating leases:


	September 30, 2024		December 31, 2023
Assets
Right-of-use assets	$	33,313	$	46,715

Liabilities
Current lease liabilities	22,804		21,659
Noncurrent lease liabilities	20,360		37,820
Total lease liabilities	$	43,164	$	59,479

Other information related to leases was as follows:


	Nine Months Ended September 30, 2024	Nine Months Ended September 30, 2023
Supplemental cash flow information:
Cash paid for amounts included in measurement of lease liabilities:
Operating cash flows for operating lease liabilities	21,183	25,369


	September 30, 2024		December 31, 2023
Weighted average remaining lease term (years)	2.0		2.7
Weighted average discount rate	14.0	%	13.9	%

Maturities of lease liabilities as of September 30, 2024 were as follows:


Year	Operating Leases
Remainder of 2024	$	7,109
2025	25,607
2026	12,787
2027	2,469
2028	870
Thereafter	571
Total lease payments	49,413
Less: imputed interest	(6,249)
Total	$	43,164

Sublease receipts to be received in the future under noncancelable subleases as of September 30, 2024 were as follows:


Year	Amount
Remainder of 2024	$	4,413
2025	16,536
2026	4,692
2027	—

Thereafter	—
Total	$	25,641