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| 8-K - 8-K - CASTLIGHT HEALTH, INC. | q415form8-k.htm |
Castlight Health Announces Fourth Quarter and Full Year 2015 Results
Total Revenue of $75.3 Million for the Year, Up 65% Year Over Year
SAN FRANCISCO - February 17, 2016 - Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its fourth quarter and full year ended December 31, 2015.
“In 2015, we grew our annual recurring revenue (ARR) 41% year-over-year to $110 million, added 9 Fortune 500 customers and achieved Net Dollar Retention (NDR) of 116% due to strong uptake of our newest products Elevate and Action. While we did not achieve our growth objectives for the business, we made significant progress on several key initiatives in 2015 that lay the foundation for future growth," said Giovanni Colella, M.D., co-founder and chief executive officer of Castlight Health. “In 2016, we will be focused on accelerating sales velocity with our now ramped sale force, leveraging our comprehensive health benefits platform to deliver value to customers, and driving to cash flow break-even. We believe these initiatives along with our company-wide focus on execution will position us well to achieve our long-term goals."
Fourth Quarter Results
• | Total revenue for the fourth quarter of 2015 was $21.3 million, an increase of 47% from the fourth quarter of 2014. Subscription revenue was $19.9 million, an increase of 50% on a year-over-year basis. |
• | Gross margin for the fourth quarter of 2015 was 54.7%, compared to a gross margin of 54.3% in the fourth quarter of 2014. Non-GAAP gross margin for the fourth quarter of 2015 was 58.6% compared to a non-GAAP gross margin of 58.3% in the fourth quarter of 2014. |
• | Operating loss for the fourth quarter of 2015 was $19.1 million, compared to an operating loss of $19.7 million in the fourth quarter of 2014. Non-GAAP operating loss for the fourth quarter of 2015 was $14.9 million, compared to a non-GAAP operating loss of $15.3 million in the fourth quarter of 2014. |
• | Net loss per basic and diluted share was $0.20 in the fourth quarter of 2015, compared to a net loss per basic and diluted share of $0.22 in the fourth quarter of 2014. The non-GAAP net loss per basic and diluted share for the fourth quarter of 2015 was $0.16, compared to a net loss per basic and diluted share of $0.17 in the fourth quarter of 2014. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for the fourth quarter of 2015 was 95.0 million compared to 90.5 million in the fourth quarter of 2014. |
• | Total cash, cash equivalents and marketable securities were $133.8 million at the end of the fourth quarter of 2015. Cash used in operations for the fourth quarter of 2015 was $12.0 million, compared to $11.5 million used in operations in the fourth quarter of 2014. |
Full Year 2015 Results
• | Total revenue for 2015 was $75.3 million, an increase of 65% from 2014. Subscription revenue was $70.4 million, an increase of 69% on a year-over-year basis. |
• | Gross margin for 2015 was 55.2%, compared to a gross margin of 39.1% in 2014. Non-GAAP gross margin for 2015 was 58.6% compared to a non-GAAP gross margin of 42.2% in 2014. |
• | Operating loss for 2015 was $80.2 million, compared to an operating loss of $86.2 million in 2014. Non-GAAP operating loss for 2015 was $64.5 million, compared to a non-GAAP operating loss of $69.6 million in 2014. |
• | Net loss per basic and diluted share was $0.85 in 2015, compared to a net loss per basic and diluted share of $1.16 in 2014. The non-GAAP net loss per basic and diluted share for 2015 was $0.68, compared to a net loss per basic and diluted share of $0.93 in 2014. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for 2015 was 93.8 million compared to 74.4 million in 2014. |
• | Total cash, cash equivalents and marketable securities were $133.8 million at the end of 2015. |
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
Q1 2016 Guidance: Revenue for the company’s first quarter is expected to be $22.0 million to $22.3 million. We expect to generate a non-GAAP operating loss in the range of $14.7 million to $15.7 million and a non-GAAP net loss per share of $0.15 to $0.16 based on 96 million weighted average basic and diluted shares outstanding.
Full Year 2016 Guidance: Revenue for the company’s full year 2016 is expected to be in the range of $99.0 million to $102.0 million, an increase of 31% to 35% year-over-year. Non-GAAP operating loss is expected to be in the range of $47.0 million to $50.0 million. Non-GAAP basic and diluted loss per share is expected to be in the range of $0.47 to $0.51 based on 98 million to 99 million weighted average basic and diluted common shares outstanding.
For both the first quarter and the full year 2016, 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 fourth quarter and full year 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 24103644. A replay will be available for one week at 1-855-859-2056, passcode 24103644.
About Castlight Health
Our mission is to empower people to make the best choices for their health and to help companies make the most of their health benefits. We offer a health benefits platform that engages employees to make better healthcare decisions and guide them to the right program,
care, and provider. The platform also enables benefit leaders to communicate and measure their programs while driving employee engagement with targeted, relevant communications. Castlight has partnered with more than 190 customers, spanning millions of lives, to improve healthcare outcomes, lower costs, and increase benefits satisfaction.
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 margin, 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 first quarter and full year 2016 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 first quarter and 2016 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 2016 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 | |||||||
December 31, 2015 | December 31, 2014 | ||||||
(unaudited) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 19,150 | $ | 17,425 | |||
Marketable securities | 101,274 | 175,057 | |||||
Accounts receivable, net | 12,751 | 11,097 | |||||
Deferred commissions | 5,438 | 3,675 | |||||
Prepaid expenses and other current assets | 3,772 | 3,476 | |||||
Total current assets | 142,385 | 210,730 | |||||
Property and equipment, net | 6,896 | 3,630 | |||||
Marketable securities, noncurrent | 13,335 | 6,220 | |||||
Restricted cash, noncurrent | 1,000 | — | |||||
Deferred commissions, noncurrent | 4,923 | 2,563 | |||||
Other assets | 4,735 | 131 | |||||
Total assets | $ | 173,274 | $ | 223,274 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 3,384 | $ | 3,217 | |||
Accrued expenses and other current liabilities | 4,550 | 5,791 | |||||
Accrued compensation | 11,477 | 10,455 | |||||
Deferred revenue | 26,590 | 20,708 | |||||
Total current liabilities | 46,001 | 40,171 | |||||
Deferred revenue, noncurrent | 7,522 | 6,652 | |||||
Other liabilities, noncurrent | 1,397 | 261 | |||||
Total liabilities | 54,920 | 47,084 | |||||
Stockholders’ equity | 118,354 | 176,190 | |||||
Total liabilities and stockholders’ equity | $ | 173,274 | $ | 223,274 | |||
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenue: | |||||||||||||||
Subscription | $ | 19,933 | $ | 13,309 | $ | 70,350 | $ | 41,602 | |||||||
Professional services | 1,382 | 1,178 | 4,965 | 4,003 | |||||||||||
Total revenue | 21,315 | 14,487 | 75,315 | 45,605 | |||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription (1) | 3,885 | 2,249 | 12,417 | 10,472 | |||||||||||
Cost of professional services (1) | 5,770 | 4,368 | 21,351 | 17,300 | |||||||||||
Total cost of revenue | 9,655 | 6,617 | 33,768 | 27,772 | |||||||||||
Gross profit | 11,660 | 7,870 | 41,547 | 17,833 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing (1) | 16,579 | 15,798 | 67,414 | 62,065 | |||||||||||
Research and development (1) | 8,224 | 6,284 | 30,077 | 22,917 | |||||||||||
General and administrative (1) | 5,983 | 5,536 | 24,274 | 19,009 | |||||||||||
Total operating expenses | 30,786 | 27,618 | 121,765 | 103,991 | |||||||||||
Operating loss | (19,126 | ) | (19,748 | ) | (80,218 | ) | (86,158 | ) | |||||||
Other income, net | 68 | 64 | 298 | 218 | |||||||||||
Net loss | $ | (19,058 | ) | $ | (19,684 | ) | $ | (79,920 | ) | $ | (85,940 | ) | |||
Net loss per share, basic and diluted | $ | (0.20 | ) | $ | (0.22 | ) | $ | (0.85 | ) | $ | (1.16 | ) | |||
Weighted-average shares used to compute basic and diluted net loss per share | 94,969 | 90,467 | 93,753 | 74,381 | |||||||||||
_______________________
(1) | Includes stock-based compensation expense as follows: |
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Cost of revenue: | |||||||||||||||
Cost of subscription | $ | 87 | $ | 81 | $ | 283 | $ | 180 | |||||||
Cost of professional services | 653 | 494 | 2,175 | 1,220 | |||||||||||
Sales and marketing | 1,822 | 1,594 | 7,705 | 5,933 | |||||||||||
Research and development | 1,154 | 1,081 | 3,498 | 2,556 | |||||||||||
General and administrative | 1,069 | 1,349 | 4,169 | 4,312 | |||||||||||
CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Operating activities: | |||||||||||||||
Net loss | $ | (19,058 | ) | $ | (19,684 | ) | $ | (79,920 | ) | $ | (85,940 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||
Depreciation | 646 | 410 | 2,024 | 1,354 | |||||||||||
Stock-based compensation | 4,785 | 4,599 | 17,830 | 14,201 | |||||||||||
Amortization of deferred commissions | 934 | 973 | 3,510 | 4,092 | |||||||||||
Accretion and amortization of marketable securities | 259 | 468 | 1,385 | 1,489 | |||||||||||
Expense related to warrant | — | (20 | ) | — | 2,639 | ||||||||||
Changes in operating assets and liabilities: | |||||||||||||||
Accounts receivable | 894 | 181 | (1,654 | ) | (6,032 | ) | |||||||||
Deferred commissions | (4,287 | ) | (1,235 | ) | (7,633 | ) | (4,861 | ) | |||||||
Prepaid expenses and other assets | 1,354 | 27 | 328 | (1,895 | ) | ||||||||||
Accounts payable | (70 | ) | (46 | ) | 646 | 147 | |||||||||
Accrued expenses and other liabilities | 1,604 | 1,529 | (136 | ) | 4,282 | ||||||||||
Deferred revenue | 982 | 1,254 | 6,752 | 15,887 | |||||||||||
Net cash used in operating activities | (11,957 | ) | (11,544 | ) | (56,868 | ) | (54,637 | ) | |||||||
Investing activities: | |||||||||||||||
Restricted cash | — | — | (1,000 | ) | 101 | ||||||||||
Investment in related party | — | — | (4,125 | ) | — | ||||||||||
Purchase of property and equipment | (1,877 | ) | (462 | ) | (5,376 | ) | (1,860 | ) | |||||||
Purchase of marketable securities | (33,543 | ) | (19,928 | ) | (119,867 | ) | (230,316 | ) | |||||||
Sales of marketable securities | — | — | 5,000 | 13,000 | |||||||||||
Maturities of marketable securities | 40,092 | 22,762 | 180,111 | 76,527 | |||||||||||
Net cash provided by (used in) investing activities | 4,672 | 2,372 | 54,743 | (142,548 | ) | ||||||||||
Financing activities: | |||||||||||||||
Proceeds from the exercise of stock options | 764 | 1,366 | 3,944 | 3,294 | |||||||||||
Payments of deferred financing costs | — | — | (94 | ) | (3,781 | ) | |||||||||
Proceeds from initial public offering | — | — | — | 189,943 | |||||||||||
Net cash provided by financing activities | 764 | 1,366 | 3,850 | 189,456 | |||||||||||
Net (decrease) increase in cash and cash equivalents | (6,521 | ) | (7,806 | ) | 1,725 | (7,729 | ) | ||||||||
Cash and cash equivalents at beginning of period | 25,671 | 25,231 | 17,425 | 25,154 | |||||||||||
Cash and cash equivalents at end of period | $ | 19,150 | $ | 17,425 | $ | 19,150 | $ | 17,425 | |||||||
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, | September 30, | December 31, | December 31, | December 31, | |||||||||||||||||
2015 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||
Gross profit: | |||||||||||||||||||||
GAAP gross profit subscription | $ | 16,048 | $ | 15,152 | $ | 11,060 | $ | 57,933 | $ | 31,130 | |||||||||||
GAAP gross margin subscription | 80.5 | % | 83.1 | % | 83.1 | % | 82.3 | % | 74.8 | % | |||||||||||
Stock-based compensation expense | 87 | 96 | 81 | 283 | 180 | ||||||||||||||||
Amortization of internal-use software | 124 | 24 | 8 | 196 | 8 | ||||||||||||||||
Non-GAAP gross profit subscription | $ | 16,259 | $ | 15,272 | $ | 11,149 | $ | 58,412 | $ | 31,318 | |||||||||||
Non-GAAP gross margin subscription | 81.6 | % | 83.8 | % | 83.8 | % | 83 | % | 75.3 | % | |||||||||||
GAAP gross loss professional services | $ | (4,388 | ) | $ | (4,300 | ) | $ | (3,190 | ) | $ | (16,386 | ) | $ | (13,297 | ) | ||||||
GAAP gross loss percentage professional services | (318 | )% | (329 | )% | (271 | )% | (330 | )% | (332 | )% | |||||||||||
Stock-based compensation expense | 653 | 647 | 494 | 2,175 | 1,220 | ||||||||||||||||
Capitalization of internal-use software | (30 | ) | (33 | ) | — | (63 | ) | — | |||||||||||||
Non-GAAP gross loss professional services | $ | (3,765 | ) | $ | (3,653 | ) | $ | (2,696 | ) | $ | (14,274 | ) | $ | (12,077 | ) | ||||||
Non-GAAP gross loss percentage professional services | (272 | )% | (282 | )% | (229 | )% | (287 | )% | (302 | )% | |||||||||||
GAAP gross profit | $ | 11,660 | $ | 10,852 | $ | 7,870 | $ | 41,547 | $ | 17,833 | |||||||||||
GAAP gross margin | 54.7 | % | 55.5 | % | 54.3 | % | 55.2 | % | 39.1 | % | |||||||||||
Impact of non-GAAP adjustments | 834 | 734 | 583 | 2,591 | 1,408 | ||||||||||||||||
Non-GAAP gross profit | $ | 12,494 | $ | 11,586 | $ | 8,453 | $ | 44,138 | $ | 19,241 | |||||||||||
Non-GAAP gross margin | 58.6 | % | 59.3 | % | 58.3 | % | 58.6 | % | 42.2 | % | |||||||||||
Operating expense: | |||||||||||||||||||||
GAAP sales and marketing | $ | 16,579 | $ | 16,731 | $ | 15,798 | $ | 67,414 | $ | 62,065 | |||||||||||
Expense related to warrant | — | — | 20 | — | (2,639 | ) | |||||||||||||||
Stock-based compensation expense | (1,822 | ) | (2,058 | ) | (1,594 | ) | (7,705 | ) | (5,933 | ) | |||||||||||
Non-GAAP sales and marketing | $ | 14,757 | $ | 14,673 | $ | 14,224 | $ | 59,709 | $ | 53,493 | |||||||||||
GAAP research and development | $ | 8,224 | $ | 7,868 | $ | 6,284 | $ | 30,077 | $ | 22,917 | |||||||||||
Stock-based compensation expense | (1,154 | ) | (981 | ) | (1,081 | ) | (3,498 | ) | (2,556 | ) | |||||||||||
Capitalization of internal-use software | 620 | 841 | 129 | 2,256 | 291 | ||||||||||||||||
Non-GAAP research and development | $ | 7,690 | $ | 7,728 | $ | 5,332 | $ | 28,835 | $ | 20,652 | |||||||||||
GAAP general and administrative | $ | 5,983 | $ | 6,311 | $ | 5,536 | $ | 24,274 | $ | 19,009 | |||||||||||
Stock-based compensation expense | (1,069 | ) | (1,177 | ) | (1,349 | ) | (4,169 | ) | (4,312 | ) | |||||||||||
Non-GAAP general and administrative | $ | 4,914 | $ | 5,134 | $ | 4,187 | $ | 20,105 | $ | 14,697 | |||||||||||
GAAP operating expense | $ | 30,786 | $ | 30,910 | $ | 27,618 | $ | 121,765 | $ | 103,991 | |||||||||||
Impact of non-GAAP adjustments | (3,425 | ) | (3,375 | ) | (3,875 | ) | (13,116 | ) | (15,149 | ) | |||||||||||
Non-GAAP operating expense | $ | 27,361 | $ | 27,535 | $ | 23,743 | $ | 108,649 | $ | 88,842 | |||||||||||
Operating loss: | |||||||||||||||||||||
GAAP operating loss | $ | (19,126 | ) | $ | (20,058 | ) | $ | (19,748 | ) | $ | (80,218 | ) | $ | (86,158 | ) | ||||||
Impact of non-GAAP adjustments | 4,259 | 4,109 | 4,458 | 15,707 | 16,557 | ||||||||||||||||
Non-GAAP operating loss | $ | (14,867 | ) | $ | (15,949 | ) | $ | (15,290 | ) | $ | (64,511 | ) | $ | (69,601 | ) | ||||||
Net loss and net loss per share: | |||||||||||||||||||||
GAAP net loss | $ | (19,058 | ) | $ | (20,007 | ) | $ | (19,684 | ) | $ | (79,920 | ) | $ | (85,940 | ) | ||||||
Total pre-tax impact of non-GAAP adjustments | 4,259 | 4,109 | 4,458 | 15,707 | 16,557 | ||||||||||||||||
Income tax impact of non-GAAP adjustments | — | — | — | — | — | ||||||||||||||||
Non-GAAP net loss | $ | (14,799 | ) | $ | (15,898 | ) | $ | (15,226 | ) | $ | (64,213 | ) | $ | (69,383 | ) | ||||||
Basic and Diluted net loss per share | |||||||||||||||||||||
GAAP | $ | (0.20 | ) | $ | (0.21 | ) | $ | (0.22 | ) | $ | (0.85 | ) | $ | (1.16 | ) | ||||||
Non-GAAP | $ | (0.16 | ) | $ | (0.17 | ) | $ | (0.17 | ) | $ | (0.68 | ) | $ | (0.93 | ) | ||||||
Shares used in basic and diluted net loss per share computation | 94,969 | 94,409 | 90,467 | 93,753 | 74,381 | ||||||||||||||||
Investor Contact:
Charles Butler
ir@castlighthealth.com
Charles Butler
ir@castlighthealth.com
415-829-1400
Media Contact:
Jim Rivas
press@castlighthealth.com
Jim Rivas
press@castlighthealth.com
415-829-1568