The Company has both lessee and lessor arrangements. The Company determines whether a contract is or contains a lease at the inception of the contract or at any subsequent modification. A contract will be deemed to be or contain a lease if the contract conveys the right to control and direct the use of identified property, plant, or equipment for a period of time in exchange for consideration. The Company generally must also have the right to obtain substantially all of the economic benefits from the use of the property, plant, and equipment. Depending on the terms, leases are classified as either operating or finance leases if the Company is the lessee, or as operating, sales-type, or direct financing leases if the Company is the lessor. Certain of the Company’s lessee and lessor leases have renewal options to extend the leases for additional periods at the Company’s discretion.

The Company leases certain facilities and certain equipment under non-cancelable finance and operating leases, which are recorded as right-of-use assets and lease liabilities. Certain leases provide the Company with either a right of first refusal to acquire or an option to purchase a facility at fair value. Certain leases also contain escalation clauses and renewal option clauses calling for increased rents. Where a lease contains an escalation clause or a concession, such as a rent holiday or tenant improvement allowance, the Company includes these items in the determination of the right-of-use asset and the lease liabilities. The effects of these escalation clauses or concessions have been reflected in lease expense on a straight-line basis over the expected lease term and any variable lease payments subsequent to establishing the lease liability are expensed as incurred. The lease term commences on the date when the Company has the right to control the use of the leased property, which is typically before lease payments are due under the terms of the lease. Certain of the Company’s leases have renewal periods up to 40 years, exercisable at the Company’s option, and generally require the Company to pay property taxes, insurance and

maintenance costs, in addition to the lease payments. At lease inception, the Company includes all renewals or option periods that are reasonably certain to be exercised when determining the expected lease term, as failure to renew the lease would impose an economic penalty.

Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the expected lease term. To determine the present value of lease payments not yet paid, the Company estimates incremental borrowing rates based on the information available at the lease commencement date, as rates are not implicitly stated in the Company’s leases.

Components of lease expense were as follows:


	Year Ended July 31,
(In thousands)	2026		2025
Operating lease expense	$	21,441	$	28,383
Finance lease expense:
Amortization of right-of-use assets		35		101
Interest on finance lease liabilities		123		249
Short-term lease expense		6,426		6,627
Variable lease expense		1,647		1,407
Total lease expense	$	29,672	$	36,767

The components of right-of-use assets and lease liabilities on the consolidated balance sheets were as follows (In thousands):


Lease Asset and Liabilities	Balance Sheet Classification (In thousands)	July 31, 2026		July 31, 2025
Operating lease right-of-use assets	Operating lease right-of-use assets	$	83,728	$	99,708
Finance lease right-of-use assets	Property and equipment, net		2,645		2,648
Total lease assets, net		$	86,373	$	102,356

Operating lease liabilities - current	Current portion of operating and finance lease liabilities	$	15,102	$	19,810
Finance lease liabilities - current	Current portion of operating and finance lease liabilities		61		59
Operating lease liabilities - non-current	Operating and finance lease liabilities, net of current portion		70,539		81,224
Finance lease liabilities - non-current	Operating and finance lease liabilities, net of current portion		2,665		2,646
Total lease liabilities		$	88,367	$	103,739

The weighted-average remaining lease terms and discount rates as of July 31, 2026 were as follows:


	Weighted-Average Remaining Lease Term (In years)		Weighted-Average Discount Rate(1)
Operating leases		9.53		4.48	%
Finance leases		29.47		4.47	%

(1)

The Company cannot determine the interest rate implicit in the Company’s leases. Therefore, the discount rate represents the Company’s incremental borrowing rate and is determined based on the risk-free rate, adjusted for the risk premium attributed to the Company’s imputed corporate credit rating for a secured or collateralized instrument.

Supplemental cash flow information related to leases for the years ended July 31 were as follows (In thousands):


	Year Ended July 31,
(In thousands)	2026		2025
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows related to operating leases	$	20,976	$	28,026
Operating cash flows related to finance leases		77		260
Financing cash flows related to finance leases		60		49
Right-of-use assets obtained in exchange for new operating lease liabilities		16,750		9,516
Right-of-use assets obtained in exchange for new finance lease liabilities		—		2,653

The annual maturities of the Company’s lease liabilities as of July 31, 2026 were as follows:


Fiscal Year (In thousands)	Finance Leases			Operating Leases
2027	$	137		$	17,450
2028		137			15,880
2029		137			13,535
2030		137			8,188
2031		137			6,976
Thereafter		4,465			41,997
Total future lease commitments	$	5,150		$	104,026
Less: imputed interest		(2,424	)		(18,385	)
Present value of lease liabilities	$	2,726		$	85,641

The Company’s lessor arrangements include certain facilities and various land locations, of which each qualifies as an operating lease. Certain leases also contain escalation clauses and renewal option clauses calling for increased rents. Where a lease contains an escalation clause or a concession, such as a rent holiday or tenant improvement allowance, the Company includes these items in the determination of the straight-line rental income. The effects of these escalation clauses or concessions have been reflected in lease payments receivable on a straight-line basis over the expected lease term and any variable lease income subsequent to establishing the receivable will be recognized as earned.

Future lease payments receivable under operating leases with terms greater than one year as of July 31, 2026 were as follows:


Fiscal Year (In thousands)	Operating Leases
2027	$	5,225
2028		4,494
2029		3,395
2030		159
2031		155
Thereafter		1,315
Total future lease payments receivable	$	14,743

The cost of the leased space was $58.8 million and $58.8 million as of July 31, 2026 and 2025, respectively. The accumulated depreciation associated with the leased assets was $7.9 million and $6.7 million as of July 31, 2026 and 2025, respectively. Both the leased assets and accumulated depreciation are included in Property and equipment, net on the consolidated balance sheets. Rental income from these operating leases was $17.1 million and $20.7 million for the years ended July 31, 2026 and 2025, respectively, and is included within service revenues on the consolidated statements of income.