v3.25.1
Leases
 12 Months Ended
Mar. 31, 2025
Leases [Abstract]  
Leases Leases
The Company has entered into operating leases for its corporate offices and storage spaces, with remaining contractual periods ranging from 0.8 years to 6.3 years. For the Company’s facility in Sunnyvale, California (the “Sunnyvale Facility”), there was an option to extend the lease for a period of seven years. However, in March 2025, in connection with the Chapter 11 Cases, the Company abandoned the Sunnyvale Facility. As a result, the Company determined to record a lease abandonment charge of $33.9 million to accelerate all amortization of the remaining carrying value of the operating lease ROU asset for the Sunnyvale Facility, and impairment losses of $16.5 million related to leasehold improvements for this facility. There were no impairments to ROU assets or leasehold improvements related to continuing operations for the fiscal years ended March 31, 2024 and 2023. The Company recorded the expenses associated with this facility exit in restructuring and other charges in the consolidated statements of operations and comprehensive loss. The Company did not have any finance leases as of March 31, 2025 and 2024.
In connection with the November 2024 Reduction Plan, the Company abandoned the South San Francisco Facility in December 2024. See Note 4, “Discontinued Operations,” for details.
On September 16, 2024, the Company entered into an agreement with a third party to sublease 17,312 square feet of the Sunnyvale Facility. The total rental commitment over the four-year term of the sublease is $3.2 million. The Company’s sublease agreement: (i) includes renewal and termination options; (ii) provides for customary escalations of lease payments in the normal course of business; (iii) grants the subtenant free rent for specific months during term; (iv) requires variable payments that are dependent on usage, output, or may vary for other reasons, such as insurance and tax payments; and (v) grants the subtenant title of furniture if it extends the lease. The sublease is classified as operating leases whereby sublease income is recognized on a straight-line basis over the sublease term that expires in 2028. Sublease income was $0.5 million for the fiscal year ended March 31, 2025. There was no sublease income recognized during the fiscal years ended March 31, 2024 and 2023.
The leases for the Sunnyvale Facility, including the aforementioned sublease, and the lease for the South San Francisco Facility were rejected or are subject to a pending motion to reject pursuant to the Chapter 11 Cases and related lease liabilities are included in liabilities subject to compromise on the consolidated balance sheets. The final allowed claim amounts related to these lease rejections have not yet been determined.
The components of lease costs and other information related to leases from continuing operations were as follows:
Year Ended March 31,
202520242023
(in thousands, except years and percentages)
Operating lease cost$9,200 $9,259 $9,820 
Variable lease cost4,784 3,496 4,681 
Total lease cost$13,984 $12,755 $14,501 
Cash paid for amounts included in the measurement of operating lease liabilities, net$10,141 $10,726 $10,801 
Weighted average remaining lease term (years)6.37.38.3
Weighted average discount rate7 %8 %7 %
As of March 31, 2025, the future minimum lease payments included in the measurement of the Company’s operating lease liabilities for both continuing and discontinued operations were as follows:
As of March 31, 2025
(in thousands)
Years ending March 31,
2026$16,528 
202715,472 
202811,666 
202912,016 
203012,376 
Thereafter17,038 
Total future operating lease payments85,096 
Less: imputed interest(16,668)
Total operating lease liabilities(1)
$68,428 
(1)This balance includes $60.9 million of operating lease liabilities included within liabilities subject to compromise, and $7.5 million of current and noncurrent operating lease liabilities included within total liabilities not subject to compromise, as they are substantially covered by the letters of credit associated with the Company’s Sunnyvale Facility, as reflected on the consolidated balance sheets.