v3.25.1
Leases
3 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Leases Leases
We lease real estate for office space under operating leases. We consider a lease to have commenced on the date when we are granted access to the leased asset.
Certain of our real estate leasing agreements include terms requiring us to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which we account for as variable lease costs when incurred since we have elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability. There are no restrictions or covenants imposed by any of the leases, and none of our leases contain material residual value guarantees.
The discount rates for all of our leases are based on our estimated incremental borrowing rate since the rates implicit in the leases were not determinable. Our incremental borrowing rate is based on management’s estimate of the rate of interest we would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
We have elected the practical expedient under which lease components would not be separated from the non-lease components for all our classes of underlying assets. Accordingly, each lease component and the non-lease components related to the lease component are accounted for as a single lease component.
In December 2024, the Company signed a Lease Assignment and Assumption Agreement (the “Lease Assignment”) for its New York office lease, whereby a third-party agreed to assume all the Company’s rights, title and interest in and to the lease, including but not limited to the performance by the third-party of all of the Company’s duties and obligations under the lease. The Lease Assignment was contingent upon the landlord’s consent. In January 2025, the Company signed an Assignment and Assumption of Lease with Landlord’s Consent for the New York office lease, which provided the landlord’s consent to the Lease Assignment. The Company is joint and severally liable with the third-party assignee for the obligations under the New York office lease. For the three months ended March 31, 2025 the Company recognized income of approximately $1.8 million related to the Lease Assignment, net of approximately $0.9 million paid to the third-party assignee under the Lease Assignment, all of which is recognized in "Other income, net" in the consolidated statements of operations.
On December 21, 2023, we signed an agreement to sublease a portion of our corporate headquarters office space in Alpharetta, Georgia. The sublease commenced in March 2024. Our Scottsdale, Arizona lease has a term of 89 months and total fixed lease payments over the term of $5.7 million. The Alpharetta call center lease has a term of 47 months and total fixed lease payments over the term of the lease are $5.9 million. As of March 31, 2025, we do not have any active finance leases. Several of these leases include escalation clauses for adjusting rentals.
Our real estate leases have remaining lease terms as of March 31, 2025 ranging from 13 months to 90 months, with three of our leases containing an option to extend the term for a period of 5 years exercisable by us, which we are not reasonably certain of exercising at commencement. None of our leases contain an option to terminate the lease without cause at the option of either party during the lease term.
As of March 31, 2025, the weighted average remaining lease term for our operating leases was approximately 77 months, and the weighted average discount rate for our operating leases was 5.4%. As of December 31, 2024, the weighted average remaining lease term for our operating leases was approximately 76 months, and the weighted average discount rate for our operating leases was 5.3%. We were party to short-term leases during the three months ended March 31, 2025 and March 31, 2024, which resulted in less than and less than $0.1 million of rent expense, respectively.
Leases Leases
We lease real estate for office space under operating leases. We consider a lease to have commenced on the date when we are granted access to the leased asset.
Certain of our real estate leasing agreements include terms requiring us to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which we account for as variable lease costs when incurred since we have elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability. There are no restrictions or covenants imposed by any of the leases, and none of our leases contain material residual value guarantees.
The discount rates for all of our leases are based on our estimated incremental borrowing rate since the rates implicit in the leases were not determinable. Our incremental borrowing rate is based on management’s estimate of the rate of interest we would have to pay to borrow on a fully collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
We have elected the practical expedient under which lease components would not be separated from the non-lease components for all our classes of underlying assets. Accordingly, each lease component and the non-lease components related to the lease component are accounted for as a single lease component.
In December 2024, the Company signed a Lease Assignment and Assumption Agreement (the “Lease Assignment”) for its New York office lease, whereby a third-party agreed to assume all the Company’s rights, title and interest in and to the lease, including but not limited to the performance by the third-party of all of the Company’s duties and obligations under the lease. The Lease Assignment was contingent upon the landlord’s consent. In January 2025, the Company signed an Assignment and Assumption of Lease with Landlord’s Consent for the New York office lease, which provided the landlord’s consent to the Lease Assignment. The Company is joint and severally liable with the third-party assignee for the obligations under the New York office lease. For the three months ended March 31, 2025 the Company recognized income of approximately $1.8 million related to the Lease Assignment, net of approximately $0.9 million paid to the third-party assignee under the Lease Assignment, all of which is recognized in "Other income, net" in the consolidated statements of operations.
On December 21, 2023, we signed an agreement to sublease a portion of our corporate headquarters office space in Alpharetta, Georgia. The sublease commenced in March 2024. Our Scottsdale, Arizona lease has a term of 89 months and total fixed lease payments over the term of $5.7 million. The Alpharetta call center lease has a term of 47 months and total fixed lease payments over the term of the lease are $5.9 million. As of March 31, 2025, we do not have any active finance leases. Several of these leases include escalation clauses for adjusting rentals.
Our real estate leases have remaining lease terms as of March 31, 2025 ranging from 13 months to 90 months, with three of our leases containing an option to extend the term for a period of 5 years exercisable by us, which we are not reasonably certain of exercising at commencement. None of our leases contain an option to terminate the lease without cause at the option of either party during the lease term.
As of March 31, 2025, the weighted average remaining lease term for our operating leases was approximately 77 months, and the weighted average discount rate for our operating leases was 5.4%. As of December 31, 2024, the weighted average remaining lease term for our operating leases was approximately 76 months, and the weighted average discount rate for our operating leases was 5.3%. We were party to short-term leases during the three months ended March 31, 2025 and March 31, 2024, which resulted in less than and less than $0.1 million of rent expense, respectively.