Total Revenue of $16.0 Million, Up 90% Year Over Year
SAN FRANCISCO – May 6, 2015 – Castlight Health, Inc. (NYSE:CSLT), a pioneer of the Enterprise Healthcare Cloud, today announced results for its first quarter ended March 31, 2015.
“We executed well across the business in the first quarter. Renewals were very strong and included our two largest, non-governmental customers that were up for renewal in 2015. Both signed renewals with us that increased their investments in Castlight solutions,” said Giovanni Colella, president and chief executive officer of Castlight Health. “In addition to these renewals and upsells, we were pleased to continue adding new large employers as customers in the first quarter, including Viacom, McKesson, and the State of Mississippi.”
Financial Performance for the Three Months Ended March 31, 2015
- Total revenue for the first quarter of 2015 was $16.0 million, an increase of 90% from the first quarter of 2014. Subscription revenue was $14.9 million, an increase of 100% on a year-over-year basis.
- Gross margin for the first quarter of 2015 was 55.0%, compared to a gross margin of 21.4% in the first quarter of 2014. Non-GAAP gross margin for the first quarter of 2015 was 58.1% compared to a non-GAAP gross margin of 23.1% in the first quarter of 2014.
- Operating loss for the first quarter of 2015 was $19.7 million, compared to an operating loss of $24.3 million in the first quarter of 2014. Non-GAAP operating loss for the first quarter of 2015 was $16.1 million, compared to a non-GAAP operating loss of $19.3 million in the first quarter of 2014.
- Net loss per basic and diluted share was $0.21 in the first quarter of 2015, compared to a net loss per share of $0.90 in the first quarter of 2014. The non-GAAP net loss per share for the first quarter of 2015 was $0.17, compared to a net loss per share of $0.72 in the first quarter of 2014. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for the first quarter of 2015 was 91.8 million compared to 27.0 million in the first quarter of 2014.
- Total cash, cash equivalents and marketable securities were $185.8 million at the end of the first quarter of 2015. Cash used in operations for the first quarter of 2015 was $13.2 million, compared to $16.1 million used in operations in the first 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”.
Q2 2015 Guidance: Revenue for the company’s second quarter is expected to be $17.6 million to $17.9 million, representing growth of 67% to 70% on a year-over-year basis. We expect to generate a non-GAAP operating loss in the range of $16.5 million to $17.5 million and a non-GAAP net loss per share of $0.18 to $0.19 based on 94 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 million to $77 million, an increase of 62% to 69% year-over-year. Non-GAAP operating loss is expected to be in the range of $64 million to $67 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 to 97 million weighted average basic and diluted common shares outstanding.
For both the second 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 first 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 29812154. A replay will be available for one week at 1-855-859-2056, passcode 29812154.
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 second 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 second 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
|March 31,||December 31,|
|Cash and cash equivalents||$||27,041||$||17,425|
|Accounts receivable, net||10,488||11,097|
|Prepaid expenses and other current assets||3,499||3,476|
|Total current assets||203,400||210,730|
|Property and equipment, net||3,497||3,630|
|Marketable securities, noncurrent||–||6,220|
|Deferred commissions, noncurrent||2,377||2,563|
|Liabilities and stockholders’ equity|
|Accrued expenses and other current liabilities||4,365||5,791|
|Total current liabilities||39,914||40,171|
|Deferred revenue, noncurrent||7,079||6,652|
|Other liabilities, noncurrent||226||261|
|Commitments and contingencies|
|Total liabilities and stockholders’ equity||$||209,352||$||223,274|
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
|Three Months Ended March 31,|
|Cost of revenue:|
|Cost of subscription (1)||2,519||2,712|
|Cost of professional services (1)||4,653||3,871|
|Total cost of revenue||7,172||6,583|
|Sales and marketing (1)||16,463||16,560|
|Research and development (1)||6,594||5,527|
|General and administrative (1)||5,463||4,010|
|Total operating expenses||28,520||26,097|
|Other income, net||98||23|
|Net loss per share, basic and diluted||$||(0.21||)||$||(0.90||)|
Weighted-average shares used to compute basic and diluted net loss
|(1||)||Includes stock-based compensation expense as follows:|
|Three Months Ended March 31,|
|Cost of revenue:|
|Cost of subscription||$||33||$||4|
|Cost of professional services||425||140|
|Sales and marketing||1,751||1,174|
|Research and development||633||421|
|General and administrative||1,027||814|
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|Three Months Ended March 31,|
Adjustments to reconcile net loss to net cash used in operating
|Amortization of deferred commissions||857||1,376|
|Accretion and amortization of marketable securities||443||124|
|Expense related to warrant||–||2,429|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other assets||30||(1,081||)|
|Accrued expenses and other liabilities||(4,403||)||(3,376||)|
|Net cash used in operating activities||(13,189||)||(16,061||)|
|Purchase of property and equipment||(887||)||(656||)|
|Purchase of marketable securities||(13,034||)||(35,733||)|
|Sales of marketable securities||5,000||13,000|
|Maturities of marketable securities||30,180||5,000|
|Net cash provided by (used in) investing activities||21,259||(18,389||)|
|Proceeds from the exercise of stock options||1,640||1,522|
|Payments of deferred financing costs||(94||)||(2,102||)|
|Net proceeds from initial public offering||–||
|Net cash provided by financing activities||1,546||189,363|
|Net increase in cash and cash equivalents||9,616||154,913|
|Cash and cash equivalents at beginning of the period||17,425||25,154|
|Cash and cash equivalents at end of the period||$||27,041||$||180,067|
|CASTLIGHT HEALTH, INC.|
|RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES|
|(In thousands, except per share data)|
|Three Months Ended|
|March 31,||December 31,||March 31,|
|GAAP gross profit subscription||$||12,387||$||11,060||$||4,751|
|GAAP gross margin subscription||83.1||%||83.1||%||63.7||%|
|Stock-based compensation expense||33||81||4|
|Amortization of internal-use software||24||8||–|
|Non-GAAP gross profit subscription||$||12,444||$||11,149||$||4,755|
|Non-GAAP gross margin subscription||83.5||%||83.8||%||63.7||%|
|GAAP gross loss professional services||$||(3,608||)||$||(3,190||)||$||(2,958||)|
|GAAP gross loss percentage professional services||
|Stock-based compensation expense||425||494||140|
|Non-GAAP gross loss professional services||$||(3,183||)||$||(2,696||)||$||(2,818||)|
|Non-GAAP gross loss percentage professional services||
|GAAP gross profit||$||8,779||$||7,870||$||1,793|
|GAAP gross margin||55.0||%||54.3||%||21.4||%|
|Impact of non-GAAP adjustments||482||583||144|
|Non-GAAP gross profit||$||9,261||$||8,453||$||1,937|
|Non-GAAP gross margin||58.1||%||58.3||%||23.1||%|
|GAAP sales and marketing||$||16,463||$||15,798||$||16,560|
|Expense related to warrant||–||20||(2,429||)|
|Stock-based compensation expense||(1,751||)||(1,594||)||(1,174||)|
|Non-GAAP sales and marketing||$||14,712||$||14,224||$||12,957|
|GAAP research and development||$||6,594||$||6,284||$||5,527|
|Stock-based compensation expense||(633||)||(1,081||)||(421||)|
|Capitalization of internal-use software||282||129||–|
|Non-GAAP research and development||$||6,243||$||5,332||$||5,106|
|GAAP general and administrative||$||5,463||$||5,536||$||4,010|
|Stock-based compensation expense||(1,027||)||(1,349||)||(814||)|
|Non-GAAP general and administrative||$||4,436||$||4,187||$||3,196|
|GAAP operating expenses||$||28,520||$||27,618||$||26,097|
|Impact of non-GAAP adjustments||(3,129||)||(3,875||)||(4,838||)|
|Non-GAAP operating expense||$||25,391||$||23,743||$||21,259|
|GAAP operating loss||$||(19,741||)||$||(19,748||)||$||(24,304||)|
|Impact of non-GAAP adjustments||3,611||4,458||4,982|
|Non-GAAP operating loss||$||(16,130||)||$||(15,290||)||$||(19,322||)|
|Net loss and net loss per share:|
|GAAP net loss||$||(19,643||)||$||(19,684||)||$||(24,281||)|
|Total pre-tax impact of non-GAAP adjustments||3,611||4,458||4,982|
|Income tax impact of non-GAAP adjustments||–||–||–|
|Non-GAAP net loss||$||(16,032||)||$||(15,226||)||$||(19,299||)|
|Basic and Diluted net loss per share|
|Shares used in basic and diluted net loss per share computation||91,786||90,467||26,970|