Leases

6 Months Ended

Jun. 30, 2026

Finance Leases

The Company generally enters into finance lease arrangements to obtain hard drives and other infrastructure equipment for its data center operations. The terms of these agreements generally range from three to five years and certain of these arrangements have optional renewals to extend the term of the lease generally at a fixed price. Finance leases are generally secured by the underlying leased equipment. The Company’s finance leases have original lease periods expiring between 2026 and 2031. Finance lease right-of-use assets are included in property and equipment, net in the Company’s condensed consolidated balance sheets.

Operating Leases

The Company leases data center spaces and office space under non-cancelable operating leases with various expiration dates. Certain lease agreements include renewal options to extend the lease term at a price to be determined upon exercise. These options are not reasonably certain to be exercised and therefore are not factored in the determination of lease payments. Contingent rental payments are generally not included in the Company’s lease agreements. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The Company's leases have original lease periods expiring between 2026 and 2033.

Summary of Lease Information

The weighted average remaining lease terms and discount rates as of June 30, 2026 and December 31, 2025 were as follows:


	June 30, 2026				December 31, 2025
	Operating leases		Finance Leases(1)		Operating leases		Finance Leases(1)
Remaining lease term	5.7 years		2.9 years		5.4 years		2.5 years
Discount rate	7.0	%	12.9	%	6.9	%	12.6	%

________________

(1) Includes lease financing obligation costs.

The following table presents the components of lease expense (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Finance lease costs
Depreciation expense(1)	$	2,473	$	2,006	$	4,809	$	4,846
Interest expense	$	1,172	$	778	$	2,271	$	1,533
Lease financing obligation costs
Depreciation expense(1)	$	213	$	233	$	426	$	842
Interest expense	$	8	$	74	$	21	$	172

Operating lease costs
Rental expense related to lease components	$	2,263	$	1,283	$	3,908	$	2,469
Rental expense related to non-lease components(2)	876		1,126		2,108		2,226
Variable lease costs	1,206		1,225		2,114		2,317
Total operating lease costs	$	4,345	$	3,634	$	8,130	$	7,012

Total included in cost of revenue	$	4,300	$	3,359	$	8,044	$	6,545
Total included in general and administrative expense	$	45	$	275	$	86	$	467

________________

(1) Substantially all of the depreciation expense on assets acquired through the Company’s finance leases and lease financing obligations is included in cost of revenue in its condensed consolidated statements of operations and comprehensive loss.

(2) Non-lease components represent non-tangible utilities and services associated with the Company’s co-location lease agreements and are not recorded on the Company’s condensed consolidated balance sheets. The Company used judgment and third-party data in determining the stand-alone price for allocating consideration to lease and non-lease components under these lease agreements, such as the price of utilities as compared to its tangible data center footprint within each facility.

The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):


	Six Months Ended June 30,
	2026		2025
Operating cash flows
Cash paid for interest on finance lease and lease financing obligations	$	2,292	$	1,694
Cash paid for operating lease liabilities	$	3,747	$	2,623
Non-cash items
Equipment acquired through finance leases	$	19,108	$	14,064
Right-of-use assets obtained in exchange for operating lease obligations	$	13,082	$	12,023

The future minimum commitments for finance leases and lease financing obligations as of June 30, 2026 were as follows (in thousands):


Year Ending December 31,	Finance leases		Lease financing obligations		Total
Remainder of 2026	$	10,809	$	191	$	11,000
2027	18,794		—		18,794
2028	11,068		—		11,068
2029	9,896		—		9,896
2030	4,337		—		4,337
Thereafter	628		—		628
Total future minimum lease and financing commitments	55,532		191		55,723
Less imputed interest	(9,007)		(3)		(9,010)
Total finance lease and lease financing obligation liabilities	$	46,525	$	188	$	46,713

As of June 30, 2026, the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):


Year Ending December 31,	Operating leases		Non-lease components		Total
Remainder of 2026	$	3,530	$	1,609	$	5,139
2027	6,981		3,068		10,049
2028	7,722		3,074		10,796
2029	7,061		2,555		9,616
2030	6,183		1,352		7,535
Thereafter	12,714		109		12,823
Total future minimum operating lease and non-lease commitments	44,191		$	11,767	$	55,958
Less imputed interest	(8,467)
Total liability	$	35,724

In June 2026, the Company entered into a leasing agreement for a data center facility that is expected to commence in the third quarter of 2026, with a non-cancellable lease term of three years. The undiscounted future lease payments for this lease are approximately €3.4 million, or approximately $3.8 million based on the exchange rate between the Euro and the U.S. dollar as of June 30, 2026.

Additionally, in July 2026, the Company entered into an agreement to expand the same lease, which is expected to commence in the fourth quarter of 2026, with a non-cancellable lease term of three years. The undiscounted future lease payments for this lease are approximately €1.4 million, or approximately $1.5 million based on the exchange rate between the Euro and the U.S. dollar as of June 30, 2026.

The future lease payments associated with these agreements are not included in the lease obligations presented in the table above as the leases had not commenced as of June 30, 2026.

Leases

Finance Leases

Operating Leases

Summary of Lease Information

The weighted average remaining lease terms and discount rates as of June 30, 2026 and December 31, 2025 were as follows:


	June 30, 2026				December 31, 2025
	Operating leases		Finance Leases(1)		Operating leases		Finance Leases(1)
Remaining lease term	5.7 years		2.9 years		5.4 years		2.5 years
Discount rate	7.0	%	12.9	%	6.9	%	12.6	%

________________

(1) Includes lease financing obligation costs.

The following table presents the components of lease expense (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Finance lease costs
Depreciation expense(1)	$	2,473	$	2,006	$	4,809	$	4,846
Interest expense	$	1,172	$	778	$	2,271	$	1,533
Lease financing obligation costs
Depreciation expense(1)	$	213	$	233	$	426	$	842
Interest expense	$	8	$	74	$	21	$	172

Operating lease costs
Rental expense related to lease components	$	2,263	$	1,283	$	3,908	$	2,469
Rental expense related to non-lease components(2)	876		1,126		2,108		2,226
Variable lease costs	1,206		1,225		2,114		2,317
Total operating lease costs	$	4,345	$	3,634	$	8,130	$	7,012

Total included in cost of revenue	$	4,300	$	3,359	$	8,044	$	6,545
Total included in general and administrative expense	$	45	$	275	$	86	$	467

________________

The following table presents supplemental cash flow information relating to the Company’s leases (in thousands):


	Six Months Ended June 30,
	2026		2025
Operating cash flows
Cash paid for interest on finance lease and lease financing obligations	$	2,292	$	1,694
Cash paid for operating lease liabilities	$	3,747	$	2,623
Non-cash items
Equipment acquired through finance leases	$	19,108	$	14,064
Right-of-use assets obtained in exchange for operating lease obligations	$	13,082	$	12,023

The future minimum commitments for finance leases and lease financing obligations as of June 30, 2026 were as follows (in thousands):


Year Ending December 31,	Finance leases		Lease financing obligations		Total
Remainder of 2026	$	10,809	$	191	$	11,000
2027	18,794		—		18,794
2028	11,068		—		11,068
2029	9,896		—		9,896
2030	4,337		—		4,337
Thereafter	628		—		628
Total future minimum lease and financing commitments	55,532		191		55,723
Less imputed interest	(9,007)		(3)		(9,010)
Total finance lease and lease financing obligation liabilities	$	46,525	$	188	$	46,713

As of June 30, 2026, the Company's future minimum obligations for operating leases and non-cancellable contractual commitments related to non-lease components were as follows (in thousands):


Year Ending December 31,	Operating leases		Non-lease components		Total
Remainder of 2026	$	3,530	$	1,609	$	5,139
2027	6,981		3,068		10,049
2028	7,722		3,074		10,796
2029	7,061		2,555		9,616
2030	6,183		1,352		7,535
Thereafter	12,714		109		12,823
Total future minimum operating lease and non-lease commitments	44,191		$	11,767	$	55,958
Less imputed interest	(8,467)
Total liability	$	35,724

The future lease payments associated with these agreements are not included in the lease obligations presented in the table above as the leases had not commenced as of June 30, 2026.