Investor Relations

Castlight Health Announces Third Quarter 2021 Results
11/02/2021
Third Straight Quarter of Sequential ARR Growth

SAN FRANCISCO, Nov. 2, 2021 /PRNewswire/ -- Castlight Health, Inc. (NYSE: CSLT), a leading health navigation platform provider, today announced results for its third quarter ended September 30, 2021.

"We delivered a solid third quarter reflecting continued progress across both our employer and health plan businesses," said Maeve O'Meara, chief executive officer of Castlight Health. "This quarter our team produced our highest direct-to-employer bookings in over three years, which led to our third straight quarter of sequential ARR growth, and our health plan pipeline grew substantially in  Q3. The momentum we are seeing is a direct result of the strong product-market fit of our next generation navigation solution that seamlessly blends technology and service to produce results for our customers."

Financial performance for the three months ended September 30, 2021 compared to the three months ended September 30, 2020 includes:

  • Total revenue of $34.8 million, compared to $35.1 million
  • GAAP gross margin of 66.2%, compared to 66.1%
  • Non-GAAP gross margin of 69.1%, compared to 69.0%
  • GAAP operating loss of $1.9 million, compared to $0.5 million
  • Non-GAAP operating income of $2.5 million, compared to $3.7 million
  • GAAP net loss per basic and diluted share of $0.01, compared to a net loss per basic and diluted share of $0.00
  • Non-GAAP net income per basic and diluted share of $0.01, compared to net income per basic and diluted share of $0.02
  • Cash provided by operations of $5.8 million, compared to $2.7 million

Total cash was $65.8 million as of September 30, 2021.

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:

  • Revenue in the range of $135 million to $140 million
  • Non-GAAP operating loss of $4 million to income of $1 million
  • Non-GAAP loss per share of $0.03 to income of $0.01, based on approximately 160 million shares

For the fourth quarter of 2021, the Company expects:

  • Revenue in the range of $33 million to $35 million

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its third quarter 2021 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 7079838.

About Castlight Health

Castlight is on a mission to make it as easy as humanly possible for people to navigate the healthcare system and live happier, healthier, more productive lives. As a leader in healthcare navigation, we provide a world-class digital platform with a team of clinical and benefits experts to help members easily connect and engage with the right programs and care, at the right time. Castlight partners with Fortune 500 companies and health plans to transform employee and member benefits into one comprehensive health and wellbeing experience to deliver better health outcomes and maximize returns 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 2021 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 certain 2021 financial projections, 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, 2020 as filed with the SEC on February 24, 2021, and our quarterly reports on Form 10-Q, including the quarterly report for the three months ended September 30, 2021, when filed with the SEC. 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


September 30, 2021


December 31, 2020

Assets




Current assets:




Cash and cash equivalents

$

65,768



$

49,242


Accounts receivable and other, net

23,284



31,740


Prepaid expenses and other current assets

7,053



3,800


Total current assets

96,105



84,782


Property and equipment, net

4,331



5,321


Restricted cash, non-current



1,144


Deferred commissions

7,092



9,556


Deferred professional service costs

3,624



4,462


Intangible assets, net

4,756



7,930


Goodwill

41,485



41,485


Operating lease right-of-use assets, net

6,860



10,238


Other assets

106



1,855


Total assets

$

164,359



$

166,773


Liabilities and stockholders' equity




Current liabilities:




Accounts payable

$

4,543



$

5,145


Accrued expenses and other current liabilities

3,997



7,898


Accrued compensation

9,398



8,633


Deferred revenue

9,703



6,848


Operating lease liabilities

5,004



5,789


Total current liabilities

32,645



34,313


Deferred revenue, non-current

188



663


Operating lease liabilities, non-current

3,950



7,446


Other liabilities, non-current

485



485


Total liabilities

37,268



42,907


Stockholders' equity

127,091



123,866


Total liabilities and stockholders' equity

$

164,359



$

166,773


 

 

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,


2021


2020


2021


2020

Revenue:








Subscription

$

31,613



$

34,069



$

94,851



$

106,741


Professional services and other

3,163



1,009



10,587



2,882


Total revenue, net

34,776



35,078



105,438



109,623


Cost of revenue:








Cost of subscription(1)

8,081



8,013



24,157



27,064


Cost of professional services and other(1)

3,675



3,874



12,513



12,057


Total cost of revenue

11,756



11,887



36,670



39,121


Gross profit

23,020



23,191



68,768



70,502


Operating expenses:








Sales and marketing(1)

7,079



6,158



21,200



24,313


Research and development(1)

11,631



11,182



36,060



38,047


General and administrative(1)

6,195



6,341



18,927



19,257


Goodwill impairment







50,300


Total operating expenses

24,905



23,681



76,187



131,917


Operating loss

(1,885)



(490)



(7,419)



(61,415)


Other income, net

132



43



281



429


Income before income taxes

(1,753)



(447)



(7,138)



(60,986)


Provision for income taxes

279





279




Net loss

$

(2,032)



$

(447)



$

(7,417)



$

(60,986)


Net loss per share, basic and diluted

$

(0.01)



$



$

(0.05)



$

(0.41)


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

161,103



152,146



158,961



150,372




(1)

Includes stock-based compensation expense as follows:






Three Months Ended September 30,


Nine Months Ended September 30,




2021


2020


2021


2020



Cost of revenue:










Cost of subscription

$

256



$

224



$

735



$

598




Cost of professional services and other

145



171



565



431




Sales and marketing

483



282



1,275



1,702




Research and development

1,001



1,026



3,130



3,503




General and administrative

1,315



1,401



3,772



3,325


 

 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

 


Three Months Ended September 30,


Nine Months Ended September 30,


2021


2020


2021


2020

Operating activities:








Net loss

$

(2,032)



$

(447)



$

(7,417)



$

(60,986)


Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:








Depreciation and amortization

1,674



1,763



4,913



4,907


Goodwill impairment







50,300


Stock-based compensation

3,200



3,104



9,477



9,559


Amortization of deferred commissions

1,372



1,598



3,940



5,517


Amortization of deferred professional service costs

568



760



1,715



2,417


Non-cash operating lease expense

1,145



1,134



3,377



3,765


Other

13





32



2


Changes in operating assets and liabilities:








Accounts receivable and other, net

(1,549)



2,704



8,456



926


Deferred commissions

(1,283)



(476)



(1,476)



(1,396)


Deferred professional service costs

(298)



(289)



(819)



(918)


Prepaid expenses and other assets

1,663



1,066



(360)



242


Accounts payable

808



(3,847)



(650)



(14,048)


Operating lease liabilities

(1,476)



(1,570)



(4,281)



(4,186)


Accrued expenses and other liabilities

(73)



(1,065)



(2,016)



(2,576)


Deferred revenue

(189)



(2,862)



2,380



(100)


Accrued compensation

2,294



1,165



765



(1,949)


Net cash provided by (used in) operating activities

5,837



2,738



18,036



(8,524)


Investing activities:








Purchase of property and equipment

(456)



(132)



(701)



(3,431)


Purchase of marketable securities







(2,994)


Sales of marketable securities







2,001


Maturities of marketable securities







17,400


Net cash (used in) provided by investing activities

(456)



(132)



(701)



12,976


Financing activities:








Proceeds from exercise of stock options

259



23



485



178


Proceeds from ESPP offering

390



185



623



371


Principal payments on long-term debt

(465)



(465)



(1,395)



(1,395)


Final payment on term loan

(490)





(490)




Net cash used in financing activities

(306)



(257)



(777)



(846)


Effect of exchange rate changes on cash, cash equivalents, and restricted cash

(13)





(32)












Net increase in cash, cash equivalents and restricted cash

5,062



2,349



16,526



3,606


Cash, cash equivalents and restricted cash at beginning of period

61,850



45,599



50,386



44,342


Cash, cash equivalents and restricted cash at end of period

$

66,912



$

47,948



$

66,912



$

47,948










Reconciliation of cash, cash equivalents and restricted cash:








Cash and cash equivalents

$

65,768



$

46,804



$

65,768



$

46,804


Restricted cash included in Prepaid expenses and other current assets

1,144





1,144




Restricted cash, non-current



1,144





1,144


Total cash, cash equivalents and restricted cash

$

66,912



$

47,948



$

66,912



$

47,948


 

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,
2021


June 30,
2021


September 30,
2020


September 30,
2021


September 30,
2020

Gross profit:










GAAP gross profit subscription

$

23,532



$

23,151



$

26,056



$

70,694



$

79,677


Stock-based compensation

256



222



224



735



598


Amortization of internal-use
software

79



79



79



237



184


Amortization of intangibles

530



530



530



1,590



1,590


Reduction in workforce









221


Non-GAAP gross profit subscription

$

24,397



$

23,982



$

26,889



$

73,256



$

82,270


GAAP gross margin subscription

74.4

%


74.4

%


76.5

%


74.5

%


74.6

%

Non-GAAP gross margin subscription

77.2

%


77.0

%


78.9

%


77.2

%


77.1

%











GAAP gross profit (loss) professional
services

$

(512)



$

294



$

(2,865)



$

(1,926)



$

(9,175)


Stock-based compensation

145



184



171



565



431


Reduction in workforce









317


Non-GAAP gross profit (loss)
professional services

$

(367)



$

478



$

(2,694)



$

(1,361)



$

(8,427)


GAAP gross margin professional
services

(16.2)

%


6.6

%


(284)

%


(18.2)

%


(318)

%

Non-GAAP gross margin professional
services

(11.6)

%


10.7

%


(267)

%


(12.9)

%


(292)

%











GAAP gross profit

$

23,020



$

23,445



$

23,191



$

68,768



$

70,502


Impact of non-GAAP adjustments

1,010



1,015



1,004



3,127



3,341


Non-GAAP gross profit

$

24,030



$

24,460



$

24,195



$

71,895



$

73,843


GAAP gross margin

66.2

%


65.9

%


66.1

%


65.2

%


64.3

%

Non-GAAP gross margin

69.1

%


68.7

%


69.0

%


68.2

%


67.4

%











Operating expense:










GAAP sales and marketing

$

7,079



$

7,208



$

6,158



$

21,200



$

24,313


Stock-based compensation

(483)



(442)



(282)



(1,275)



(1,702)


Amortization of intangibles

(528)



(528)



(528)



(1,584)



(1,584)


Reduction in workforce





2





(332)


Non-GAAP sales and marketing

$

6,068



$

6,238



$

5,350



$

18,341



$

20,695












GAAP research and development

$

11,631



$

12,316



$

11,182



$

36,060



$

38,047


Stock-based compensation

(1,001)



(1,060)



(1,026)



(3,130)



(3,503)


Reduction in workforce





(5)





(663)


Certain legal expenses









191


Capitalization of internally
developed software









21


Non-GAAP research and development

$

10,630



$

11,256



$

10,151



$

32,930



$

34,093












GAAP general and administrative

$

6,195



$

6,366



$

6,341



$

18,927



$

19,257


Stock-based compensation

(1,315)



(1,262)



(1,401)



(3,772)



(3,325)


Amortization of intangibles









(17)


Reduction in workforce





15





(482)


Non-GAAP general and
administrative

$

4,880



$

5,104



$

4,955



$

15,155



$

15,433












GAAP goodwill impairment

$



$



$



$



$

50,300


Goodwill impairment









(50,300)


Non-GAAP goodwill impairment

$



$



$



$



$












GAAP operating expense

$

24,905



$

25,890



$

23,681



$

76,187



$

131,917


Impact of non-GAAP adjustments

(3,327)



(3,292)



(3,225)



(9,761)



(61,696)


Non-GAAP operating expense

$

21,578



$

22,598



$

20,456



$

66,426



$

70,221












Operating income (loss):










GAAP operating loss

$

(1,885)



$

(2,445)



$

(490)



$

(7,419)



$

(61,415)


Impact of non-GAAP adjustments

4,337



4,307



4,229



12,888



65,037


Non-GAAP operating income

$

2,452



$

1,862



$

3,739



$

5,469



$

3,622












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










GAAP net loss

$

(2,032)



$

(2,389)



$

(447)



$

(7,417)



$

(60,986)


Total pre-tax impact of non-GAAP
adjustments

4,337



4,307



4,229



12,888



65,037


Non-GAAP net income

$

2,305



$

1,918



$

3,782



$

5,471



$

4,051


GAAP net loss per share, basic and
diluted

$

(0.01)



$

(0.02)



$



$

(0.05)



$

(0.41)


Non-GAAP net income per share,
basic and diluted

$

0.01



$

0.01



$

0.02



$

0.03



$

0.03


Shares used in basic and diluted net
loss per share computation

161,103



158,951



152,146



158,961



150,372


 

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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