EX-99.1 2 exh991-pressreleaseq119.htm EXHIBIT 99.1 Exhibit


castlightlogoa07.jpg
Castlight Health Announces First Quarter 2019 Results


SAN FRANCISCO - May 2, 2019 - Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its first quarter ended March 31, 2019.

“The first quarter was a solid start to the year with new business from our platform products, a record number of new customer launches, and financial results that were in-line with our full year outlook,” said John Doyle, chief executive officer of Castlight Health. “We are pleased to see our health navigation solutions delivering clear value while resonating with our buyers and delighting our users.”

Financial performance for the three months ended March 31, 2019 compared to the three months ended March 31, 2018 includes:
•
GAAP total revenue of $35.5 million, representing a decrease of 3%
•
GAAP gross margin of 60.2%, compared to 59.0%
•
Non-GAAP gross margin of 63.3%, compared to 63.0%
•
GAAP operating loss of $10.9 million, compared to a loss of $14.6 million
•
Non-GAAP operating loss of $5.3 million, compared to $7.7 million
•
GAAP net loss per basic and diluted share of $0.07, compared to a net loss per basic and diluted share of $0.11
•
Non-GAAP net loss per basic and diluted share of $0.03, compared to a net loss per basic and diluted share of $0.06
•
Cash used in operations of $12.1 million, compared to $19.0 million





Total cash and cash equivalents was $66.3 million as of March 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
The Company is reiterating its previously-issued 2019 outlook. For the full year 2019, the Company expects:
•
GAAP revenue in the range of $153 million to $158 million
•
Non-GAAP operating income in the range of $0 million to $5 million
•
Non-GAAP net income per share of approximately $0.00 to $0.03 based on approximately 145 million to 146 million shares

Quarterly Conference Call
Castlight Health senior management will host a conference call to discuss its first quarter 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 6488997.

About Castlight Health




Castlight is on a mission to make it as easy as humanly possible to navigate healthcare and live happier, healthier, more productive lives. Our health navigation platform connects with hundreds of health vendors, benefits resources, and plan designs, giving rise to the world’s first comprehensive app for all health needs. 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. In doing so, we help companies regain control over rising healthcare costs and get more value from their benefits investments. Castlight revolutionized the healthcare sector with the introduction of data-driven price transparency tools in 2008 and the first consumer-grade wellbeing platform in 2012. Today, Castlight serves as the health navigation platform for millions of people and is a trusted partner to many of the largest employers in the world.

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, 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 income and net income per share guidance for the full year 2019 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 2019 full year projections, 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 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 2019 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, 2019
 
December 31, 2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
66,338

 
$
66,005

Marketable securities
—

 
11,327

Accounts receivable and other, net
34,699

 
26,816

Prepaid expenses and other current assets
4,351

 
3,680

Total current assets
105,388

 
107,828

Property and equipment, net
3,754

 
3,963

Restricted cash, non-current
1,325

 
1,325

Deferred commissions
19,067

 
20,142

Deferred professional service costs
9,672

 
10,133

Intangible assets, net
15,333

 
16,209

Goodwill
91,785

 
91,785

Operating lease right-of-use assets, net
15,989

 
—

Other assets
2,209

 
2,129

Total assets
$
264,522

 
$
253,514

Liabilities and stockholders’ equity
 
 
 
Current liabilities:
 
 
 
Accounts payable
$
8,760

 
$
9,556

Accrued expenses and other current liabilities
13,025

 
15,454

Accrued compensation
5,005

 
5,975

Deferred revenue
23,774

 
20,193

Operating lease liabilities
5,928

 
—

Total current liabilities
56,492

 
51,178

Deferred revenue, non-current
944

 
1,030

Debt, non-current
2,789

 
3,254

Operating lease liabilities, non-current
13,428

 
—

Other liabilities, non-current
1,040

 
3,381

Total liabilities
74,693

 
58,843

Stockholders’ equity
189,829

 
194,671

Total liabilities and stockholders’ equity
$
264,522

 
$
253,514







CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
 
 
Three Months Ended March 31,
 
2019
 
2018
Revenue:
 
 
 
Subscription
$
33,806

 
$
32,989

Professional services and other
1,684

 
3,490

Total revenue, net
35,490

 
36,479

Cost of revenue:
 
 
 
Cost of subscription(1)
8,166

 
9,174

Cost of professional services and other(1)
5,944

 
5,769

Total cost of revenue
14,110

 
14,943

Gross profit
21,380

 
21,536

Operating expenses:
 
 
 
Sales and marketing(1)
9,215

 
13,912

Research and development(1)
15,725

 
15,371

General and administrative(1)
7,293

 
6,825

Total operating expenses
32,233

 
36,108

Operating loss
(10,853
)
 
(14,572
)
Other income, net
314

 
128

Net loss
$
(10,539
)
 
$
(14,444
)
Net loss per share, basic and diluted
$
(0.07
)
 
$
(0.11
)
Weighted-average shares used to compute basic and diluted net loss per share
143,000

 
134,994


(1)
Includes stock-based compensation expense as follows:
 
Three Months Ended March 31,
 
2019
 
2018
Cost of revenue:
 
 
 
Cost of subscription
$
219

 
$
242

Cost of professional services and other
265

 
301

Sales and marketing
627

 
1,138

Research and development
1,704

 
1,654

General and administrative
1,162

 
1,257







CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
 
Three Months Ended March 31,
 
2019
 
2018
Operating activities:
 
 
 
Net loss
$
(10,539
)
 
$
(14,444
)
Adjustments to reconcile net loss to net cash used in operating activities:

 

Depreciation and amortization
1,344

 
1,860

Stock-based compensation
3,977

 
4,592

Amortization of deferred commissions
2,491

 
2,853

Amortization of deferred professional service costs
969

 
946

Non-cash operating lease expense
1,282

 
—

Lease exit and related charges
—

 
916

Accretion and amortization of marketable securities
(126
)
 
(131
)
Changes in operating assets and liabilities:
 
 
 
Accounts receivable and other, net
(7,883
)
 
(11,196
)
Deferred commissions
(1,416
)
 
(1,171
)
Deferred professional service costs
(469
)
 
(742
)
Prepaid expenses and other assets
(751
)
 
206

Accounts payable
(849
)
 
1,783

Operating lease liabilities
(1,382
)
 
—

Accrued expenses and other liabilities
(1,304
)
 
(1,237
)
Deferred revenue
3,495

 
3,183

Accrued compensation
(970
)
 
(6,390
)
Net cash used in operating activities
(12,131
)
 
(18,972
)
Investing activities:
 
 
 
Purchase of property and equipment
(204
)
 
(388
)
Purchase of marketable securities
—

 
(10,025
)
Maturities of marketable securities
11,453

 
15,750

Net cash provided by investing activities
11,249

 
5,337

Financing activities:
 
 
 
Proceeds from exercise of stock options
1,680

 
490

Principal payments on long-term debt
(465
)
 
—

Net cash provided by financing activities
1,215

 
490

 
 
 
 
Net increase (decrease) in cash, cash equivalents and restricted cash
333

 
(13,145
)
Cash, cash equivalents and restricted cash at beginning of period
67,330

 
62,644

Cash, cash equivalents and restricted cash at end of period
$
67,663

 
$
49,499

 
 
 
 
Reconciliation of cash, cash equivalents and restricted cash:
 
 
 
Cash and cash equivalents
$
66,338

 
$
48,174

Restricted cash
1,325

 
1,325

Total cash, cash equivalents and restricted cash
$
67,663

 
$
49,499






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


 
Three Months Ended
 
March 31, 2019
 
December 31, 2018
 
March 31, 2018
Gross profit:
 
 
 
 
 
GAAP gross profit subscription
$
25,640

 
$
31,589

 
$
23,815

Stock-based compensation
219

 
222

 
242

Amortization of internal-use software
—

 
120

 
219

Amortization of intangibles
587

 
678

 
678

Non-GAAP gross profit subscription
$
26,446

 
$
32,609

 
$
24,954

GAAP gross margin subscription
75.8
 %
 
80.2
 %
 
72.2
 %
Non-GAAP gross margin subscription
78.2
 %
 
82.7
 %
 
75.6
 %
 
 
 
 
 
 
GAAP gross loss professional services
$
(4,260
)
 
$
(4,210
)
 
$
(2,279
)
Stock-based compensation
265

 
239

 
301

Non-GAAP gross loss professional services
$
(3,995
)
 
$
(3,971
)
 
$
(1,978
)
GAAP gross margin professional services
(253.0
)%
 
(156.4
)%
 
(65.3
)%
Non-GAAP gross margin professional services
(237.2
)%
 
(147.5
)%
 
(56.7
)%
 
 
 
 
 
 
GAAP gross profit
$
21,380

 
$
27,379

 
$
21,536

Impact of non-GAAP adjustments
1,071

 
1,259

 
1,440

Non-GAAP gross profit
$
22,451

 
$
28,638

 
$
22,976

GAAP gross margin
60.2
 %
 
65.0
 %
 
59.0
 %
Non-GAAP gross margin
63.3
 %
 
68.0
 %
 
63.0
 %
 
 
 
 
 
 
Operating expense:
 
 
 
 
 
GAAP sales and marketing
$
9,215

 
$
10,419

 
$
13,912

Stock-based compensation
(627
)
 
(615
)
 
(1,138
)
Amortization of intangibles
(272
)
 
(273
)
 
(448
)
Non-GAAP sales and marketing
$
8,316

 
$
9,531

 
$
12,326

 
 
 
 
 
 
GAAP research and development
$
15,725

 
$
14,531

 
$
15,371

Stock-based compensation
(1,704
)
 
(1,854
)
 
(1,654
)
Certain legal expenses
(191
)
 
—

 
—

Lease exit and related charges
—

 
(167
)
 
(916
)
Non-GAAP research and development
$
13,830

 
$
12,510

 
$
12,801

 
 
 
 
 
 
GAAP general and administrative
$
7,293

 
$
6,220

 
$
6,825

Stock-based compensation
(1,162
)
 
(1,193
)
 
(1,257
)
Amortization of intangibles
(17
)
 
(17
)
 
(17
)
Certain legal expenses
(533
)
 
—

 
—

Non-GAAP general and administrative
$
5,581

 
$
5,010

 
$
5,551

 
 
 
 
 
 
GAAP operating expense
$
32,233

 
$
31,170

 
$
36,108

Impact of non-GAAP adjustments
(4,506
)
 
(4,119
)
 
(5,430
)
Non-GAAP operating expense
$
27,727

 
$
27,051

 
$
30,678

 
 
 
 
 
 
Operating loss:
 
 
 
 
 
GAAP operating loss
$
(10,853
)
 
$
(3,791
)
 
$
(14,572
)
Impact of non-GAAP adjustments
5,577

 
5,378

 
6,870

Non-GAAP operating (loss) income
$
(5,276
)
 
$
1,587

 
$
(7,702
)
 
 
 
 
 
 
Net (loss) income and net (loss) income per share:
 
 
 
 
 
GAAP net loss
$
(10,539
)
 
$
(4,039
)
 
$
(14,444
)


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


Total pre-tax impact of non-GAAP adjustments
5,577

 
5,378

 
6,870

Non-GAAP net (loss) income
$
(4,962
)
 
$
1,339

 
$
(7,574
)
GAAP net loss per share, basic and diluted
$
(0.07
)
 
$
(0.03
)
 
$
(0.11
)
Non-GAAP net (loss) income per share, basic and diluted
$
(0.03
)
 
$
0.01

 
$
(0.06
)
Shares used in basic and diluted net loss per share computation
143,000

 
140,508

 
134,994






Castlight Media Contact:
Courtney Lamie
press@castlighthealth.com
276-492-4248



Castlight Investor Contact:
Gary J. Fuges, CFA
ir@castlighthealth.com
415-829-1680