Investor Relations

NYSE: CSLT
$3.70
(Common Stock)
Change (%): -0.10 (-2.63%)
Volume: 134,335
August 23, 2017
20 minute delay
Castlight Health Announces Second Quarter 2017 Results
08/02/2017

Total Revenue of $32.1 million, Up 36% Year-over-Year
Company Reiterates 2017 Guidance

SAN FRANCISCO, Aug. 2, 2017 /PRNewswire/ -- Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its second quarter ended June 30, 2017.

 (PRNewsfoto/Castlight Health, Inc.)

"In our first quarter after closing the Jiff acquisition, Castlight's financial results reflect solid execution on our plans to reaccelerate growth and drive the business to breakeven cash flows," said John Doyle, chief executive officer of Castlight Health. "Our customers are increasingly looking to Castlight to provide a health navigation platform that engages employees with the right benefit at the right time, whether they are accessing care, managing a condition, or focused on their own well-being."

Financial Performance for the Three Months Ended June 30, 2017

  • Total revenue for the second quarter of 2017 was $32.1 million, an increase of 36% from the second quarter of 2016. Subscription revenue was $29.8 million, an increase of 36% on a year-over-year basis.
  • Gross margin for the second quarter of 2017 was 61.1%, compared to a gross margin of 62.1% in the second quarter of 2016. Non-GAAP gross margin for the second quarter of 2017 was 67.0% compared to a non-GAAP gross margin of 66.3% in the second quarter of 2016.
  • Operating loss for the second quarter of 2017 was $18.9 million, compared to an operating loss of $16.8 million in the second quarter of 2016. Non-GAAP operating loss for the second quarter of 2017 was $9.8 million, compared to a non-GAAP operating loss of $10.6 million in the second quarter of 2016.
  • Net loss per basic and diluted share was $0.11 in the second quarter of 2017, compared to a net loss per basic and diluted share of $0.17 in the second quarter of 2016. Non-GAAP net loss per basic and diluted share for the second quarter of 2017 was $0.07, compared to a net loss per basic and diluted share of $0.11 in the second quarter of 2016. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for the second quarter of 2017 was 130.5 million compared to 99.7 million in the second quarter of 2016.
  • Total cash, cash equivalents and marketable securities were $96.0 million at the end of the second quarter of 2017. Cash used in operations for the second quarter of 2017 was $4.1 million, compared to $11.9 million used in operations in the second quarter of 2016.

A reconciliation of GAAP to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

Business Outlook

For the full year 2017, the Company expects GAAP revenue in the range of $132 million to $136 million. Castlight expects full year 2017 non-GAAP operating loss in the range of $31 to $35 million and non-GAAP net loss per share of approximately $0.24 to $0.28 based on approximately 125 to 127 million shares.  For the full year 2017, non-GAAP guidance excludes the effects of stock-based compensation, amortization of intangibles, capitalization and amortization of internal-use software and charges related to the acquisition.

Quarterly Conference Call

Castlight Health will host a conference call to discuss its second quarter 2017 results and business outlook today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through the company's Investor Relations website at http://ir.castlighthealth.com. In addition, an archive of the webcast can be accessed through the same link. The conference call can also be accessed by dialing (877) 201-0168. The conference ID number is 48143236. A replay will be available for one week at (800) 585-8367, passcode 48143236.

About Castlight Health

Our mission is to empower people to make the best choices for their health and to help companies make the most of their health benefits. We offer a health benefits platform that engages employees to make better healthcare decisions and can guide them to the right program, care, and provider. The platform also enables benefit leaders to communicate and measure their programs while driving employee engagement with targeted, relevant communications. Castlight has partnered with enterprise customers, spanning millions of lives, to improve healthcare outcomes, lower costs, and increase benefits satisfaction.

For more information visit www.castlighthealth.com. Follow us on Twitter and LinkedIn and Like us on Facebook.

Non-GAAP Financial Measures

To supplement Castlight Health's financial statements presented in accordance with generally accepted accounting principles (GAAP), we also use and provide investors and others with non-GAAP measures of certain components of financial performance, including non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating loss, non-GAAP net loss, non-GAAP net loss per share and free cash flow. Non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating loss and non-GAAP net loss exclude stock-based compensation, litigation settlement, charges related to a reduction in workforce, amortization of intangibles, capitalization and amortization of internal-use software and charges related to the acquisition and the associated tax impact of these items, where applicable.

We believe that these non-GAAP financial measures provide useful supplemental information to investors and others, facilitate the analysis of the company's core operating results and comparison of operating results across reporting periods, and can help enhance overall understanding of the company's historical financial performance.

We have provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, except that we have not reconciled our non-GAAP operating loss and net loss per share guidance for the full year 2017 to comparable GAAP operating loss and net loss per share guidance because we do not provide guidance for stock-based compensation expense, capitalization and amortization of internal-use software and charges related to the acquisition, which are reconciling items between GAAP and non-GAAP operating loss. The factors that may impact our future stock-based compensation expense and capitalization and amortization of internal-use software are out of our control and/or cannot be reasonably predicted, and therefore we are unable to provide such guidance without unreasonable effort. Factors include our market capitalization and related volatility of our stock price and our inability to project the cost or scope of internally produced software and charges related to the proposed acquisition for the year.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP.

Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Castlight Health encourages investors and others to review the company's financial information in its entirety and not rely on a single financial measure.

Safe Harbor For Forward-Looking Statements

This press release contains forward-looking statements about Castlight Health's expectations, plans, intentions, and strategies, including, but not limited to, statements regarding Castlight Health's 2017 full year projections, our expectations for future performance of our business, market growth and business conditions, future innovation by the company and future developments with respect to the digital healthcare industry. Statements including words such as "anticipate," "believe," "estimate," "will," "continue," "expect," or "future," and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include those described in Castlight Health's documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Castlight Health as of the date hereof. Castlight Health assumes no obligation to update these forward-looking statements.

Copyright 2017 Castlight Health, Inc. Castlight Health® is the registered trademark of Castlight Health, Inc. Other company and product names may be trademarks of the respective companies with which they are associated.

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)



As of


June 30,
2017


December 31,
2016


 (unaudited)



Assets




Current assets:




Cash and cash equivalents

$

62,201



$

48,722


Marketable securities

33,821



65,882


Accounts receivable, net

21,356



14,806


Deferred commissions

8,190



8,218


Prepaid expenses and other current assets

6,250



3,382


Total current assets

131,818



141,010


Property and equipment, net

5,184



5,285


Restricted cash, non-current

1,507



1,144


Goodwill

91,398




Intangible assets, net

22,684




Deferred commissions, non-current

3,304



5,050


Other assets

7,266



4,677


Total assets

$

263,161



$

157,166


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

2,743



$

2,288


Accrued expenses and other current liabilities

9,011



6,369


Accrued compensation

10,411



9,443


Deferred revenue

36,924



30,623


Total current liabilities

59,089



48,723


Deferred revenue, non-current

8,003



5,245


Debt, non-current

5,578




Other liabilities, non-current

1,677



1,236


Total liabilities

74,347



55,204


Commitments and contingencies




Stockholders' equity:




Class A and Class B common stock

13



10


Additional paid-in capital

573,339



457,596


Accumulated other comprehensive loss

(15)




Accumulated deficit

(384,523)



(355,644)


Total stockholders' equity

188,814



101,962


Total liabilities and stockholders' equity

$

263,161



$

157,166


 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2017


2016


2017


2016

Revenue:








Subscription

$

29,834



$

21,955



$

55,600



$

42,992


Professional services and other

2,265



1,630



4,243



3,310


Total revenue, net

32,099



23,585



59,843



46,302


Cost of revenue:








Cost of subscription (1)

7,706



4,094



11,952



8,230


Cost of professional services and other (1)

4,793



4,850



8,781



9,963


Total cost of revenue

12,499



8,944



20,733



18,193


Gross profit

19,600



14,641



39,110



28,109


Operating expenses:








Sales and marketing (1)

16,575



15,452



31,018



31,734


Research and development (1)

15,194



9,961



26,265



20,046


General and administrative (1)

6,766



6,019



15,764



14,564


Total operating expenses

38,535



31,432



73,047



66,344


Operating loss

(18,935)



(16,791)



(33,937)



(38,235)


Other income, net

12



99



205



188


Income before income taxes

$

(18,923)



(16,692)



$

(33,732)



(38,047)


Income tax benefit

5,206





5,206




Net loss

$

(13,717)



$

(16,692)



$

(28,526)



$

(38,047)


Net loss per Class A and B share, basic and diluted

$

(0.11)



$

(0.17)



$

(0.24)



$

(0.39)


Weighted-average shares used to compute basic and diluted net loss per Class A and B share

130,537



99,728



117,807



98,009



___________________

(1)

Includes stock-based compensation expense as follows:




Three Months Ended
June 30,


Six Months Ended
June 30,


2017


2016


2017


2016

Cost of revenue:








Cost of subscription

$

253



$

120



$

380



$

228


Cost of professional services

597



535



1,058



1,012


Sales and marketing

2,441



2,219



4,595



4,454


Research and development

2,254



1,264



4,044



2,669


General and administrative

1,169



971



2,464



2,240


 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)



Three Months Ended


Six Months Ended


June 30,
2017


June 30,
2016


June 30,
2017


June 30,
2016

Operating activities:








Net loss

$

(13,717)



$

(16,692)



$

(28,526)



$

(38,047)


Adjustments to reconcile net loss to net cash used in operating activities:








Depreciation and amortization

2,060



802



2,758



1,585


Stock-based compensation

6,714



5,109



12,541



10,603


Amortization of deferred commissions

3,083



953



5,172



2,115


Release of deferred tax valuation allowance due to business combination

(5,206)





(5,206)




Change in fair value of contingent consideration liability

(643)





(643)




Accretion and amortization of marketable securities

20



129



84



305


Changes in operating assets and liabilities:








Accounts receivable

(1,426)



1,542



(3,117)



260


Deferred commissions

(2,982)



(2,635)



(3,398)



(2,924)


Prepaid expenses and other assets

323



(849)



(860)



(813)


Accounts payable

(685)



(715)



(508)



(110)


Accrued expenses and other liabilities

4,230



3,269



(525)



(463)


Deferred revenue

4,115



(2,827)



7,202



1,585


Net cash used in operating activities

(4,114)



(11,914)



(15,026)



(25,904)


Investing activities:








Restricted cash

(362)





(362)




Purchase of property and equipment

(766)



(776)



(931)



(1,242)


Purchase of marketable securities

(15,767)



(31,706)



(31,775)



(61,192)


Maturities of marketable securities

28,938



31,950



63,737



90,587


Business combination, net of cash acquired

(2,264)





(2,264)




Net cash provided by (used in) investing activities

9,779



(532)



28,405



28,153


Financing activities:








Proceeds from the exercise of stock options

457



674



831



1,940


Proceeds from issuance of common stock and warrants



17,358





17,358


Payments of issuance costs related to equity

(119)



(46)



(731)



(46)


Net cash provided by financing activities

338



17,986



100



19,252










Net increase in cash and cash equivalents

6,003



5,540



13,479



21,501


Cash and cash equivalents at beginning of period

56,198



35,111



48,722



19,150


Cash and cash equivalents at end of period

$

62,201



$

40,651



$

62,201



$

40,651










Non-cash investing and financing activity:








Non-cash purchase consideration related to acquisition of Jiff

$

101,692



$



$

101,692



$


SAP warrant

$

1,729



$



$

1,729



$


 

CASTLIGHT HEALTH, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(unaudited)



Three Months Ended


Six Months Ended


June 30,


March 31,


June 30,


June 30,


June 30,


2017


2017


2016


2017


2016

Gross profit:










GAAP gross profit subscription

$

22,128



$

21,520



$

17,861



$

43,648



$

34,762


Stock-based compensation

253



127



120



380



228


Amortization of internal-use software

244



244



244



488



488


Amortization of intangibles

751







751




Reduction in workforce





5





5


Acquisition related costs

52







52




Non-GAAP gross profit subscription

$

23,428



$

21,891



$

18,230



$

45,319



$

35,483


GAAP gross margin subscription

74.2

%


83.5

%


81.4

%


78.5

%


80.9

%

Non-GAAP gross margin subscription

78.5

%


85.0

%


83.0

%


81.5

%


82.5

%











GAAP gross loss professional services

$

(2,528)



$

(2,009)



$

(3,220)



$

(4,538)



$

(6,653)


Stock-based compensation

597



461



535



1,058



1,012


Reduction in workforce





99





99


Acquisition related costs

17



147





164




Non-GAAP gross loss professional services

$

(1,914)



$

(1,401)



$

(2,586)



$

(3,316)



$

(5,542)


GAAP gross margin professional services

(112)%



(102)%



(198)%



(107)%



(201)%


Non-GAAP gross margin professional services

(85)%



(71)%



(159)%



(78.2)%



(167)%












GAAP gross profit

$

19,600



$

19,511



$

14,641



$

39,111



$

28,109


Impact of non-GAAP adjustments

1,914



979



1,003



2,893



1,832


Non-GAAP gross profit

$

21,514



$

20,490



$

15,644



$

42,004



$

29,941


GAAP gross margin

61.1

%


70.3

%


62.1

%


65.4

%


60.7

%

Non-GAAP gross margin

67.0

%


73.9

%


66.3

%


70.2

%


64.7

%

Operating expense:










GAAP sales and marketing

$

16,575



$

14,443



$

15,452



$

31,018



$

31,734


Stock-based compensation

(2,441)



(2,154)



(2,219)



(4,595)



(4,454)


Amortization of intangibles

(448)







(448)




Reduction in workforce





(374)





(374)


Acquisition related costs

(518)



(405)





(923)




Non-GAAP sales and marketing

$

13,168



$

11,884



$

12,859



$

25,052



$

26,906


GAAP research and development

$

15,194



$

11,071



$

9,961



$

26,265



$

20,046


Stock-based compensation

(2,254)



(1,790)



(1,264)



(4,044)



(2,669)


Capitalization of internal-use software









1,636


Reduction in workforce





(118)





(118)


Acquisition related costs

(126)



(267)





(393)




Non-GAAP research and development

$

12,814



$

9,014



$

8,579



$

21,828



$

18,895


GAAP general and administrative

$

6,766



$

8,998



$

6,019



$

15,764



$

14,564


Stock-based compensation

(1,169)



(1,295)



(971)



(2,464)



(2,240)


Litigation settlement



(250)



(141)



(250)



(2,876)


Amortization of intangibles

(17)







(17)




Change in fair value of contingent consideration liability

643







643




Reduction in workforce





(80)





(80)


Acquisition related costs

(899)



(2,340)





(3,239)




Non-GAAP general and administrative

$

5,324



$

5,113



$

4,827



$

10,437



$

9,368


GAAP operating expense

$

38,535



$

34,512



$

31,432



$

73,047



$

66,344


Impact of non-GAAP adjustments

(7,229)



(8,501)



(5,167)



(15,730)



(12,811)


Non-GAAP operating expense

$

31,306



$

26,011



$

26,265



$

57,317



$

53,533


Operating loss:










GAAP operating loss

$

(18,935)



$

(15,001)



$

(16,791)



$

(33,937)



$

(38,235)


Impact of non-GAAP adjustments

9,143



9,480



6,170



18,623



14,643


Non-GAAP operating loss

$

(9,792)



$

(5,521)



$

(10,621)



$

(15,314)



$

(23,592)


Net loss and net loss per share:










GAAP net loss

$

(13,717)



$

(14,809)



$

(16,692)



$

(28,526)



$

(38,047)


Total pre-tax impact of non-GAAP adjustments

9,143



9,480



6,170



18,623



14,643


Release of deferred tax valuation allowance due to business combination

(5,206)







(5,206)




Income tax impact of non-GAAP adjustments










Non-GAAP net loss

$

(9,780)



$

(5,329)



$

(10,522)



$

(15,109)



$

(23,404)


GAAP net loss per share, basic and diluted

$

(0.11)



$

(0.14)



$

(0.17)



$

(0.24)



$

(0.39)


Non-GAAP net loss per share, basic and diluted

$

(0.07)



$

(0.05)



$

(0.11)



$

(0.13)



$

(0.24)


Shares used in basic and diluted net loss per share computation

130,537



104,935



99,728



117,807



98,009


Castlight Media Contact:
Courtney Lamie
press@castlighthealth.com
276-492-4248

Castlight Investor Contact:
Gary J. Fuges, CFA
ir@castlighthealth.com
415-829-1680

 

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SOURCE Castlight Health, Inc.

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