Investor Relations

Castlight Health Announces Fourth Quarter and Full Year 2019 Results
02/25/2020
Company Provides Initial 2020 Financial Outlook

SAN FRANCISCO, Feb. 25, 2020 /PRNewswire/ -- Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its fourth quarter and full year ended December 31, 2019.

Castlight Logo (PRNewsfoto/Castlight Health)

"In the fourth quarter, we continued our momentum with execution against our top priorities, including: the launch of the Castlight Care Guides high-touch pilot, the hire of our chief commercial officer, industry veteran Keith Reynolds, and the pipeline development and advancement by our new dedicated health plan team," said Maeve O'Meara, chief executive officer at Castlight Health. "The work we've done over the last two quarters provides a solid foundation for the Company to execute on our two-prong strategy of revitalizing our employer business while unlocking new growth vectors, starting with health plans."

Financial performance for the three months ended December 31, 2019 compared to the three months ended December 31, 2018 includes:

  • GAAP total revenue of $36.4 million, compared to $42.1 million
  • GAAP gross margin of 55.3%, compared to 65.0%
  • Non-GAAP gross margin of 57.8%, compared to 68.0%
  • GAAP operating loss of $12.2 million, compared to $3.8 million
  • Non-GAAP operating loss of $8.1 million, compared to income of $1.6 million
  • GAAP net loss per basic and diluted share of $0.08, compared to a net loss per basic and diluted share of $0.03
  • Non-GAAP net loss per basic and diluted share of $0.05, compared to a net income per basic and diluted share of $0.01
  • Cash provided by operations of $4.0 million, compared to $7.5 million

Financial performance for the 12 months ended December 31, 2019 compared to the 12 months ended December 31, 2018 includes:

  • GAAP total revenue of $143.3 million, compared to $156.4 million
  • GAAP gross margin of 58.8%, compared to 61.5%
  • Non-GAAP gross margin of 61.6% compared to 65.3%
  • GAAP operating loss of $41.3 million, compared to a loss of $39.9 million
  • Non-GAAP operating loss of $21.7 million, compared to a loss of $12.7 million
  • GAAP net loss per basic and diluted share of $0.28, compared to a net loss per basic and diluted share of $0.29
  • Non-GAAP net loss per basic and diluted share of $0.14, compared to a net loss per basic and diluted share of $0.09
  • Cash used in operations of $17.4 million, compared to $18.6 million used in operations

Total cash, cash equivalents and marketable securities was $59.4 million as of December 31, 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
For the full year 2020, the Company expects:

  • GAAP revenue between $130 million and $135 million
  • Non-GAAP operating loss between $17 million and $22 million
  • Non-GAAP net loss per share between $0.12 and $0.15, based on approximately 150 million to 151 million shares

Quarterly Conference Call
Castlight Health senior management will host a conference call to discuss its fourth quarter and full year 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 2757629.

About Castlight Health
Castlight is on a mission to make it as easy as humanly possible for its users to navigate the healthcare system and live happier, healthier, more productive lives. Our health navigation platform connects hundreds of health vendors, benefits resources, and plan designs into one comprehensive health and wellbeing experience. 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. Castlight transforms the employee benefit experience into a deeply personalized, yet simple, guided one, empowering better-informed patient decisions to unlock better healthcare outcomes and maximizing return on healthcare investments.

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, restructuring charges, capitalization and 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 2020 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 2020 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 Annual Report on Form 10-K and other 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 2020 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


December 31, 2019


December 31, 2018

Assets




Current assets:




Cash and cash equivalents

$

43,017



$

66,005


Marketable securities

16,411



11,327


Accounts receivable and other, net

31,397



26,816


Prepaid expenses and other current assets

4,645



3,680


Total current assets

95,470



107,828


Property and equipment, net

4,856



3,963


Restricted cash, non-current

1,144



1,325


Deferred commissions

14,718



20,142


Deferred professional service costs

6,711



10,133


Intangible assets, net

12,178



16,209


Goodwill

91,785



91,785


Operating lease right-of-use assets, net

13,906




Other assets

2,016



2,129


Total assets

$

242,784



$

253,514


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

19,596



$

9,556


Accrued expenses and other current liabilities

10,454



15,454


Accrued compensation

8,770



5,975


Deferred revenue

10,173



20,193


Operating lease liabilities

5,914




Total current liabilities

54,907



51,178


Deferred revenue, non-current

572



1,030


Debt, non-current

1,395



3,254


Operating lease liabilities, non-current

11,823




Other liabilities, non-current

1,213



3,381


Total liabilities

69,910



58,843


Stockholders' equity

172,874



194,671


Total liabilities and stockholders' equity

$

242,784



$

253,514


 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)



Three Months Ended December 31,


Year Ended December 31,


2019


2018


2019


2018

Revenue:








Subscription

$

34,723



$

39,408



$

137,393



$

143,901


Professional services and other

1,724



2,692



5,915



12,503


Total revenue, net

36,447



42,100



143,308



156,404


Cost of revenue:








Cost of subscription(1)

9,150



7,819



34,067



34,691


Cost of professional services and other(1)

7,150



6,902



25,007



25,498


Total cost of revenue

16,300



14,721



59,074



60,189


Gross profit

20,147



27,379



84,234



96,215


Operating expenses:








Sales and marketing(1)

10,664



10,419



38,597



49,134


Research and development(1)

14,487



14,531



58,994



61,355


General and administrative(1)

7,238



6,220



27,981



25,620


Total operating expenses

32,389



31,170



125,572



136,109


Operating loss

(12,242)



(3,791)



(41,338)



(39,894)


Other income, net

496



(248)



1,336



188


Net loss

$

(11,746)



$

(4,039)



$

(40,002)



$

(39,706)


Net loss per share, basic and diluted

$

(0.08)



$

(0.03)



$

(0.28)



$

(0.29)


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

147,359



140,508



145,172



137,686



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



Three Months Ended December 31,


Year Ended December 31,


2019


2018


2019


2018

Cost of revenue:








Cost of subscription

$

179



$

222



$

774



$

1,017


Cost of professional services and other

216



239



953



1,177


Sales and marketing

175



615



2,142



3,770


Research and development

1,369



1,854



6,100



7,214


General and administrative

1,217



1,193



5,034



4,954


 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)



Three Months Ended December 31,


Year Ended December 31,


2019


2018


2019


2018

Operating activities:








Net loss

$

(11,746)



$

(4,039)



$

(40,002)



$

(39,706)


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








Depreciation and amortization

1,552



1,587



5,920



6,858


Stock-based compensation

3,156



4,123



15,003



18,132


Amortization of deferred commissions

3,365



4,088



10,768



13,105


Amortization of deferred professional service costs

2,132



1,917



5,242



5,268


Non-cash operating lease expense

1,396





5,315




Lease exit and related charges



564





2,634


Accretion and amortization of marketable securities

6



(124)



(238)



(516)


Changes in operating assets and liabilities:








Accounts receivable and other, net

4,045



3,419



(4,581)



(4,883)


Deferred commissions

(841)



(555)



(5,344)



(5,735)


Deferred professional service costs

(385)



(625)



(1,686)



(2,735)


Prepaid expenses and other assets

924



1,297



102



178


Accounts payable

6,900



3,999



9,278



5,744


Operating lease liabilities

(1,459)





(5,726)




Accrued expenses and other liabilities

(688)



(1,355)



(3,760)



290


Deferred revenue

(7,588)



(6,904)



(10,478)



(9,219)


Accrued compensation

3,223



114



2,795



(7,966)


Net cash provided by (used in) operating activities

3,992



7,506



(17,392)



(18,551)


Investing activities:








Purchase of property and equipment

(1,241)



(119)



(1,953)



(2,014)


Purchase of marketable securities

(7,520)



(6,544)



(30,589)



(31,974)


Maturities of marketable securities

11,075



16,860



25,745



53,210


Net cash provided by (used in) investing activities

2,314



10,197



(6,797)



19,222


Financing activities:








Proceeds from exercise of stock options

1,136



1,867



3,060



4,480


Principal payments on long-term debt

(465)



(465)



(1,859)



(465)


Net cash provided by financing activities

671



1,402



1,201



4,015










Net increase (decrease) in cash, cash equivalents and restricted cash

6,977



19,105



(22,988)



4,686


Cash, cash equivalents and restricted cash at beginning of period

37,365



48,225



67,330



62,644


Cash, cash equivalents and restricted cash at end of period

$

44,342



$

67,330



$

44,342



$

67,330










Reconciliation of cash, cash equivalents and restricted cash:








Cash and cash equivalents

$

43,017



$

66,005



$

43,017



$

66,005


Restricted cash included in Prepaid and other current assets

181





181




Restricted cash, non-current

1,144



1,325



1,144



1,325


Total cash, cash equivalents and restricted cash

$

44,342



$

67,330



$

44,342



$

67,330


 

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



Three Months Ended


Year Ended


December 31,
2019


September 30,
2019


December 31,
2018


December 31,
2019


December 31,
2018

Gross profit:










GAAP gross profit subscription

$

25,573



$

26,383



$

31,589



$

103,326



$

109,210


Stock-based compensation

179



180



222



774



1,017


Amortization of internal-use software





120





778


Amortization of intangibles

530



660



678



2,364



2,712


Reduction in workforce









130


Non-GAAP gross profit subscription

$

26,282



$

27,223



$

32,609



$

106,464



$

113,847


GAAP gross margin subscription

73.6

%


75.6

%


80.2

%


75.2

%


75.9

%

Non-GAAP gross margin subscription

75.7

%


78.0

%


82.7

%


77.5

%


79.1

%











GAAP gross loss professional services

$

(5,426)



$

(5,423)



$

(4,210)



$

(19,092)



$

(12,995)


Stock-based compensation

216



236



239



953



1,177


Reduction in workforce









173


Non-GAAP gross loss professional services

$

(5,210)



$

(5,187)



$

(3,971)



$

(18,139)



$

(11,645)


GAAP gross margin professional services

(315)

%


(967)

%


(156.4)

%


(323)

%


(103.9)

%

Non-GAAP gross margin professional services

(302)

%


(925)

%


(147.5)

%


(307)

%


(93.1)

%











GAAP gross profit

$

20,147



$

20,960



$

27,379



$

84,234



$

96,215


Impact of non-GAAP adjustments

925



1,076



1,259



4,091



5,987


Non-GAAP gross profit

$

21,072



$

22,036



$

28,638



$

88,325



$

102,202


GAAP gross margin

55.3

%


59.1

%


65.0

%


58.8

%


61.5

%

Non-GAAP gross margin

57.8

%


62.1

%


68.0

%


61.6

%


65.3

%











Operating expense:










GAAP sales and marketing

$

10,664



$

9,829



$

10,419



$

38,597



$

49,134


Stock-based compensation

(175)



(678)



(615)



(2,142)



(3,770)


Amortization of intangibles

(529)



(528)



(273)



(1,601)



(1,265)


Reduction in workforce









(1,055)


Non-GAAP sales and marketing

$

9,960



$

8,623



$

9,531



$

34,854



$

43,044












GAAP research and development

$

14,487



$

14,295



$

14,531



$

58,994



$

61,355


Stock-based compensation

(1,369)



(1,294)



(1,854)



(6,100)



(7,214)


Reduction in workforce









(522)


Certain legal expenses







(191)




Capitalization of internally developed software

80







80




Lease exit and related charges





(167)





(2,178)


Non-GAAP research and development

$

13,198



$

13,001



$

12,510



$

52,783



$

51,441












GAAP general and administrative

$

7,238



$

6,440



$

6,220



$

27,981



$

25,620


Stock-based compensation

(1,217)



(625)



(1,193)



(5,034)



(4,954)


Amortization of intangibles

(16)



(16)



(17)



(66)



(67)


Certain legal expenses







(533)




Reduction in workforce









(172)


Non-GAAP general and administrative

$

6,005



$

5,799



$

5,010



$

22,348



$

20,427












GAAP operating expense

$

32,389



$

30,564



$

31,170



$

125,572



$

136,109


Impact of non-GAAP adjustments

(3,226)



(3,141)



(4,119)



(15,587)



(21,197)


Non-GAAP operating expense

$

29,163



$

27,423



$

27,051



$

109,985



$

114,912












Operating loss:










GAAP operating loss

$

(12,242)



$

(9,604)



$

(3,791)



$

(41,338)



$

(39,894)


Impact of non-GAAP adjustments

4,151



4,217



5,378



19,678



27,184


Non-GAAP operating loss (income)

$

(8,091)



$

(5,387)



$

1,587



$

(21,660)



$

(12,710)












Net (loss) income and net (loss) income per share:










GAAP net loss

$

(11,746)



$

(9,336)



$

(4,039)



$

(40,002)



$

(39,706)


Total pre-tax impact of non-GAAP adjustments

4,151



4,217



5,378



19,678



27,184


Non-GAAP net (loss) income

$

(7,595)



$

(5,119)



$

1,339



$

(20,324)



$

(12,522)


GAAP net loss per share, basic and diluted

$

(0.08)



$

(0.06)



$

(0.03)



$

(0.28)



$

(0.29)


Non-GAAP net (loss) income per share, basic and diluted

$

(0.05)



$

(0.04)



$

0.01



$

(0.14)



$

(0.09)


Shares used in basic and diluted net (loss) income per share computation

147,359



145,701



140,508



145,172



137,686


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

Castlight Investor Contact:
ir@castlighthealth.com
415-829-1680

 

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