8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

July 26, 2019

Date of Report (Date of earliest event reported)

CASTLIGHT HEALTH, INC.

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization) 001-36330 (Commission File Number) 26-1989091 (I.R.S. Employer Identification Number)

150 Spear Street, Suite 400

San Francisco, CA 94105

(Address of principal executive offices)

(415) 829-1400

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Not applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class B Common Stock, par value $0.0001 per share	CSLT	New York Stock Exchange

Securities registered pursuant to section 12(g) of the Act:

Not applicable

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company [x]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [x]

Item 2.02 Results of Operations and Financial Condition.

On July 30, 2019, Castlight Health, Inc. (the “Company”) issued a press release announcing its results for the three months ended June 30, 2019. The press release is attached to this current report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document filed by the Company with the Securities and Exchange Commission, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in such filing (or any reference to this Current Report on Form 8-K generally), except as shall be expressly set forth by specific reference in such filing.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 30, 2019, the Company issued a press release announcing certain key management changes. The press release is attached to this current report on Form 8-K as Exhibit 99.2 and is incorporated herein by reference.

On July 26, 2019, John C. Doyle, Chief Executive Officer and a member of the Board of Directors (the “Board”) of the Company, notified the Board of his intention to resign from all executive and Board positions held at the Company, effective July 26, 2019 (the “Resignation Date”). Mr. Doyle’s decision to resign was not due to any disagreements with management or the Board or any matters relating to the Company’s operations, policies or practices.

On July 26, 2019, the Board appointed Maeve O’Meara, Executive Vice President, Product and Customer Experience, to serve as Chief Executive Officer (Principal Executive Officer), effective upon the Resignation Date. In addition, the Board unanimously approved Ms. O’Meara to serve as a Class III director, whose term will expire at the Company’s 2020 annual meeting of stockholders. In connection with her appointment as Chief Executive Officer, Ms. O’Meara will no longer serve as Executive Vice President, Product and Customer Experience.

Ms. O’Meara, 37, has served as Executive Vice President, Product and Customer Experience since June 2018. Ms. O’Meara joined the Company in 2010, and previously served as the Company’s Chief Product Officer and Senior Vice President of Products. Prior to joining the Company, Ms. O’Meara was a venture capital investor at Highland Capital Partners, a venture capital firm, where she focused on investments in healthcare IT and services and the consumer internet markets. Ms. O’Meara holds an M.B.A. from Stanford Graduate School of Business and a B.A. in Economics from the University of Virginia. There are no family relationships between Ms. O’Meara and any previous or current officers or directors of the Company, and there are no related party transactions reportable under Item 404(a) of Regulation S-K.

Additionally, on July 26, 2019, the Board appointed Siobhan Nolan Mangini, the Company’s Chief Financial Officer, to serve additionally as its President, effective on July 26, 2019.

Ms. Nolan Mangini, 38, has served as Chief Financial Officer since July 2016. Prior to that she served as Vice President, Finance & Business Operations, from October 2015 to July 2016. She joined the Company in February 2012 and previously served as Senior Director, Financial Planning & Business Operations, from November 2014 to September 2015, and as Director, Strategy & Business Development, from February 2012 to September 2014. Prior to joining the Company, she worked at Bain & Company, a management consulting company, from 2009 to January 2012, working in the health care and private equity practices. Ms. Nolan Mangini holds a B.S. in Economics from The Wharton School at University of Pennsylvania, an M.B.A. from the Graduate School of Business at Stanford University, and an M.P.A. from The Kennedy School of Government at Harvard University. Ms. Nolan Mangini is a CFA charterholder. There are no family relationships between Ms. Nolan Mangini and any previous or current officers or directors of the Company, and there are no related party transactions reportable under Item 404(a) of Regulation S-K.

In connection with their appointments, the Company entered into new offer letters with Ms. O’Meara and Ms. Nolan Mangini, effective July 26, 2019 (collectively, the “Offer Letters”). Pursuant to the Offer Letters, the base salary for Ms. O’Meara will be $450,000, her annual target bonus percentage of base salary will be 100%, and she will receive a sign-on bonus of $500,000 which must be repaid if she leaves within 12 months following the effective date of the Offer Letter. Also pursuant to the Offer Letters, the base salary for Ms. Nolan Mangini will be $400,000, her annual target bonus percentage of

base salary will be 75%, and she will receive a sign-on bonus of $300,000, which must be repaid if she leaves within 6 months following the effective date of the Offer Letter.

Subject to approval by the Company’s Compensation and Talent Committee, Ms. O’Meara will be eligible to receive (i) a grant of restricted stock units (“RSUs”) determined by dividing $1,000,000 by the closing price of the Company’s Class B common stock on the date of grant, which grant will vest in equal quarterly installments over a period of four years starting on November 16, 2019, provided Ms. O’Meara remains in continuous service on each applicable vesting date and (ii) a grant of performance-based restricted stock units determined by dividing $1,000,000 by the closing price of the Company’s Class B common stock on the date of grant, which grant will be subject to performance metrics as determined by the Company’s Compensation and Talent Committee.

Subject to approval by the Company’s Compensation and Talent Committee, Ms. Nolan Mangini will be eligible to receive (i) a grant of RSUs determined by dividing $600,000 by the closing price of the Company’s Class B common stock on the date of grant, which grant will vest in equal quarterly installments over a period of four years starting on November 16, 2019, provided Ms. O’Meara remains in continuous service on each applicable vesting date and (ii) a grant of performance-based restricted stock units determined by dividing $300,000 by the closing price of the Company’s Class B common stock on the date of grant, which grant will be subject to performance metrics as determined by the Company’s Compensation and Talent Committee.

In connection with Ms. O’Meara’s promotion to Chief Executive Officer, Ms. O’Meara will also be entitled to receive the severance benefits applicable to the Chief Executive Officer under the Executive Severance Agreement previously entered into between Ms. O’Meara and the Company, which severance benefits are greater than the severance benefits to which Ms. O’Meara was entitled as an Executive Vice President under such agreement. Ms. Nolan Mangini will continue to receive the severance benefits applicable to a Chief Financial Officer under the Executive Severance Agreement attached to her Offer Letter.

As previously disclosed, the Executive Severance Agreement provides for the payment of severance and other benefits to eligible employees in the event of a termination of employment at the Company without “Cause” or for “Good Reason”, each as defined in the Executive Severance Agreement (each, a “Qualifying Termination”). In the event of a Qualifying Termination and subject to the employee’s execution of a general release of liability against the Company, the Executive Severance Agreement provides the following payments and benefits to the executive officers:

• a lump sum payment equal to, in the case of the Chief Executive Officer, 12 months of base salary and COBRA premiums or, in the case of an Executive Vice President or our Chief Financial Officer, nine months of base salary and COBRA premiums; provided, that if an Executive Vice President or Chief Financial Officer has not been providing services to the Company for at least one year prior to the Qualifying Termination, such officer will only receive a lump sum payment equal to the executive officer’s base salary for six months and will not be entitled to the value of any COBRA premiums.

In addition, in the event of a Qualifying Termination during the period that is three months prior through 12 months following a “Corporate Transaction”, as defined in the Executive Severance Agreement, and subject to the applicable participant’s execution of a general release of liability against the Company, the Executive Severance Agreement provides the following payments and benefits to the executive officers:

• a lump sum payment equal to, in the case of the Chief Executive Officer, 24 months of base salary and COBRA premiums or, in the case of an Executive Vice President or our Chief Financial Officer, 18 months of base salary and COBRA premiums; and

• full vesting of all outstanding equity awards held by each participant, as set forth in the Company 2014 Equity Incentive Plan.

The foregoing summary of the Offer Letters and the Executive Severance Agreements does not purport to be complete and is subject to, and qualified in its entirety by the Offer Letters, which will be filed as exhibits to the Company’s Quarterly Report on Form 10-Q for the three months ended June 30, 2019 and the form Executive Severance Agreement which was previously filed as Exhibit 10.1 to Form 8-K on July 11, 2016.

Forward-Looking Statements

This report contains forward-looking statements. All statements other than statements of historical facts contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the impact of the Company’s expectations for 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 the Company’s results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include those described in the Company’s documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this report are based on information available to the Company as of the date hereof. The Company assumes no obligation to update these forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Description

99.1    Press Release, dated July 30, 2019, entitled “Castlight Health Announces Second Quarter 2019 Results”

99.2    Press Release, dated July 30, 2019, entitled “Castlight Health Announces Key Management Changes”

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CASTLIGHT HEALTH, INC.
Date:	July 30, 2019	By:	/s/ Siobhan Nolan Mangini
			Siobhan Nolan Mangini
			President and Chief Financial Officer

EX-99.1

Castlight Health Announces Second Quarter2019 Results

Updates Full Year 2019 Guidance & Announces Management Changes

SAN FRANCISCO -July 30, 2019 - Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its second quarter ended June 30, 2019 and updated guidance for full year 2019. The Company also announced today that John Doyle has stepped down from his roles as chief executive officer and director. The Castlight board of directors has appointed Maeve O’Meara, formerly executive vice president of product and customer experience, as Castlight’s chief executive officer and director, effective immediately. Additionally, Siobhan Nolan Mangini has been promoted to president and will also continue to serve as chief financial officer.

“From the time Maeve joined Castlight in 2010, her excellence across product development and customer relationships has impressed all of us on the board of directors. These skills, combined with the vision and leadership she’s exhibited as executive vice president make her the natural choice to become Castlight’s CEO,” said Bryan Roberts, co-founder and chairman of Castlight Health. “We are confident in Maeve’s ability to execute on our strategic and financial goals, and I look forward to working closely with her to help Castlight accomplish its mission of simplifying and improving healthcare.”

“I’m excited to lead Castlight, given the strength of our team and technology, and I believe our assets put us in position to improve the cost, quality and consumer experience issues across US healthcare,” said Maeve O’Meara, chief executive officer of Castlight Health. “We will continue to focus on partnering with our core employer buyers in order to create more value for them in their

workforce, but we also have a clear opportunity to leverage our data and technology assets more broadly. By expanding our channel strategy to power user experiences outside of our own applications, we believe we can expand our addressable market and make a greater impact across the healthcare ecosystem.”

For more information on Maeve O’Meara and Siobhan Nolan Mangini, please refer to the press release entitled “Castlight Health Announces Key Management Changes” published today.

Financial performance for the three months ended June 30, 2019 compared to the three months ended June 30, 2018 includes:

• GAAP total revenue of $35.9 million, representing a decrease of 5%

• GAAP gross margin of 60.6%, compared to 58.4%

• Non-GAAP gross margin of 63.4%, compared to 62.2%

• GAAP operating loss of $8.6 million, compared to a loss of $14.1 million

• Non-GAAP operating loss of $2.9 million, compared to $6.9 million

• GAAP net loss per basic and diluted share of $0.06, compared to a net loss per basic and diluted share of $0.10

• Non-GAAP net loss per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.05

• Cash used in operations of $1.8 million, compared to $1.1 million

Total cash, cash equivalents and marketable securities was $63.9 million as of June 30, 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 updating its previously-issued 2019 outlook. For the full year 2019, the Company now expects:

• GAAP revenue in the range of $140 million to $145 million

• Non-GAAP operating loss in the range of $8 million to $13 million

• Non-GAAP net loss per share of approximately $0.06 to $0.09 based on approximately 145 million to 146 million shares

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its second 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 2365013.

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 loss and net loss 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 second quarter performance and 2019 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 documents filed with or furnished to the Securities and Exchange Commission,

including the risks set forth in our quarterly report on Form 10-Q for the three months ended June 30, 2019. 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
	June 30, 2019		December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	50,052	$	66,005
Marketable securities	13,874		11,327
Accounts receivable and other, net	32,611		26,816
Prepaid expenses and other current assets	5,450		3,680
Total current assets	101,987		107,828
Property and equipment, net	3,556		3,963
Restricted cash, non-current	1,325		1,325
Deferred commissions	17,956		20,142
Deferred professional service costs	9,093		10,133
Intangible assets, net	14,457		16,209
Goodwill	91,785		91,785
Operating lease right-of-use assets, net	14,691		—
Other assets	2,223		2,129
Total assets	$	257,073	$	253,514
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	11,355	$	9,556
Accrued expenses and other current liabilities	11,170		15,454
Accrued compensation	5,169		5,975
Deferred revenue	20,698		20,193
Operating lease liabilities	5,911		—
Total current liabilities	54,303		51,178
Deferred revenue, non-current	837		1,030
Debt, non-current	2,324		3,254
Operating lease liabilities, non-current	12,032		—
Other liabilities, non-current	1,067		3,381
Total liabilities	70,563		58,843
Stockholders’ equity	186,510		194,671
Total liabilities and stockholders’ equity	$	257,073	$	253,514

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,
	2019			2018			2019			2018
Revenue:
Subscription	$	33,964		$	34,802		$	67,770		$	67,791
Professional services and other	1,946			2,982			3,630			6,472
Total revenue, net	35,910			37,784			71,400			74,263
Cost of revenue:
Cost of subscription(1)	8,234			9,140			16,400			18,314
Cost of professional services and other(1)	5,929			6,590			11,873			12,359
Total cost of revenue	14,163			15,730			28,273			30,673
Gross profit	21,747			22,054			43,127			43,590
Operating expenses:
Sales and marketing(1)	8,889			13,306			18,104			27,218
Research and development(1)	14,487			16,425			30,212			31,796
General and administrative(1)	7,010			6,382			14,303			13,207
Total operating expenses	30,386			36,113			62,619			72,221
Operating loss	(8,639		)	(14,059		)	(19,492		)	(28,631		)
Other income, net	258			101			572			229
Net loss	$	(8,381	)	$	(13,958	)	$	(18,920	)	$	(28,402	)
Net loss per share, basic and diluted	$	(0.06	)	$	(0.10	)	$	(0.13	)	$	(0.21	)
Weighted-average shares used to compute basic and diluted net loss per share	144,572			136,682			143,790			135,843

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cost of revenue:
Cost of subscription	$	196	$	231	$	415	$	473
Cost of professional services and other	236		315		501		616
Sales and marketing	662		1,318		1,289		2,456
Research and development	1,733		1,908		3,437		3,562
General and administrative	2,030		1,375		3,192		2,632

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Operating activities:
Net loss	$	(8,381	)	$	(13,958	)	$	(18,920	)	$	(28,402	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,343			1,713			2,687			3,573
Stock-based compensation	4,857			5,147			8,834			9,739
Amortization of deferred commissions	2,365			2,947			4,856			5,800
Amortization of deferred professional service costs	1,045			1,151			2,014			2,097
Non-cash operating lease expense	1,298			—			2,580			—
Lease exit and related charges	—			901			—			1,817
Accretion and amortization of marketable securities	(87		)	(135		)	(213		)	(266		)
Changes in operating assets and liabilities:
Accounts receivable and other, net	2,088			4,944			(5,795		)	(6,252		)
Deferred commissions	(1,254		)	(1,808		)	(2,670		)	(2,979		)
Deferred professional service costs	(432		)	(647		)	(901		)	(1,389		)
Prepaid expenses and other assets	(1,113		)	(2,102		)	(1,864		)	(1,896		)
Accounts payable	2,713			(1,272		)	1,864			511
Operating lease liabilities	(1,413		)	—			(2,795		)	—
Accrued expenses and other liabilities	(1,827		)	4,419			(3,131		)	3,182
Deferred revenue	(3,183		)	(4,393		)	312			(1,210		)
Accrued compensation	164			1,979			(806		)	(4,411		)
Net cash used in operating activities	(1,817		)	(1,114		)	(13,948		)	(20,086		)
Investing activities:
Purchase of property and equipment	(389		)	(916		)	(593		)	(1,304		)
Purchase of marketable securities	(13,780		)	(13,954		)	(13,780		)	(23,979		)
Maturities of marketable securities	—			10,700			11,453			26,450
Net cash (used in) provided by investing activities	(14,169		)	(4,170		)	(2,920		)	1,167
Financing activities:
Proceeds from exercise of stock options	165			1,752			1,845			2,242
Principal payments on long-term debt	(465		)	—			(930		)	—
Net cash (used in) provided by financing activities	(300		)	1,752			915			2,242
Net decrease in cash, cash equivalents and restricted cash	(16,286		)	(3,532		)	(15,953		)	(16,677		)
Cash, cash equivalents and restricted cash at beginning of period	67,663			49,499			67,330			62,644
Cash, cash equivalents and restricted cash at end of period	$	51,377		$	45,967		$	51,377		$	45,967
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	50,052		$	44,642		$	50,052		$	44,642
Restricted cash	1,325			1,325			1,325			1,325
Total cash, cash equivalents and restricted cash	$	51,377		$	45,967		$	51,377		$	45,967

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, 2019			March 31, 2019			June 30, 2018			June 30, 2019			June 30, 2018
Gross profit:
GAAP gross profit subscription	$	25,730		$	25,640		$	25,662		$	51,370		$	49,477
Stock-based compensation	196			219			231			415			473
Amortization of internal-use software	—			—			219			—			438
Amortization of intangibles	587			587			678			1,174			1,356
Non-GAAP gross profit subscription	$	26,513		$	26,446		$	26,790		$	52,959		$	51,744
GAAP gross margin subscription	75.8		%	75.8		%	73.7		%	75.8		%	73.0		%
Non-GAAP gross margin subscription	78.1		%	78.2		%	77.0		%	78.1		%	76.3		%
GAAP gross loss professional services	$	(3,983	)	$	(4,260	)	$	(3,608	)	$	(8,243	)	$	(5,887	)
Stock-based compensation	236			265			315			501			616
Non-GAAP gross loss professional services	$	(3,747	)	$	(3,995	)	$	(3,293	)	$	(7,742	)	$	(5,271	)
GAAP gross margin professional services	(205		)%	(253		)%	(121		)%	(227		)%	(91.0		)%
Non-GAAP gross margin professional services	(193		)%	(237		)%	(110		)%	(213		)%	(81.4		)%
GAAP gross profit	$	21,747		$	21,380		$	22,054		$	43,127		$	43,590
Impact of non-GAAP adjustments	1,019			1,071			1,443			2,090			2,883
Non-GAAP gross profit	$	22,766		$	22,451		$	23,497		$	45,217		$	46,473
GAAP gross margin	60.6		%	60.2		%	58.4		%	60.4		%	58.7		%
Non-GAAP gross margin	63.4		%	63.3		%	62.2		%	63.3		%	62.6		%
Operating expense:
GAAP sales and marketing	$	8,889		$	9,215		$	13,306		$	18,104		$	27,218
Stock-based compensation	(662		)	(627		)	(1,318		)	(1,289		)	(2,456		)
Amortization of intangibles	(272		)	(272		)	(273		)	(544		)	(721		)
Non-GAAP sales and marketing	$	7,955		$	8,316		$	11,715		$	16,271		$	24,041
GAAP research and development	$	14,487		$	15,725		$	16,425		$	30,212		$	31,796
Stock-based compensation	(1,733		)	(1,704		)	(1,908		)	(3,437		)	(3,562		)
Certain legal expenses	—			(191		)	—			(191		)	—
Lease exit and related charges	—			—			(842		)	—			(1,758		)
Non-GAAP research and development	$	12,754		$	13,830		$	13,675		$	26,584		$	26,476
GAAP general and administrative	$	7,010		$	7,293		$	6,382		$	14,303		$	13,207
Stock-based compensation	(2,030		)	(1,162		)	(1,375		)	(3,192		)	(2,632		)
Amortization of intangibles	(17		)	(17		)	(17		)	(34		)	(34		)
Certain legal expenses	—			(533		)	—			(533		)	—
Non-GAAP general and administrative	$	4,963		$	5,581		$	4,990		$	10,544		$	10,541
GAAP operating expense	$	30,386		$	32,233		$	36,113		$	62,619		$	72,221
Impact of non-GAAP adjustments	(4,714		)	(4,506		)	(5,733		)	(9,220		)	(11,163		)
Non-GAAP operating expense	$	25,672		$	27,727		$	30,380		$	53,399		$	61,058
Operating loss:
GAAP operating loss	$	(8,639	)	$	(10,853	)	$	(14,059	)	$	(19,492	)	$	(28,631	)
Impact of non-GAAP adjustments	5,733			5,577			7,176			11,310			14,046
Non-GAAP operating loss	$	(2,906	)	$	(5,276	)	$	(6,883	)	$	(8,182	)	$	(14,585	)
Net loss and net loss per share:
GAAP net loss	$	(8,381	)	$	(10,539	)	$	(13,958	)	$	(18,920	)	$	(28,402	)

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	5,733			5,577			7,176			11,310			14,046
Non-GAAP net loss	$	(2,648	)	$	(4,962	)	$	(6,782	)	$	(7,610	)	$	(14,356	)
GAAP net loss per share, basic and diluted	$	(0.06	)	$	(0.07	)	$	(0.10	)	$	(0.13	)	$	(0.21	)
Non-GAAP net loss per share, basic and diluted	$	(0.02	)	$	(0.03	)	$	(0.05	)	$	(0.05	)	$	(0.11	)
Shares used in basic and diluted net loss per share computation	144,572			143,000			136,682			143,790			135,843

Castlight Media Contact:

Courtney Lamie

press@castlighthealth.com

276-492-4248

Castlight Investor Contact:

Gary J. Fuges, CFA

ir@castlighthealth.com

415-829-1680

EX-99.2

Castlight Health Announces Key Management Changes

Maeve O’Meara Named Chief Executive Officer; Siobhan Nolan Mangini Named President

SAN FRANCISCO (July 30, 2019) – Castlight Health, Inc. (NYSE: CSLT) today announced that Maeve O’Meara has been named as the company’s CEO and to a seat on its Board of Directors, and that Siobhan Nolan Mangini will serve as the company’s President and retain her position of Chief Financial Officer. Maeve and Siobhan have worked at Castlight for nine years and seven years respectively, leading a wide variety of corporate functions during their tenures. John Doyle is stepping down from his role as CEO and Director. These changes are effective immediately.

“With the appointments of Maeve as CEO and Siobhan as President, the Castlight board is recognizing the exceptional leadership that both have provided as the company has scaled, as well as the impressive bench of talent Castlight has developed over the years,” said Judith Verhave, former Global Head of Compensation and Benefits for BNY Mellon and member of the Castlight Board of Directors. “Maeve and Siobhan have the vision and experience that Castlight needs to drive the company to the next chapter of growth.”

Maeve O’Meara joined Castlight nearly a decade ago, after working as an investor with Highland Capital Partners and as a consultant with Bain & Company. Early in her tenure, Maeve served as the product lead for Castlight’s transparency and personalization solutions, which drove Castlight’s early market success. In the years since, she has played a prominent role as Castlight has scaled: creating deep relationships with employer customers, overseeing product development and delivery, fostering a deep talent pool, building Castlight’s relationship with Anthem, and developing an influential voice in the industry. She has held leadership roles in Product Management, Customer Experience, Business Development, Product Design, and Product Marketing, and most recently served as Executive Vice President of Product and Customer Experience.

“Maeve is a talented leader, with deep healthcare and technology expertise,” said Rajeev Ronanki, Senior Vice President and Chief Digital Officer at Anthem. “She has been essential to Anthem’s relationship with Castlight, and we look forward to working with her in this new capacity.”

“Maeve is a product visionary and a force for good in employer health benefits,” said Shawn Leavitt, Senior Vice President, Total Rewards at Comcast. “As a longtime customer, I have always felt like I could count on her to champion Comcast’s needs. I am excited to see her take the reins at Castlight.”

In her role as Executive Vice President of Product and Customer Experience, Maeve managed all customer-facing functions, and oversaw the build and launch of Castlight’s two new solutions: Castlight Complete, its comprehensive navigation platform for large employers, and Engage, its health plan platform. Castlight’s technology now serves approximately 260 customers and improves the health experience for approximately 20 million members. Maeve serves on the National Business Group on Health Cost Institute, and was named one of Employee Benefits News’ Top Digital Innovators this year.

“Through her work with NBGH and her work on our Cost Institute, Maeve has been an invaluable partner to employers seeking to address rising health costs and improve the employee healthcare experience,” said Brian Marcotte, President and CEO of the National Business Group on Health. “She is a true thought leader who consistently strives to push the industry forward.”

Maeve O’Meara commented: “Since its founding, Castlight has never wavered from its mission to improve the health experience of the millions of people we serve. Together with our employer customers, health plan partners, and ecosystem partners, we have an incredible opportunity to raise the bar in our continued pursuit of this mission. I am honored and humbled to be asked to lead this dedicated team as we embark on the next phase.”

For the past three years, Siobhan Nolan Mangini has served as Castlight’s Chief Financial Officer. She has increased the company’s investment in critical customer and research and development initiatives while driving Castlight towards sustainability. Siobhan first joined the company seven years ago in strategy and business development, after working as a consultant with Bain & Company and as an investor at the Kaiser Family Foundation. She has held a variety of roles at Castlight and has focused on driving operational excellence and cross-functional collaboration while leading the finance, investor relations, accounting, real estate, and business operations functions. As President, Siobhan’s expanded duties will include oversight of the daily management of the organization.

About Maeve O’Meara, CEO

Maeve O’Meara, 37, has served as Executive Vice President, Product and Customer Experience since June 2018. Maeve joined the Company in 2010, and previously served as the Company’s Chief Product Officer and Senior Vice President of Products. Prior to joining the Company, Maeve was a venture capital investor at Highland Capital Partners, a venture capital firm, where she focused on investments in healthcare IT and services and the consumer internet markets. Maeve holds an M.B.A. from Stanford Graduate School of Business and a B.A. in Economics from the University of Virginia.

About Siobhan Nolan Mangini, President and CFO

Siobhan Nolan Mangini, 38, has served as Chief Financial Officer since July 2016. Prior to that she served as Vice President, Finance & Business Operations, from October 2015 to July 2016. She joined the Company in February 2012 and previously served as Senior Director, Financial Planning & Business Operations, from November 2014 to September 2015, and as Director, Strategy & Business Development, from February 2012 to September 2014. Prior to joining the Company, she worked at Bain & Company, a management consulting company, from 2009 to January 2012, working in the health care and private equity practices. Siobhan holds a B.S. in Economics from The Wharton School at the University of Pennsylvania, an M.B.A. from the Graduate School of Business at Stanford University, and an M.P.A. from The Kennedy School of Government at Harvard University. Ms. Nolan Mangini is a CFA charterholder.

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.

Castlight Media Contact: 

Courtney Lamie 

press@castlighthealth.com   

276-492-4248