Castlight Health Announces Fourth Quarter and Full Year 2020 Results

SAN FRANCISCO, Feb. 23, 2021 /PRNewswire/ -- Castlight Health, Inc. CSLT, a leading health benefits platform provider, today announced results for its fourth quarter and full year ended December 31, 2020.

"Our strong fourth quarter performance punctuated an important year for Castlight, during which we achieved a number of strategic milestones and delivered Castlight's best financial performance in the company's history," said Maeve O'Meara, chief executive officer of Castlight Health. "We accomplished several key achievements in the quarter, including adding a new health plan customer, Blue Cross Blue Shield of Alabama, in December, signing a partnership with Boston Children's Hospital to support the national vaccination effort, and delivering strong results from our first year live with Care Guides. Our swift decisions early in the year strengthened our financial position, but still enabled us to address our customers' needs amidst the pandemic. We are confident that the foundation we have built in high-tech, high-touch navigation has us well positioned to capture share in the growing market and deliver ARR growth in 2021."

Financial performance for the three months ended December 31, 2020 compared to the three months ended December 31, 2019 includes:

  • GAAP total revenue of $37.1 million, compared to $36.4 million
  • GAAP gross margin of 65.2%, compared to 55.3%
  • Non-GAAP gross margin of 68.0%, compared to 57.8%
  • GAAP operating loss of $1.4 million, compared to $12.2 million
  • Non-GAAP operating income of $2.7 million, compared to an operating loss of $8.1 million
  • GAAP net loss per basic and diluted share of $0.01, compared to a net loss per basic and diluted share of $0.08
  • Non-GAAP net income per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.05
  • Cash provided by operations of $3.0 million, compared to $4.0 million

Financial performance for the 12 months ended December 31, 2020 compared to the 12 months ended December 31, 2019 includes:

  • GAAP total revenue of $146.7 million, compared to $143.3 million
  • GAAP gross margin of 64.5%, compared to 58.8%
  • Non-GAAP gross margin of 67.5% compared to 61.6%
  • GAAP operating loss of $62.8 million, compared to a loss of $41.3 million
  • Non-GAAP operating income of $6.3 million, compared to a loss of $21.7 million
  • GAAP net loss per basic and diluted share of $0.41, compared to a net loss per basic and diluted share of $0.28
  • Non-GAAP net income per basic and diluted share of $0.05, compared to a net loss per basic and diluted share of $0.14
  • Cash used in operations of $5.6 million, compared to $17.4 million used in operations

Total cash and cash equivalents were $49.2 million as of December 31, 2020.

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:

  • GAAP revenue in the range of $130 million and $135 million
  • Non-GAAP operating loss between $4 million and $9 million
  • Non-GAAP net loss per share between $0.02 and $0.06, based on approximately 160 million to 161 million shares

For the first quarter of 2021, the Company expects:

  • GAAP revenue in the range of $32 million and $34 million

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its fourth quarter and full year 2020 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 4576726.

About Castlight Health

Castlight is on a mission to make it as easy as humanly possible for its users to navigate the healthcare system and live happier, healthier, more productive lives. Our health navigation platform connects hundreds of health vendors, benefits resources, and plan designs into one comprehensive health and wellbeing experience. 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. Castlight transforms the employee benefit experience into a deeply personalized, yet simple, guided one, empowering better-informed patient decisions to unlock better healthcare outcomes and maximizing return 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 (i) 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 (ii) 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 projections, the impact of COVID-19, the success of our strategy, 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 Annual Report on Form 10-K and other documents filed with or furnished to the Securities and Exchange Commission. 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



December 31, 2020



December 31, 2019

Assets







Current assets:







Cash and cash equivalents

$

49,242





$

43,017



Marketable securities





16,411



Accounts receivable and other, net

31,740





31,397



Prepaid expenses and other current assets

3,800





4,645



Total current assets

84,782





95,470



Property and equipment, net

5,321





4,856



Restricted cash, non-current

1,144





1,144



Deferred commissions

9,556





14,718



Deferred professional service costs

4,462





6,711



Intangible assets, net

7,930





12,178



Goodwill

41,485





91,785



Operating lease right-of-use assets, net

10,238





13,906



Other assets

1,855





2,016



Total assets

$

166,773





$

242,784



Liabilities and stockholders' equity







Current liabilities:







Accounts payable

$

5,145





$

19,596



Accrued expenses and other current liabilities

7,898





10,454



Accrued compensation

8,633





8,770



Deferred revenue

6,848





10,173



Operating lease liabilities

5,789





5,914



Total current liabilities

34,313





54,907



Deferred revenue, non-current

663





572



Debt, non-current





1,395



Operating lease liabilities, non-current

7,446





11,823



Other liabilities, non-current

485





1,213



Total liabilities

42,907





69,910



Stockholders' equity

123,866





172,874



Total liabilities and stockholders' equity

$

166,773





$

242,784



 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(unaudited)





Three Months Ended December 31,



Year Ended December 31,



2020



2019



2020



2019

Revenue:















Subscription

$

34,419





$

34,723





$

141,160





$

137,393



Professional services and other

2,667





1,724





5,549





5,915



Total revenue, net

37,086





36,447





146,709





143,308



Cost of revenue:















Cost of subscription(1)

7,932





9,150





34,996





34,067



Cost of professional services and other(1)

4,989





7,150





17,046





25,007



Total cost of revenue

12,921





16,300





52,042





59,074



Gross profit

24,165





20,147





94,667





84,234



Operating expenses:















Sales and marketing(1)

7,713





10,664





32,026





38,597



Research and development(1)

11,418





14,487





49,465





58,994



General and administrative(1)

6,405





7,238





25,662





27,981



Goodwill impairment









50,300







Total operating expenses

25,536





32,389





157,453





125,572



Operating loss

(1,371)





(12,242)





(62,786)





(41,338)



Other income, net

174





496





603





1,336



Net loss

$

(1,197)





$

(11,746)





$

(62,183)





$

(40,002)



Net loss per share, basic and diluted

$

(0.01)





$

(0.08)





$

(0.41)





$

(0.28)



Weighted-average shares used to compute

basic and diluted net loss per share

154,739





147,359





151,478





145,172







(1)

  Includes stock-based compensation expense as follows:

 



Three Months Ended December 31,



Year Ended December 31,



2020



2019



2020



2019

Cost of revenue:















Cost of subscription

$

215





$

179





$

813





$

774



Cost of professional services and other

219





216





650





953



Sales and marketing

326





175





2,028





2,142



Research and development

1,041





1,369





4,544





6,100



General and administrative

1,085





1,217





4,410





5,034



 

CASTLIGHT HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(unaudited)





Three Months Ended December 31,



Year Ended December 31,



2020



2019



2020



2019

Operating activities:















Net loss

$

(1,197)





$

(11,746)





$

(62,183)





$

(40,002)



Adjustments to reconcile net loss to net cash used in

      operating activities:















Depreciation and amortization

1,630





1,552





6,537





5,920



Goodwill impairment









50,300







Stock-based compensation

2,886





3,156





12,445





15,003



Amortization of deferred commissions

2,272





3,365





7,789





10,768



Amortization of deferred professional service costs

1,100





2,132





3,517





5,242



Non-cash operating lease expense

1,145





1,396





4,910





5,315



Accretion and amortization of marketable securities





6





2





(238)



Changes in operating assets and liabilities:















Accounts receivable and other, net

(1,269)





4,045





(343)





(4,581)



Deferred commissions

(1,231)





(841)





(2,627)





(5,344)



Deferred professional service costs

(260)





(385)





(1,178)





(1,686)



Prepaid expenses and other assets

582





924





824





102



Accounts payable

426





6,900





(13,622)





9,278



Operating lease liabilities

(1,558)





(1,459)





(5,744)





(5,726)



Accrued expenses and other liabilities

(245)





(688)





(2,821)





(3,760)



Deferred revenue

(3,134)





(7,588)





(3,234)





(10,478)



Accrued compensation

1,812





3,223





(137)





2,795



Net cash provided by (used in) operating activities

2,959





3,992





(5,565)





(17,392)



Investing activities:















Purchase of property and equipment

(149)





(1,241)





(3,580)





(1,953)



Purchase of marketable securities





(7,520)





(2,994)





(30,589)



Sales of marketable securities









2,001







Maturities of marketable securities





11,075





17,400





25,745



Net cash (used in) provided by investing activities

(149)





2,314





12,827





(6,797)



Financing activities:















Proceeds from exercise of stock options

92





1,136





270





3,060



Proceeds from ESPP offering









371







Principal payments on long-term debt

(464)





(465)





(1,859)





(1,859)



Net cash (used in) provided by financing activities

(372)





671





(1,218)





1,201



















Net increase (decrease) in cash, cash equivalents and 

     restricted cash

2,438





6,977





6,044





(22,988)



Cash, cash equivalents and restricted cash at beginning of 

     period

47,948





37,365





44,342





67,330



Cash, cash equivalents and restricted cash at end of 

     period

$

50,386





$

44,342





$

50,386





$

44,342



















Reconciliation of cash, cash equivalents and restricted

      cash:















Cash and cash equivalents

$

49,242





$

43,017





$

49,242





$

43,017



Restricted cash included in Prepaid and other current

      assets





181









181



Restricted cash, non-current

1,144





1,144





1,144





1,144



Total cash, cash equivalents and restricted cash

$

50,386





$

44,342





$

50,386





$

44,342



 

CASTLIGHT HEALTH, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(unaudited)





Three Months Ended



Year Ended



December 31, 2020



September 30, 2020



December 31, 2019



December 31, 2020



December 31, 2019

Gross profit:



















GAAP gross profit subscription

$

26,487





$

26,056





$

25,573





$

106,164





$

103,326



Stock-based compensation

215





224





179





813





774



Amortization of internal-use software

80





79









264







Amortization of intangibles

530





530





530





2,120





2,364



Reduction in workforce













221







Non-GAAP gross profit subscription

$

27,312





$

26,889





$

26,282





$

109,582





$

106,464



GAAP gross margin subscription

77.0

%



76.5

%



73.6

%



75.2

%



75.2

%

Non-GAAP gross margin subscription

79.4

%



78.9

%



75.7

%



77.6

%



77.5

%





















GAAP gross loss professional services

$

(2,322)





$

(2,865)





$

(5,426)





$

(11,497)





$

(19,092)



Stock-based compensation

219





171





216





650





953



Reduction in workforce













317







Non-GAAP gross loss professional services

$

(2,103)





$

(2,694)





$

(5,210)





$

(10,530)





$

(18,139)



GAAP gross margin professional services

(87)

%



(284)

%



(315)

%



(207)

%



(323)

%

Non-GAAP gross margin professional services

(79)

%



(267)

%



(302)

%



(190)

%



(307)

%





















GAAP gross profit

$

24,165





$

23,191





$

20,147





$

94,667





$

84,234



Impact of non-GAAP adjustments

1,044





1,004





925





4,385





4,091



Non-GAAP gross profit

$

25,209





$

24,195





$

21,072





$

99,052





$

88,325



GAAP gross margin

65.2

%



66.1

%



55.3

%



64.5

%



58.8

%

Non-GAAP gross margin

68.0

%



69.0

%



57.8

%



67.5

%



61.6

%





















Operating expense:



















GAAP sales and marketing

$

7,713





$

6,158





$

10,664





$

32,026





$

38,597



Stock-based compensation

(326)





(282)





(175)





(2,028)





(2,142)



Amortization of intangibles

(528)





(528)





(529)





(2,112)





(1,601)



Reduction in workforce





2









(332)







Non-GAAP sales and marketing

$

6,859





$

5,350





$

9,960





$

27,554





$

34,854























GAAP research and development

$

11,418





$

11,182





$

14,487





$

49,465





$

58,994



Stock-based compensation

(1,041)





(1,026)





(1,369)





(4,544)





(6,100)



Reduction in workforce





(5)









(663)







Certain legal expenses













191





(191)



Capitalization of internally developed software









80





21





80



Non-GAAP research and development

$

10,377





$

10,151





$

13,198





$

44,470





$

52,783























GAAP general and administrative

$

6,405





$

6,341





$

7,238





$

25,662





$

27,981



Stock-based compensation

(1,085)





(1,401)





(1,217)





(4,410)





(5,034)



Amortization of intangibles









(16)





(17)





(66)



Certain legal expenses

















(533)



Reduction in workforce





15









(482)







Non-GAAP general and administrative

$

5,320





$

4,955





$

6,005





$

20,753





$

22,348























GAAP goodwill impairment

$





$





$





$

50,300





$



Goodwill impairment













(50,300)







Non-GAAP goodwill impairment

$





$





$





$





$























GAAP operating expense

$

25,536





$

23,681





$

32,389





$

157,453





$

125,572



Impact of non-GAAP adjustments

(2,980)





(3,225)





(3,226)





(64,676)





(15,587)



Non-GAAP operating expense

$

22,556





$

20,456





$

29,163





$

92,777





$

109,985























Operating loss:



















GAAP operating loss

$

(1,371)





$

(490)





$

(12,242)





$

(62,786)





$

(41,338)



Impact of non-GAAP adjustments

4,024





4,229





4,151





69,061





19,678



Non-GAAP operating income (loss)

$

2,653





$

3,739





$

(8,091)





$

6,275





$

(21,660)























Net loss and net loss per share:



















GAAP net loss

$

(1,197)





$

(447)





$

(11,746)





$

(62,183)





$

(40,002)



Total pre-tax impact of non-GAAP adjustments

4,024





4,229





4,151





69,061





19,678



Non-GAAP net income (loss)

$

2,827





$

3,782





$

(7,595)





$

6,878





$

(20,324)



GAAP net loss per share, basic and diluted

$

(0.01)





$





$

(0.08)





$

(0.41)





$

(0.28)



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

$

0.02





$

0.02





$

(0.05)





$

0.05





$

(0.14)



Shares used in basic and diluted net loss per share computation

154,739





152,146





147,359





151,478





145,172



 

Castlight Media Contact:

Caroline Kawashima

press@castlighthealth.com

415-246-0313

Castlight Investor Contact:

ir@castlighthealth.com

443-213-0500

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/castlight-health-announces-fourth-quarter-and-full-year-2020-results-301233870.html

SOURCE Castlight Health, Inc.

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