The Company has long-term operating leases, comprised primarily of equipment, vehicles, and real estate lease arrangements. Operating leases have remaining lease terms of one year to seven years.

The classification of leases in the unaudited condensed consolidated balance sheets was as follows:


		June 30,		December 31,
(in thousands)	Classification	2026		2025
Right-of-use assets
Operating leases	Right-of-use assets, net	$	23,975	$	10,832
Lease liabilities
Current
Operating leases	Lease liabilities, current	$	4,896	$	3,343
Noncurrent
Operating leases	Lease liabilities, noncurrent		24,875		8,019
Total lease liabilities		$	29,771	$	11,362

Operating lease liabilities are based on the net present value of the remaining lease payments over the remaining lease term. In determining the lease liability and the present value of lease payments, management used the incremental borrowing rate.

Operating lease expense for the three months ended June 30, 2026 and 2025 was $1.9 million and $0.9 million, respectively, and operating lease expense for the six months ended June 30, 2026 and 2025 was $3.5 million and $1.9 million, respectively. Operating lease expense is included in cost of power system sales revenues, cost of ongoing services revenues, and general and administrative expenses in the unaudited condensed consolidated statements of operations.

The following is the aggregate future lease payments for operating leases as of June 30, 2026:

(in thousands)


Remainder of 2026	$	3,486
2027		7,115
2028		6,320
2029		5,612
2030		4,812
2031		4,253
Thereafter		6,936
Total undiscounted lease payments		38,534
Less imputed interest		(8,763	)
Total lease liabilities	$	29,771

For the three months ended June 30, 2026 and 2025, cash paid for operating leases was $1.1 million and $1.0 million, respectively. For the six months ended June 30, 2026 and 2025, cash paid for operating leases was $2.2 million and $2.0 million, respectively. For the six months ended June 30, 2026 and the year ended December 31, 2025, right-of-use (“ROU”) assets obtained in exchange for the lease obligations for operating leases were $15.5 million and $3.1 million, respectively.

The weighted-average remaining lease term of operating leases is approximately six years. The weighted-average discount rate used to determine the operating lease liabilities at June 30, 2026 and December 31, 2025 was 8.70% and 6.73%, respectively.

On January 30, 2026, the Company obtained possession and commenced a new 89-month operating lease for an approximately 407,300 square foot facility in Houston, Texas. Upon the lease commencement, the Company recorded an operating lease ROU asset of approximately $14.7 million and a corresponding lease liability of approximately $18.7 million, inclusive of a $4.0 million tenant improvement allowance, measured using an incremental borrowing rate and net of expected tenant improvement allowance.