Related Party Transactions

3 Months Ended

Mar. 31, 2020

The Company has various agreements in place with related parties. Below are details of significant related party transactions that occurred during the three months ended March 31, 2019 and 2020.

SiteLock, LLC:

The Company has an agreement with SiteLock, LLC ("SiteLock"), which provides multi-layered third-party security and website performance applications that are sold by the Company. During the three months ended March 31, 2020, a director of the Company continued to hold a material financial interest in SiteLock.

The Company records revenue on the sale of SiteLock products on a net basis, since the Company views SiteLock as the primary obligor to deliver these services. As a result, the revenue share paid by the Company to SiteLock is recorded as contra-revenue. Further, SiteLock pays the Company a fee on sales made by SiteLock directly to customers of the Company. The Company records these fees as revenue.

The following table presents the amounts of related party transactions recorded in the consolidated statements of operations and comprehensive income (loss) for the periods presented relating to the Company's agreement with SiteLock:



	Three Months Ended March 31,
	2019			2020
	(unaudited, in thousands)
Revenue	$	(1,300	)	$	(920	)
Revenue (contra)	2,100			1,540
Total related party transaction impact to revenue	$	800		$	620
Cost of revenue	150			90
Total related party transaction expense, net	$	950		$	710

As of December 31, 2019 and March 31, 2020, no amounts were included in prepaid expenses and other current assets relating to the Company’s agreement with SiteLock.

As of December 31, 2019 and March 31, 2020, approximately $0.4 million and $1.0 million, respectively, was included in accounts payable and accrued expense relating to the Company’s agreement with SiteLock.

As of December 31, 2019 and March 31, 2020, approximately $0.3 million and $0.6 million, respectively, was included in accounts receivable relating to the Company’s agreement with SiteLock.

Okumus Share Repurchase:

Pursuant to the Company’s share repurchase program announced on March 10, 2020, on March 19, 2020, the Company entered into a stock repurchase agreement with Okumus, a holder of more than 5% of the Company's capital stock. Under the agreement, the Company repurchased 5.0 million shares of its common stock from Okumus at a price of $1.49 per share, for an aggregate repurchase price of $7.45 million. The $1.49 per share repurchase price that the Company paid represented a discount to the closing price per share of its common stock on the trading day prior to its entry into the repurchase agreement, which was $1.55 per share.