Investor Relations

NYSE: CSLT
$1.40
(Common Stock)
Change (%): -0.05 (-3.45%)
Volume: 615,907
August 23, 2019
20 minute delay
Castlight Health Announces Second Quarter 2019 Results
07/30/2019
Updates Full Year 2019 Guidance & Announces Management Changes

SAN FRANCISCO, July 30, 2019 /PRNewswire/ -- Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its second quarter ended June 30, 2019 and updated guidance for full year 2019. The Company also announced today that John Doyle has stepped down from his roles as chief executive officer and director. The Castlight board of directors has appointed Maeve O'Meara, formerly executive vice president of product and customer experience, as Castlight's chief executive officer and director, effective immediately. Additionally, Siobhan Nolan Mangini has been promoted to president and will also continue to serve as chief financial officer.

Castlight Logo (PRNewsfoto/Castlight Health)

"From the time Maeve joined Castlight in 2010, her excellence across product development and customer relationships has impressed all of us on the board of directors. These skills, combined with the vision and leadership she's exhibited as executive vice president make her the natural choice to become Castlight's CEO," said Bryan Roberts, co-founder and chairman of Castlight Health. "We are confident in Maeve's ability to execute on our strategic and financial goals, and I look forward to working closely with her to help Castlight accomplish its mission of simplifying and improving healthcare."

"I'm excited to lead Castlight, given the strength of our team and technology, and I believe our assets put us in position to improve the cost, quality and consumer experience issues across US healthcare," said Maeve O'Meara, chief executive officer of Castlight Health. "We will continue to focus on partnering with our core employer buyers in order to create more value for them in their workforce, but we also have a clear opportunity to leverage our data and technology assets more broadly. By expanding our channel strategy to power user experiences outside of our own applications, we believe we can expand our addressable market and make a greater impact across the healthcare ecosystem."

For more information on Maeve O'Meara and Siobhan Nolan Mangini, please refer to the press release entitled "Castlight Health Announces Key Management Changes" published today.

Financial performance for the three months ended June 30, 2019 compared to the three months ended June 30, 2018 includes:

  • GAAP total revenue of $35.9 million, representing a decrease of 5%
  • GAAP gross margin of 60.6%, compared to 58.4%
  • Non-GAAP gross margin of 63.4%, compared to 62.2%
  • GAAP operating loss of $8.6 million, compared to a loss of $14.1 million
  • Non-GAAP operating loss of $2.9 million, compared to $6.9 million
  • GAAP net loss per basic and diluted share of $0.06, compared to a net loss per basic and diluted share of $0.10
  • Non-GAAP net loss per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.05
  • Cash used in operations of $1.8 million, compared to $1.1 million

Total cash, cash equivalents and marketable securities was $63.9 million as of June 30, 2019.

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

The Company is updating its previously-issued 2019 outlook. For the full year 2019, the Company now expects:

  • GAAP revenue in the range of $140 million to $145 million
  • Non-GAAP operating loss in the range of $8 million to $13 million
  • Non-GAAP net loss per share of approximately $0.06 to $0.09 based on approximately 145 million to 146 million shares

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its second quarter 2019 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. An archive of the webcast can also be accessed through the same link. The live conference call can be accessed by dialing (833) 238-7953 and the replay will be available for one week at (800) 585-8367.  The conference ID number for the live call and replay is 2365013.

About Castlight Health

Castlight is on a mission to make it as easy as humanly possible to navigate healthcare and live happier, healthier, more productive lives. Our health navigation platform connects with hundreds of health vendors, benefits resources, and plan designs, giving rise to the world's first comprehensive app for all health needs. We guide individuals-based on their unique profile- to the best resources available to them, whether they are healthy, chronically ill, or actively seeking medical care. In doing so, we help companies regain control over rising healthcare costs and get more value from their benefits investments. Castlight revolutionized the healthcare sector with the introduction of data-driven price transparency tools in 2008 and the first consumer-grade wellbeing platform in 2012. Today, Castlight serves as the health navigation platform for millions of people and is a trusted partner to many of the largest employers in the world.

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 income (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share. Non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating income (loss), and non-GAAP net income (loss) exclude stock-based compensation, certain legal expenses, amortization of intangibles, amortization of internal-use software, and lease exit and related charges.

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 2019 to comparable GAAP measures because we do not provide guidance for stock-based compensation expense, and capitalization and amortization of internal-use software, which are reconciling items between GAAP and non-GAAP. 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.

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 second quarter performance and 2019 full year projections, executive leadership, the success of our strategy and our expectations for our future business and financial performance. 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, including the risks set forth in our quarterly report on Form 10-Q for the three months ended June 30, 2019. 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 2019 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)

(unaudited)



As of


June 30, 2019


December 31, 2018

Assets




Current assets:




Cash and cash equivalents

$

50,052



$

66,005


Marketable securities

13,874



11,327


Accounts receivable and other, net

32,611



26,816


Prepaid expenses and other current assets

5,450



3,680


Total current assets

101,987



107,828


Property and equipment, net

3,556



3,963


Restricted cash, non-current

1,325



1,325


Deferred commissions

17,956



20,142


Deferred professional service costs

9,093



10,133


Intangible assets, net

14,457



16,209


Goodwill

91,785



91,785


Operating lease right-of-use assets, net

14,691




Other assets

2,223



2,129


Total assets

$

257,073



$

253,514


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

11,355



$

9,556


Accrued expenses and other current liabilities

11,170



15,454


Accrued compensation

5,169



5,975


Deferred revenue

20,698



20,193


Operating lease liabilities

5,911




Total current liabilities

54,303



51,178


Deferred revenue, non-current

837



1,030


Debt, non-current

2,324



3,254


Operating lease liabilities, non-current

12,032




Other liabilities, non-current

1,067



3,381


Total liabilities

70,563



58,843


Stockholders' equity

186,510



194,671


Total liabilities and stockholders' equity

$

257,073



$

253,514


 

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,


2019


2018


2019


2018

Revenue:








Subscription

$

33,964



$

34,802



$

67,770



$

67,791


Professional services and other

1,946



2,982



3,630



6,472


Total revenue, net

35,910



37,784



71,400



74,263


Cost of revenue:








Cost of subscription(1)

8,234



9,140



16,400



18,314


Cost of professional services and other(1)

5,929



6,590



11,873



12,359


Total cost of revenue

14,163



15,730



28,273



30,673


Gross profit

21,747



22,054



43,127



43,590


Operating expenses:








Sales and marketing(1)

8,889



13,306



18,104



27,218


Research and development(1)

14,487



16,425



30,212



31,796


General and administrative(1)

7,010



6,382



14,303



13,207


Total operating expenses

30,386



36,113



62,619



72,221


Operating loss

(8,639)



(14,059)



(19,492)



(28,631)


Other income, net

258



101



572



229


Net loss

$

(8,381)



$

(13,958)



$

(18,920)



$

(28,402)


Net loss per share, basic and diluted

$

(0.06)



$

(0.10)



$

(0.13)



$

(0.21)


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

144,572



136,682



143,790



135,843



(1)  Includes stock-based compensation expense as follows:



Three Months Ended June 30,


Six Months Ended June 30,


2019


2018


2019


2018

Cost of revenue:








Cost of subscription

$

196



$

231



$

415



$

473


Cost of professional services and other

236



315



501



616


Sales and marketing

662



1,318



1,289



2,456


Research and development

1,733



1,908



3,437



3,562


General and administrative

2,030



1,375



3,192



2,632


 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)



Three Months Ended June 30,


Six Months Ended June 30,


2019


2018


2019


2018

Operating activities:








Net loss

$

(8,381)



$

(13,958)



$

(18,920)



$

(28,402)


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








Depreciation and amortization

1,343



1,713



2,687



3,573


Stock-based compensation

4,857



5,147



8,834



9,739


Amortization of deferred commissions

2,365



2,947



4,856



5,800


Amortization of deferred professional service costs

1,045



1,151



2,014



2,097


Non-cash operating lease expense

1,298





2,580




Lease exit and related charges



901





1,817


Accretion and amortization of marketable securities

(87)



(135)



(213)



(266)


Changes in operating assets and liabilities:








Accounts receivable and other, net

2,088



4,944



(5,795)



(6,252)


Deferred commissions

(1,254)



(1,808)



(2,670)



(2,979)


Deferred professional service costs

(432)



(647)



(901)



(1,389)


Prepaid expenses and other assets

(1,113)



(2,102)



(1,864)



(1,896)


Accounts payable

2,713



(1,272)



1,864



511


Operating lease liabilities

(1,413)





(2,795)




Accrued expenses and other liabilities

(1,827)



4,419



(3,131)



3,182


Deferred revenue

(3,183)



(4,393)



312



(1,210)


Accrued compensation

164



1,979



(806)



(4,411)


Net cash used in operating activities

(1,817)



(1,114)



(13,948)



(20,086)


Investing activities:








Purchase of property and equipment

(389)



(916)



(593)



(1,304)


Purchase of marketable securities

(13,780)



(13,954)



(13,780)



(23,979)


Maturities of marketable securities



10,700



11,453



26,450


Net cash (used in) provided by investing activities

(14,169)



(4,170)



(2,920)



1,167


Financing activities:








Proceeds from exercise of stock options

165



1,752



1,845



2,242


Principal payments on long-term debt

(465)





(930)




Net cash (used in) provided by financing activities

(300)



1,752



915



2,242










Net decrease in cash, cash equivalents and restricted cash

(16,286)



(3,532)



(15,953)



(16,677)


Cash, cash equivalents and restricted cash at beginning of period

67,663



49,499



67,330



62,644


Cash, cash equivalents and restricted cash at end of period

$

51,377



$

45,967



$

51,377



$

45,967










Reconciliation of cash, cash equivalents and restricted cash:








Cash and cash equivalents

$

50,052



$

44,642



$

50,052



$

44,642


Restricted cash

1,325



1,325



1,325



1,325


Total cash, cash equivalents and restricted cash

$

51,377



$

45,967



$

51,377



$

45,967


 

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, 2019


March 31, 2019


June 30, 2018


June 30, 2019


June 30, 2018

Gross profit:










GAAP gross profit subscription

$

25,730



$

25,640



$

25,662



$

51,370



$

49,477


Stock-based compensation

196



219



231



415



473


Amortization of internal-use software





219





438


Amortization of intangibles

587



587



678



1,174



1,356


Non-GAAP gross profit subscription

$

26,513



$

26,446



$

26,790



$

52,959



$

51,744


GAAP gross margin subscription

75.8

%


75.8

%


73.7

%


75.8

%


73.0

%

Non-GAAP gross margin subscription

78.1

%


78.2

%


77.0

%


78.1

%


76.3

%











GAAP gross loss professional services

$

(3,983)



$

(4,260)



$

(3,608)



$

(8,243)



$

(5,887)


Stock-based compensation

236



265



315



501



616


Non-GAAP gross loss professional services

$

(3,747)



$

(3,995)



$

(3,293)



$

(7,742)



$

(5,271)


GAAP gross margin professional services

(205)

%


(253)

%


(121)

%


(227)

%


(91.0)

%

Non-GAAP gross margin professional services

(193)

%


(237)

%


(110)

%


(213)

%


(81.4)

%











GAAP gross profit

$

21,747



$

21,380



$

22,054



$

43,127



$

43,590


Impact of non-GAAP adjustments

1,019



1,071



1,443



2,090



2,883


Non-GAAP gross profit

$

22,766



$

22,451



$

23,497



$

45,217



$

46,473


GAAP gross margin

60.6

%


60.2

%


58.4

%


60.4

%


58.7

%

Non-GAAP gross margin

63.4

%


63.3

%


62.2

%


63.3

%


62.6

%











Operating expense:










GAAP sales and marketing

$

8,889



$

9,215



$

13,306



$

18,104



$

27,218


Stock-based compensation

(662)



(627)



(1,318)



(1,289)



(2,456)


Amortization of intangibles

(272)



(272)



(273)



(544)



(721)


Non-GAAP sales and marketing

$

7,955



$

8,316



$

11,715



$

16,271



$

24,041












GAAP research and development

$

14,487



$

15,725



$

16,425



$

30,212



$

31,796


Stock-based compensation

(1,733)



(1,704)



(1,908)



(3,437)



(3,562)


Certain legal expenses



(191)





(191)




Lease exit and related charges





(842)





(1,758)


Non-GAAP research and development

$

12,754



$

13,830



$

13,675



$

26,584



$

26,476












GAAP general and administrative

$

7,010



$

7,293



$

6,382



$

14,303



$

13,207


Stock-based compensation

(2,030)



(1,162)



(1,375)



(3,192)



(2,632)


Amortization of intangibles

(17)



(17)



(17)



(34)



(34)


Certain legal expenses



(533)





(533)




Non-GAAP general and administrative

$

4,963



$

5,581



$

4,990



$

10,544



$

10,541












GAAP operating expense

$

30,386



$

32,233



$

36,113



$

62,619



$

72,221


Impact of non-GAAP adjustments

(4,714)



(4,506)



(5,733)



(9,220)



(11,163)


Non-GAAP operating expense

$

25,672



$

27,727



$

30,380



$

53,399



$

61,058












Operating loss:










GAAP operating loss

$

(8,639)



$

(10,853)



$

(14,059)



$

(19,492)



$

(28,631)


Impact of non-GAAP adjustments

5,733



5,577



7,176



11,310



14,046


Non-GAAP operating loss

$

(2,906)



$

(5,276)



$

(6,883)



$

(8,182)



$

(14,585)












Net loss and net loss per share:










GAAP net loss

$

(8,381)



$

(10,539)



$

(13,958)



$

(18,920)



$

(28,402)


Total pre-tax impact of non-GAAP adjustments

5,733



5,577



7,176



11,310



14,046


Non-GAAP net loss

$

(2,648)



$

(4,962)



$

(6,782)



$

(7,610)



$

(14,356)


GAAP net loss per share, basic and diluted

$

(0.06)



$

(0.07)



$

(0.10)



$

(0.13)



$

(0.21)


Non-GAAP net loss per share, basic and diluted

$

(0.02)



$

(0.03)



$

(0.05)



$

(0.05)



$

(0.11)


Shares used in basic and diluted net loss per share computation

144,572



143,000



136,682



143,790



135,843


 

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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