Our operating lease arrangements relate to our office space and data centers. We review new arrangements at inception to evaluate whether we obtain substantially all the economic benefits of and have the right to control the use of an asset. Our lease ROU assets and lease liabilities are recognized based on the present value of future minimum lease payments at lease commencement or modification date (which includes fixed lease payments and certain qualifying index-based variable payments) over the reasonably certain lease term, leveraging an estimated incremental borrowing rate ("IBR"). Certain adjustments to calculate our lease ROU assets may be required due to prepayments, lease incentives received and initial direct costs incurred. We account for lease and non-lease components as a single lease component, which we recognize over the expected lease term on a straight-line expense basis in occupancy costs (a component of Selling, general and administrative ("SG&A") expense) in our Consolidated Statements of Income.

As of May 31, 2026, we recognized $119.4 million of Lease ROU assets, net and $180.9 million of combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets. Our leases have remaining lease terms ranging from less than one year to just under 10 years. Our lease agreements may include options to extend or terminate the lease, which would be included in the measurement of our lease term if it is reasonably certain that we will exercise the option.

The following table presents our future minimum lease payments and a reconciliation to the combined Current lease liabilities and Long-term lease liabilities in the Consolidated Balance Sheets as of May 31, 2026:


(in thousands)	Minimum Lease Payments
Fiscal Years ended August 31,
2026 (remaining three months)	$	10,395
2027	41,696
2028	37,633
2029	32,223
2030	27,196
Thereafter	60,014
Total minimum lease payments	$	209,157
Less: Imputed interest	28,216
Total lease liabilities	$	180,941

The following table includes components of our occupancy costs:


	Three Months Ended				Nine Months Ended
	May 31,				May 31,
(in thousands)	2026		2025		2026		2025
Operating lease costs(1)	$	8,084	$	7,974	$	24,269	$	23,152
Variable lease costs(2)	$	4,624	$	4,031	$	13,814	$	13,696

(1) Operating lease costs include costs associated with fixed lease payments and index-based variable payments that qualified for lease accounting under ASC 842, Leases and complied with the practical expedients and exceptions we elected.

(2) Variable lease costs include costs that are not fixed and are not dependent on an index or rate. These costs were not included in the measurement of lease liabilities and primarily include variable non-lease costs, such as utilities, real estate taxes, insurance and maintenance, as well as lease costs for those leases that qualified for the short-term lease exception.

The following table summarizes supplemental cash flow information related to our operating leases:


	Nine Months Ended
	May 31,
(in thousands)	2026		2025
Cash paid for amounts included in the measurement of lease liabilities	$	29,807	$	30,218
Lease ROU assets obtained in exchange for lease liabilities(1)	$	23,875	$	5,175
Reductions to ROU assets resulting from reductions to lease liabilities(2)	$	—	$	(5,528)