Castlight Health Announces Second Quarter 2021 Results

Company Demonstrates Sequential Increase in ARR

News provided by

Castlight Health, Inc.

Aug 03, 2021, 16:05 ET

SAN FRANCISCO, Aug. 3, 2021 /PRNewswire/ -- 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, 2021

December 31, 2020

Assets


Current assets:


Cash and cash equivalents

$

60,706

$

49,242

Accounts receivable and other, net

21,735

31,740

Prepaid expenses and other current assets

8,716

3,800

Total current assets

91,157

84,782

Property and equipment, net

4,485

5,321

Restricted cash, non-current

—

1,144

Deferred commissions

7,181

9,556

Deferred professional service costs

3,874

4,462

Intangible assets, net

5,814

7,930

Goodwill

41,485

41,485

Operating lease right-of-use assets, net

8,006

10,238

Other assets

106

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 liabilities

5,175

7,898

Accrued compensation

7,104

8,633

Deferred revenue

9,993

6,848

Operating lease liabilities

6,092

5,789

Total current liabilities

32,093

34,313

Deferred revenue, non-current

87

663

Operating lease liabilities, non-current

4,338

7,446

Other liabilities, non-current

335

485

Total liabilities

36,853

42,907

Stockholders' equity

125,255

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,

2021

2020

2021

2020

Revenue:






Subscription

$

31,128

$

34,289

$

63,238

$

72,672

Professional services and other

4,475

1,211

7,424

1,873

Total revenue, net

35,603

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 revenue

12,158

12,761

24,914

27,234

Gross profit

23,445

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 expenses

25,890

27,066

51,282

108,236

Operating loss

(2,445)

(4,327)

(5,534)

(60,925)

Other income, net

56

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 share

158,951

150,078

157,872

149,475

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

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Cost of revenue:






Cost of subscription

$

222

$

205

$

479

$

374

Cost of professional services and other

184

144

420

260

Sales and marketing

442

748

792

1,420

Research and development

1,060

1,314

2,129

2,477

General and administrative

1,262

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,

2021

2020

2021

2020

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 amortization

1,616

1,609

3,239

3,144

Goodwill impairment

—

—

—

50,300

Stock-based compensation

3,170

3,269

6,277

6,455

Amortization of deferred commissions

1,228

1,536

2,568

3,919

Amortization of deferred professional service costs

567

732

1,147

1,657

Non-cash operating lease expense

1,125

1,231

2,232

2,631

Other

19

—

19

2

Changes in operating assets and liabilities:






Accounts receivable and other, net

3,300

4,898

10,005

(1,778)

Deferred commissions

(219)

(602)

(193)

(920)

Deferred professional service costs

(221)

(213)

(521)

(629)

Prepaid expenses and other assets

932

(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 compensation

2,349

1,351

(1,529)

(3,114)

Net cash provided by (used in) operating activities

4,624

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 options

98

—

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 cash

4,205

6,593

11,464

1,257

Cash, cash equivalents and restricted cash at beginning of
  period

57,645

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 assets

1,144

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 Ended

Six Months Ended

June 30, 2021

March 31, 2021

June 30, 2020

June 30, 2021

June 30, 2020

Gross profit:








GAAP gross profit subscription

$

23,151

$

24,011

$

25,470

$

47,162

$

53,621

Stock-based compensation

222

257

205

479

374

Amortization of internal-use software

79

79

79

158

105

Amortization of intangibles

530

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 subscription

74.4

%

74.8

%

74.3

%

74.6

%

73.8

%

Non-GAAP gross margin subscription

77.0

%

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 compensation

184

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
services

6.6

%

(57.9)

%

(226)

%

(19.0)

%

(337)

%

Non-GAAP gross margin professional
services

10.7

%

(49.9)

%

(187)

%

(13.4)

%

(306)

%










GAAP gross profit

$

23,445

$

22,303

$

22,739

$

45,748

$

47,311

Impact of non-GAAP adjustments

1,015

1,102

1,496

2,117

2,337

Non-GAAP gross profit

$

24,460

$

23,405

$

24,235

$

47,865

$

49,648

GAAP gross margin

65.9

%

63.6

%

64.1

%

64.7

%

63.5

%

Non-GAAP gross margin

68.7

%

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

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 adjustments

4,307

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
adjustments

4,307

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 computation

158,951

156,781

150,078

157,872

149,475

Castlight Media Contact:
Caroline Kawashima
[email protected]
415-246-0313

Castlight Investor Contact:
[email protected]
443-213-0500

SOURCE Castlight Health, Inc.

Related Links

http://www.castlighthealth.com

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

icon3
440k+
Newsrooms &
Influencers
icon1
9k+
Digital Media
Outlets
icon2
270k+
Journalists
Opted In
GET STARTED