Investor Relations

Castlight Health Announces Fourth Quarter and Full Year 2020 Results
02/23/2021

SAN FRANCISCO, Feb. 23, 2021 /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, 2020.

"Our strong fourth quarter performance punctuated an important year for Castlight, during which we achieved a number of strategic milestones and delivered Castlight's best financial performance in the company's history," said Maeve O'Meara, chief executive officer of Castlight Health. "We accomplished several key achievements in the quarter, including adding a new health plan customer, Blue Cross Blue Shield of Alabama, in December, signing a partnership with Boston Children's Hospital to support the national vaccination effort, and delivering strong results from our first year live with Care Guides. Our swift decisions early in the year strengthened our financial position, but still enabled us to address our customers' needs amidst the pandemic. We are confident that the foundation we have built in high-tech, high-touch navigation has us well positioned to capture share in the growing market and deliver ARR growth in 2021."

Financial performance for the three months ended December 31, 2020 compared to the three months ended December 31, 2019 includes:

  • GAAP total revenue of $37.1 million, compared to $36.4 million
  • GAAP gross margin of 65.2%, compared to 55.3%
  • Non-GAAP gross margin of 68.0%, compared to 57.8%
  • GAAP operating loss of $1.4 million, compared to $12.2 million
  • Non-GAAP operating income of $2.7 million, compared to an operating loss of $8.1 million
  • GAAP net loss per basic and diluted share of $0.01, compared to a net loss per basic and diluted share of $0.08
  • Non-GAAP net income per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.05
  • Cash provided by operations of $3.0 million, compared to $4.0 million

Financial performance for the 12 months ended December 31, 2020 compared to the 12 months ended December 31, 2019 includes:

  • GAAP total revenue of $146.7 million, compared to $143.3 million
  • GAAP gross margin of 64.5%, compared to 58.8%
  • Non-GAAP gross margin of 67.5% compared to 61.6%
  • GAAP operating loss of $62.8 million, compared to a loss of $41.3 million
  • Non-GAAP operating income of $6.3 million, compared to a loss of $21.7 million
  • GAAP net loss per basic and diluted share of $0.41, compared to a net loss per basic and diluted share of $0.28
  • Non-GAAP net income per basic and diluted share of $0.05, compared to a net loss per basic and diluted share of $0.14
  • Cash used in operations of $5.6 million, compared to $17.4 million used in operations

Total cash and cash equivalents were $49.2 million as of December 31, 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

For the full year 2021, the Company expects:

  • GAAP revenue in the range of $130 million and $135 million
  • Non-GAAP operating loss between $4 million and $9 million
  • Non-GAAP net loss per share between $0.02 and $0.06, based on approximately 160 million to 161 million shares

For the first quarter of 2021, the Company expects:

  • GAAP revenue in the range of $32 million and $34 million

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its fourth quarter and full year 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 4576726.

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 (i) operating loss and net loss per share guidance for the full year 2021 to comparable GAAP measures because we do not provide guidance for stock-based compensation expense, and (ii) 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 certain 2021 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 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 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 2021 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, 2020


December 31, 2019

Assets




Current assets:




Cash and cash equivalents

$

49,242



$

43,017


Marketable securities



16,411


Accounts receivable and other, net

31,740



31,397


Prepaid expenses and other current assets

3,800



4,645


Total current assets

84,782



95,470


Property and equipment, net

5,321



4,856


Restricted cash, non-current

1,144



1,144


Deferred commissions

9,556



14,718


Deferred professional service costs

4,462



6,711


Intangible assets, net

7,930



12,178


Goodwill

41,485



91,785


Operating lease right-of-use assets, net

10,238



13,906


Other assets

1,855



2,016


Total assets

$

166,773



$

242,784


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

5,145



$

19,596


Accrued expenses and other current liabilities

7,898



10,454


Accrued compensation

8,633



8,770


Deferred revenue

6,848



10,173


Operating lease liabilities

5,789



5,914


Total current liabilities

34,313



54,907


Deferred revenue, non-current

663



572


Debt, non-current



1,395


Operating lease liabilities, non-current

7,446



11,823


Other liabilities, non-current

485



1,213


Total liabilities

42,907



69,910


Stockholders' equity

123,866



172,874


Total liabilities and stockholders' equity

$

166,773



$

242,784


 

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



Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

Revenue:








Subscription

$

34,419



$

34,723



$

141,160



$

137,393


Professional services and other

2,667



1,724



5,549



5,915


Total revenue, net

37,086



36,447



146,709



143,308


Cost of revenue:








Cost of subscription(1)

7,932



9,150



34,996



34,067


Cost of professional services and other(1)

4,989



7,150



17,046



25,007


Total cost of revenue

12,921



16,300



52,042



59,074


Gross profit

24,165



20,147



94,667



84,234


Operating expenses:








Sales and marketing(1)

7,713



10,664



32,026



38,597


Research and development(1)

11,418



14,487



49,465



58,994


General and administrative(1)

6,405



7,238



25,662



27,981


Goodwill impairment





50,300




Total operating expenses

25,536



32,389



157,453



125,572


Operating loss

(1,371)



(12,242)



(62,786)



(41,338)


Other income, net

174



496



603



1,336


Net loss

$

(1,197)



$

(11,746)



$

(62,183)



$

(40,002)


Net loss per share, basic and diluted

$

(0.01)



$

(0.08)



$

(0.41)



$

(0.28)


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

154,739



147,359



151,478



145,172




(1)

  Includes stock-based compensation expense as follows:

 


Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

Cost of revenue:








Cost of subscription

$

215



$

179



$

813



$

774


Cost of professional services and other

219



216



650



953


Sales and marketing

326



175



2,028



2,142


Research and development

1,041



1,369



4,544



6,100


General and administrative

1,085



1,217



4,410



5,034


 

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



Three Months Ended December 31,


Year Ended December 31,


2020


2019


2020


2019

Operating activities:








Net loss

$

(1,197)



$

(11,746)



$

(62,183)



$

(40,002)


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








Depreciation and amortization

1,630



1,552



6,537



5,920


Goodwill impairment





50,300




Stock-based compensation

2,886



3,156



12,445



15,003


Amortization of deferred commissions

2,272



3,365



7,789



10,768


Amortization of deferred professional service costs

1,100



2,132



3,517



5,242


Non-cash operating lease expense

1,145



1,396



4,910



5,315


Accretion and amortization of marketable securities



6



2



(238)


Changes in operating assets and liabilities:








Accounts receivable and other, net

(1,269)



4,045



(343)



(4,581)


Deferred commissions

(1,231)



(841)



(2,627)



(5,344)


Deferred professional service costs

(260)



(385)



(1,178)



(1,686)


Prepaid expenses and other assets

582



924



824



102


Accounts payable

426



6,900



(13,622)



9,278


Operating lease liabilities

(1,558)



(1,459)



(5,744)



(5,726)


Accrued expenses and other liabilities

(245)



(688)



(2,821)



(3,760)


Deferred revenue

(3,134)



(7,588)



(3,234)



(10,478)


Accrued compensation

1,812



3,223



(137)



2,795


Net cash provided by (used in) operating activities

2,959



3,992



(5,565)



(17,392)


Investing activities:








Purchase of property and equipment

(149)



(1,241)



(3,580)



(1,953)


Purchase of marketable securities



(7,520)



(2,994)



(30,589)


Sales of marketable securities





2,001




Maturities of marketable securities



11,075



17,400



25,745


Net cash (used in) provided by investing activities

(149)



2,314



12,827



(6,797)


Financing activities:








Proceeds from exercise of stock options

92



1,136



270



3,060


Proceeds from ESPP offering





371




Principal payments on long-term debt

(464)



(465)



(1,859)



(1,859)


Net cash (used in) provided by financing activities

(372)



671



(1,218)



1,201










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

2,438



6,977



6,044



(22,988)


Cash, cash equivalents and restricted cash at beginning of 
     period

47,948



37,365



44,342



67,330


Cash, cash equivalents and restricted cash at end of 
     period

$

50,386



$

44,342



$

50,386



$

44,342










Reconciliation of cash, cash equivalents and restricted
      cash:








Cash and cash equivalents

$

49,242



$

43,017



$

49,242



$

43,017


Restricted cash included in Prepaid and other current
      assets



181





181


Restricted cash, non-current

1,144



1,144



1,144



1,144


Total cash, cash equivalents and restricted cash

$

50,386



$

44,342



$

50,386



$

44,342


 

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, 2020


September 30, 2020


December 31, 2019


December 31, 2020


December 31, 2019

Gross profit:










GAAP gross profit subscription

$

26,487



$

26,056



$

25,573



$

106,164



$

103,326


Stock-based compensation

215



224



179



813



774


Amortization of internal-use software

80



79





264




Amortization of intangibles

530



530



530



2,120



2,364


Reduction in workforce







221




Non-GAAP gross profit subscription

$

27,312



$

26,889



$

26,282



$

109,582



$

106,464


GAAP gross margin subscription

77.0

%


76.5

%


73.6

%


75.2

%


75.2

%

Non-GAAP gross margin subscription

79.4

%


78.9

%


75.7

%


77.6

%


77.5

%











GAAP gross loss professional services

$

(2,322)



$

(2,865)



$

(5,426)



$

(11,497)



$

(19,092)


Stock-based compensation

219



171



216



650



953


Reduction in workforce







317




Non-GAAP gross loss professional services

$

(2,103)



$

(2,694)



$

(5,210)



$

(10,530)



$

(18,139)


GAAP gross margin professional services

(87)

%


(284)

%


(315)

%


(207)

%


(323)

%

Non-GAAP gross margin professional services

(79)

%


(267)

%


(302)

%


(190)

%


(307)

%











GAAP gross profit

$

24,165



$

23,191



$

20,147



$

94,667



$

84,234


Impact of non-GAAP adjustments

1,044



1,004



925



4,385



4,091


Non-GAAP gross profit

$

25,209



$

24,195



$

21,072



$

99,052



$

88,325


GAAP gross margin

65.2

%


66.1

%


55.3

%


64.5

%


58.8

%

Non-GAAP gross margin

68.0

%


69.0

%


57.8

%


67.5

%


61.6

%











Operating expense:










GAAP sales and marketing

$

7,713



$

6,158



$

10,664



$

32,026



$

38,597


Stock-based compensation

(326)



(282)



(175)



(2,028)



(2,142)


Amortization of intangibles

(528)



(528)



(529)



(2,112)



(1,601)


Reduction in workforce



2





(332)




Non-GAAP sales and marketing

$

6,859



$

5,350



$

9,960



$

27,554



$

34,854












GAAP research and development

$

11,418



$

11,182



$

14,487



$

49,465



$

58,994


Stock-based compensation

(1,041)



(1,026)



(1,369)



(4,544)



(6,100)


Reduction in workforce



(5)





(663)




Certain legal expenses







191



(191)


Capitalization of internally developed software





80



21



80


Non-GAAP research and development

$

10,377



$

10,151



$

13,198



$

44,470



$

52,783












GAAP general and administrative

$

6,405



$

6,341



$

7,238



$

25,662



$

27,981


Stock-based compensation

(1,085)



(1,401)



(1,217)



(4,410)



(5,034)


Amortization of intangibles





(16)



(17)



(66)


Certain legal expenses









(533)


Reduction in workforce



15





(482)




Non-GAAP general and administrative

$

5,320



$

4,955



$

6,005



$

20,753



$

22,348












GAAP goodwill impairment

$



$



$



$

50,300



$


Goodwill impairment







(50,300)




Non-GAAP goodwill impairment

$



$



$



$



$












GAAP operating expense

$

25,536



$

23,681



$

32,389



$

157,453



$

125,572


Impact of non-GAAP adjustments

(2,980)



(3,225)



(3,226)



(64,676)



(15,587)


Non-GAAP operating expense

$

22,556



$

20,456



$

29,163



$

92,777



$

109,985












Operating loss:










GAAP operating loss

$

(1,371)



$

(490)



$

(12,242)



$

(62,786)



$

(41,338)


Impact of non-GAAP adjustments

4,024



4,229



4,151



69,061



19,678


Non-GAAP operating income (loss)

$

2,653



$

3,739



$

(8,091)



$

6,275



$

(21,660)












Net loss and net loss per share:










GAAP net loss

$

(1,197)



$

(447)



$

(11,746)



$

(62,183)



$

(40,002)


Total pre-tax impact of non-GAAP adjustments

4,024



4,229



4,151



69,061



19,678


Non-GAAP net income (loss)

$

2,827



$

3,782



$

(7,595)



$

6,878



$

(20,324)


GAAP net loss per share, basic and diluted

$

(0.01)



$



$

(0.08)



$

(0.41)



$

(0.28)


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

$

0.02



$

0.02



$

(0.05)



$

0.05



$

(0.14)


Shares used in basic and diluted net loss per share computation

154,739



152,146



147,359



151,478



145,172


 

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

Castlight Investor Contact:
ir@castlighthealth.com
443-213-0500

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SOURCE Castlight Health, Inc.

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