Investor Relations

Castlight Health Announces Third Quarter 2020 Results
11/05/2020

SAN FRANCISCO, Nov. 5, 2020 /PRNewswire/ -- Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its third quarter ended September 30, 2020.

"In the third quarter, we made progress on our strategic priorities, meeting our goal of signing a new health plan partner in 2020, making the high-touch Care Guides solution that launched last year generally available to the market, and achieving strong financial results that allow us to increase our 2020 financial outlook," said Maeve O'Meara, chief executive officer of Castlight Health. "We also delivered significant product innovation in the quarter, aligning our solutions to employer priorities like enablement of virtual care. We are competitively well positioned in the growing navigation market due to the complement of our high-touch capabilities, alongside our high-tech platform. As we look towards 2021, our two national health plan partnerships and the strength of our pipeline provide a foundation for growth through health plans."

Financial performance for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 includes:

  • GAAP total revenue of $35.1 million, compared to $35.5 million
  • GAAP gross margin of 66.1%, compared to 59.1%
  • Non-GAAP gross margin of 69.0%, compared to 62.1%
  • GAAP operating loss of $0.5 million, compared to $9.6 million
  • Non-GAAP operating income of $3.7 million, compared to an operating loss of $5.4 million
  • GAAP net loss per basic and diluted share of $0.00, compared to a net loss per basic and diluted share of $0.06
  • Non-GAAP net income per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.04
  • Cash provided by operations of $2.7 million, compared to cash used in operations of $7.4 million

Total cash and cash equivalents were $46.8 million as of September 30, 2020.

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 2020 outlook. For the full year 2020, the Company now expects:

  • GAAP revenue in the range of $140 million to $143 million
  • Non-GAAP operating income between $0 to $3 million
  • Non-GAAP net income per share between $0.00 and $0.02, based on approximately 151 million shares

Quarterly Conference Call
Castlight Health senior management will host a conference call to discuss its third quarter 2020 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 8774374.

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 goodwill impairment, 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. However, 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.

The non-GAAP measures we provide 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.

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.

Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," "can," "may," "will," "would" and similar expressions identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. The forward-looking statements about Castlight Health's expectations, plans, intentions, and strategies include, but are not limited to, statements regarding Castlight Health's third quarter 2020 performance and 2020 full year projections, the impact of COVID-19, the success of our strategy, and our expectations for our future business and financial performance. 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 annual report on Form 10-K for the year ended December 31, 2019 as filed with the SEC on February 28, 2020, and our quarterly reports on Form 10-Q, including the quarterly report for the three months ended September 30, 2020, when filed. All forward-looking statements in this press release are expressly qualified in their entirety by these cautionary statements and are based on information available to Castlight Health as of the date hereof. Castlight Health assumes no obligation to update these forward-looking statements, except as required by law. 

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


September 30, 2020


December 31, 2019

Assets




Current assets:




Cash and cash equivalents

$

46,804



$

43,017


Marketable securities



16,411


Accounts receivable and other, net

30,471



31,397


Prepaid expenses and other current assets

4,399



4,645


Total current assets

81,674



95,470


Property and equipment, net

5,721



4,856


Restricted cash, non-current

1,144



1,144


Deferred commissions

10,597



14,718


Deferred professional service costs

5,277



6,711


Intangible assets, net

8,988



12,178


Goodwill

41,485



91,785


Operating lease right-of-use assets, net

11,383



13,906


Other assets

1,687



2,016


Total assets

$

167,956



$

242,784


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

4,698



$

19,596


Accrued expenses and other current liabilities

8,184



10,454


Accrued compensation

6,821



8,770


Deferred revenue

10,202



10,173


Operating lease liabilities

5,687



5,914


Total current liabilities

35,592



54,907


Deferred revenue, non-current

443



572


Debt, non-current



1,395


Operating lease liabilities, non-current

8,954



11,823


Other liabilities, non-current

909



1,213


Total liabilities

45,898



69,910


Stockholders' equity

122,058



172,874


Total liabilities and stockholders' equity

$

167,956



$

242,784


 

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)



Three Months Ended September 30,


Nine Months Ended September 30,


2020


2019


2020


2019

Revenue:








Subscription

$

34,069



$

34,900



$

106,741



$

102,670


Professional services and other

1,009



561



2,882



4,191


Total revenue, net

35,078



35,461



109,623



106,861


Cost of revenue:








Cost of subscription(1)

8,013



8,517



27,064



24,917


Cost of professional services and other(1)

3,874



5,984



12,057



17,857


Total cost of revenue

11,887



14,501



39,121



42,774


Gross profit

23,191



20,960



70,502



64,087


Operating expenses:








Sales and marketing(1)

6,158



9,829



24,313



27,933


Research and development(1)

11,182



14,295



38,047



44,507


General and administrative(1)

6,341



6,440



19,257



20,743


Goodwill impairment





50,300




Total operating expenses

23,681



30,564



131,917



93,183


Operating loss

(490)



(9,604)



(61,415)



(29,096)


Other income, net

43



268



429



840


Net loss

$

(447)



$

(9,336)



$

(60,986)



$

(28,256)


Net loss per share, basic and diluted

$



$

(0.06)



$

(0.41)



$

(0.20)


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

152,146



145,701



150,372



144,434



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



Three Months Ended September 30,


Nine Months Ended September 30,


2020


2019


2020


2019

Cost of revenue:








Cost of subscription

$

224



$

180



$

598



$

595


Cost of professional services and other

171



236



431



737


Sales and marketing

282



678



1,702



1,967


Research and development

1,026



1,294



3,503



4,731


General and administrative

1,401



625



3,325



3,817


 

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)



Three Months Ended September 30,


Nine Months Ended September 30,


2020


2019


2020


2019

Operating activities:








Net loss

$

(447)



$

(9,336)



$

(60,986)



$

(28,256)


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








Depreciation and amortization

1,763



1,681



4,907



4,368


Goodwill impairment





50,300




Stock-based compensation

3,104



3,013



9,559



11,847


Amortization of deferred commissions

1,598



2,547



5,517



7,403


Amortization of deferred professional service costs

760



1,096



2,417



3,110


Non-cash operating lease expense

1,134



1,339



3,765



3,919


Accretion and amortization of marketable securities



(31)



2



(244)


Changes in operating assets and liabilities:








Accounts receivable and other, net

2,704



(2,831)



926



(8,626)


Deferred commissions

(476)



(1,833)



(1,396)



(4,503)


Deferred professional service costs

(289)



(400)



(918)



(1,301)


Prepaid expenses and other assets

1,066



1,042



242



(822)


Accounts payable

(3,847)



514



(14,048)



2,378


Operating lease liabilities

(1,570)



(1,472)



(4,186)



(4,267)


Accrued expenses and other liabilities

(1,065)



59



(2,576)



(3,072)


Deferred revenue

(2,862)



(3,202)



(100)



(2,890)


Accrued compensation

1,165



378



(1,949)



(428)


Net cash provided by (used in) operating activities

2,738



(7,436)



(8,524)



(21,384)


Investing activities:








Purchase of property and equipment

(132)



(119)



(3,431)



(712)


Purchase of marketable securities



(9,289)



(2,994)



(23,069)


Sales of marketable securities





2,001




Maturities of marketable securities



3,217



17,400



14,670


Net cash (used in) provided by investing activities

(132)



(6,191)



12,976



(9,111)


Financing activities:








Proceeds from exercise of stock options

23



79



178



1,924


Proceeds from ESPP offering

185





371




Principal payments on long-term debt

(465)



(464)



(1,395)



(1,394)


Net cash (used in) provided by financing activities

(257)



(385)



(846)



530










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

2,349



(14,012)



3,606



(29,965)


Cash, cash equivalents and restricted cash at beginning of period

45,599



51,377



44,342



67,330


Cash, cash equivalents and restricted cash at end of period

$

47,948



$

37,365



$

47,948



$

37,365










Reconciliation of cash, cash equivalents and restricted cash:








Cash and cash equivalents

$

46,804



$

36,040



$

46,804



$

36,040


Restricted cash, non-current

1,144



1,325



1,144



1,325


Total cash, cash equivalents and restricted cash

$

47,948



$

37,365



$

47,948



$

37,365


 

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



Three Months Ended


Nine Months Ended


September 30, 2020


June 30, 2020


September 30, 2019


September 30, 2020


September 30, 2019

Gross profit:










GAAP gross profit subscription

$

26,056



$

25,470



$

26,383



$

79,677



$

77,753


Stock-based compensation

224



205



180



598



595


Amortization of internal-use software

79



79





184




Amortization of intangibles

530



530



660



1,590



1,834


Reduction in workforce



221





221




Non-GAAP gross profit subscription

$

26,889



$

26,505



$

27,223



$

82,270



$

80,182


GAAP gross margin subscription

76.5

%


74.3

%


75.6

%


74.6

%


75.7

%

Non-GAAP gross margin subscription

78.9

%


77.3

%


78.0

%


77.1

%


78.1

%











GAAP gross loss professional services

$

(2,865)



$

(2,731)



$

(5,423)



$

(9,175)



$

(13,666)


Stock-based compensation

171



144



236



431



737


Reduction in workforce



317





317




Non-GAAP gross loss professional services

$

(2,694)



$

(2,270)



$

(5,187)



$

(8,427)



$

(12,929)


GAAP gross margin professional services

(284)

%


(226)

%


(967)

%


(318)

%


(326)

%

Non-GAAP gross margin professional services

(267)

%


(187)

%


(925)

%


(292)

%


(308)

%











GAAP gross profit

$

23,191



$

22,739



$

20,960



$

70,502



$

64,087


Impact of non-GAAP adjustments

1,004



1,496



1,076



3,341



3,166


Non-GAAP gross profit

$

24,195



$

24,235



$

22,036



$

73,843



$

67,253


GAAP gross margin

66.1

%


64.1

%


59.1

%


64.3

%


60.0

%

Non-GAAP gross margin

69.0

%


68.3

%


62.1

%


67.4

%


62.9

%











Operating expense:










GAAP sales and marketing

$

6,158



$

7,683



$

9,829



$

24,313



$

27,933


Stock-based compensation

(282)



(748)



(678)



(1,702)



(1,967)


Amortization of intangibles

(528)



(528)



(528)



(1,584)



(1,072)


Reduction in workforce

2



(334)





(332)




Non-GAAP sales and marketing

$

5,350



$

6,073



$

8,623



$

20,695



$

24,894












GAAP research and development

$

11,182



$

13,043



$

14,295



$

38,047



$

44,507


Stock-based compensation

(1,026)



(1,314)



(1,294)



(3,503)



(4,731)


Reduction in workforce

(5)



(658)





(663)




Certain legal expenses







191



(191)


Capitalization of internally developed software







21




Non-GAAP research and development

$

10,151



$

11,071



$

13,001



$

34,093



$

39,585












GAAP general and administrative

$

6,341



$

6,340



$

6,440



$

19,257



$

20,743


Stock-based compensation

(1,401)



(858)



(625)



(3,325)



(3,817)


Amortization of intangibles





(16)



(17)



(50)


Certain legal expenses









(533)


Reduction in workforce

15



(497)





(482)




Non-GAAP general and administrative

$

4,955



$

4,985



$

5,799



$

15,433



$

16,343












GAAP goodwill impairment

$



$



$



$

50,300



$


Goodwill impairment







(50,300)




Non-GAAP goodwill impairment

$



$



$



$



$












GAAP operating expense

$

23,681



$

27,066



$

30,564



$

131,917



$

93,183


Impact of non-GAAP adjustments

(3,225)



(4,937)



(3,141)



(61,696)



(12,361)


Non-GAAP operating expense

$

20,456



$

22,129



$

27,423



$

70,221



$

80,822












Operating loss:










GAAP operating loss

$

(490)



$

(4,327)



$

(9,604)



$

(61,415)



$

(29,096)


Impact of non-GAAP adjustments

4,229



6,433



4,217



65,037



15,527


Non-GAAP operating income (loss)

$

3,739



$

2,106



$

(5,387)



$

3,622



$

(13,569)












Net loss and net loss per share:










GAAP net loss

$

(447)



$

(4,204)



$

(9,336)



$

(60,986)



$

(28,256)


Total pre-tax impact of non-GAAP adjustments

4,229



6,433



4,217



65,037



15,527


Non-GAAP net income (loss)

$

3,782



$

2,229



$

(5,119)



$

4,051



$

(12,729)


GAAP net loss per share, basic and diluted

$



$

(0.03)



$

(0.06)



$

(0.41)



$

(0.20)


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

$

0.02



$

0.01



$

(0.04)



$

0.03



$

(0.09)


Shares used in basic and diluted net loss per share computation

152,146



150,078



145,701



150,372



144,434


 

Castlight Media Contact:
Caroline Kawashima
press@castlighthealth.com  
415-246-0313

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

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/castlight-health-announces-third-quarter-2020-results-301167360.html

SOURCE Castlight Health, Inc.

Contact Investor Relations

Email Alerts