Leases are classified as either finance leases or operating leases based on criteria in ASC 842. The Company has finance leases for its vehicle and equipment leases and operating leases for its real estate space and office equipment leases. The Company’s operating and finance leases generally have original lease terms between 1 year and 15 years, and in some instances include one or more options to renew. The Company includes options to extend the lease term if the options are reasonably certain of being exercised. The Company currently considers some of its renewal options to be reasonably certain to be exercised. Some leases also include early termination options, which can be exercised under specific conditions. The Company does not have material residual value guarantees or restrictive covenants associated with its leases.

Finance and operating lease assets represent the right to use an underlying asset for the lease term, and finance and operating lease liabilities represent the obligation to make lease payments arising from the lease.

The Company calculates the present value of its finance and operating leases using an estimated incremental borrowing rate (“IBR”), which requires judgment. For real estate operating leases, the Company estimates the IBR based on prevailing market rates for collateralized debt in a similar economic environment with similar payment terms and maturity dates commensurate with the terms of the lease. For all other leases, the Company estimates the IBR based on the stated interest rate on the contract. Since many of the inputs used to calculate the rate implicit in the leases are not readily determinable from the lessee’s perspective, the Company does not use the implicit interest rate.

Certain leases contain variable payments, these payments are expensed as incurred and not included in the Company’s operating lease right-of-use ("ROU") assets and operating lease liabilities. These amounts primarily include payments for maintenance, utilities, taxes, and insurance and are excluded from the present value of the Company’s lease obligations.

The Company does not record operating lease ROU assets or operating lease liabilities for leases with an initial term of 12 months or less. The Company also combines lease and non-lease components on all new or modified operating leases into a single lease component for all classes of assets.

When a lease is terminated before the expiration of the lease term, irrespective of whether the lease is classified as a finance lease or an operating lease, the lessee would derecognize the ROU asset and corresponding lease liability. Any difference would be recognized as a gain or loss related to the termination of the lease. Similarly, if a lessee is required to make any payments or receives any consideration when terminating the lease, it would include such amounts in the determination of the gain or loss upon termination.

The components of lease expense were as follows:


		For the Three Months Ended March 31,
	Statement of Operations Location	2024		2023
Operating lease cost
Lease cost	Selling, general and administrative expense	$	2,994	$	2,741
Variable lease cost	Selling, general and administrative expense		456		326
Total operating lease cost			3,450		3,067

Finance lease cost
Amortization of ROU assets	Depreciation and amortization		1,278		1,154
Interest on lease liabilities	Interest expense—net		189		130
Total finance lease cost			1,467		1,284
Total lease cost		$	4,917	$	4,351

Supplemental cash flow information related to leases was as follows:


	For the Three Months Ended March 31,
	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used in operating leases	$	3,158	$	2,557
Operating cash flows used in finance leases		189		130
Financing cash flows used in finance leases		1,085		1,029

Lease liabilities arising from new ROU assets:
Operating leases		3,111		7,999
Finance leases		2,066		2,405

Weighted average remaining lease terms and weighted average discount rates were:


	March 31, 2024
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)	4.31				3.56
Weighted average discount rate		4.42	%		6.44	%

	March 31, 2023
	Operating Leases			Finance Leases
Weighted average remaining lease term (years)	4.62				3.43
Weighted average discount rate		3.31	%		5.57	%

The following is a schedule by year of the maturities of lease liabilities with original terms in excess of one year:


	Operating Leases			Finance Leases
Remainder of 2024	$	8,760		$	3,772
2025		9,617			3,989
2026		7,441			3,346
2027		5,120			2,344
2028		3,928			1,139
2029 and thereafter		4,293			99
Total undiscounted future minimum lease payments		39,159			14,689
Less imputed interest		(3,626	)		(1,613	)
Total discounted future minimum lease payments	$	35,533		$	13,076