The Company determines if an arrangement is a lease at inception. Assets and obligations related to operating leases are included in operating lease right-of-use (“ROU”) assets; current portion of operating lease liability; and operating lease liability, net of current portion in the consolidated balance sheets. Assets and obligations related to finance leases are included in property and equipment, net; current portion of finance lease liability; and finance lease liability, net of current portion in the condensed consolidated balance sheets.

 

ROU assets represent the Company’s right to use an underlying asset for the lease term, and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on the information available at commencement date is used in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

 

The Company’s agreements with lease and non-lease components are all accounted for as a single lease component.

 

For leases with an initial term of twelve months or less, the Company elected the exemption from recording right of use assets and lease liabilities for all leases that qualify and records rent expense on a straight-line basis over the lease term.

 

The Company has operating leases for office and warehouse space in all districts where it conducts business. As of March 31, 2026, the remaining terms of the Company’s operating leases were between one month and 95 months and certain lease agreements contain provisions for future rent increases. Payments due under the lease contracts include the minimum lease payments that the Company is obligated to make under the non-cancelable initial terms of the leases as the renewal terms are at the Company’s option and the Company is not reasonably certain to exercise those renewal options at lease commencement.

 

The components of lease expense for the three- and six-month periods ended March 31, 2026 and 2025 are as follows:

 

 

Operating lease right of use assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of March 31, 2026 were $6,582, $2,054 and $5,173, respectively.

 

Operating lease right of use assets, current portion of operating lease liabilities and long-term portion of operating lease liabilities reported in the condensed consolidated balance sheets for operating leases as of September 30, 2025 were $7,760, $2,114 and $6,310, respectively.

 

During the six months ended March 31, 2026, the Company did not modify or enter into any new operating leases.

 

As of March 31, 2026 and September 30, 2025, the weighted-average remaining lease term and the weighted-average discount rate related to the Company’s operating leases were 4.2 years and 7.20% and 4.5 years and 6.13%, respectively.

 

For the three and six months ended March 31, 2026 and 2025, cash paid for amounts included in the measurement of operating lease obligations was $655 and $665, and $1,313 and $1,021, respectively.

 

Future minimum lease payments under non-cancelable operating leases as of March 31, 2026 are as follows for each of the fiscal years ending September 30 of :