Leases

12 Months Ended

Dec. 31, 2023

The Company leases its corporate offices, retail spaces and authentication centers under various noncancelable operating leases with terms ranging from one year to fifteen years.

The Company recorded operating lease costs of $22.8 million and $29.0 million for the years ended December 31, 2023 and 2022, respectively. The Company incurred $5.2 million and $5.6 million of variable lease costs for the years ended December 31, 2023 and 2022, respectively, which is comprised primarily of the Company’s proportionate share of operating expenses, property taxes and insurance.

Due to the office and store closures in the year ended December 31, 2023, the Company reviewed its right-of-use assets for impairment. Impairment losses are measured and recorded for the excess of carrying value over its fair value, estimated based on expected future cash flows using discount rate and other quantitative and qualitative factors. As a result, the Company recorded $31.1 million related to the impairment of certain office and store right-of-use assets during the year ended December 31, 2023. The impairment charges are included in restructuring in the statements of operations.

During the year ended December 31, 2023, the Company entered into agreements to amend certain of its operating leases. The lease for the Company's corporate headquarters in San Francisco, CA was amended to remove one floor of leased space, and the lease for the Company's offices in New York, NY, was amended to remove two floors of leased space. Additionally, the Company terminated the operating leases for retail locations in Austin, TX, Atlanta, GA, and

Miami, FL. The Company treated the lease termination amendments as lease modifications for accounting purposes as of the applicable effective dates of such terminations which resulted in a decrease of $7.7 million to the related lease liabilities, and a decrease of $1.4 million to the related right-of-use assets for the year ended December 31, 2023. The Company recorded a net gain on the lease terminations of $0.7 million during the year ended December 31, 2023. The net gain on lease terminations is included in restructuring in the statement of operations.

Maturities of operating lease liabilities by fiscal year for the Company’s operating leases are as follows (in thousands):


Fiscal Year	Amount
2024	26,964
2025	27,787
2026	27,614
2027	23,608
2028	20,866
Thereafter	19,866
Total future minimum payments	$	146,705
Less: Imputed interest	(21,755)
Present value of operating lease liabilities	$	124,950

Supplemental cash flow information related to the Company’s operating leases are as follows (in thousands):


	Year Ended Year ended December 31,
	2023		2022		2021
Operating cash flows used for operating leases	$	34,118	$	27,097	$	25,386
Operating lease assets obtained in exchange for operating lease liabilities	$	6,272	$	2,245	$	46,614

The weighted average remaining lease term and discount rate for the Company’s operating leases are as follows:


	As of December 31, 2023		As of December 31, 2022
Weighted average remaining lease term	5.5 years		6.2 years
Weighted average discount rate	6.1	%	6.2	%

The Company has leases for certain vehicles and equipment that are classified as finance leases. The finance lease right-of-use asset and finance lease liabilities for these vehicle and equipment leases are immaterial as of December 31, 2023 and 2022.