v3.26.3
LEASES
 9 Months Ended
Sep. 30, 2026
Leases [Abstract]  
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into an agreement with Fluidstack for the development, construction and lease of an HPC data center facility for a 10-year term, with two five-year extension options, which lease was subsequently amended and restated in November 2025 (as so amended and restated, the “Fluidstack Lease”). As part of the Fluidstack Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to the tenant, and failure to provide these services may result in additional costs under the lease.
In connection with the Fluidstack Lease, Google LLC (“Google”) agreed to support certain payment obligations under the lease upon the occurrence of specified events. See additional information regarding this agreement in Note 16. Warrants.
In September 2026, the Company amended the Fluidstack Lease to provide for an updated phased delivery schedule, with individual data halls expected to be delivered between the fourth quarter of 2026 and the first quarter of 2027 and remove the two five-year extension options. Concurrently with the execution of the amendment to the Fluidstack Lease, the Company entered into a binding agreement with a leading AI lab to lease the facility for 10 years to commence following the term of the Fluidstack Lease. In connection with the amendment to the Fluidstack Lease and related tenant-modification change orders, the Company, Fluidstack and the leading AI lab established a cost reimbursement framework under which the Company will bear the first $359.3 million of costs in excess of the initial budgeted amount under the Fluidstack Lease. The tenant will reimburse the Company over the aggregate 20-year contracted term for 50% of any such costs above that amount, payable as additional rent and calculated in a manner to provide the Company with a contracted rate of return on such reimbursed amounts.
In October 2025, the Company, through its wholly owned subsidiary Cipher Black Pearl LLC, entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility (the “Black Pearl Facility Lease”). Delivery of the facility occurs on a phased basis, with the initial phase commenced in August 2026. The Black Pearl Facility Lease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones. Between November 2025 and July 2026, the parties entered into three amendments to the Black Pearl Facility Lease that, among other things, revised the data hall configuration and milestone delivery dates.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
The components of the Company’s HPC leasing revenue for its commenced operating leases were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Income relating to fixed payments$5,231 $— $5,231 $— 
Income relating to variable payments621 — 621 — 
Total HPC leasing revenue$5,852 $— $5,852 $— 
The difference between lease revenue recognized on a straight-line basis and contractual lease payments billed is recorded as accrued rent receivable or deferred rent liability. As of September 30, 2026, the Company had accrued rent receivables of $1.4 million, included in Other noncurrent assets, and deferred rent liabilities of $46.2 million included in Deferred revenue, in the Company’s condensed consolidated balance sheets. There were no accrued rent receivables or deferred rent liabilities as of December 31, 2025.
The following table presents the Company’s future minimum operating lease payments expected to be received from commenced lease components as of September 30, 2026. The table includes only base rent and excludes reimbursements and variable lease components:
Remainder of Year Ending December 31, 2026$7,909 
Year Ending December 31, 202729,989 
Year Ending December 31, 202826,965 
Year Ending December 31, 202927,774 
Year Ending December 31, 203028,607 
Thereafter363,920 
Total undiscounted lease payments$485,164 
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended on July 9, 2021 and August 23, 2023 (as amended, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Purchase and Sale Agreement dated June 28, 2021 with Vistra Operations Company LLC (the “Luminant Purchase and Sale Agreement”) to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842, Leases (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of approximately five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC, at a price to be determined based upon bids obtained in the secondary market.
Mikeska Ground Lease
In August 2026, the Company, through its wholly-owned subsidiary Mikeska LLC, entered into a Second Amendment to Ground Lease with Purchase Option with the property owner to expand the optioned land, and extend term during which the purchase option is exercisable. The Company determined that it is reasonably certain to exercise the purchase option and classified the lease as a finance lease. At the amendment date, the Company recognized a finance lease ROU asset of $18.2 million and a lease liability of $18.0 million.
Reveille Facility Lease
The Company, through its wholly owned subsidiary, Cipher Reveille LLC, assumed a lease for up to 52 acres of land in LaSalle, Texas, in October 2024 for the purpose of constructing a data center, and ancillary infrastructure. The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each.
Office and warehouse leases
The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado. In September 2026, the Company entered into an agreement to terminate the license for its One Vanderbilt Avenue office effective January 30, 2027, and remeasured the related lease liability and right-of-use asset.
In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
All of the Company's office leases are classified as operating leases.
Additional lease information
Components of the Company’s lease expenses are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,508 $2,283 
Interest on lease liability298 246 655 817 
Total finance lease expense801 1,007 2,163 3,100 
Operating leases:
Operating lease expense1,746 676 4,185 1,962 
Total operating lease expense1,746 676 4,185 1,962 
Total lease expense$2,547 $1,683 $6,348 $5,062 
(1)Amortization of finance lease ROU asset is included within depreciation expense. The Mikeska ROU asset is not amortized as the underlying asset is land.
The Company did not incur any variable lease costs during any of the periods presented.
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Operating cash flows - operating lease$237 $570 $1,866 $1,648 
Right-of-use asset obtained in exchange for finance lease liabilities$17,959 $— $17,959 $— 
Right-of-use asset obtained in exchange for operating lease liabilities$— $491 $29,021 $491 
Decrease in right-of-use asset and operating lease liability from lease modification$2,957 $— $2,957 $— 
September 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.57.3
Weighted-average discount rate – finance lease7.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$20,052 $5,073 
(1)As of September 30, 2026, the Company recorded accumulated amortization of $8.9 million for the Odessa finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. The Mikeska finance lease ROU asset is not amortized, as the underlying asset is land.
As of September 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20261,216 1,373 2,589 
Year Ending December 31, 20273,253 3,546 6,799 
Year Ending December 31, 202819,500 5,285 24,785 
Year Ending December 31, 2029— 5,179 5,179 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments23,969 56,858 80,827 
Less present value discount(1,650)(19,830)(21,480)
Total$22,319 $37,028 $59,347 
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into an agreement with Fluidstack for the development, construction and lease of an HPC data center facility for a 10-year term, with two five-year extension options, which lease was subsequently amended and restated in November 2025 (as so amended and restated, the “Fluidstack Lease”). As part of the Fluidstack Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to the tenant, and failure to provide these services may result in additional costs under the lease.
In connection with the Fluidstack Lease, Google LLC (“Google”) agreed to support certain payment obligations under the lease upon the occurrence of specified events. See additional information regarding this agreement in Note 16. Warrants.
In September 2026, the Company amended the Fluidstack Lease to provide for an updated phased delivery schedule, with individual data halls expected to be delivered between the fourth quarter of 2026 and the first quarter of 2027 and remove the two five-year extension options. Concurrently with the execution of the amendment to the Fluidstack Lease, the Company entered into a binding agreement with a leading AI lab to lease the facility for 10 years to commence following the term of the Fluidstack Lease. In connection with the amendment to the Fluidstack Lease and related tenant-modification change orders, the Company, Fluidstack and the leading AI lab established a cost reimbursement framework under which the Company will bear the first $359.3 million of costs in excess of the initial budgeted amount under the Fluidstack Lease. The tenant will reimburse the Company over the aggregate 20-year contracted term for 50% of any such costs above that amount, payable as additional rent and calculated in a manner to provide the Company with a contracted rate of return on such reimbursed amounts.
In October 2025, the Company, through its wholly owned subsidiary Cipher Black Pearl LLC, entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility (the “Black Pearl Facility Lease”). Delivery of the facility occurs on a phased basis, with the initial phase commenced in August 2026. The Black Pearl Facility Lease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones. Between November 2025 and July 2026, the parties entered into three amendments to the Black Pearl Facility Lease that, among other things, revised the data hall configuration and milestone delivery dates.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
The components of the Company’s HPC leasing revenue for its commenced operating leases were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Income relating to fixed payments$5,231 $— $5,231 $— 
Income relating to variable payments621 — 621 — 
Total HPC leasing revenue$5,852 $— $5,852 $— 
The difference between lease revenue recognized on a straight-line basis and contractual lease payments billed is recorded as accrued rent receivable or deferred rent liability. As of September 30, 2026, the Company had accrued rent receivables of $1.4 million, included in Other noncurrent assets, and deferred rent liabilities of $46.2 million included in Deferred revenue, in the Company’s condensed consolidated balance sheets. There were no accrued rent receivables or deferred rent liabilities as of December 31, 2025.
The following table presents the Company’s future minimum operating lease payments expected to be received from commenced lease components as of September 30, 2026. The table includes only base rent and excludes reimbursements and variable lease components:
Remainder of Year Ending December 31, 2026$7,909 
Year Ending December 31, 202729,989 
Year Ending December 31, 202826,965 
Year Ending December 31, 202927,774 
Year Ending December 31, 203028,607 
Thereafter363,920 
Total undiscounted lease payments$485,164 
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended on July 9, 2021 and August 23, 2023 (as amended, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Purchase and Sale Agreement dated June 28, 2021 with Vistra Operations Company LLC (the “Luminant Purchase and Sale Agreement”) to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842, Leases (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of approximately five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC, at a price to be determined based upon bids obtained in the secondary market.
Mikeska Ground Lease
In August 2026, the Company, through its wholly-owned subsidiary Mikeska LLC, entered into a Second Amendment to Ground Lease with Purchase Option with the property owner to expand the optioned land, and extend term during which the purchase option is exercisable. The Company determined that it is reasonably certain to exercise the purchase option and classified the lease as a finance lease. At the amendment date, the Company recognized a finance lease ROU asset of $18.2 million and a lease liability of $18.0 million.
Reveille Facility Lease
The Company, through its wholly owned subsidiary, Cipher Reveille LLC, assumed a lease for up to 52 acres of land in LaSalle, Texas, in October 2024 for the purpose of constructing a data center, and ancillary infrastructure. The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each.
Office and warehouse leases
The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado. In September 2026, the Company entered into an agreement to terminate the license for its One Vanderbilt Avenue office effective January 30, 2027, and remeasured the related lease liability and right-of-use asset.
In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
All of the Company's office leases are classified as operating leases.
Additional lease information
Components of the Company’s lease expenses are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,508 $2,283 
Interest on lease liability298 246 655 817 
Total finance lease expense801 1,007 2,163 3,100 
Operating leases:
Operating lease expense1,746 676 4,185 1,962 
Total operating lease expense1,746 676 4,185 1,962 
Total lease expense$2,547 $1,683 $6,348 $5,062 
(1)Amortization of finance lease ROU asset is included within depreciation expense. The Mikeska ROU asset is not amortized as the underlying asset is land.
The Company did not incur any variable lease costs during any of the periods presented.
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Operating cash flows - operating lease$237 $570 $1,866 $1,648 
Right-of-use asset obtained in exchange for finance lease liabilities$17,959 $— $17,959 $— 
Right-of-use asset obtained in exchange for operating lease liabilities$— $491 $29,021 $491 
Decrease in right-of-use asset and operating lease liability from lease modification$2,957 $— $2,957 $— 
September 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.57.3
Weighted-average discount rate – finance lease7.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$20,052 $5,073 
(1)As of September 30, 2026, the Company recorded accumulated amortization of $8.9 million for the Odessa finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. The Mikeska finance lease ROU asset is not amortized, as the underlying asset is land.
As of September 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20261,216 1,373 2,589 
Year Ending December 31, 20273,253 3,546 6,799 
Year Ending December 31, 202819,500 5,285 24,785 
Year Ending December 31, 2029— 5,179 5,179 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments23,969 56,858 80,827 
Less present value discount(1,650)(19,830)(21,480)
Total$22,319 $37,028 $59,347 
LEASES LEASES
Lessor Accounting
In September 2025, the Company, through its wholly owned subsidiary Cipher Barber Lake LLC, entered into an agreement with Fluidstack for the development, construction and lease of an HPC data center facility for a 10-year term, with two five-year extension options, which lease was subsequently amended and restated in November 2025 (as so amended and restated, the “Fluidstack Lease”). As part of the Fluidstack Lease, the Company is required to provide certain services for the data center including supplying power, environmental controls, physical security and connectivity products to the tenant, and failure to provide these services may result in additional costs under the lease.
In connection with the Fluidstack Lease, Google LLC (“Google”) agreed to support certain payment obligations under the lease upon the occurrence of specified events. See additional information regarding this agreement in Note 16. Warrants.
In September 2026, the Company amended the Fluidstack Lease to provide for an updated phased delivery schedule, with individual data halls expected to be delivered between the fourth quarter of 2026 and the first quarter of 2027 and remove the two five-year extension options. Concurrently with the execution of the amendment to the Fluidstack Lease, the Company entered into a binding agreement with a leading AI lab to lease the facility for 10 years to commence following the term of the Fluidstack Lease. In connection with the amendment to the Fluidstack Lease and related tenant-modification change orders, the Company, Fluidstack and the leading AI lab established a cost reimbursement framework under which the Company will bear the first $359.3 million of costs in excess of the initial budgeted amount under the Fluidstack Lease. The tenant will reimburse the Company over the aggregate 20-year contracted term for 50% of any such costs above that amount, payable as additional rent and calculated in a manner to provide the Company with a contracted rate of return on such reimbursed amounts.
In October 2025, the Company, through its wholly owned subsidiary Cipher Black Pearl LLC, entered into a 15-year lease agreement with an investment grade hyperscaler tenant to deliver approximately 300 gross MW of turnkey data center capacity at the Black Pearl Facility (the “Black Pearl Facility Lease”). Delivery of the facility occurs on a phased basis, with the initial phase commenced in August 2026. The Black Pearl Facility Lease provides three five-year extension options, as well as a short-term extension option under specified conditions. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified milestones. Between November 2025 and July 2026, the parties entered into three amendments to the Black Pearl Facility Lease that, among other things, revised the data hall configuration and milestone delivery dates.
In March 2026, the Company, through a wholly owned subsidiary, entered into a data center lease agreement with an investment grade hyperscaler tenant for the development, construction and lease of an additional HPC data center facility at one of the Company’s existing sites in Texas. The initial term of the lease is 15 years, with multiple extension options at the tenant's election. The Company is responsible for construction of the facility, with phased delivery expected to begin in 2027. Base rent is abated prior to the first phase commencement date and commences on a per-phase basis as each phase is
delivered. The Company is required to provide ongoing services including power, operations and maintenance, and other operating services, and may be subject to rent credits or other remedies for failure to achieve specified delivery milestones.
The components of the Company’s HPC leasing revenue for its commenced operating leases were as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Income relating to fixed payments$5,231 $— $5,231 $— 
Income relating to variable payments621 — 621 — 
Total HPC leasing revenue$5,852 $— $5,852 $— 
The difference between lease revenue recognized on a straight-line basis and contractual lease payments billed is recorded as accrued rent receivable or deferred rent liability. As of September 30, 2026, the Company had accrued rent receivables of $1.4 million, included in Other noncurrent assets, and deferred rent liabilities of $46.2 million included in Deferred revenue, in the Company’s condensed consolidated balance sheets. There were no accrued rent receivables or deferred rent liabilities as of December 31, 2025.
The following table presents the Company’s future minimum operating lease payments expected to be received from commenced lease components as of September 30, 2026. The table includes only base rent and excludes reimbursements and variable lease components:
Remainder of Year Ending December 31, 2026$7,909 
Year Ending December 31, 202729,989 
Year Ending December 31, 202826,965 
Year Ending December 31, 202927,774 
Year Ending December 31, 203028,607 
Thereafter363,920 
Total undiscounted lease payments$485,164 
Lessee Accounting
Odessa Facility Lease
The Company entered into a series of agreements with affiliates of Luminant, including the Lease Agreement dated June 29, 2021, as amended on July 9, 2021 and August 23, 2023 (as amended, the “Luminant Lease Agreement”). The Luminant Lease Agreement leases a plot of land to the Company for the data center, ancillary infrastructure and electrical system (the “Interconnection Electrical Facilities” or “substation”) of the Odessa Facility. The Company entered into the Luminant Lease Agreement and the Purchase and Sale Agreement dated June 28, 2021 with Vistra Operations Company LLC (the “Luminant Purchase and Sale Agreement”) to build the infrastructure necessary to support its Odessa Facility operations. The Company determined that the Luminant Lease Agreement and the Luminant Purchase and Sale Agreement should be combined for accounting purposes under ASC 842, Leases (collectively, the “Combined Luminant Lease Agreement”) and that amounts exchanged under the combined contract should be allocated to the various components of the overall transaction based on relative fair values. The Combined Luminant Lease Agreement is classified as a finance lease.
The Combined Luminant Lease Agreement commenced on November 22, 2022 and has an initial term of approximately five years, with renewal provisions that are aligned with the Luminant Power Agreement. Financing for use of the land and substation is provided by Luminant affiliates.
At the end of the lease term for the Interconnection Electrical Facilities, the substation will be sold back to Luminant’s affiliate, Vistra Operations Company, LLC, at a price to be determined based upon bids obtained in the secondary market.
Mikeska Ground Lease
In August 2026, the Company, through its wholly-owned subsidiary Mikeska LLC, entered into a Second Amendment to Ground Lease with Purchase Option with the property owner to expand the optioned land, and extend term during which the purchase option is exercisable. The Company determined that it is reasonably certain to exercise the purchase option and classified the lease as a finance lease. At the amendment date, the Company recognized a finance lease ROU asset of $18.2 million and a lease liability of $18.0 million.
Reveille Facility Lease
The Company, through its wholly owned subsidiary, Cipher Reveille LLC, assumed a lease for up to 52 acres of land in LaSalle, Texas, in October 2024 for the purpose of constructing a data center, and ancillary infrastructure. The initial term of the lease is ten years, and includes two consecutive renewal options for ten years each.
Office and warehouse leases
The Company leases office space for its headquarters in New York, New York, and office space in Charleston, South Carolina, and Denver, Colorado. In September 2026, the Company entered into an agreement to terminate the license for its One Vanderbilt Avenue office effective January 30, 2027, and remeasured the related lease liability and right-of-use asset.
In April 2025, the Company entered into a commercial lease for a warehouse in Odessa, Texas.
In April 2026, the Company entered into an operating lease for office space in New York, New York.
All of the Company's office leases are classified as operating leases.
Additional lease information
Components of the Company’s lease expenses are as follows (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Finance leases:
Amortization of ROU assets (1)
$503 $761 $1,508 $2,283 
Interest on lease liability298 246 655 817 
Total finance lease expense801 1,007 2,163 3,100 
Operating leases:
Operating lease expense1,746 676 4,185 1,962 
Total operating lease expense1,746 676 4,185 1,962 
Total lease expense$2,547 $1,683 $6,348 $5,062 
(1)Amortization of finance lease ROU asset is included within depreciation expense. The Mikeska ROU asset is not amortized as the underlying asset is land.
The Company did not incur any variable lease costs during any of the periods presented.
Other information related to the Company’s leases is shown below (dollar amounts in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2026202520262025
Operating cash flows - operating lease$237 $570 $1,866 $1,648 
Right-of-use asset obtained in exchange for finance lease liabilities$17,959 $— $17,959 $— 
Right-of-use asset obtained in exchange for operating lease liabilities$— $491 $29,021 $491 
Decrease in right-of-use asset and operating lease liability from lease modification$2,957 $— $2,957 $— 
September 30, 2026December 31, 2025
Weighted-average remaining lease term – finance lease (in years)1.21.7
Weighted-average remaining lease term – operating lease (in years)10.57.3
Weighted-average discount rate – finance lease7.0 %11.0 %
Weighted-average discount rate – operating lease7.8 %8.0 %
Finance lease ROU assets(1)
$20,052 $5,073 
(1)As of September 30, 2026, the Company recorded accumulated amortization of $8.9 million for the Odessa finance lease ROU asset. Finance lease ROU assets are recorded within property and equipment, net on the Company’s condensed consolidated balance sheets. The Mikeska finance lease ROU asset is not amortized, as the underlying asset is land.
As of September 30, 2026, future minimum lease payments are as follows (in thousands):
Finance Lease
Operating Lease
Total
Remainder of Year Ending December 31, 20261,216 1,373 2,589 
Year Ending December 31, 20273,253 3,546 6,799 
Year Ending December 31, 202819,500 5,285 24,785 
Year Ending December 31, 2029— 5,179 5,179 
Year Ending December 31, 2030— 4,950 4,950 
Thereafter— 36,525 36,525 
Total lease payments23,969 56,858 80,827 
Less present value discount(1,650)(19,830)(21,480)
Total$22,319 $37,028 $59,347