v3.25.2
Leases
 6 Months Ended
Jun. 28, 2025
Leases [Abstract]  
Leases Leases
See Note 9.
Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company has operating leases for its corporate offices, including the Campus Headquarters (as defined below), its manufacturing facilities, warehouses and vehicles, and to a lesser extent, certain equipment and finance leases. Such leases generally have original lease terms between 2 years and 12 years, and often include one or more options to renew. Some leases also include early termination options, which can be exercised under specific conditions. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company does not have residual value guarantees or material restrictive covenants associated with its leases.
On January 14, 2021, the Company entered into the Campus Lease, a 12-year lease with two 5-year renewal options to house its corporate headquarters, lab and innovation space (“Campus Headquarters”) in El Segundo, California. Although the Company is involved in the design of the tenant improvements of the Campus Headquarters, the Company does not have title or possession of the assets during construction. In addition, the Company does not have the ability to control the leased Campus Headquarters until each phase of the tenant improvements is complete.
The Company paid $3.9 million and $6.5 million in rent prepayments and payments towards construction costs of the Campus Headquarters in the six months ended June 28, 2025 and the year ended December 31, 2024, respectively. The rent prepayments and payments towards construction costs are initially recorded in Prepaid lease costs, non-current in the Company’s condensed consolidated balance sheets and will ultimately be reclassified as a component of a right-of-use asset upon lease commencement for each phase of the lease.
On September 17, 2024, the Company entered into the First Amendment, which amendment: (i) revised the square footage of the premises, building and project to: (a) increase the Company’s base rent by approximately $851,000 over the initial lease term; (b) adjust the Company’s percentage share of direct expenses; and (c) increase the tenant improvement allowance to reflect a reduction in the scope of the Landlord’s work; (ii) specify which improvements must be removed by the Company from the premises if the premises are not occupied in their entirety throughout the initial lease term and first extension term; and (iii) address other ministerial matters concerning the Campus Lease. Costs associated with this amendment are included in operating lease costs related to research and development expenses and SG&A expenses and are reflected in the tables below.
On May 9, 2025, the Company entered into the Second Amendment, which provided for, among other things, (i) the surrender by the Company to the Landlord of the Surrendered Premises; (ii) a release of all claims arising out of, or based upon, any act, matter, or thing regarding the Surrendered Premises; (iii) the continued leasing of approximately 220,519 rentable square feet of the existing premises by the Company; (iv) payment by the Company of a one-time termination fee of $1.0 million for the benefit of the Landlord; (v) transfer of title to certain equipment from the Company to the Landlord; (vi) construction of modifications to the Surrendered Premises by the Company to be completed by June 30, 2025; (vii) payment by the Company of rent for the Surrendered Premises under the Campus Lease until at latest December 14, 2025; (viii) payment by the Company of the difference between (A) the Company’s base rent and parking charges under the Campus Lease for the Surrendered Premises and (B) the base rent and parking charges payable by a new tenant under its new lease for the Surrendered Premises, beginning on the earlier of when the new tenant commences normal business operations in the Surrendered Premises and December 15, 2025, and ending on the last day of the Initial Term (as defined in the Campus Lease); and (ix) payment by the Company of customary brokers’ fees in connection with the Second Amendment.
Termination costs related to the Surrendered Premises in the three and six months ended June 28, 2025 were $32.8 million, consisting of $31.3 million in prepaid rent related to the Surrendered Premises, a $1.0 million one-time termination fee and $0.5 million in brokers’ fees. The termination costs are being recognized over the remaining initial term and first renewal term of the Campus Lease. These costs are reflected in the tables below. As a result of this lease modification, the Company remeasured the remaining lease liability and ROU asset associated with the continuing portion of the lease. Based on the revised terms, including updated lease payments and term, the Company concluded that the classification of the remaining lease had changed from an operating lease to a finance lease. As such, $115.6 million previously classified as an operating lease right-of-use asset was reclassified as finance lease right-of-use asset. In addition, the right-of-use assets for the continuing portion of the lease increased by $19.9 million, due to the reclassification of amounts previously recorded as prepaid rent, and by $10.1 million related to increases in the present value of the lease liability following the modification.
Subsequent to the period ended June 28, 2025, on July 16, 2025, the Company and the Landlord entered into the Third Amendment, settling a dispute between the Company and the Landlord regarding the provision
and disbursement of the tenant improvement allowance. Under the terms of the Third Amendment, in exchange for a release of certain claims, the Landlord agreed to provide to the Company a rent credit of up to $700,000 for certain tenant improvements, a tenant improvement allowance of up to $150,000 to construct certain improvements, and an extension to the end of the initial term of the Campus Lease for a Landlord-approved subtenant, assignee or transferee to use the tenant improvement allowance to construct improvements for its intended use. The impact of the Third Amendment is not reflected in the tables below.
Subsequent to the period ended June 28, 2025, the Company entered into the Varda Sublease with Subtenant to sublease a portion of the Campus Headquarters. See Note 14. The impact of the Varda Sublease is not reflected in the tables below.
The lease on the Company’s Manhattan Beach Project Innovation Center expired on January 31, 2024. Costs associated with this lease through its expiration date are included in operating lease costs related to research and development expenses and are reflected in the tables below.
Given the Company’s intention to reduce its overall operating expenses and cash expenditures, on February 2, 2024, the Company terminated the agreement to purchase a property in Enschede, the Netherlands (the “Enschede Property”) and the security deposit was returned to the Company, which was subsequently paid to the purchaser of the property to be applied towards the deposit and future lease payments. The Company entered into a lease agreement with the purchaser of the property to lease the approximately 114,000 square foot property for an initial period of five years with an option to renew for an additional five years at an annual rent of approximately €1.0 million. The lease is classified as a finance lease in the Company’s condensed consolidated balance sheets as of June 28, 2025 and December 31, 2024. Costs associated with this lease are included in finance lease costs related to cost of goods sold and are reflected in the tables below.
Lease costs for operating and finance leases were as follows:
Three Months Ended
(in thousands)Statement of Operations LocationJune 28, 2025June 29, 2024
Operating lease cost:
Lease costCost of goods sold$419 $425 
Lease costResearch and development expenses485 2,377 
Lease costSelling, general and administrative expenses557 610 
Variable lease cost(1)
Cost of goods sold66 51 
Variable lease cost(1)
Research and development expenses— (12)
Variable lease cost(1)
Selling, general and administrative expenses370 869 
Operating lease cost$1,897 $4,320 
Short- term lease cost:
Short-term lease costCost of goods sold$118 $23 
Short-term lease costResearch and development expenses15 30 
Short-term lease costSelling, general and administrative expenses109 75 
Short-term lease cost242128
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$272 $269 
Amortization of right-of use assetsResearch and development expenses1,561 3 
Interest on lease liabilitiesInterest expense1,016 45 
Variable lease cost(1)
Cost of goods sold16 2 
Variable lease cost(1)
Research and development expenses1 1 
Variable lease cost(1)
Selling, general and administrative expenses585 — 
Finance lease cost$3,451 $320 
Total lease cost$5,590 $4,768 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.
Six Months Ended
(in thousands)Statement of Operations LocationJune 28, 2025June 29, 2024
Operating lease cost:
Lease costCost of goods sold$826 $822 
Lease costResearch and development expenses2,872 4,768 
Lease costSelling, general and administrative expenses1,180 1,278 
Variable lease cost(1)
Cost of goods sold102 116 
Variable lease cost(1)
Research and development expenses— 6 
Variable lease cost(1)
Selling, general and administrative expenses1,468 1,960 
Operating lease cost$6,448 $8,950 
Short- term lease cost:
Short-term lease costCost of goods sold$195 $44 
Short-term lease costResearch and development expenses29 54 
Short-term lease costSelling, general and administrative expenses245 108 
Short-term lease cost$469 206
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$526 $466 
Amortization of right-of use assetsResearch and development expenses1,564 7 
Interest on lease liabilitiesInterest expense1,056 77 
Variable lease cost(1)
Cost of goods sold28 6 
Variable lease cost(1)
Research and development expenses1 1 
Variable lease cost(1)
Selling, general and administrative expenses585 — 
Finance lease cost$3,760 $557 
Total lease cost$10,677 $9,713 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.
Supplemental balance sheet information related to leases:
(in thousands) Balance Sheet LocationJune 28, 2025December 31, 2024
Assets
Operating leasesOperating lease right-of-use assets$6,527 $123,975 
Finance leases, netProperty, plant and equipment, net147,785 3,817 
Total lease assets$154,312 $127,792 
Liabilities
Current:
Operating lease liabilitiesCurrent portion of operating lease liabilities$1,798 $4,125 
Finance lease liabilitiesAccrued expenses and other current liabilities3,934 851 
Long-term:
Operating lease liabilitiesOperating lease liabilities, net of current portion4,441 73,613 
Finance lease liabilitiesFinance lease obligations and other long-term liabilities80,025 2,812 
Total lease liabilities$90,198 $81,401 

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year, as of June 28, 2025:
June 28, 2025
(in thousands)Operating LeasesFinance Leases
Remainder of 2025$1,054 $5,206 
20261,852 10,929 
20271,565 9,866 
2028900 10,086 
2029615 9,340 
Thereafter802 95,565 
Total undiscounted future minimum lease payments6,788 140,992 
Less imputed interest(547)(57,033)
Total discounted future minimum lease payments$6,241 $83,959 

Weighted average remaining lease terms and weighted average discount rates were:
June 28, 2025
Operating Leases
Finance Leases
Weighted average remaining lease term (years)4.212.9
Weighted average discount rate4.7%8.2%
Supplemental cash flow information related to leases:
Three Months EndedSix Months Ended
(in thousands)June 28, 2025June 29, 2024June 28, 2025June 29, 2024
Cash paid for amounts included in the measurement of operating lease liabilities
$1,568 $2,160 $3,823 $4,331 
Operating lease right-of-use assets obtained in exchange for lease liabilities2,082 $355 2,082 $1,389 
Leases Leases
See Note 9.
Leases are classified as either finance leases or operating leases based on criteria in Accounting Standards Codification (“ASC”) 842. The Company has operating leases for its corporate offices, including the Campus Headquarters (as defined below), its manufacturing facilities, warehouses and vehicles, and to a lesser extent, certain equipment and finance leases. Such leases generally have original lease terms between 2 years and 12 years, and often include one or more options to renew. Some leases also include early termination options, which can be exercised under specific conditions. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company does not have residual value guarantees or material restrictive covenants associated with its leases.
On January 14, 2021, the Company entered into the Campus Lease, a 12-year lease with two 5-year renewal options to house its corporate headquarters, lab and innovation space (“Campus Headquarters”) in El Segundo, California. Although the Company is involved in the design of the tenant improvements of the Campus Headquarters, the Company does not have title or possession of the assets during construction. In addition, the Company does not have the ability to control the leased Campus Headquarters until each phase of the tenant improvements is complete.
The Company paid $3.9 million and $6.5 million in rent prepayments and payments towards construction costs of the Campus Headquarters in the six months ended June 28, 2025 and the year ended December 31, 2024, respectively. The rent prepayments and payments towards construction costs are initially recorded in Prepaid lease costs, non-current in the Company’s condensed consolidated balance sheets and will ultimately be reclassified as a component of a right-of-use asset upon lease commencement for each phase of the lease.
On September 17, 2024, the Company entered into the First Amendment, which amendment: (i) revised the square footage of the premises, building and project to: (a) increase the Company’s base rent by approximately $851,000 over the initial lease term; (b) adjust the Company’s percentage share of direct expenses; and (c) increase the tenant improvement allowance to reflect a reduction in the scope of the Landlord’s work; (ii) specify which improvements must be removed by the Company from the premises if the premises are not occupied in their entirety throughout the initial lease term and first extension term; and (iii) address other ministerial matters concerning the Campus Lease. Costs associated with this amendment are included in operating lease costs related to research and development expenses and SG&A expenses and are reflected in the tables below.
On May 9, 2025, the Company entered into the Second Amendment, which provided for, among other things, (i) the surrender by the Company to the Landlord of the Surrendered Premises; (ii) a release of all claims arising out of, or based upon, any act, matter, or thing regarding the Surrendered Premises; (iii) the continued leasing of approximately 220,519 rentable square feet of the existing premises by the Company; (iv) payment by the Company of a one-time termination fee of $1.0 million for the benefit of the Landlord; (v) transfer of title to certain equipment from the Company to the Landlord; (vi) construction of modifications to the Surrendered Premises by the Company to be completed by June 30, 2025; (vii) payment by the Company of rent for the Surrendered Premises under the Campus Lease until at latest December 14, 2025; (viii) payment by the Company of the difference between (A) the Company’s base rent and parking charges under the Campus Lease for the Surrendered Premises and (B) the base rent and parking charges payable by a new tenant under its new lease for the Surrendered Premises, beginning on the earlier of when the new tenant commences normal business operations in the Surrendered Premises and December 15, 2025, and ending on the last day of the Initial Term (as defined in the Campus Lease); and (ix) payment by the Company of customary brokers’ fees in connection with the Second Amendment.
Termination costs related to the Surrendered Premises in the three and six months ended June 28, 2025 were $32.8 million, consisting of $31.3 million in prepaid rent related to the Surrendered Premises, a $1.0 million one-time termination fee and $0.5 million in brokers’ fees. The termination costs are being recognized over the remaining initial term and first renewal term of the Campus Lease. These costs are reflected in the tables below. As a result of this lease modification, the Company remeasured the remaining lease liability and ROU asset associated with the continuing portion of the lease. Based on the revised terms, including updated lease payments and term, the Company concluded that the classification of the remaining lease had changed from an operating lease to a finance lease. As such, $115.6 million previously classified as an operating lease right-of-use asset was reclassified as finance lease right-of-use asset. In addition, the right-of-use assets for the continuing portion of the lease increased by $19.9 million, due to the reclassification of amounts previously recorded as prepaid rent, and by $10.1 million related to increases in the present value of the lease liability following the modification.
Subsequent to the period ended June 28, 2025, on July 16, 2025, the Company and the Landlord entered into the Third Amendment, settling a dispute between the Company and the Landlord regarding the provision
and disbursement of the tenant improvement allowance. Under the terms of the Third Amendment, in exchange for a release of certain claims, the Landlord agreed to provide to the Company a rent credit of up to $700,000 for certain tenant improvements, a tenant improvement allowance of up to $150,000 to construct certain improvements, and an extension to the end of the initial term of the Campus Lease for a Landlord-approved subtenant, assignee or transferee to use the tenant improvement allowance to construct improvements for its intended use. The impact of the Third Amendment is not reflected in the tables below.
Subsequent to the period ended June 28, 2025, the Company entered into the Varda Sublease with Subtenant to sublease a portion of the Campus Headquarters. See Note 14. The impact of the Varda Sublease is not reflected in the tables below.
The lease on the Company’s Manhattan Beach Project Innovation Center expired on January 31, 2024. Costs associated with this lease through its expiration date are included in operating lease costs related to research and development expenses and are reflected in the tables below.
Given the Company’s intention to reduce its overall operating expenses and cash expenditures, on February 2, 2024, the Company terminated the agreement to purchase a property in Enschede, the Netherlands (the “Enschede Property”) and the security deposit was returned to the Company, which was subsequently paid to the purchaser of the property to be applied towards the deposit and future lease payments. The Company entered into a lease agreement with the purchaser of the property to lease the approximately 114,000 square foot property for an initial period of five years with an option to renew for an additional five years at an annual rent of approximately €1.0 million. The lease is classified as a finance lease in the Company’s condensed consolidated balance sheets as of June 28, 2025 and December 31, 2024. Costs associated with this lease are included in finance lease costs related to cost of goods sold and are reflected in the tables below.
Lease costs for operating and finance leases were as follows:
Three Months Ended
(in thousands)Statement of Operations LocationJune 28, 2025June 29, 2024
Operating lease cost:
Lease costCost of goods sold$419 $425 
Lease costResearch and development expenses485 2,377 
Lease costSelling, general and administrative expenses557 610 
Variable lease cost(1)
Cost of goods sold66 51 
Variable lease cost(1)
Research and development expenses— (12)
Variable lease cost(1)
Selling, general and administrative expenses370 869 
Operating lease cost$1,897 $4,320 
Short- term lease cost:
Short-term lease costCost of goods sold$118 $23 
Short-term lease costResearch and development expenses15 30 
Short-term lease costSelling, general and administrative expenses109 75 
Short-term lease cost242128
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$272 $269 
Amortization of right-of use assetsResearch and development expenses1,561 3 
Interest on lease liabilitiesInterest expense1,016 45 
Variable lease cost(1)
Cost of goods sold16 2 
Variable lease cost(1)
Research and development expenses1 1 
Variable lease cost(1)
Selling, general and administrative expenses585 — 
Finance lease cost$3,451 $320 
Total lease cost$5,590 $4,768 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.
Six Months Ended
(in thousands)Statement of Operations LocationJune 28, 2025June 29, 2024
Operating lease cost:
Lease costCost of goods sold$826 $822 
Lease costResearch and development expenses2,872 4,768 
Lease costSelling, general and administrative expenses1,180 1,278 
Variable lease cost(1)
Cost of goods sold102 116 
Variable lease cost(1)
Research and development expenses— 6 
Variable lease cost(1)
Selling, general and administrative expenses1,468 1,960 
Operating lease cost$6,448 $8,950 
Short- term lease cost:
Short-term lease costCost of goods sold$195 $44 
Short-term lease costResearch and development expenses29 54 
Short-term lease costSelling, general and administrative expenses245 108 
Short-term lease cost$469 206
Finance lease cost:
Amortization of right-of use assetsCost of goods sold$526 $466 
Amortization of right-of use assetsResearch and development expenses1,564 7 
Interest on lease liabilitiesInterest expense1,056 77 
Variable lease cost(1)
Cost of goods sold28 6 
Variable lease cost(1)
Research and development expenses1 1 
Variable lease cost(1)
Selling, general and administrative expenses585 — 
Finance lease cost$3,760 $557 
Total lease cost$10,677 $9,713 
____________
(1) Variable lease cost primarily consists of common area maintenance, such as cleaning and repairs.
Supplemental balance sheet information related to leases:
(in thousands) Balance Sheet LocationJune 28, 2025December 31, 2024
Assets
Operating leasesOperating lease right-of-use assets$6,527 $123,975 
Finance leases, netProperty, plant and equipment, net147,785 3,817 
Total lease assets$154,312 $127,792 
Liabilities
Current:
Operating lease liabilitiesCurrent portion of operating lease liabilities$1,798 $4,125 
Finance lease liabilitiesAccrued expenses and other current liabilities3,934 851 
Long-term:
Operating lease liabilitiesOperating lease liabilities, net of current portion4,441 73,613 
Finance lease liabilitiesFinance lease obligations and other long-term liabilities80,025 2,812 
Total lease liabilities$90,198 $81,401 

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year, as of June 28, 2025:
June 28, 2025
(in thousands)Operating LeasesFinance Leases
Remainder of 2025$1,054 $5,206 
20261,852 10,929 
20271,565 9,866 
2028900 10,086 
2029615 9,340 
Thereafter802 95,565 
Total undiscounted future minimum lease payments6,788 140,992 
Less imputed interest(547)(57,033)
Total discounted future minimum lease payments$6,241 $83,959 

Weighted average remaining lease terms and weighted average discount rates were:
June 28, 2025
Operating Leases
Finance Leases
Weighted average remaining lease term (years)4.212.9
Weighted average discount rate4.7%8.2%
Supplemental cash flow information related to leases:
Three Months EndedSix Months Ended
(in thousands)June 28, 2025June 29, 2024June 28, 2025June 29, 2024
Cash paid for amounts included in the measurement of operating lease liabilities
$1,568 $2,160 $3,823 $4,331 
Operating lease right-of-use assets obtained in exchange for lease liabilities2,082 $355 2,082 $1,389