Nov 2, 2021 MicroCapNewsDaily

Castlight Health Announces Third Quarter 2021 Results

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

Third Straight Quarter of Sequential ARR Growth

PR Newswire


SAN FRANCISCO

,

Nov. 2, 2021

/PRNewswire/ — 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, 2021



December 31, 2020


Assets


Current assets:


Cash and cash equivalents


$


65,768


$


49,242


Accounts receivable and other, net


23,284


31,740


Prepaid expenses and other current assets


7,053


3,800


Total current assets


96,105


84,782


Property and equipment, net


4,331


5,321


Restricted cash, non-current


—


1,144


Deferred commissions


7,092


9,556


Deferred professional service costs


3,624


4,462


Intangible assets, net


4,756


7,930


Goodwill


41,485


41,485


Operating lease right-of-use assets, net


6,860


10,238


Other assets


106


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 liabilities


3,997


7,898


Accrued compensation


9,398


8,633


Deferred revenue


9,703


6,848


Operating lease liabilities


5,004


5,789


Total current liabilities


32,645


34,313


Deferred revenue, non-current


188


663


Operating lease liabilities, non-current


3,950


7,446


Other liabilities, non-current


485


485


Total liabilities


37,268


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,



2021



2020



2021



2020


Revenue:


Subscription


$


31,613


$


34,069


$


94,851


$


106,741


Professional services and other


3,163


1,009


10,587


2,882


Total revenue, net


34,776


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 revenue


11,756


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 expenses


24,905


23,681


76,187


131,917


Operating loss


(1,885)


(490)


(7,419)


(61,415)


Other income, net


132


43


281


429


Income before income taxes


(1,753)


(447)


(7,138)


(60,986)


Provision for income taxes


279


—


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,



2021



2020



2021



2020


Cost of revenue:


Cost of subscription


$


256


$


224


$


735


$


598


Cost of professional services and other


145


171


565


431


Sales and marketing


483


282


1,275


1,702


Research and development


1,001


1,026


3,130


3,503


General and administrative


1,315


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,



2021



2020



2021



2020


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 amortization


1,674


1,763


4,913


4,907


Goodwill impairment


—


—


—


50,300


Stock-based compensation


3,200


3,104


9,477


9,559


Amortization of deferred commissions


1,372


1,598


3,940


5,517


Amortization of deferred professional service costs


568


760


1,715


2,417


Non-cash operating lease expense


1,145


1,134


3,377


3,765


Other


13


—


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 assets


1,663


1,066


(360)


242


Accounts payable


808


(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 compensation


2,294


1,165


765


(1,949)


Net cash provided by (used in) operating activities


5,837


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 options


259


23


485


178


Proceeds from ESPP offering


390


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 assets


1,144


—


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 Ended



Nine Months Ended



September 30,

2021



June 30,

2021



September 30,

2020



September 30,

2021



September 30,

2020



Gross profit:


GAAP gross profit subscription


$


23,532


$


23,151


$


26,056


$


70,694


$


79,677


Stock-based compensation


256


222


224


735


598


Amortization of internal-use

software


79


79


79


237


184


Amortization of intangibles


530


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 subscription


74.4


%


74.4


%


76.5


%


74.5


%


74.6


%


Non-GAAP gross margin subscription


77.2


%


77.0


%


78.9


%


77.2


%


77.1


%


GAAP gross profit (loss) professional

services


$


(512)


$


294


$


(2,865)


$


(1,926)


$


(9,175)


Stock-based compensation


145


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 adjustments


1,010


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


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 adjustments


4,337


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

adjustments


4,337


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 computation


161,103


158,951


152,146


158,961


150,372


Castlight Media Contact:



Caroline Kawashima



[email protected]


415-246-0313


Castlight Investor Contact:



[email protected]


443-213-0500

Cision
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SOURCE Castlight Health, Inc.

PR Newswire
November 2, 2021 – 1:05 PM PDT

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