Leases

12 Months Ended

Sep. 30, 2024

Leases [Abstract]

Operating leases

Leases

We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as operating leases or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2024 and 2023:

	Balance Sheet Location	September 30,
		2024		2023
		(In thousands)
Assets
Operating leases	Operating lease right-of-use assets	$	29,580	$	25,703
Finance leases (*)	Property and equipment, net	9,881		—
Total lease assets		$	39,461	$	25,703
Liabilities
Current:
Operating leases	Other accrued liabilities	$	11,555	$	16,336
Finance leases	Other accrued liabilities	3,144		—
Non-current:
Operating leases	Operating lease liabilities	21,963		23,903
Finance leases	Other liabilities	7,263		—
Total lease liabilities		$	43,925	$	40,239

(*) Finance leases were recorded net of accumulated depreciation of $1.9 million at September 30, 2024.

The components of our operating and finance lease expenses were as follows:

	Year Ended September 30,
	2024		2023		2022
	(In thousands)
Operating lease cost	$	14,421	$	16,594	$	18,426
Finance lease cost:
Depreciation of lease assets	1,859		—		—
Interest on lease liabilities	369		—		—
Short-term lease cost	811		461		201
Variable lease cost	2,060		2,363		2,091
Sublease income	(1,073)		(429)		—
Total lease cost	$	18,447	$	18,989	$	20,718

The following table presents weighted-average remaining lease terms and weighted-average discount rates related to our operating and finance leases:

	September 30,
	2024		2023
Operating leases:
Weighted-average remaining lease term (in months)	44		35
Weighted-average discount rate	6.41	%	4.58	%
Finance leases:
Weighted-average remaining lease term (in months)	40		0
Weighted-average discount rate	5.52	%	—	%

Supplemental cash flow information related to our non-cancellable leases was as follows:

	Year Ended September 30,
	2024		2023		2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow for operating leases	$	18,153	$	19,780	$	22,021
Operating cash outflow for finance leases	369		—		—
Financing cash outflow for finance leases	1,333		—		—
Lease assets obtained in exchange for new lease liabilities:
Operating leases	22,433		4,150		7,505
Finance leases	11,740		—		—

Future lease payments under our non-cancellable leases as of September 30, 2024 were as follows:

	Operating Leases		Finance Leases
	(In thousands)
Fiscal 2025	$	13,378	$	3,625
Fiscal 2026	9,805		3,625
Fiscal 2027	5,618		3,625
Fiscal 2028	4,439		441
Fiscal 2029	2,626		—
Thereafter	2,039		—
Total future undiscounted lease payments	37,905		11,316
Less imputed interest	(4,387)		(909)
Total reported lease liabilities	$	33,518	$	10,407

Finance leases

Leases

We lease office space and data centers under operating lease arrangements, which constitute the majority of our lease obligations. We also enter into finance lease agreements from time to time for certain computer equipment. For any lease with a lease term in excess of 12 months, the related lease assets and liabilities are recognized on our consolidated balance sheets as operating leases or finance leases at the commencement of an agreement where it is determined that a lease exists. We have lease agreements that contain both lease and non-lease components, and we have elected to combine these components together and account for them as a single lease component for all classes of assets. Leases with a lease term of 12 months or less are not recorded on our consolidated balance sheets. Furthermore, we recognize lease expense for these leases on a straight-line basis over the lease term.

Operating lease assets represent the right to use an underlying asset for the lease term and operating lease liabilities represent the obligation to make lease payments arising from the lease. These assets and liabilities are recognized based on the present value of future payments over the lease term at the commencement date. We use a collateralized incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of future payments. In calculating the incremental borrowing rates, we consider recent ratings from credit agencies and current lease demographic information. Our operating leases also typically require payment of real estate taxes, common area maintenance, insurance and other operating costs as well as payments that are adjusted based on a consumer price index. These components comprise the majority of our variable lease cost and are excluded from the present value of our lease obligations. In instances where they are fixed, they are included due to our election to combine lease and non-lease components. Operating lease assets also include prepaid lease payments and initial direct costs, and are reduced by lease incentives. Our lease terms generally do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Fixed payments may contain predetermined fixed rent escalations. We recognize the related rent expense on a straight-line basis from the commencement date to the end of the lease term.

The following table presents the lease balances within the accompanying consolidated balance sheets as of September 30, 2024 and 2023:

	Balance Sheet Location	September 30,
		2024		2023
		(In thousands)
Assets
Operating leases	Operating lease right-of-use assets	$	29,580	$	25,703
Finance leases (*)	Property and equipment, net	9,881		—
Total lease assets		$	39,461	$	25,703
Liabilities
Current:
Operating leases	Other accrued liabilities	$	11,555	$	16,336
Finance leases	Other accrued liabilities	3,144		—
Non-current:
Operating leases	Operating lease liabilities	21,963		23,903
Finance leases	Other liabilities	7,263		—
Total lease liabilities		$	43,925	$	40,239

(*) Finance leases were recorded net of accumulated depreciation of $1.9 million at September 30, 2024.

The components of our operating and finance lease expenses were as follows:

	Year Ended September 30,
	2024		2023		2022
	(In thousands)
Operating lease cost	$	14,421	$	16,594	$	18,426
Finance lease cost:
Depreciation of lease assets	1,859		—		—
Interest on lease liabilities	369		—		—
Short-term lease cost	811		461		201
Variable lease cost	2,060		2,363		2,091
Sublease income	(1,073)		(429)		—
Total lease cost	$	18,447	$	18,989	$	20,718

The following table presents weighted-average remaining lease terms and weighted-average discount rates related to our operating and finance leases:

	September 30,
	2024		2023
Operating leases:
Weighted-average remaining lease term (in months)	44		35
Weighted-average discount rate	6.41	%	4.58	%
Finance leases:
Weighted-average remaining lease term (in months)	40		0
Weighted-average discount rate	5.52	%	—	%

Supplemental cash flow information related to our non-cancellable leases was as follows:

	Year Ended September 30,
	2024		2023		2022
	(In thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflow for operating leases	$	18,153	$	19,780	$	22,021
Operating cash outflow for finance leases	369		—		—
Financing cash outflow for finance leases	1,333		—		—
Lease assets obtained in exchange for new lease liabilities:
Operating leases	22,433		4,150		7,505
Finance leases	11,740		—		—

Future lease payments under our non-cancellable leases as of September 30, 2024 were as follows:

	Operating Leases		Finance Leases
	(In thousands)
Fiscal 2025	$	13,378	$	3,625
Fiscal 2026	9,805		3,625
Fiscal 2027	5,618		3,625
Fiscal 2028	4,439		441
Fiscal 2029	2,626		—
Thereafter	2,039		—
Total future undiscounted lease payments	37,905		11,316
Less imputed interest	(4,387)		(909)
Total reported lease liabilities	$	33,518	$	10,407