For information about the Company’s revenue-generating activities as a lessor, refer to the “Leased merchandise and revenue recognition” section of Note 2 to the consolidated financial statements included in the Company’s 2025 Annual Report on Form 10-K. All of the Company’s lease agreements are considered operating leases.

The Company leases approximately 62% of its U.S. pawnshop locations, almost all of its Latin America and U.K. pawnshop locations and certain administrative offices under operating leases and determines if an arrangement is or contains a lease at inception. Many leases include both lease and non-lease components for which the Company accounts separately. Lease components include rent, taxes and insurance costs while non-lease components include common area or other maintenance costs. Operating leases are included in operating lease right of use assets, lease liability, current and lease liability, non-current in the consolidated balance sheets. The Company does not have any finance leases.

Leased facilities are generally leased for a term of three to five years with one or more options to renew for an additional three to five years, typically at the Company’s sole discretion. In addition, the majority of these leases can be terminated early upon an adverse change in law which negatively affects the store’s profitability. The Company regularly evaluates renewal and termination options to determine if the Company is reasonably certain to exercise the option, and excludes these options from the lease term included in the recognition of the operating lease right of use asset and lease liability until such certainty exists. The weighted-average remaining lease term for operating leases was 4.1 years as of June 30, 2026 and 4.2 years as of June 30, 2025.

The operating lease right of use asset and lease liability is recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. The Company’s leases do not provide an implicit rate, and therefore, it uses its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. The Company utilizes a portfolio approach for determining the incremental borrowing rate to apply to groups of leases with similar characteristics. The weighted-average discount rate used to measure the lease liability as of June 30, 2026 and 2025 was 8.0% and 8.5%, respectively.

The Company has certain operating leases in Mexico which are denominated in U.S. dollars. The liability related to these leases is considered a monetary liability and requires remeasurement each reporting period into the functional currency (Mexican pesos) using reporting date exchange rates. The remeasurement results in the recognition of foreign currency exchange gains or losses each reporting period, which can produce a certain level of earnings volatility. The Company recognized a foreign currency gain of $0.8 million and $1.6 million during the three months ended June 30, 2026 and 2025, respectively, related to the remeasurement of these U.S. dollar-denominated operating leases, which is included in loss (gain) on foreign exchange in the accompanying consolidated statements of income. During the six months ended June 30, 2026 and 2025, the Company recognized a foreign currency gain of $1.6 million and $1.5 million, respectively, related to these U.S. dollar denominated operating leases.

Lease expense is recognized on a straight-line basis over the lease term, with variable lease expense recognized in the period such payments are incurred. The following table details the components of lease expense included in operating expenses in the consolidated statements of income during the three and six months ended June 30, 2026 and 2025 (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2026		2025		2026		2025
Operating lease expense	$	40,368	$	36,588	$	81,227	$	71,217
Variable lease expense (1)	5,843		4,913		11,432		9,717
Total operating lease expense	$	46,211	$	41,501	$	92,659	$	80,934


Six months ending December 31, 2026	$	71,570
2027	119,538
2028	93,523
2029	64,238
2030	32,598
Thereafter	36,628
Total	$	418,095
Less amount of lease payments representing interest	(61,118)
Total present value of lease payments	$	356,977


	Six Months Ended
	June 30,
	2026		2025
Cash paid for amounts included in the measurement of operating lease liabilities	$	75,026	$	64,927
Leased assets obtained in exchange for new operating lease liabilities	$	52,595	$	61,208