We lease office and data center facilities under non-cancelable operating lease agreements expiring through November 2038. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. During the first quarter of fiscal 2027, we have executed certain lease agreements primarily related to our headquarter office and data center that are expected to commence between fiscal 2027 and fiscal 2031, with duration of these leases ranging from 5 to 12 years. As such, aggregate lease payments of approximately $366.6 million are excluded from our future lease payments tabular disclosure below.

We also lease certain engineering test equipment under financing agreements. These finance leases have a lease term of three to five years and contain a bargain purchase option that we have exercised or expect to exercise at the end of the respective lease terms. Lease asset and liability associated with these leases were not material for all periods presented.


	First Quarter of Fiscal
	2026		2027
Fixed operating lease cost	$	12,867	$	13,830

Variable lease cost (1)	2,033		3,372
Short-term lease cost (12 months or less)	1,126		1,361






Total lease cost	$	16,026	$	18,563

Supplemental information related to operating leases is as follows (in thousands):


	At the End of
	Fiscal 2026		First Quarter of Fiscal 2027
Operating leases:
Weighted-average remaining lease term (in years)	4.7		5.3
Weighted-average discount rate	6.5	%	5.7	%


	First Quarter of Fiscal
	2026		2027
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases	$	16,369	$	14,014

Right-of-use assets obtained in exchange for lease liabilities:
Operating leases	$	1,473	$	31,261

Future lease payments under our non-cancelable operating leases at the end of the first quarter of fiscal 2027 are as follows (in thousands):


Fiscal Years Ending	Operating Leases
Remainder of 2027	$	27,411
2028	56,518
2029	56,053
2030	53,042
2031	44,478
Thereafter	33,946
Total future lease payments	271,448
Less: imputed interest	(40,487)
Present value of total lease liabilities	$	230,961

We, as a lessor, have entered into non-cancelable arrangements to lease our storage and data management solutions and subscription services. The arrangements include multiple seven-year leases with total net consideration of $372.9 million. The arrangements provide an end-of-term option to purchase the leased assets for a pre-determined price.

We determined, at inception of the respective arrangements, that each of the leases include sales-type leases, an operating lease, and non-lease components. The non-lease components are comprised primarily of subscription support services and professional services. The total net consideration for each lease was allocated to these components based on relative standalone selling price. The amounts allocated to the lease and non-lease components are accounted for in accordance with ASC 842 and ASC 606, respectively.

No product revenue was recognized during the first quarter of fiscal 2026. We recognized $29.2 million in product revenue related to the sales-type lease components during the first quarter of fiscal 2027. The associated profit was $27.0 million, based on the product revenue recognized less certain costs, during the first quarter of fiscal 2027. Subscription services revenue related to the operating lease and non-lease components recognized was $7.2 million and $15.1 million during the first quarter of fiscal 2026 and 2027.

Future minimum gross lease payments allocated to the sales-type leases and operating lease components are as follows (in thousands). The remaining lease payments of $182.7 million allocated to the non-lease components are excluded from the table below.


Fiscal Years Ending	Sales-Type Leases		Operating Lease
Remainder of 2027	$	16,325	$	9,406
2028	21,267		9,063
2029	24,916		3,354
2030	29,300		—
2031	29,300		—
Thereafter	33,541		—
Total future lease payments to be received	$	154,649	$	21,823