Castlight Health Announces Third Quarter 2019 Results
Oct 24, 2019
Signs Anthem, Inc. to Enterprise License Agreement
Launches Personalized High-Touch Offering for Health Navigation Platform Customers
Expands Leadership Team
SAN FRANCISCO (October 24, 2019) — Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its third quarter ended September 30, 2019.
- Signed Anthem, Inc. to a 30-month enterprise license agreement, effective January 1, 2020, which renews the Engage relationship and provides a non-exclusive license for components of Castlight’s core platform services
- Launched its new personalized high-touch solution, Castlight Care Guides, and announced a Charter Customer Program that includes a Fortune 500 customer
- Selected its new Customer Center of Excellence in Salt Lake City, Utah, and hired and trained its inaugural class of Castlight employees
- Announced the following senior management appointments:
- Helen Kotchoubey hired as executive vice president and chief operating officer
- Will Bondurant promoted to senior vice president and chief financial officer, effective November 15, 2019
- Matt Moran hired as senior vice president of corporate development to lead health plan and new growth initiatives
“We’ve made significant progress on our top priorities over the last ninety days. Our new Anthem enterprise license agreement is meaningful validation of our technology and a proof point for our growth strategy,” said Maeve O’Meara, chief executive officer of Castlight Health. “In addition to expanding our Anthem relationship, Castlight made meaningful advances in jump-starting our health plan growth initiative, reinvigorating our customer base with value-based innovation, and assembling a strong team to lead Castlight in its next chapter. These steps are foundational to our long-term success.”
For more information on the Anthem enterprise license agreement, please see the associated 8-K filing with the Securities and Exchange Commission and the press release entitled “Anthem, Inc. Signs Enterprise Licensing Agreement with Castlight Health” dated October 24, 2019. Also, please see the press release entitled “Castlight Health Announces Castlight Care Guides” dated October 22, 2019 for more information on the Castlight Care Guides announcement.
Financial performance for the three months ended September 30, 2019 compared to the three months ended September 30, 2018 includes:
- GAAP total revenue of $35.5 million, representing a decrease of 11.4%
- GAAP gross margin of 59.1%, compared to 63.1%
- Non-GAAP gross margin of 62.1%, compared to 67.7%
- GAAP operating loss of $9.6 million, compared to $7.5 million
- Non-GAAP operating loss of $5.4 million, compared to income of $0.3 million
- GAAP net loss per basic and diluted share of $0.06, compared to a net loss per basic and diluted share of $0.05
- Non-GAAP net loss per basic and diluted share of $0.04, compared to a net income per basic and diluted share of $0.00
- Cash used in operations of $7.4 million, compared to $6.0 million
Total cash, cash equivalents and marketable securities was $56.0 million as of September 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.”
For the full year 2019, the Company expects:
- GAAP revenue in line with its previously-issued range of $140 million to $145 million
- Non-GAAP operating loss to exceed $13 million, the high-end of its previously-issued range of $8 million to $13 million
- Non-GAAP net loss per share to exceed $0.09, the high-end of its previously-issued range of $0.06 to $0.09 based on approximately 145 million to 146 million shares
About Helen Kotchoubey
Helen is an experienced healthcare operations leader and advisor. From 2017 to August 2018, Helen served as chief of staff at New York-Presbyterian Brooklyn Methodist Hospital where she integrated $1 billion in hospital assets into a nationally recognized academic healthcare delivery system and oversaw a 300-person staff across sixteen departments. From 2006 to 2017, Helen held multiple operating roles at New York-Presbyterian Hospital including vice president of IT strategy where she led financial and strategic planning initiatives and managed the department’s annual operating budget. Prior to that, Helen served as director of revenue cycle management at Montefiore Medical Center in New York and as a manager and consultant at Deloitte in their healthcare practice. Helen holds an MBA from Harvard Business School and a BA from Amherst College.
About Will Bondurant
Will Bondurant is a six-year veteran of Castlight Health with deep operational experience across the Company’s finance, product, and customer-facing functions, including serving as the lead of Castlight’s Anthem relationship since 2017. Will began his Castlight career in 2013 as director, strategy and corporate development where he led the annual and corporate planning and strategy processes. In 2015, Will served as director, product marketing where he was responsible for product positioning, pricing and market strategy. In 2017, Will served as senior director, health plan strategy where he negotiated and launched Castlight’s partnership with Anthem and the distribution of the Engage health navigation app. In 2018, Will served as vice president, professional services where he was responsible for client launches and migrations. Prior to joining Castlight, Will served as an analyst at McKinsey & Company focusing on healthcare delivery. Will holds a BA from the University of North Carolina.
About Matt Moran
Matt is a proven leader in digital health and has been working in healthcare since 2002. From 2015 to September 2019, Matt worked at Rally Health, most recently as vice president of strategy. From 2006 to 2015, Matt was at Prime Therapeutics, a pharmacy benefit manager serving 22 Blues plans and 28 million members. From 2013 to 2015, Matt served as Prime’s vice president of client engagement where he was responsible for the strategic alignment, sales, and business performance between the company and its Blue Cross Blue Shield health plan partners. Before joining Prime, Matt held positions in Deloitte Consulting’s healthcare and life sciences practice and at Health Care Services Corporation (Blue Cross Blue Shield) in Chicago. Matt holds an MBA from the University of Notre Dame and a BBA from Indiana University.
Quarterly Conference Call
Castlight Health senior management will host a conference call to discuss its third 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 5829129.
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.
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, restructuring charges, 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 third 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 September 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.