The Company determines if an arrangement contains a lease at contract inception. The Company’s current lease agreements have remaining lease terms between one and seven years. The Company recognizes a right-of-use (“ROU”) asset and a lease liability at the lease commencement date. The lease liability is initially measured based on the present value of the unpaid lease payments as of the lease commencement date. Key estimates and judgments used in determining the liability include the (1) discount rate the Company uses to discount the unpaid lease payments to present value, (2) lease term, and (3) lease payments.

ASC 842, “Leases,” requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor’s estimated residual value or the amount of the lessor’s deferred initial direct costs. Therefore, the Company generally uses its incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate for a lease is the rate of interest it would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. Because the Company does not generally borrow on a collateralized basis, it uses quoted interest rates obtained from financial institutions as an input to derive an appropriate incremental borrowing rate, adjusted for the amount of the lease payments, the lease term, and the effect on that rate of designating specific collateral with a value equal to the unpaid lease payments for that lease.

Some of the Company’s lease agreements include options to extend the lease following the initial term. The Company elected the practical expedient of hindsight in determining the option to renew. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

For lease agreements entered into or reassessed after the adoption of ASC 842, “Leases,” the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component. Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract.

Variable lease payments associated with the Company’s leases are recognized upon occurrence of the event, activity, or circumstance in the lease agreement on which those payments are assessed.

Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term.

The components of lease expenses are as follows:


	March 31, 2026		March 31, 2025		March 31, 2024
Operating lease expense	$	8,185,000	$	9,070,000	$	9,989,000
Finance lease expense		19,000		80,000		86,000
Short-term lease expense		—		114,000		114,000
Variable lease expense		628,000		665,000		559,000
Total lease expenses	$	8,832,000	$	9,929,000	$	10,748,000

The following table presents the lease related assets and liabilities recorded on the Company’s consolidated balance sheets related to its operating leases at March 31, 2026 and March 31, 2025:


	March 31, 2026			March 31, 2025
Right-of-use asset, net	$	21,164,000		$	20,825,000
Short-term lease liability	$	7,420,000		$	8,126,000
Long-term lease liability		20,687,000			19,953,000
Total lease liabilities	$	28,107,000		$	28,079,000
Weighted average remaining lease term	4.23 years			4.01 years
Weighted average finance lease term		—		0.25 years
Weighted average discount rate		5.3	%		4.5	%

Supplemental cash flow information related to operating leases for fiscal years ended March 31, 2026 and 2025 were as follows:


	March 31, 2026		March 31, 2025
Cash paid for amounts included in the measurement of operating lease liabilities	$	8,457,000	$	9,151,000
Operating lease liabilities arising from obtaining ROU assets	$	41,582,000	$	46,954,000
Finance lease liabilities arising from obtaining ROU assets	$	—	$	358,000
Additions to ROU assets resulting from additions to operating lease liabilities	$	3,300,000	$	4,555,000

As of March 31, 2026, maturities of operating lease liabilities for each of the next five years and thereafter are as follows:


2027	$	8,700,000
2028		8,213,000
2029		5,949,000
2030		3,968,000
2031		2,455,000
Thereafter		2,345,000
Total lease payments		31,630,000
Less interest		(3,523,000	)
Total lease liabilities	$	28,107,000

As of March 31, 2026, the Company has approximately $1.5 million of additional operating lease commitments that have not yet commenced. This lease will commence in 2026 and has lease terms of 10 years.