The Company has entered into non-cancelable operating leases, primarily for the rent of office space expiring at various dates through 2037. Certain lease agreements contain an option for the Company to renew the lease or an option to terminate the lease early. The Company considers these options in determining the lease term and minimum lease payments on a lease-by-lease basis. None of the Company’s lease agreements contain any material non-lease components, material residual value guarantees, or material restrictive covenants.

In 2019, the Company was issued a letter of credit of $8.2 million for its office space in Mountain View, California. In 2024, the letter of credit was reduced to $6.5 million. No draws have been made under the letter of credit as of December 31, 2025 and 2024.

For the years ended December 31, 2025, 2024, and 2023, lease expense of $4.9 million, $4.9 million, and $20.9 million is included in operating expenses in the consolidated statements of operations, respectively. The Company did not have any material variable lease costs or short-term lease costs for the years ended December 31, 2025, 2024, and 2023. Cash paid for amounts included in the measurement of operating lease liabilities was $9.6 million, $11.1 million, and $8.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025 and 2024, the weighted-average remaining lease term of the Company’s operating leases was 1.2 years and 2.0 years, respectively. As of December 31, 2025 and 2024, the weighted-average discount rate used to measure the present value of the operating lease liabilities was 4.9% and 4.7%, respectively.

In November 2025, the Company entered into an operating lease agreement for office space in Burlingame, California to replace its existing headquarters lease. The lease term begins in September 2026 and expires in June 2037. The total minimum obligation under the lease agreement is $37.0 million, which excludes variable operating expenses, and is excluded from the future minimum lease payments disclosed above. The Company will recognize the related right-of-use asset and lease liability on the consolidated balance sheet upon taking possession of the premises.

As of December 31, 2025, future payments under non-cancelable purchase obligations, primarily related to third-party cloud infrastructure agreements under which the Company is granted access to use certain cloud services, were as follows (in thousands):

In connection with the proposed Merger with IBM, the Company expects to incur an additional liability of approximately $82.9 million upon the closing, which primarily represents transaction fees that are contingent upon the consummation of the Merger.

From time to time, the Company has become involved in claims and other legal matters arising in the ordinary course of business. The Company investigates these claims as they arise. As of December 31, 2025 and 2024, the Company is not aware of any matters that would individually or taken together have a material adverse effect on the Company’s results of operations, financial position, or cash flows.

The Company enters into indemnification provisions under its agreements with other companies in the ordinary course of business, including customers, business partners, landlords, and certain third-party vendors. Under these arrangements, the Company agrees to indemnify, hold harmless, and reimburse the indemnified party for certain losses suffered or incurred by the indemnified party resulting from certain Company activities. The terms of these indemnification agreements are generally perpetual and the maximum potential amount of future payments the Company could be required to make under these agreements is not determinable. As of December 31, 2025 and 2024, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements. The Company maintained commercial general liability insurance and product liability insurance during the years ended December 31, 2025, 2024, and 2023 to offset certain of the Company’s potential liabilities under these indemnification provisions.

The Company also indemnifies certain of its officers, directors, and certain key employees while they are serving in good faith in their respective capacities. As of December 31, 2025 and 2024, the Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification agreements.