EX-99.1 2 exh991-pressreleaseq41.htm EX-99.1 Document

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Castlight Health Announces Fourth Quarter and Full Year 2019 Results

Company Provides Initial 2020 Financial Outlook

SAN FRANCISCO - February 25, 2020 - 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.

“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, 2019December 31, 2018
Assets
Current assets:
Cash and cash equivalents$43,017  $66,005  
Marketable securities16,411  11,327  
Accounts receivable and other, net31,397  26,816  
Prepaid expenses and other current assets4,645  3,680  
Total current assets95,470  107,828  
Property and equipment, net4,856  3,963  
Restricted cash, non-current1,144  1,325  
Deferred commissions14,718  20,142  
Deferred professional service costs6,711  10,133  
Intangible assets, net12,178  16,209  
Goodwill91,785  91,785  
Operating lease right-of-use assets, net13,906  —  
Other assets2,016  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 liabilities10,454  15,454  
Accrued compensation8,770  5,975  
Deferred revenue10,173  20,193  
Operating lease liabilities5,914  —  
Total current liabilities54,907  51,178  
Deferred revenue, non-current572  1,030  
Debt, non-current1,395  3,254  
Operating lease liabilities, non-current11,823  —  
Other liabilities, non-current1,213  3,381  
Total liabilities69,910  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,
2019201820192018
Revenue:
Subscription$34,723  $39,408  $137,393  $143,901  
Professional services and other1,724  2,692  5,915  12,503  
Total revenue, net36,447  42,100  143,308  156,404  
Cost of revenue:
Cost of subscription(1)
9,150  7,819  34,067  34,691  
Cost of professional services and other(1)
7,150  6,902  25,007  25,498  
Total cost of revenue16,300  14,721  59,074  60,189  
Gross profit 20,147  27,379  84,234  96,215  
Operating expenses:
Sales and marketing(1)
10,664  10,419  38,597  49,134  
Research and development(1)
14,487  14,531  58,994  61,355  
General and administrative(1)
7,238  6,220  27,981  25,620  
Total operating expenses32,389  31,170  125,572  136,109  
Operating loss(12,242) (3,791) (41,338) (39,894) 
Other income, net496  (248) 1,336  188  
Net loss$(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,
 2019201820192018
Cost of revenue:
Cost of subscription$179  $222  $774  $1,017  
Cost of professional services and other216  239  953  1,177  
Sales and marketing175  615  2,142  3,770  
Research and development1,369  1,854  6,100  7,214  
General and administrative1,217  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,
 2019201820192018
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 amortization1,552  1,587  5,920  6,858  
Stock-based compensation3,156  4,123  15,003  18,132  
Amortization of deferred commissions3,365  4,088  10,768  13,105  
Amortization of deferred professional service costs2,132  1,917  5,242  5,268  
Non-cash operating lease expense1,396  —  5,315  —  
Lease exit and related charges—  564  —  2,634  
Accretion and amortization of marketable securities6  (124) (238) (516) 
Changes in operating assets and liabilities:
Accounts receivable and other, net4,045  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 assets924  1,297  102  178  
Accounts payable6,900  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 compensation3,223  114  2,795  (7,966) 
Net cash provided by (used in) operating activities3,992  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 securities11,075  16,860  25,745  53,210  
Net cash provided by (used in) investing activities2,314  10,197  (6,797) 19,222  
Financing activities:
Proceeds from exercise of stock options1,136  1,867  3,060  4,480  
Principal payments on long-term debt(465) (465) (1,859) (465) 
Net cash provided by financing activities671  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 assets181  —  181  —  
Restricted cash, non-current1,144  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 EndedYear Ended
December 31, 2019September 30, 2019December 31, 2018December 31, 2019December 31, 2018
Gross profit:
GAAP gross profit subscription$25,573  $26,383  $31,589  $103,326  $109,210  
Stock-based compensation179  180  222  774  1,017  
Amortization of internal-use software—  —  120  —  778  
Amortization of intangibles530  660  678  2,364  2,712  
Reduction in workforce—  —  —  —  130  
Non-GAAP gross profit subscription$26,282  $27,223  $32,609  $106,464  $113,847  
GAAP gross margin subscription73.6 %75.6 %80.2 %75.2 %75.9 %
Non-GAAP gross margin subscription75.7 %78.0 %82.7 %77.5 %79.1 %
GAAP gross loss professional services$(5,426) $(5,423) $(4,210) $(19,092) $(12,995) 
Stock-based compensation216  236  239  953  1,177  
Reduction in workforce—  —  —  —  173  
Non-GAAP gross loss professional services$(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 adjustments925  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 software80  —  —  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  

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

Operating loss:
GAAP operating loss$(12,242) $(9,604) $(3,791) $(41,338) $(39,894) 
Impact of non-GAAP adjustments4,151  4,217  5,378  19,678  27,184  
Non-GAAP operating loss (income)$(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) $(39,706) 
Total pre-tax impact of non-GAAP adjustments4,151  4,217  5,378  19,678  27,184  
Non-GAAP net (loss) income$(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 computation147,359  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