Castlight Health Announces First Quarter 2021 Results

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    <br /> Castlight Health Announces First Quarter 2021 Results<br />

    Company Demonstrates Sequential Increase in ARR and Increases 2021 Outlook

    PR Newswire


    SAN FRANCISCO

    ,

    April 29, 2021

    /PRNewswire/ — Castlight Health, Inc. (NYSE:CSLT), a leading health navigation platform provider, today announced results for its first quarter ended March 31, 2021.

    “We executed well in the first quarter and made meaningful progress against each of our three priorities for 2021 while delivering strong financial results, including sequential ARR growth and our fourth straight quarter of non-GAAP profitability,” said

    Maeve O’Meara

    , chief executive officer of Castlight Health. “We were pleased with our pipeline generation activity in the quarter, reported our lowest churn quarter since 2016, and expanded a key health plan partnership. We demonstrated our commitment and ability to innovate in the category of next generation navigation with the launch of our market-leading vaccine navigation solution. Finally, we expanded and extended our work with Boston Children’s Hospital to support the nation’s ongoing COVID-19 vaccination effort. Our progress in the first quarter allows us to increase our financial guidance for 2021.”

    Financial performance for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 includes:

    • Total revenue of

      $35.1 million

      , compared to

      $39.0 million
    • GAAP gross margin of 63.6%, compared to 62.9%
    • Non-GAAP gross margin of 66.8%, compared to 65.1%
    • GAAP operating loss of

      $3.1 million

      , compared to

      $56.6 million
    • Non-GAAP operating income of

      $1.2 million

      , compared to an operating loss of

      $2.2 million
    • GAAP net loss per basic and diluted share of

      $0.02

      , compared to a net loss per basic and diluted share of

      $0.38
    • Non-GAAP net income per basic and diluted share of

      $0.01

      , compared to a net loss per basic and diluted share of

      $0.01
    • Cash provided by operations of

      $7.6 million

      , compared to cash used in operations of

      $14.4 million

    Total cash was

    $56.5 million

    as of March 31, 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 increasing its outlook and now 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 second quarter of 2021, the Company now 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 first 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 2847469.


    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 March 31, 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



    March 31, 2021



    December 31, 2020


    Assets


    Current assets:


    Cash and cash equivalents


    $


    56,501


    $


    49,242


    Accounts receivable and other, net


    25,035


    31,740


    Prepaid expenses and other current assets


    6,772


    3,800


    Total current assets


    88,308


    84,782


    Property and equipment, net


    4,966


    5,321


    Restricted cash, non-current


    1,144


    1,144


    Deferred commissions


    8,190


    9,556


    Deferred professional service costs


    4,205


    4,462


    Intangible assets, net


    6,872


    7,930


    Goodwill


    41,485


    41,485


    Operating lease right-of-use assets, net


    9,131


    10,238


    Other assets


    1,838


    1,855


    Total assets


    $


    166,139


    $


    166,773


    Liabilities and stockholders’ equity


    Current liabilities:


    Accounts payable


    $


    4,383


    $


    5,145


    Accrued expenses and other current liabilities


    7,057


    7,898


    Accrued compensation


    4,755


    8,633


    Deferred revenue


    13,135


    6,848


    Operating lease liabilities


    5,939


    5,789


    Total current liabilities


    35,269


    34,313


    Deferred revenue, non-current


    122


    663


    Operating lease liabilities, non-current


    5,907


    7,446


    Other liabilities, non-current


    480


    485


    Total liabilities


    41,778


    42,907


    Stockholders’ equity


    124,361


    123,866


    Total liabilities and stockholders’ equity


    $


    166,139


    $


    166,773



    CASTLIGHT HEALTH, INC.



    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



    (In thousands, except per share data)



    (unaudited)



    Three Months Ended March 31,



    2021



    2020


    Revenue:


    Subscription


    $


    32,110


    $


    38,383


    Professional services and other


    2,949


    662


    Total revenue, net


    35,059


    39,045


    Cost of revenue:


    Cost of subscription

    (1)


    8,099


    10,232


    Cost of professional services and other

    (1)


    4,657


    4,241


    Total cost of revenue


    12,756


    14,473


    Gross profit


    22,303


    24,572


    Operating expenses:


    Sales and marketing

    (1)


    6,913


    10,472


    Research and development

    (1)


    12,113


    13,822


    General and administrative

    (1)


    6,366


    6,576


    Goodwill impairment


    —


    50,300


    Total operating expenses


    25,392


    81,170


    Operating loss


    (3,089)


    (56,598)


    Other income, net


    93


    263


    Net loss


    $


    (2,996)


    $


    (56,335)


    Net loss per share, basic and diluted


    $


    (0.02)


    $


    (0.38)


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


    156,781


    148,872


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



    Three Months Ended March 31,



    2021



    2020


    Cost of revenue:


    Cost of subscription


    $


    257


    $


    169


    Cost of professional services and other


    236


    116


    Sales and marketing


    350


    672


    Research and development


    1,069


    1,163


    General and administrative


    1,195


    1,066



    CASTLIGHT HEALTH, INC.



    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



    (In thousands)



    (unaudited)



    Three Months Ended March 31,



    2021



    2020


    Operating activities:


    Net loss


    $


    (2,996)


    $


    (56,335)


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


    Depreciation and amortization


    1,623


    1,535


    Goodwill impairment


    —


    50,300


    Stock-based compensation


    3,107


    3,186


    Amortization of deferred commissions


    1,340


    2,383


    Amortization of deferred professional service costs


    580


    925


    Non-cash operating lease expense


    1,107


    1,400


    Accretion and amortization of marketable securities


    —


    2


    Changes in operating assets and liabilities:


    Accounts receivable and other, net


    6,705


    (6,676)


    Deferred commissions


    26


    (318)


    Deferred professional service costs


    (300)


    (416)


    Prepaid expenses and other assets


    (2,955)


    (494)


    Accounts payable


    (759)


    (7,462)


    Operating lease liabilities


    (1,389)


    (1,516)


    Accrued expenses and other liabilities


    (382)


    19


    Deferred revenue


    5,746


    3,573


    Accrued compensation


    (3,878)


    (4,465)


    Net cash provided by (used in) operating activities


    7,575


    (14,359)


    Investing activities:


    Purchase of property and equipment


    (212)


    (1,264)


    Purchase of marketable securities


    —


    (1,989)


    Maturities of marketable securities


    —


    12,400


    Net cash (used in) provided by investing activities


    (212)


    9,147


    Financing activities:


    Proceeds from exercise of stock options


    128


    155


    Proceeds from ESPP offering


    233


    186


    Principal payments on long-term debt


    (465)


    (465)


    Net cash used in financing activities


    (104)


    (124)


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


    7,259


    (5,336)


    Cash, cash equivalents and restricted cash at beginning of period


    50,386


    44,342


    Cash, cash equivalents and restricted cash at end of period


    $


    57,645


    $


    39,006


    Reconciliation of cash, cash equivalents and restricted cash:


    Cash and cash equivalents


    $


    56,501


    $


    37,681


    Restricted cash included in Prepaid expenses and other current assets


    —


    181


    Restricted cash, non-current


    1,144


    1,144


    Total cash, cash equivalents and restricted cash


    $


    57,645


    $


    39,006



    Three Months Ended



    March 31, 2021



    December 31, 2020



    March 31, 2020



    Gross profit:


    GAAP gross profit subscription


    $


    24,011


    $


    26,487


    $


    28,151


    Stock-based compensation


    257


    215


    169


    Amortization of internal-use software


    79


    80


    26


    Amortization of intangibles


    530


    530


    530


    Non-GAAP gross profit subscription


    $


    24,877


    $


    27,312


    $


    28,876


    GAAP gross margin subscription


    74.8


    %


    77.0


    %


    73.3


    %


    Non-GAAP gross margin subscription


    77.5


    %


    79.4


    %


    75.2


    %


    GAAP gross loss professional services


    $


    (1,708)


    $


    (2,322)


    $


    (3,579)


    Stock-based compensation


    236


    219


    116


    Non-GAAP gross loss professional services


    $


    (1,472)


    $


    (2,103)


    $


    (3,463)


    GAAP gross margin professional services


    (58)


    %


    (87)


    %


    (541)


    %


    Non-GAAP gross margin professional services


    (50)


    %


    (79)


    %


    (523)


    %


    GAAP gross profit


    $


    22,303


    $


    24,165


    $


    24,572


    Impact of non-GAAP adjustments


    1,102


    1,044


    841


    Non-GAAP gross profit


    $


    23,405


    $


    25,209


    $


    25,413


    GAAP gross margin


    63.6


    %


    65.2


    %


    62.9


    %


    Non-GAAP gross margin


    66.8


    %


    68.0


    %


    65.1


    %



    Operating expense:


    GAAP sales and marketing


    $


    6,913


    $


    7,713


    $


    10,472


    Stock-based compensation


    (350)


    (326)


    (672)


    Amortization of intangibles


    (528)


    (528)


    (528)


    Non-GAAP sales and marketing


    $


    6,035


    $


    6,859


    $


    9,272


    GAAP research and development


    $


    12,113


    $


    11,418


    $


    13,822


    Stock-based compensation


    (1,069)


    (1,041)


    (1,163)


    Certain legal expenses


    —


    —


    191


    Capitalization of internally developed software


    —


    —


    21


    Non-GAAP research and development


    $


    11,044


    $


    10,377


    $


    12,871


    GAAP general and administrative


    $


    6,366


    $


    6,405


    $


    6,576


    Stock-based compensation


    (1,195)


    (1,085)


    (1,066)


    Amortization of intangibles


    —


    —


    (17)


    Non-GAAP general and administrative


    $


    5,171


    $


    5,320


    $


    5,493


    GAAP goodwill impairment


    $


    —


    $


    —


    $


    50,300


    Goodwill impairment


    —


    —


    (50,300)


    Non-GAAP goodwill impairment


    $


    —


    $


    —


    $


    —


    GAAP operating expense


    $


    25,392


    $


    25,536


    $


    81,170


    Impact of non-GAAP adjustments


    (3,142)


    (2,980)


    (53,534)


    Non-GAAP operating expense


    $


    22,250


    $


    22,556


    $


    27,636



    Operating loss:


    GAAP operating loss


    $


    (3,089)


    $


    (1,371)


    $


    (56,598)


    Impact of non-GAAP adjustments


    4,244


    4,024


    54,375


    Non-GAAP operating income (loss)


    $


    1,155


    $


    2,653


    $


    (2,223)



    Net loss and net loss per share:


    GAAP net loss


    $


    (2,996)


    $


    (1,197)


    $


    (56,335)


    Total pre-tax impact of non-GAAP adjustments


    4,244


    4,024


    54,375


    Non-GAAP net income (loss)


    $


    1,248


    $


    2,827


    $


    (1,960)


    GAAP net loss per share, basic and diluted


    $


    (0.02)


    $


    (0.01)


    $


    (0.38)


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


    $


    0.01


    $


    0.02


    $


    (0.01)


    Shares used in basic and diluted net loss per share computation


    156,781


    154,739


    148,872


    Castlight Media Contact:



    Caroline Kawashima



    [email protected]


    415-246-0313


    Castlight Investor Contact:



    [email protected]


    443-213-0500

    Cision
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    SOURCE Castlight Health, Inc.

    PR Newswire
    April 29, 2021 – 1:05 PM PDT