LEASES

12 Months Ended

Dec. 31, 2022

NOTE 13—LEASES

The Company leases office space, data center facilities, and equipment used in connection with its operations under various operating leases, many of which contain escalation clauses.

ROU assets represent the Company’s right to use the underlying assets for the lease term and lease liabilities represent the present value of the Company’s obligation to make payments arising from leases. ROU assets and related lease liabilities are based on the present value of fixed lease payments over the lease term using the Company’s incremental borrowing rates on the lease commencement date or January 1, 2019 for leases that commenced prior to that date. The Company combines the lease and non-lease components of lease payments in determining ROU assets and related lease liabilities. If the lease includes one or more options to extend the term of the lease, the renewal option is considered in the lease term if it is reasonably certain the Company will exercise the options. Lease expense is recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases with an initial term of twelve months or less (“short-term leases”) are not recorded on the accompanying consolidated balance sheet.

Variable lease payments consist primarily of common area maintenance, utilities, and taxes, which are not included in the recognition of ROU assets and related lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.


Leases	Balance Sheet Classification	December 31, 2022		December 31, 2021
		(In thousands)
Assets:
Right-of-use assets	Other non-current assets	$	93,661	$	113,582


Liabilities:
Current lease liabilities	Accrued expenses and other current liabilities	$	14,495	$	10,618
Long-term lease liabilities	Other long-term liabilities	97,410		113,533
Total lease liabilities		$	111,905	$	124,151


Lease Cost	Income Statement Classification	Year Ended December 31, 2022		Year Ended December 31, 2021

		(In thousands)
Fixed lease cost	Cost of revenue	$	1,618	$	2,280

Fixed lease cost	General and administrative expense	22,356		22,772

Total fixed lease cost(a)		23,974		25,052

Variable lease cost	Cost of revenue	682		80
Variable lease cost	General and administrative expense	2,383		2,768
Total variable lease cost		3,065		2,848


Net lease cost		$	27,039	$	27,900

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(a)Includes approximately $2.6 million and $3.5 million of short-term lease cost, and $0.3 million and $0.5 million of sublease income, for the years ended December 31, 2022 and December 31, 2021, respectively.

Maturities of lease liabilities as of December 31, 2022(b):


	(In thousands)
2023	$	18,724
2024	15,417
2025	14,340
2026	13,873
2027	12,249
After 2027	58,572
Total	133,175
Less: Interest	(20,318)
Less: Tenant improvement receivables	(952)
Present value of lease liabilities	$	111,905

______________________

(b)Operating lease payments exclude $8.9 million of legally binding minimum lease payments for leases signed but not yet commenced.

The following are the weighted average assumptions used for lease term and discount rate:


	December 31, 2022		December 31, 2021
Remaining lease term	9.1 years		9.2 years
Discount rate	3.54	%	3.03	%


	Year Ended December 31, 2022		Year Ended December 31, 2021

	(In thousands)
Other information:
Right-of-use assets obtained in exchange for lease liabilities	$	10,431	$	53,492
Cash paid for amounts included in the measurement of lease liabilities	$	20,318	$	18,345