Castlight Health Announces Second Quarter 2015 Results
Total Revenue of $18.5 Million, up 76% Year Over Year
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SAN FRANCISCO, CA -- (Marketwired) -- 08/05/15 -- Castlight Health, Inc. (NYSE: CSLT), the leader in enterprise healthcare management (EHM), today announced results for its second quarter ended June 30, 2015.
"Castlight continues to gain momentum among large enterprises and we are pleased to now count 10% of the Fortune 500 as our customers. Importantly, we are also seeing our customers expand their relationship with Castlight as we build out our platform," said Giovanni Colella, M.D., co-founder and chief executive officer of Castlight Health. "This quarter we continued to further our leadership position with the introductions of Castlight Elevate, which enables employees to access behavioral health resources, and Castlight Pulse, our first employer-facing analytics solution."
Financial Performance for the Three Months Ended June 30, 2015
- Total revenue for the second quarter of 2015 was $18.5 million, an increase of 76% from the second quarter of 2014. Subscription revenue was $17.3 million, an increase of 80% on a year-over-year basis.
- Gross margin for the second quarter of 2015 was 55.4%, compared to a gross margin of 29.6% in the second quarter of 2014. Non-GAAP gross margin for the second quarter of 2015 was 58.3% compared to a non-GAAP gross margin of 32.6% in the second quarter of 2014.
- Operating loss for the second quarter of 2015 was $21.3 million, compared to an operating loss of $21.8 million in the second quarter of 2014. Non-GAAP operating loss for the second quarter of 2015 was $17.6 million, compared to a non-GAAP operating loss of $18.8 million in the second quarter of 2014.
- Net loss per basic and diluted share was $0.23 in the second quarter of 2015, compared to a net loss per basic and diluted share of $0.24 in the second quarter of 2014. The non-GAAP net loss per basic and diluted share for the second quarter of 2015 was $0.19, compared to a net loss per basic and diluted share of $0.21 in the second quarter of 2014. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for the second quarter of 2015 was 93.8 million compared to 89.5 million in the second quarter of 2014.
- Total cash, cash equivalents and marketable securities were $164.4 million at the end of the second quarter of 2015. Cash used in operations for the second quarter of 2015 was $17.2 million, compared to $19.6 million used in operations in the second quarter of 2014.
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
Q3 2015 Guidance: Revenue for the company's third quarter is expected to be $19.2 million to $19.5 million, representing growth of 57% to 60% on a year-over-year basis. We expect to generate a non-GAAP operating loss in the range of $16.0 million to $17.0 million and a non-GAAP net loss per share of $0.17 to $0.18 based on 95 million weighted average basic and diluted shares outstanding.
Full Year 2015 Guidance: Revenue for the company's full year 2015 is expected to be in the range of $74.0 million to $77.0 million, an increase of 62% to 69% year-over-year. Non-GAAP operating loss is expected to be in the range of $64.0 million to $67.0 million. Non-GAAP basic and diluted loss per share is expected to be in the range of $0.66 to $0.71 based on 95 million to 97 million weighted average basic and diluted common shares outstanding.
For both the third quarter and the full year 2015, non-GAAP guidance excludes the effects of stock-based compensation expense and capitalization and amortization of internal-use software.
Quarterly Conference Call
Castlight Health will host a conference call to discuss its second quarter 2015 results 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. In addition, an archive of the webcast can be accessed through the same link. Participants who choose to call in to the conference call can do so by dialing 1-877-201-0168. The conference ID number is 80918941. A replay will be available for one week at 1-855-859-2056, passcode 80918941.
About Castlight Health
Castlight Health, Inc. (NYSE: CSLT) is a leader in Enterprise Healthcare Management. We believe great healthcare builds great business and U.S. enterprises can gain control over the $620 billion spent annually on healthcare, transforming a crippling cost into a strategic business advantage. Recognized as a top 2014 software platform by the HR Technology Conference & Exposition, the Castlight Enterprise Healthcare Cloud enables employers to understand and manage all their healthcare investments while helping employees make the best possible healthcare decisions. Castlight is a great place to work, honored with a Glassdoor Employees' Choice award and recognized by Rock Health for Diversity in Leadership. For more information visit www.castlighthealth.com. Follow us on Twitter and LinkedIn and Like us on Facebook. Source: Castlight Health.
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 margin (loss), non-GAAP operating expense, non-GAAP operating loss, non-GAAP net loss and non-GAAP net loss per share. These non-GAAP financial measures differ from GAAP financial measures in that they exclude stock-based compensation, warrant expense, capitalization and amortization of internal-use software and the associated tax impact of these items, where applicable.
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 third quarter of 2015 to comparable GAAP operating loss and net loss per share guidance 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 operating loss. 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.
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 third quarter and full year projections, our expectations for future performance of our business, market growth and business conditions, future innovation by the company and future developments with respect to the digital healthcare industry. 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 2015 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)
As of
------------------------
June 30, December 31,
2015 2014
----------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 31,533 $ 17,425
Marketable securities 132,905 175,057
Accounts receivable, net 11,048 11,097
Deferred commissions 3,956 3,675
Prepaid expenses and other current assets 5,960 3,476
----------- ------------
Total current assets 185,402 210,730
Property and equipment, net 4,515 3,630
Marketable securities, noncurrent - 6,220
Restricted cash, noncurrent 1,000 -
Deferred commissions, noncurrent 2,374 2,563
Other assets 3,692 131
----------- ------------
Total assets $ 196,983 $ 223,274
=========== ============
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 4,180 $ 3,217
Accrued expenses and other current liabilities 4,702 5,791
Accrued compensation 8,730 10,455
Deferred revenue 24,125 20,708
----------- ------------
Total current liabilities 41,737 40,171
Deferred revenue, noncurrent 7,638 6,652
Other liabilities, noncurrent 1,208 261
----------- ------------
Total liabilities 50,583 47,084
Commitments and contingencies
Stockholders' equity 146,400 176,190
----------- ------------
Total liabilities and stockholders' equity $ 196,983 $ 223,274
=========== ============
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
Revenue:
Subscription $ 17,278 $ 9,576 $ 32,184 $ 17,039
Professional services 1,232 957 2,277 1,870
--------- --------- --------- ---------
Total revenue 18,510 10,533 34,461 18,909
--------- --------- --------- ---------
Cost of revenue:
Cost of subscription (1) 2,932 2,915 5,451 5,627
Cost of professional services
(1) 5,322 4,502 9,975 8,373
--------- --------- --------- ---------
Total cost of revenue 8,254 7,417 15,426 14,000
--------- --------- --------- ---------
Gross profit 10,256 3,116 19,035 4,909
--------- --------- --------- ---------
Operating expenses:
Sales and marketing (1) 17,641 14,947 34,104 31,507
Research and development (1) 7,391 5,476 13,985 11,003
General and administrative (1) 6,517 4,519 11,980 8,529
--------- --------- --------- ---------
Total operating expenses 31,549 24,942 60,069 51,039
--------- --------- --------- ---------
Operating loss (21,293) (21,826) (41,034) (46,130)
Other income, net 81 50 179 73
--------- --------- --------- ---------
Net loss $ (21,212) $ (21,776) $ (40,855) $ (46,057)
========= ========= ========= =========
Net loss per share, basic and
diluted $ (0.23) $ (0.24) $ (0.44) $ (0.86)
========= ========= ========= =========
Weighted-average shares used to
compute basic and diluted net
loss per share 93,804 89,520 92,801 53,284
========= ========= ========= =========
--------------------------------
(1) Includes stock-based compensation expense as follows:
Three Months Six Months Ended
Ended June 30, June 30,
----------------- -----------------
2015 2014 2015 2014
-------- -------- -------- --------
Cost of revenue:
Cost of subscription $ 67 $ 35 $ 100 $ 39
Cost of professional services 450 280 875 420
Sales and marketing 2,074 1,152 3,825 2,326
Research and development 730 493 1,363 914
General and administrative 896 980 1,923 1,794
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- -------------------
2015 2014 2015 2014
-------- --------- -------- ---------
Operating activities:
Net loss $(21,212) $ (21,776) $(40,855) $ (46,057)
Adjustments to reconcile net loss
to net cash used in operating
activities:
Depreciation 456 322 910 604
Stock-based compensation 4,217 2,940 8,086 5,493
Amortization of deferred
commissions 802 868 1,659 2,244
Accretion and amortization of
marketable securities 384 373 827 497
Expense related to warrant - 70 - 2,499
Changes in operating assets and
liabilities:
Accounts receivable (560) (4,077) 49 (5,327)
Deferred commissions (1,113) (1,087) (1,751) (1,369)
Prepaid expenses and other
assets (1,848) (596) (1,818) (1,677)
Accounts payable (254) (375) 1,258 384
Accrued expenses and other
liabilities 1,234 2,173 (3,169) (1,203)
Deferred revenue 682 1,591 4,403 8,277
-------- --------- -------- ---------
Net cash used in operating
activities (17,212) (19,574) (30,401) (35,635)
-------- --------- -------- ---------
Investing activities:
(Increase) decrease in
restricted cash (1,000) 101 (1,000) 101
Investment in related party (3,125) - (3,125) -
Purchase of property and
equipment (806) (311) (1,693) (967)
Purchase of marketable
securities (5,924) (126,442) (18,958) (162,175)
Sales of marketable securities - - 5,000 13,000
Maturities of marketable
securities 31,373 3,000 61,553 8,000
-------- --------- -------- ---------
Net cash provided by (used in)
investing activities 20,518 (123,652) 41,777 (142,041)
-------- --------- -------- ---------
Financing activities:
Proceeds from the exercise of
stock options 1,186 106 2,826 1,628
Payments of deferred financing
costs - (1,679) (94) (3,781)
Net proceeds from initial public
offering - - - 189,943
-------- --------- -------- ---------
Net cash provided by (used in)
financing activities 1,186 (1,573) 2,732 187,790
-------- --------- -------- ---------
Net increase (decrease) in cash
and cash equivalents 4,492 (144,799) 14,108 10,114
Cash and cash equivalents at
beginning of period 27,041 180,067 17,425 25,154
-------- --------- -------- ---------
Cash and cash equivalents at end
of period $ 31,533 $ 35,268 $ 31,533 $ 35,268
======== ========= ======== =========
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, March 31, June 30, June 30, June 30,
2015 2015 2014 2015 2014
---------- ---------- ---------- ---------- ----------
Gross profit:
GAAP gross profit
subscription $ 14,346 $ 12,387 $ 6,661 $ 26,733 $ 11,412
GAAP gross margin
subscription 83.0% 83.1% 69.6% 83.1% 67.0%
Stock-based
compensation
expense 67 33 35 100 39
Amortization of
internal-use
software 24 24 - 48 -
---------- ---------- ---------- ---------- ----------
Non-GAAP gross
profit subscription $ 14,437 $ 12,444 $ 6,696 $ 26,881 $ 11,451
========== ========== ========== ========== ==========
Non-GAAP gross
margin
subscription 83.6% 83.5% 69.9% 83.5% 67.2%
GAAP gross loss
professional
services $ (4,090) $ (3,608) $ (3,545) $ (7,698) $ (6,503)
GAAP gross loss
percentage
professional
services (332)% (345)% (370)% (338)% (348)%
Stock-based
compensation
expense 450 425 280 875 420
---------- ---------- ---------- ---------- ----------
Non-GAAP gross loss
professional
services $ (3,640) $ (3,183) $ (3,265) $ (6,823) $ (6,083)
========== ========== ========== ========== ==========
Non-GAAP gross loss
percentage
professional
services (295)% (305)% (341)% (300)% (325)%
GAAP gross profit $ 10,256 $ 8,779 $ 3,116 $ 19,035 $ 4,909
GAAP gross margin 55.4% 55.0% 29.6% 55.2% 26.0%
Impact of non-GAAP
adjustments 541 482 315 1,023 459
---------- ---------- ---------- ---------- ----------
Non-GAAP gross
profit $ 10,797 $ 9,261 $ 3,431 $ 20,058 $ 5,368
========== ========== ========== ========== ==========
Non-GAAP gross
margin 58.3% 58.1% 32.6% 58.2% 28.4%
Operating expense:
GAAP sales and
marketing $ 17,641 $ 16,463 $ 14,947 $ 34,104 $ 31,507
Expense related to
warrant - - (70) - (2,499)
Stock-based
compensation
expense (2,074) (1,751) (1,152) (3,825) (2,326)
---------- ---------- ---------- ---------- ----------
Non-GAAP sales and
marketing $ 15,567 $ 14,712 $ 13,725 $ 30,279 $ 26,682
========== ========== ========== ========== ==========
GAAP research and
development $ 7,391 $ 6,594 $ 5,476 $ 13,985 $ 11,003
Stock-based
compensation
expense (730) (633) (493) (1,363) (914)
Capitalization of
internal-use
software 513 282 - 795 -
---------- ---------- ---------- ---------- ----------
Non-GAAP research
and development $ 7,174 $ 6,243 $ 4,983 $ 13,417 $ 10,089
========== ========== ========== ========== ==========
GAAP general and
administrative $ 6,517 $ 5,463 $ 4,519 $ 11,980 $ 8,529
Stock-based
compensation
expense (896) (1,027) (980) (1,923) (1,794)
---------- ---------- ---------- ---------- ----------
Non-GAAP general and
administrative $ 5,621 $ 4,436 $ 3,539 $ 10,057 $ 6,735
========== ========== ========== ========== ==========
GAAP operating
expense $ 31,549 $ 28,520 $ 24,942 $ 60,069 $ 51,039
Impact of non-GAAP
adjustments (3,187) (3,129) (2,695) (6,316) (7,533)
---------- ---------- ---------- ---------- ----------
Non-GAAP operating
expense $ 28,362 $ 25,391 $ 22,247 $ 53,753 $ 43,506
========== ========== ========== ========== ==========
Operating loss:
GAAP operating loss $(21,293) $(19,741) $(21,826) $(41,034) $(46,130)
Impact of non-GAAP
adjustments 3,728 3,611 3,010 7,339 7,992
---------- ---------- ---------- ---------- ----------
Non-GAAP operating
loss $(17,565) $(16,130) $(18,816) $(33,695) $(38,138)
========== ========== ========== ========== ==========
Net loss and net loss
per share:
GAAP net loss $(21,212) $(19,643) $(21,776) $(40,855) $(46,057)
Total pre-tax
impact of non-GAAP
adjustments 3,728 3,611 3,010 7,339 7,992
Income tax impact
of non-GAAP
adjustments - - - - -
---------- ---------- ---------- ---------- ----------
Non-GAAP net loss $(17,484) $(16,032) $(18,766) $(33,516) $(38,065)
========== ========== ========== ========== ==========
Basic and Diluted
net loss per share
GAAP $ (0.23) $ (0.21) $ (0.24) $ (0.44) $ (0.86)
========== ========== ========== ========== ==========
Non-GAAP $ (0.19) $ (0.17) $ (0.21) $ (0.36) $ (0.71)
========== ========== ========== ========== ==========
Shares used in basic
and diluted net
loss per share
computation 93,804 91,786 89,520 92,801 53,284
========== ========== ========== ========== ==========
Investor Contact: Charles Butler [email protected] 415-829-1400Media Contact: Jim Rivas [email protected] 415-515-8780
Source: Castlight Health
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