LEASES

3 Months Ended

Mar. 31, 2026

The Company leases certain equipment, vehicles, office and storage facilities via various operating and financing lease agreements. Our leases have initial lease terms ranging from one year to seventeen years. Certain lease agreements require the Company to pay taxes, insurance, and maintenance, and provide for options to extend the term beyond the initial lease termination date. We use judgment to determine whether it is reasonably possible that we will extend the lease beyond the initial term and the length of the possible extension. Leases that have terms of less than 12 months are treated as short-term and we do not recognize right-of-use assets or lease liabilities for such leases. We generally estimate discount rates using our incremental borrowing rate, and based on other information available, at commencement date of a lease when determining the present value of future payments, as most of our leases do not provide an implicit rate.

The Company includes financing lease right-of-use assets in other assets, short-term financing lease liabilities in accrued expenses, and long-term financing lease liabilities in other liabilities on the condensed consolidated balance sheet. Operating lease expense is recognized, on a straight-line basis over the term of the lease, as a component of operating income on the condensed consolidated statement of operations and comprehensive income. Finance leases amortize the right-of-use assets and amortize the interest on the lease liability over the term of the lease.

Amounts reported in the condensed consolidated balance sheet were as follows as of March 31, 2026 and December 31, 2025, respectively:


	March 31,		December 31,
(In thousands)	2026		2025
Asset:
Operating lease right-of-use asset	$	61,507	$	63,786
Finance lease right-of-use asset	697		718
Total leased assets	$	62,204	$	64,504

Liabilities:
Current:
Operating lease liability	15,121		14,738
Finance lease liability	320		348
Long-term:
Operating lease liability	100,102		103,918
Finance lease liability	398		436
Total lease liabilities	$	115,941	$	119,440

The table below summarizes the Company’s lease costs arising from the operating and financing lease obligations for the three months ended March 31, 2026 and 2025, respectively:


	Three Months Ended March 31,
(In thousands)	2026		2025
Lease expense:
Operating lease expense	$	5,945	$	3,570
Finance lease expense
Depreciation of right-of-use asset	94		65
Interest expense on lease liabilities	12		13
Total lease expense	$	6,051	$	3,648

Future minimum lease payments under non-cancellable leases as of March 31, 2026, are as follows:


(In thousands)	Finance Leases		Operating Leases
2026	$	294	$	17,347
2027	287		21,020
2028	168		18,519
2029	52		18,172
2030	—		17,953
Thereafter	—		57,976
Total minimum lease payments	$	801	$	150,987
Less: amount representing interest	(83)		(35,764)
Present value of obligations under leases	718		115,223
Less: current portion	(320)		(15,121)
Long-term lease obligations	$	398	$	100,102

The table below summarizes the Company’s supplemental cash flow information and assumptions used for the three months ended March 31, 2026 and 2025, respectively:


	Three Months Ended March 31,
(In thousands, except weighted average lease term and discount rate)	2026			2025
Other supplemental cash flow information:
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	$	6,066		$	5,623
Operating cash flows for finance leases	12			13
Financing cash flows for finance leases	88			57
Total cash paid for amounts included in the measurement of lease liabilities	$	6,165		$	5,693

Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	774		$	820
Financing leases	$	274		$	—
Weighted-average remaining lease term
Operating leases	7.4			7.5
Financing leases	3.5			2.4
Weighted-average discount rate
Operating leases	6.9		%	5.3		%
Financing leases	6.0		%	5.8		%

LEASES

Amounts reported in the condensed consolidated balance sheet were as follows as of March 31, 2026 and December 31, 2025, respectively:


	March 31,		December 31,
(In thousands)	2026		2025
Asset:
Operating lease right-of-use asset	$	61,507	$	63,786
Finance lease right-of-use asset	697		718
Total leased assets	$	62,204	$	64,504

Liabilities:
Current:
Operating lease liability	15,121		14,738
Finance lease liability	320		348
Long-term:
Operating lease liability	100,102		103,918
Finance lease liability	398		436
Total lease liabilities	$	115,941	$	119,440

The table below summarizes the Company’s lease costs arising from the operating and financing lease obligations for the three months ended March 31, 2026 and 2025, respectively:


	Three Months Ended March 31,
(In thousands)	2026		2025
Lease expense:
Operating lease expense	$	5,945	$	3,570
Finance lease expense
Depreciation of right-of-use asset	94		65
Interest expense on lease liabilities	12		13
Total lease expense	$	6,051	$	3,648

Future minimum lease payments under non-cancellable leases as of March 31, 2026, are as follows:


(In thousands)	Finance Leases		Operating Leases
2026	$	294	$	17,347
2027	287		21,020
2028	168		18,519
2029	52		18,172
2030	—		17,953
Thereafter	—		57,976
Total minimum lease payments	$	801	$	150,987
Less: amount representing interest	(83)		(35,764)
Present value of obligations under leases	718		115,223
Less: current portion	(320)		(15,121)
Long-term lease obligations	$	398	$	100,102

The table below summarizes the Company’s supplemental cash flow information and assumptions used for the three months ended March 31, 2026 and 2025, respectively:


	Three Months Ended March 31,
(In thousands, except weighted average lease term and discount rate)	2026			2025
Other supplemental cash flow information:
Cash paid for amounts included in measurement of lease liabilities
Operating cash flows from operating leases	$	6,066		$	5,623
Operating cash flows for finance leases	12			13
Financing cash flows for finance leases	88			57
Total cash paid for amounts included in the measurement of lease liabilities	$	6,165		$	5,693

Right-of-use assets obtained in exchange for lease obligations
Operating leases	$	774		$	820
Financing leases	$	274		$	—
Weighted-average remaining lease term
Operating leases	7.4			7.5
Financing leases	3.5			2.4
Weighted-average discount rate
Operating leases	6.9		%	5.3		%
Financing leases	6.0		%	5.8		%

GLOBUS MEDICAL INC 10-Q