EX-99.1 2 exh991-pressreleaseq321.htm EX-99.1 Document

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Castlight Health Announces Third Quarter 2021 Results

Third Straight Quarter of Sequential ARR Growth


SAN FRANCISCO - November 2, 2021 - 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, 2021December 31, 2020
Assets
Current assets:
Cash and cash equivalents$65,768 $49,242 
Accounts receivable and other, net23,284 31,740 
Prepaid expenses and other current assets7,053 3,800 
Total current assets96,105 84,782 
Property and equipment, net4,331 5,321 
Restricted cash, non-current— 1,144 
Deferred commissions7,092 9,556 
Deferred professional service costs3,624 4,462 
Intangible assets, net4,756 7,930 
Goodwill41,485 41,485 
Operating lease right-of-use assets, net6,860 10,238 
Other assets106 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 liabilities3,997 7,898 
Accrued compensation9,398 8,633 
Deferred revenue9,703 6,848 
Operating lease liabilities5,004 5,789 
Total current liabilities32,645 34,313 
Deferred revenue, non-current188 663 
Operating lease liabilities, non-current3,950 7,446 
Other liabilities, non-current485 485 
Total liabilities37,268 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,
2021202020212020
Revenue:
Subscription$31,613 $34,069 $94,851 $106,741 
Professional services and other3,163 1,009 10,587 2,882 
Total revenue, net34,776 35,078 105,438 109,623 
Cost of revenue:
Cost of subscription(1)
8,081 8,013 24,157 27,064 
Cost of professional services and other(1)
3,675 3,874 12,513 12,057 
Total cost of revenue11,756 11,887 36,670 39,121 
Gross profit 23,020 23,191 68,768 70,502 
Operating expenses:
Sales and marketing(1)
7,079 6,158 21,200 24,313 
Research and development(1)
11,631 11,182 36,060 38,047 
General and administrative(1)
6,195 6,341 18,927 19,257 
Goodwill impairment— — — 50,300 
Total operating expenses24,905 23,681 76,187 131,917 
Operating loss(1,885)(490)(7,419)(61,415)
Other income, net132 43 281 429 
Income before income taxes(1,753)(447)(7,138)(60,986)
Provision for income taxes279 — 279 — 
Net loss$(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,
 2021202020212020
Cost of revenue:
Cost of subscription$256 $224 $735 $598 
Cost of professional services and other145 171 565 431 
Sales and marketing483 282 1,275 1,702 
Research and development1,001 1,026 3,130 3,503 
General and administrative1,315 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,
 2021202020212020
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 amortization1,674 1,763 4,913 4,907 
Goodwill impairment— — — 50,300 
Stock-based compensation3,200 3,104 9,477 9,559 
Amortization of deferred commissions1,372 1,598 3,940 5,517 
Amortization of deferred professional service costs568 760 1,715 2,417 
Non-cash operating lease expense1,145 1,134 3,377 3,765 
Other13 — 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 assets1,663 1,066 (360)242 
Accounts payable808 (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 compensation2,294 1,165 765 (1,949)
Net cash provided by (used in) operating activities5,837 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 options259 23 485 178 
Proceeds from ESPP offering390 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 assets1,144 — 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 EndedNine Months Ended
September 30, 2021June 30, 2021September 30, 2020September 30, 2021September 30, 2020
Gross profit:
GAAP gross profit subscription$23,532 $23,151 $26,056 $70,694 $79,677 
Stock-based compensation256 222 224 735 598 
Amortization of internal-use software79 79 79 237 184 
Amortization of intangibles530 530 530 1,590 1,590 
Reduction in workforce— — — — 221 
Non-GAAP gross profit subscription$24,397 $23,982 $26,889 $73,256 $82,270 
GAAP gross margin subscription74.4 %74.4 %76.5 %74.5 %74.6 %
Non-GAAP gross margin subscription77.2 %77.0 %78.9 %77.2 %77.1 %
GAAP gross profit (loss) professional services$(512)$294 $(2,865)$(1,926)$(9,175)
Stock-based compensation145 184 171 565 431 
Reduction in workforce— — — — 317 
Non-GAAP gross profit (loss) professional services$(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 adjustments1,010 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 

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

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 adjustments4,337 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 adjustments4,337 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 computation161,103 158,951 152,146 158,961 150,372 




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



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