The Company rents certain office facilities and equipment under noncancelable operating leases. As of June 30, 2025, approximately 94,000 square feet of office space is utilized for our sales and recruiting offices, delivery centers, and corporate headquarters. All of our leases are classified as operating leases. The average initial lease term is 3.9 years. Several leases have an option to renew, at our sole discretion, for an additional term. Our present lease terms range from less than one year to 4.3 years with a weighted average of 2.7 years. Leases with an initial term of twelve months or less are not recorded on the balance sheet.

The following table summarizes the balance sheet classification of the lease assets and related lease liabilities:

 

Future minimum rental payments for office facilities and equipment under the Company’s noncancelable operating leases are as follows:

 

The weighted average discount rate used to calculate the present value of future lease payments was 5.6%.

We recognize rent expense for these leases on a straight-line basis over the lease term. Rental expense for the three and six months ended June 30, 2025 totaled $0.4 million and $0.8 million, respectively. Rental expense for the three and six months ended June 30, 2024 totaled $0.3 million and $0.7 million, respectively.

 

Total cash paid for lease liabilities for the three and six months ended June 30, 2025 totaled $0.3 million and $0.7 million, respectively. Total cash paid for lease liabilities for the three and six months ended June 30, 2024 totaled $0.3 million and $0.7 million, respectively.

There were no new leases entered into during the three and six months ended June 30, 2025 and 2024. New leases are considered transactions.