Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

We have certain revenue share agreements with related parties. Accordingly, we recognized revenue from related parties of $351 and $637 for the three months ended September 30, 2023 and 2022, respectively, and $1,250 and $1,363 for the nine months ended September 30, 2023 and 2022, respectively.

We incurred costs related to revenue share agreements with related parties which are capitalized within deferred contract acquisition costs. We capitalized $1,952 and $397 for the three months ended September 30, 2023 and 2022, respectively, and $4,039 and $2,167 for the nine months ended September 30, 2023 and 2022, respectively.

Additionally, a related party provided call center support and other services to the Company for which we recorded an expense within cost of revenue of $80 and $186 for the three months ended September 30, 2023 and 2022, respectively, and $433 and $680 for the nine months ended September 30, 2023 and 2022, respectively.

A related party provided marketing and copywriting services to the Company for which we recorded an expense within cost of revenue of $644 and $1,229 for the three and nine months ended September 30, 2023, respectively, and $86 for the three months ended September 30, 2022.

A related party also provided certain corporate functions to the Company and the costs of these services are charged to us. We recorded $24 and $21 for the three months ended September 30, 2023 and 2022, respectively, and $78 and $64 for the nine months ended September 30, 2023 and 2022, respectively, within related party expense in the accompanying condensed consolidated statement of operations. We held balances of $1,015 and $1,043 as of September 30, 2023 and December 31, 2022, respectively, of related party payables related to revenue share expenses, call center support, and the services noted above. The balances with our related party are presented net and are included in related party payables, net in the condensed consolidated balance sheet.

We earned fees and provided certain accounting and marketing services to companies owned by certain of MarketWise’s Class B stockholders. As a result, we recognized $97 and $225 in other income, net for the three months ended September 30, 2023 and 2022, respectively, and $604 and $478 for the nine months ended September 30, 2023 and 2022, respectively. Related party receivables related to these services were $97 and $403 as of September 30, 2023 and December 31, 2022, respectively.

We lease offices from related parties. Lease payments made to related parties were $441 and $418 for the three months ended September 30, 2023 and 2022, respectively, and $1,309 and $1,337 for the nine months ended September 30, 2023 and 2022, respectively. Rent expense of $602 and $588 for the three months ended September 30, 2023 and 2022, respectively, and $1,802 and $1,729 for the nine months ended September 30, 2023 and 2022, respectively, related to leases with related parties, and was recognized in general and administrative expenses.

At September 30, 2023 and December 31, 2022, ROU assets of $7,804 and $9,210 and lease liabilities of $6,124 and $7,041, respectively, are associated with leases with related parties.

In April 2020 we provided a loan to a related party and recognized a related party note receivable from the unitholder of $1,148. We recognized $6 and $16 in interest income for the three and nine months ended September 30, 2022, respectively. This loan was repaid in October 2022.