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CSLT Castlight Health

Filed: 3 Aug 21, 4:10pm

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Castlight Health Announces Second Quarter 2021 Results

Company Demonstrates Sequential Increase in ARR


SAN FRANCISCO - August 3, 2021 - Castlight Health, Inc. (NYSE:CSLT), a leading health navigation platform provider, today announced results for its second quarter ended June 30, 2021.

“We had a strong second quarter, achieving the top-end of our revenue guidance and generating our fifth straight quarter of non-GAAP profitability and positive cash flow,” said Maeve O’Meara, chief executive officer of Castlight Health. “We were pleased with pipeline progress, as our late-stage pipeline for the quarter is the largest in four years, we reported a second low churn quarter, and released a third-party study that demonstrated Castlight’s clear value across members at every clinical risk level. We continue to be confident that we will deliver ARR growth in 2021 and are excited about opportunities to extend our data and technology to new markets as part of our long-term growth strategy.”

Financial performance for the three months ended June 30, 2021 compared to the three months ended June 30, 2020 includes:
Total revenue of $35.6 million, compared to $35.5 million
GAAP gross margin of 65.9%, compared to 64.1%
Non-GAAP gross margin of 68.7%, compared to 68.3%
GAAP operating loss of $2.4 million, compared to $4.3 million
Non-GAAP operating income of $1.9 million, compared to $2.1 million



GAAP net loss per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.03
Non-GAAP net income per basic and diluted share of $0.01, compared to net income per basic and diluted share of $0.01
Cash provided by operations of $4.6 million, compared to cash provided by operations of $3.1 million

Total cash was $60.7 million as of June 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 is reiterating its outlook and expects:
Revenue in the range of $135 million to $140 million
Non-GAAP operating income between income of $1 million and a loss of $4 million
Non-GAAP net income per share between income of $0.01 and a loss of $0.03, based on approximately 160 million to 161 million shares
For the third 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 second 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 3859414.

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 June 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
June 30, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$60,706 $49,242 
Accounts receivable and other, net21,735 31,740 
Prepaid expenses and other current assets8,716 3,800 
Total current assets91,157 84,782 
Property and equipment, net4,485 5,321 
Restricted cash, non-current— 1,144 
Deferred commissions7,181 9,556 
Deferred professional service costs3,874 4,462 
Intangible assets, net5,814 7,930 
Goodwill41,485 41,485 
Operating lease right-of-use assets, net8,006 10,238 
Other assets106 1,855 
Total assets$162,108 $166,773 
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$3,729 $5,145 
Accrued expenses and other current liabilities5,175 7,898 
Accrued compensation7,104 8,633 
Deferred revenue9,993 6,848 
Operating lease liabilities6,092 5,789 
Total current liabilities32,093 34,313 
Deferred revenue, non-current87 663 
Operating lease liabilities, non-current4,338 7,446 
Other liabilities, non-current335 485 
Total liabilities36,853 42,907 
Stockholders’ equity125,255 123,866 
Total liabilities and stockholders’ equity$162,108 $166,773 





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,
2021202020212020
Revenue:
Subscription$31,128 $34,289 $63,238 $72,672 
Professional services and other4,475 1,211 7,424 1,873 
Total revenue, net35,603 35,500 70,662 74,545 
Cost of revenue:
Cost of subscription(1)
7,977 8,819 16,076 19,051 
Cost of professional services and other(1)
4,181 3,942 8,838 8,183 
Total cost of revenue12,158 12,761 24,914 27,234 
Gross profit23,445 22,739 45,748 47,311 
Operating expenses:
Sales and marketing(1)
7,208 7,683 14,121 18,155 
Research and development(1)
12,316 13,043 24,429 26,865 
General and administrative(1)
6,366 6,340 12,732 12,916 
Goodwill impairment— — — 50,300 
Total operating expenses25,890 27,066 51,282 108,236 
Operating loss(2,445)(4,327)(5,534)(60,925)
Other income, net56 123 149 386 
Net loss$(2,389)$(4,204)$(5,385)$(60,539)
Net loss per share, basic and diluted$(0.02)$(0.03)$(0.03)$(0.41)
Weighted-average shares used to compute basic and diluted net loss per share158,951 150,078 157,872 149,475 

(1)Includes stock-based compensation expense as follows:
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Cost of revenue:
Cost of subscription$222 $205 $479 $374 
Cost of professional services and other184 144 420 260 
Sales and marketing442 748 792 1,420 
Research and development1,060 1,314 2,129 2,477 
General and administrative1,262 858 2,457 1,924 





CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
 2021202020212020
Operating activities:
Net loss$(2,389)$(4,204)$(5,385)$(60,539)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization1,616 1,609 3,239 3,144 
Goodwill impairment— — — 50,300 
Stock-based compensation3,170 3,269 6,277 6,455 
Amortization of deferred commissions1,228 1,536 2,568 3,919 
Amortization of deferred professional service costs567 732 1,147 1,657 
Non-cash operating lease expense1,125 1,231 2,232 2,631 
Other19 — 19 
Changes in operating assets and liabilities:
Accounts receivable and other, net3,300 4,898 10,005 (1,778)
Deferred commissions(219)(602)(193)(920)
Deferred professional service costs(221)(213)(521)(629)
Prepaid expenses and other assets932 (330)(2,023)(824)
Accounts payable(699)(2,739)(1,458)(10,201)
Operating lease liabilities(1,416)(1,100)(2,805)(2,616)
Accrued expenses and other liabilities(1,561)(1,530)(1,943)(1,511)
Deferred revenue(3,177)(811)2,569 2,762 
Accrued compensation2,349 1,351 (1,529)(3,114)
Net cash provided by (used in) operating activities4,624 3,097 12,199 (11,262)
Investing activities:
Purchase of property and equipment(33)(2,035)(245)(3,299)
Purchase of marketable securities— (1,005)— (2,994)
Sales of marketable securities— 2,001 — 2,001 
Maturities of marketable securities— 5,000 — 17,400 
Net cash (used in) provided by investing activities(33)3,961 (245)13,108 
Financing activities:
Proceeds from exercise of stock options98 — 226 155 
Proceeds from ESPP offering— — 233 186 
Principal payments on long-term debt(465)(465)(930)(930)
Net cash used in financing activities(367)(465)(471)(589)
Effect of of exchange rate changes on cash, cash equivalents, and restricted cash(19)— (19)— 
Net increase (decrease) in cash, cash equivalents and restricted cash4,205 6,593 11,464 1,257 
Cash, cash equivalents and restricted cash at beginning of period57,645 39,006 50,386 44,342 
Cash, cash equivalents and restricted cash at end of period$61,850 $45,599 $61,850 $45,599 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents$60,706 $44,274 $60,706 $44,274 
Restricted cash included in Prepaid expenses and other current assets1,144 181 1,144 181 
Restricted cash, non-current— 1,144 — 1,144 
Total cash, cash equivalents and restricted cash$61,850 $45,599 $61,850 $45,599 


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

Three Months EndedSix Months Ended
June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
Gross profit:
GAAP gross profit subscription$23,151 $24,011 $25,470 $47,162 $53,621 
Stock-based compensation222 257 205 479 374 
Amortization of internal-use software79 79 79 158 105 
Amortization of intangibles530 530 530 1,060 1,060 
Reduction in workforce— — 221 — 221 
Non-GAAP gross profit subscription$23,982 $24,877 $26,505 $48,859 $55,381 
GAAP gross margin subscription74.4 %74.8 %74.3 %74.6 %73.8 %
Non-GAAP gross margin subscription77.0 %77.5 %77.3 %77.3 %76.2 %
GAAP gross profit (loss) professional services$294 $(1,708)$(2,731)$(1,414)$(6,310)
Stock-based compensation184 236 144 420 260 
Reduction in workforce— — 317 — 317 
Non-GAAP gross profit (loss) professional services$478 $(1,472)$(2,270)$(994)$(5,733)
GAAP gross margin professional services6.6 %(57.9)%(226)%(19.0)%(337)%
Non-GAAP gross margin professional services10.7 %(49.9)%(187)%(13.4)%(306)%
GAAP gross profit$23,445 $22,303 $22,739 $45,748 $47,311 
Impact of non-GAAP adjustments1,015 1,102 1,496 2,117 2,337 
Non-GAAP gross profit$24,460 $23,405 $24,235 $47,865 $49,648 
GAAP gross margin65.9 %63.6 %64.1 %64.7 %63.5 %
Non-GAAP gross margin68.7 %66.8 %68.3 %67.7 %66.6 %
Operating expense:
GAAP sales and marketing$7,208 $6,913 $7,683 $14,121 $18,155 
Stock-based compensation(442)(350)(748)(792)(1,420)
Amortization of intangibles(528)(528)(528)(1,056)(1,056)
Reduction in workforce— — (334)— (334)
Non-GAAP sales and marketing$6,238 $6,035 $6,073 $12,273 $15,345 
GAAP research and development$12,316 $12,113 $13,043 $24,429 $26,865 
Stock-based compensation(1,060)(1,069)(1,314)(2,129)(2,477)
Reduction in workforce— — (658)— (658)
Certain legal expenses— — — — 191 
Capitalization of internally developed software— — — — 21 
Non-GAAP research and development$11,256 $11,044 $11,071 $22,300 $23,942 
GAAP general and administrative$6,366 $6,366 $6,340 $12,732 $12,916 
Stock-based compensation(1,262)(1,195)(858)(2,457)(1,924)
Amortization of intangibles— — — — (17)
Reduction in workforce— — (497)— (497)
Non-GAAP general and administrative$5,104 $5,171 $4,985 $10,275 $10,478 
GAAP goodwill impairment$— $— $— $— $50,300 


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

Goodwill impairment— — — — (50,300)
Non-GAAP goodwill impairment$— $— $— $— $— 
GAAP operating expense$25,890 $25,392 $27,066 $51,282 $108,236 
Impact of non-GAAP adjustments(3,292)(3,142)(4,937)(6,434)(58,471)
Non-GAAP operating expense$22,598 $22,250 $22,129 $44,848 $49,765 
Operating income (loss):
GAAP operating loss$(2,445)$(3,089)$(4,327)$(5,534)$(60,925)
Impact of non-GAAP adjustments4,307 4,244 6,433 8,551 60,808 
Non-GAAP operating income (loss)$1,862 $1,155 $2,106 $3,017 $(117)
Net income (loss) and net income (loss) per share:
GAAP net loss$(2,389)$(2,996)$(4,204)$(5,385)$(60,539)
Total pre-tax impact of non-GAAP adjustments4,307 4,244 6,433 8,551 60,808 
Non-GAAP net income$1,918 $1,248 $2,229 $3,166 $269 
GAAP net loss per share, basic and diluted$(0.02)$(0.02)$(0.03)$(0.03)$(0.41)
Non-GAAP net income per share, basic and diluted$0.01 $0.01 $0.01 $0.02 $— 
Shares used in basic and diluted net loss per share computation158,951 156,781 150,078 157,872 149,475 





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



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