CASTLIGHT HEALTH, INC., 10-Q filed on 10/31/2019
Quarterly Report
v3.19.3
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2019
Oct. 25, 2019
Document Information [Line Items]    
Document Type 10-Q  
Document Period End Date Sep. 30, 2019  
Entity Registrant Name CASTLIGHT HEALTH, INC.  
Entity Current Reporting Status Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company true  
Entity Ex Transition Period true  
Entity Shell Company false  
Amendment Flag false  
Document Fiscal Year Focus 2019  
Document Fiscal Period Focus Q3  
Entity Central Index Key 0001433714  
Current Fiscal Year End Date --12-31  
Class A common stock    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   35,032,053
Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   111,141,225
v3.19.3
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2019
Dec. 31, 2018
Current assets:    
Cash and cash equivalents $ 36,040 $ 66,005
Marketable securities 19,977 11,327
Accounts receivable and other, net 35,442 26,816
Prepaid expenses and other current assets 4,512 3,680
Total current assets 95,971 107,828
Property and equipment, net 3,318 3,963
Restricted cash, non-current 1,325 1,325
Deferred commissions 17,242 20,142
Deferred professional service costs 8,429 10,133
Intangible assets, net 13,253 16,209
Goodwill 91,785 91,785
Operating lease right-of-use assets, net 13,351  
Other assets 2,119 2,129
Total assets 246,793 253,514
Current liabilities:    
Accounts payable 11,989 9,556
Accrued expenses and other current liabilities 11,169 15,454
Accrued compensation 5,547 5,975
Deferred revenue 17,509 20,193
Operating lease liabilities 5,897  
Total current liabilities 52,111 51,178
Deferred revenue, non-current 824 1,030
Debt, non-current 1,860 3,254
Operating lease liabilities, non-current 10,574  
Other liabilities, non-current 1,125 3,381
Total liabilities 66,494 58,843
Commitments and contingencies
Stockholders’ equity:    
Additional paid-in capital 623,573 609,697
Accumulated other comprehensive income 7 0
Accumulated deficit (443,296) (415,040)
Total stockholders’ equity 180,299 194,671
Total liabilities and stockholders’ equity 246,793 253,514
Class A common stock    
Stockholders’ equity:    
Class A common stock, $0.0001 par value; 200,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 35,032,053 shares and 37,576,324 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively 4 4
Class B common stock    
Stockholders’ equity:    
Class A common stock, $0.0001 par value; 200,000,000 shares authorized as of September 30, 2019 and December 31, 2018; 35,032,053 shares and 37,576,324 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively $ 11 $ 10
v3.19.3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2019
Dec. 31, 2018
Class A common stock    
Par value (usd per share) $ 0.0001 $ 0.0001
Common stock authorized (in shares) 200,000,000 200,000,000
Common stock issued (in shares) 35,032,053 37,576,324
Common stock outstanding (in shares) 35,032,053 37,576,324
Class B    
Par value (usd per share) $ 0.0001 $ 0.0001
Common stock authorized (in shares) 800,000,000 800,000,000
Common stock issued (in shares) 111,133,913 104,350,881
Common stock outstanding (in shares) 111,133,913 104,350,881
v3.19.3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Revenue:        
Total revenue, net $ 35,461 $ 40,041 $ 106,861 $ 114,304
Cost of revenue:        
Total cost of revenue 14,501 14,795 42,774 45,468
Gross profit 20,960 25,246 64,087 68,836
Operating expenses:        
Sales and marketing [1] 9,829 11,497 27,933 38,715
Research and development [1] 14,295 15,028 44,507 46,824
General and administrative [1] 6,440 6,193 20,743 19,400
Total operating expenses 30,564 32,718 93,183 104,939
Operating loss (9,604) (7,472) (29,096) (36,103)
Other income, net 268 207 840 436
Net loss $ (9,336) $ (7,265) $ (28,256) $ (35,667)
Net loss per share, basic and diluted (in usd per share) $ (0.06) $ (0.05) $ (0.20) $ (0.26)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 145,701 138,490 144,434 136,735
Subscription        
Revenue:        
Total revenue, net $ 34,900 $ 36,702 $ 102,670 $ 104,493
Cost of revenue:        
Total cost of revenue [1] 8,517 8,558 24,917 26,872
Professional services and other        
Revenue:        
Total revenue, net 561 3,339 4,191 9,811
Cost of revenue:        
Total cost of revenue [1] $ 5,984 $ 6,237 $ 17,857 $ 18,596
[1] Includes stock-based compensation expense as follows:
 Three Months Ended September 30,Nine Months Ended September 30,
 2019201820192018
Cost of revenue:
Cost of subscription$180  $322  $595  $795  
Cost of professional services and other236  322  737  938  
Sales and marketing678  699  1,967  3,155  
Research and development1,294  1,798  4,731  5,360  
General and administrative625  1,129  3,817  3,761  
v3.19.3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Subscription        
Stock-based compensation expense $ 180 $ 322 $ 595 $ 795
Professional services and other        
Stock-based compensation expense 236 322 737 938
Sales and marketing        
Stock-based compensation expense 678 699 1,967 3,155
Research and development        
Stock-based compensation expense 1,294 1,798 4,731 5,360
General and administrative        
Stock-based compensation expense $ 625 $ 1,129 $ 3,817 $ 3,761
v3.19.3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Sep. 30, 2019
Sep. 30, 2018
Statement of Comprehensive Income [Abstract]        
Net loss $ (9,336) $ (7,265) $ (28,256) $ (35,667)
Other comprehensive income:        
Net change in unrealized gain on available-for-sale marketable securities 0 3 7 16
Other comprehensive income 0 3 7 16
Comprehensive loss $ (9,336) $ (7,262) $ (28,249) $ (35,651)
v3.19.3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Class A and B Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income (Loss)
Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017   134,539,275      
Beginning balance at Dec. 31, 2017 $ 211,557 $ 13 $ 586,900 $ (22) $ (375,334)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   2,881,870      
Exercise of stock options, net (in shares)   1,879,322      
Exercise of stock options, net 2,613 $ 1 2,612    
Stock-based compensation 14,145   14,145    
Comprehensive loss (35,651)     16 (35,667)
Ending balance (in shares) at Sep. 30, 2018   139,300,467      
Ending balance at Sep. 30, 2018 192,664 $ 14 603,657 (6) (411,001)
Beginning balance (in shares) at Jun. 30, 2018   137,729,010      
Beginning balance at Jun. 30, 2018 195,232 $ 14 598,963 (9) (403,736)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   1,219,444      
Exercise of stock options, net (in shares)   352,013      
Exercise of stock options, net 371   371    
Stock-based compensation 4,323   4,323    
Comprehensive loss (7,262)     3 (7,265)
Ending balance (in shares) at Sep. 30, 2018   139,300,467      
Ending balance at Sep. 30, 2018 192,664 $ 14 603,657 (6) (411,001)
Beginning balance (in shares) at Dec. 31, 2018   141,927,205      
Beginning balance at Dec. 31, 2018 $ 194,671 $ 14 609,697 0 (415,040)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   3,004,471      
Exercise of stock options, net (in shares) 1,234,290 1,234,290      
Exercise of stock options, net $ 1,924 $ 1 1,923    
Stock-based compensation 11,953   11,953    
Comprehensive loss (28,249)     7 (28,256)
Ending balance (in shares) at Sep. 30, 2019   146,165,966      
Ending balance at Sep. 30, 2019 180,299 $ 15 623,573 7 (443,296)
Beginning balance (in shares) at Jun. 30, 2019   145,198,887      
Beginning balance at Jun. 30, 2019 186,510 $ 14 620,449 7 (433,960)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   913,573      
Exercise of stock options, net (in shares)   53,506      
Exercise of stock options, net 79 $ 1 78    
Stock-based compensation 3,046   3,046    
Comprehensive loss (9,336)       (9,336)
Ending balance (in shares) at Sep. 30, 2019   146,165,966      
Ending balance at Sep. 30, 2019 $ 180,299 $ 15 $ 623,573 $ 7 $ (443,296)
v3.19.3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2019
Sep. 30, 2018
Operating activities:    
Net loss $ (28,256) $ (35,667)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 4,368 5,271
Stock-based compensation 11,847 14,009
Amortization and impairment of deferred commissions 7,403 9,017
Amortization and impairment of deferred professional service costs 3,110 3,351
Non-cash operating lease expense 3,919  
Lease exit and related charges 0 2,070
Accretion and amortization of marketable securities (244) (392)
Changes in operating assets and liabilities:    
Accounts receivable and other, net (8,626) (8,302)
Deferred commissions (4,503) (5,180)
Deferred professional service costs (1,301) (2,110)
Prepaid expenses and other assets (822) (1,119)
Accounts payable 2,378 1,745
Operating lease liabilities (4,267)  
Accrued expenses and other liabilities (3,072) 1,645
Deferred revenue (2,890) (2,315)
Accrued compensation (428) (8,080)
Net cash used in operating activities (21,384) (26,057)
Investing activities:    
Purchase of property and equipment (712) (1,895)
Purchase of marketable securities (23,069) (25,430)
Maturities of marketable securities 14,670 36,350
Net cash (used in) provided by investing activities (9,111) 9,025
Financing activities:    
Proceeds from exercise of stock options 1,924 2,613
Principal payments on long-term debt (1,394) 0
Net cash provided by financing activities 530 2,613
Net decrease in cash, cash equivalents and restricted cash (29,965) (14,419)
Cash, cash equivalents and restricted cash at beginning of period 67,330 62,644
Cash, cash equivalents and restricted cash at end of period 37,365 48,225
Reconciliation of cash, cash equivalents and restricted cash:    
Total cash, cash equivalents and restricted cash $ 67,330 $ 62,644
v3.19.3
Organization and Description of Business
9 Months Ended
Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business Organization and Description of Business Castlight Health, Inc. (“Castlight” or “the Company”) offers a comprehensive software-as-a-service platform that simplifies health benefits navigation for millions of employees. The Castlight platform matches employees to the best resources their employers make available to them, whether they are healthy, actively seeking medical care, or managing a condition, and motivates them to take the best steps for their health. Castlight helps employers generate more value from their benefits investments by helping to improve outcomes, lower health care costs, and increase benefits satisfaction. In July 2019, the Company announced plans to market its technology beyond its current employer market to health plans and other potential buyers who interact with healthcare users at the point of their care. The Company was incorporated in the State of Delaware in January 2008. The Company's principal executive offices are located in San Francisco, California.
v3.19.3
Accounting Standards and Significant Accounting Policies
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Accounting Standards and Significant Accounting Policies Accounting Standards and Significant Accounting Policies
Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include Castlight and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity and cash flows. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 

Other than as described below, there have been no changes to the Company's significant accounting policies described in the Company's Annual Report that have had a material impact on the Company's consolidated financial statements and related notes.
Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to the determination of:

Variable consideration included in the transaction price of the Company’s contracts with customers;
The standalone selling price of the performance obligations in the Company’s contracts with customers;
Assumptions used in the valuation of certain equity awards;
The amortization period for deferred commissions and deferred professional services costs; and
Assumptions used in the calculation of right-of-use (“ROU”) assets and lease liabilities for operating leases, including lease terms and the Company’s incremental borrowing rate.

Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.

Summary of Significant Accounting Policies

Leases

The Company determines if an arrangement is a lease and its classification at lease inception. Operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the lease commencement date to
compute the present value of lease payments when the implicit rate is not readily determinable. ROU assets are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease amounts, less any lease incentives. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less. Lease terms do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Generally, lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company's lease agreements have both lease and non-lease components. The Company has elected to account for the non-lease components of its leases as part of their related lease components.

Concentrations of Risk and Significant Customers

No single direct customer accounted for more than 10% of total revenue during the three and nine months ended September 30, 2019 or more than 10% of accounts receivable as of September 30, 2019. Castlight had one channel partner, Anthem, Inc. (“Anthem”), that represented approximately 29% and 26% of total revenue during the three and nine months ended September 30, 2019, respectively, and approximately 41% of accounts receivable as of September 30, 2019.

Recently Adopted Accounting Pronouncements

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases, and subsequent amendments ("ASC 842") using the modified retrospective method, and chose to apply the provisions at the beginning of the period of adoption. The guidance requires lessees to put all leases that have a term of more than one year on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term. 

As a result of the adoption of ASC 842 as of January 1, 2019, reporting periods beginning on and after January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with prior accounting guidance under ASC 840. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2019 an operating lease ROU asset of approximately $17.3 million and an operating lease liability of approximately $20.7 million. The difference between the operating lease ROU asset and lease liability resulted from the reclass of the deferred rent liability to the operating lease ROU asset. The standard did not materially impact the Company’s condensed consolidated statement of operations and had no impact on the cash flows. See Note 10 - Leases for more information on leases.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined that the ASUs issued by the FASB during the nine months ended September 30, 2019 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results.
v3.19.3
Revenue, Deferred Revenue, Contract Balances and Performance Obligations
9 Months Ended
Sep. 30, 2019
Revenue from Contract with Customer [Abstract]  
Revenue, Deferred Revenue, Contract Balances and Performance Obligations Revenue, Deferred Revenue, Contract Balances and Performance Obligations
The Company sells to customers based in the United States through direct sales and indirect channels. Indirect channel revenue represented approximately 31% and 13% of the Company’s total revenue for the three months ended September 30, 2019 and 2018, respectively. Indirect channel revenue represented approximately 28% and 11% of the Company’s total revenue for the nine months ended September 30, 2019 and 2018, respectively.

Deferred revenue as of September 30, 2019 and December 31, 2018 was $18.3 million and $21.2 million, respectively. Contract assets as of September 30, 2019 and December 31, 2018 were $1.1 million and $1.0 million, respectively.

$11.3 million and $16.0 million of revenue was recognized during the three months ended September 30, 2019 and 2018, respectively, that was included in the Company’s deferred revenue balances at the beginning of the respective periods. $18.5 million and $26.6 million of revenue was recognized during the nine months ended September 30, 2019 and 2018, respectively, that was included in the Company’s deferred revenue balances at the beginning of the respective periods.
The Company recorded unfavorable cumulative catch-up adjustments to revenue of $0.1 million during the three months ended September 30, 2019 and favorable cumulative catch-up adjustments to revenue of $0.7 million during the three months ended September 30, 2018, arising from changes in estimates of transaction price. The Company recorded favorable cumulative catch-up adjustments to revenue of $1.8 million during the nine months ended September 30, 2019 and favorable cumulative catch-up adjustments to revenue of $0.1 million during the nine months ended September 30, 2018, arising from changes in estimates of transaction price.

The aggregate balance of remaining performance obligations from non-cancelable contracts with customers as of September 30, 2019 was $121.9 million. The Company expects to recognize approximately 70% of this balance over the next 12 months, with the remaining balance recognized thereafter. Remaining performance obligations are defined as deferred revenue and amounts yet to be billed for the non-cancelable portion of contracts.
v3.19.3
Deferred Costs
9 Months Ended
Sep. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Costs Deferred Costs
Changes in the balance of total deferred commissions and total deferred professional service costs during the nine months ended September 30, 2019 are as follows (in thousands):
As of December 31, 2018Expense recognizedAs of September 30, 2019  
Additions
Deferred commissions$20,142  $4,503  $(7,403) $17,242  
Deferred professional service costs  10,133  1,406  (3,110) 8,429  
Total deferred commissions and professional service costs
$30,275  $5,909  $(10,513) $25,671  

 These costs are reviewed for impairment quarterly. Impairment charges, included in expense recognized above, were $0.2 million and $0.3 million for the three months ended September 30, 2019 and 2018, respectively, and were $0.8 million and $0.9 million for the nine months ended September 30, 2019 and 2018, respectively.
v3.19.3
Goodwill and Intangible Assets
9 Months Ended
Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Goodwill

Currently, all of the Company’s goodwill relates to the acquisition of Jiff. The excess of purchase consideration over the fair value of net tangible and identifiable intangible assets acquired was recorded as goodwill. There were no changes to goodwill for the three and nine months ended September 30, 2019.
Intangible assets, net

Identified intangible assets are recorded at their estimated fair values at the date of acquisition and are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are used. Subsequent to the end of second quarter of 2019, the Company realized elevated churn related to legacy Jiff customers. As a result, the Company performed an analysis of realized churn and future forecasts and updated its estimate of the original useful life of customer relationships and backlog in the third quarter of 2019. The estimated useful life of customer relationships was revised from 10 years to 6 years, and the estimated useful life of backlog was revised from 3 years to 2.5 years. These updates in useful lives have been accounted for as a change in accounting estimate and will be applied prospectively to the remaining carrying amounts.

The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands):
As of September 30, 2019
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900  $(2,980) $7,920  
Developed technology510,600  (5,300) 5,300  
Backlog2.51,500  (1,500) —  
Other acquired intangible assets1-3900  (867) 33  
Total identifiable intangible assets$23,900  $(10,647) $13,253  

As of December 31, 2018
Useful LifeGrossAccumulated AmortizationNet
Customer relationships10$10,900  $(1,908) $8,992  
Developed technology510,600  (3,710) 6,890  
Backlog31,500  (1,256) 244  
Other acquired intangible assets1-3900  (817) 83  
Total identifiable intangible assets$23,900  $(7,691) $16,209  

Amortization expense from acquired intangible assets for the three months ended September 30, 2019 and 2018 was $1.2 million and $1.0 million, respectively. Amortization expense from acquired intangible assets for the nine months ended September 30, 2019 and 2018 was $3.0 million and $3.1 million, respectively. Amortization expense is included in cost of subscription, sales and marketing, and general and administrative expenses.

Amortization expense for acquired intangible assets for the following five years is as follows (in thousands):
Remainder of 2019$1,075  
20204,248  
20214,232  
20222,642  
20231,056  
Total amortization expense$13,253  
v3.19.3
Marketable Securities
9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Marketable Securities Marketable Securities
All of the Company’s cash equivalents and marketable securities are classified as “available-for-sale” securities. These securities are reported at fair value, with the related unrealized gains and losses included in accumulated other comprehensive income, a component of stockholders’ equity, except for money market mutual funds, where gains and losses are included in the results of operations.

Marketable securities consisted of the following (in thousands):
As of September 30, 2019
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. treasury securities $9,504  $ $—  $9,507  
U.S. agency obligations10,466   —  10,470  
Money market mutual funds11,703  —  —  11,703  
31,673   —  31,680  
Included in cash and cash equivalents11,703  —  —  11,703  
Included in marketable securities$19,970  $ $—  $19,977  

As of December 31, 2018
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. treasury securities$7,980  $—  $—  $7,980  
U.S. agency obligations18,158  —  —  18,158  
Money market mutual funds7,115  —  —  7,115  
33,253  —  —  33,253  
Included in cash and cash equivalents21,926  —  —  21,926  
Included in marketable securities$11,327  $—  $—  $11,327  
v3.19.3
Fair Value Measurements
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value:
Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2—Include other inputs that are directly or indirectly observable in the marketplace.
Level 3—Unobservable inputs that are supported by little or no market activity.
The fair value of marketable securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from a third-party pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established third party pricing vendors and broker-dealers.
There have been no changes in valuation techniques in the periods presented. There were no significant transfers between fair value measurement levels as of September 30, 2019 and December 31, 2018. As of September 30, 2019 and December 31, 2018, there were no securities within Level 3 of the fair value hierarchy.
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands):
As of September 30, 2019
Level 1Level 2Total
Cash equivalents:
Money market mutual funds$11,703  $—  $11,703  
Marketable securities:
U.S. treasury securities—  9,507  9,507  
U.S. agency obligations—  10,470  10,470  
$11,703  $19,977  $31,680  
 
As of December 31, 2018
Level 1Level 2Total
Cash equivalents:
U.S. agency obligations $—  $14,811  $14,811  
Money market mutual funds7,115  —  7,115  
Marketable securities:
U.S. treasury securities—  7,980  7,980  
U.S. agency obligations—  3,347  3,347  
$7,115  $26,138  $33,253  
Gross unrealized gains and losses for cash equivalents and marketable securities as of September 30, 2019 and December 31, 2018 were not material. The Company does not believe the unrealized losses represent other-than-temporary impairments based on the Company’s evaluation of available evidence as of September 30, 2019 and December 31, 2018.
There were no realized gains or losses during the three and nine months ended September 30, 2019. All of the Company’s securities as of September 30, 2019 and December 31, 2018 mature within one year.
v3.19.3
Property and Equipment
9 Months Ended
Sep. 30, 2019
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following (in thousands):
As of
 September 30, 2019December 31, 2018
Leasehold improvements$3,102  $3,102  
Computer equipment7,373  6,860  
Software1,110  1,097  
Internal-use software2,925  2,925  
Furniture and equipment1,085  1,018  
Total15,595  15,002  
Less: accumulated depreciation(12,277) (11,039) 
Property and equipment, net$3,318  $3,963  
Depreciation and amortization expense for the three months ended September 30, 2019 and 2018 was $0.5 million and $0.7 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2019 and 2018 was $1.4 million and $2.2 million, respectively. Depreciation and amortization are recorded on a straight-line basis.
v3.19.3
Debt
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Debt Debt
Term Loan

In connection with the Company’s acquisition of Jiff, on April 3, 2017, the Company, Jiff and Silicon Valley Bank (the “Bank”) agreed to refinance the existing term loan facility owed by Jiff to the Bank (the “Loan Agreement”) for approximately $5.6 million (the “Term Loan”). The Term Loan requires interest-only payments for the period May 2017 through September 2018, followed by 36 monthly payments of principal and interest. Obligations under the Term Loan accrue interest at a floating per annum rate equal to the greater of (A) the prime rate as published in the money rates section of The Wall Street Journal (“Prime Rate”) minus 1% or (B) 0%. Interest on the Term Loan is payable monthly. The maturity date of the Term Loan is September 1, 2021.

In addition to principal and interest payments, the Company is also required to pay $0.5 million as final payment on the earlier of maturity, termination or prepayment of the Term Loan. The Company accrues for the final payment over the life of the Term Loan using the effective interest method.

The future maturities of the Term Loan by year as of September 30, 2019 are as follows (in thousands):
Remainder of 2019$465  
20201,859  
2021(1)
1,395  
Total future maturities of debt3,719  
Less current maturities(2)
(1,859) 
Debt, non-current$1,860  
(1) Excludes the $0.5 million required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan.
(2) Classified within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2019.
In relation to the Loan Agreement, the Company is subject to certain reporting covenants. The Company was in compliance with all reporting covenants in the Loan Agreement related to the outstanding principal balance as of September 30, 2019.
v3.19.3
Leases
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Leases Leases
The Company’s principal commitments primarily consist of obligations under leases for office space and co-location facilities for data center capacity. The leases expire at various dates through 2025 and, in some cases, include renewal options. The exercise of the option is at the sole discretion of the Company. The Company subleases certain office facilities to third parties. These leases are classified as operating leases. The Company does not have finance leases. Information about these operating leases is disclosed in the following table (dollars in thousands):
Three Months Ended September 30, 2019Nine Months Ended September 30, 2019
Lease cost:
Operating lease cost$1,654  $4,942  
Variable lease cost (1)
206  586  
Short-term lease cost34  41  
Sublease income(680) (1,873) 
Total lease cost$1,214  $3,696  
Other information:
Operating cash flows used in the measurement of operating lease liabilities$5,290  
Weighted-average remaining lease term - operating leases (in years)
3.1
Weighted-average discount rate - operating leases
7.48 %
(1) Includes variable payments such as common area maintenance, property taxes and insurance.
Maturities of Lease Liabilities

As of September 30, 2019, the future minimum lease payments under non-cancellable operating leases are as follows (in thousands):
Remainder of 2019$1,795  
20206,524  
20215,355  
20223,050  
2023677  
2024 and later1,111  
Total lease payments (1)
18,512  
Less: Interest(2,041) 
Present value of lease liabilities16,471  
Less: current portion (5,897) 
Operating lease liabilities, non-current$10,574  
v3.19.3
Contingencies
9 Months Ended
Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies Legal Matters From time to time, the Company may become subject to other legal proceedings, claims or litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patents or other intellectual property rights. If an unfavorable outcome were to occur in litigation, the impact could be material to the Company’s business, financial condition, cash flow or results of operations, depending on the specific circumstances of the outcome. The Company accrues for loss contingencies when it is both probable that it will incur the loss and when it can reasonably estimate the amount of the loss or range of loss.
v3.19.3
Stock Compensation
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
Stock Compensation Stock Compensation
Restricted Stock Units (“RSUs”)

A summary of unvested restricted stock unit activity for the nine months ended September 30, 2019 is as follows:
Number of
Shares
Weighted-
Average
Grant Date Fair Value
Balance as of December 31, 20189,528,602  $3.54  
Granted (1)
9,334,664  $2.51  
Vested(3,004,471) $3.77  
Forfeited and canceled (2) (3)
(3,502,993) $3.42  
Balance as of September 30, 201912,355,802  $2.71  
(1) Includes 896,553 performance stock units ("PSUs") that were granted during the nine months ended September 30, 2019.
(2) Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
(3) Includes market-based RSUs that were granted in the current year, which were canceled due to employee termination.
As of September 30, 2019, there was a total of $30.8 million in unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of approximately 2.8 years.
The Company granted 519,000 market-based RSUs during the second quarter of 2019. No market-based RSUs were granted in prior periods or during the third quarter of 2019. The market-based RSUs vest based on the Company achieving certain stock price thresholds, subject to the employee’s continued employment with the Company through the date of achievement. The fair value was based on values calculated under the Monte Carlo simulation model on the grant date and recognized over the derived service period. Compensation cost is not adjusted in future periods for subsequent changes in the expected outcome of market related conditions. During the third quarter of 2019, the Company reversed approximately $0.4 million of stock compensation expense that was previously recognized in connection with this award, upon the employee's termination in the third quarter.

The Company granted 896,553 PSUs during the third quarter of 2019. The number of shares that will eventually vest depends on achievement of certain performance targets, as determined by the compensation committee of the Company's board of directors. Once the performance is determined, the PSUs, if any, will vest, subject to recipients' continued service, on the later of (i) the attainment of the performance targets and (ii) a year after the grant date. The compensation expense associated with the PSUs is recognized using the accelerated method. For the three and nine months ended September 30, 2019, the Company recognized compensation expense of approximately $0.1 million and $0.3 million, respectively, related to these performance awards and performance awards granted in 2018.
Stock Options
A summary of stock option activity for the nine months ended September 30, 2019 is as follows: 
Options
Outstanding
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value (in thousands)
Balance as of December 31, 20186,265,223  $2.65  $3,499  
Granted2,792,000  $1.70  
Exercised(1,234,290) $1.56  
Forfeited and canceled(367,391) $3.27  
Balance as of September 30, 20197,455,542  $2.45  $760  
The total grant-date fair value of stock options granted during the nine months ended September 30, 2019 and 2018 was $2.6 million and $0.3 million, respectively.
The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-valuation model with the following assumptions and fair value per share:
 Nine Months Ended September 30, 2019
 20192018
Volatility57 % 58%  57%  
Expected life (in years)6.066.06
Risk-free interest rate1.62 % 2.57%  2.72 % 2.74%  
Dividend yield—  —  
As of September 30, 2019, the Company had $2.7 million in unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 3.6 years. 
Employee Stock Purchase Plan
In March 2014, the Company's Board of Directors adopted and its stockholders approved the 2014 Employee Stock Purchase Plan ("the ESPP"). A total of 6,000,000 shares of Class B common stock were initially reserved and available for issuance under the ESPP. The ESPP provides for an initial three-month offering period commencing December 1, 2019, and for regular six-month offering periods beginning each March 1 and September 1 thereafter. On each purchase date, ESPP participants will purchase shares of the Company’s Class B common stock at a price per share equal to 85% of the lesser of (1)
the fair market value of the Class B common stock on the offering date or (2) the fair market value of the Class B common stock on the purchase date.
The Company will begin recognizing stock-based compensation expense for the ESPP in the fourth quarter of 2019.
v3.19.3
Income Taxes
9 Months Ended
Sep. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes The effective tax rate for each of the three and nine months ended September 30, 2019 and 2018 was zero percent, primarily as a result of the estimated tax loss for the year and the change in valuation allowance. At September 30, 2019, all unrecognized tax benefits are subject to a full valuation allowance and, if recognized, will not affect the effective tax rate.
v3.19.3
Net Loss per Share
9 Months Ended
Sep. 30, 2019
Earnings Per Share [Abstract]  
Net Loss per Share Net Loss per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including outstanding stock options and warrants, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.
Net loss is allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the net loss is allocated on a proportionate basis.

The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except per share data):
 Three Months Ended September 30,Nine Months Ended September 30,
 2019201820192018
Class A  Class B  Class A  Class B  Class A  Class B  Class A  Class B  
Net loss$(2,245) $(7,091) $(2,260) $(5,005) $(7,009) $(21,247) $(12,850) $(22,817) 
Weighted-average shares used to compute basic and diluted net loss per share
35,041  110,660  43,085  95,405  35,827  108,607  49,262  87,473  
Basic and diluted net loss per share
$(0.06) $(0.06) $(0.05) $(0.05) $(0.20) $(0.20) $(0.26) $(0.26) 
The following securities were excluded from the calculation of diluted net loss per share for common stock because their effect would have been anti-dilutive for the periods presented (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2019201820192018
Stock options and restricted stock units
19,811  19,588  19,811  19,588  
Warrants115  115  115  115  
Total19,926  19,703  19,926  19,703  
v3.19.3
Reduction in Workforce
9 Months Ended
Sep. 30, 2019
Restructuring and Related Activities [Abstract]  
Reduction in Workforce Reduction in Workforce On July 30, 2018, the Company announced its intent to undertake a program to reduce its workforce in order to decrease expenses, align its operations with evolving business needs and improve efficiencies. This was in part due to the unexpected churn of a large customer. Under this program, the Company undertook an initiative to reduce its workforce by approximately 12%. For the three months ended September 30, 2018, the Company incurred charges of approximately $2.1 million for this reduction, all of which related to severance costs. As of September 30, 2018, $1.4 million of the total was paid out, and the remaining balance of $0.7 million was paid in the fourth quarter of 2018.
v3.19.3
Subsequent Event
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
Subsequent Event Subsequent EventIn October 2019, the Company entered into an agreement with Anthem, pursuant to which the Company will provide certain services to Anthem. For these services, Anthem will pay the Company license fees of $168 million over 30 months, starting January 1, 2020.
v3.19.3
Accounting Standards and Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2019
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include Castlight and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity and cash flows. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018. 

Other than as described below, there have been no changes to the Company's significant accounting policies described in the Company's Annual Report that have had a material impact on the Company's consolidated financial statements and related notes.
Use of Estimates
Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. These estimates include, but are not limited to the determination of:

Variable consideration included in the transaction price of the Company’s contracts with customers;
The standalone selling price of the performance obligations in the Company’s contracts with customers;
Assumptions used in the valuation of certain equity awards;
The amortization period for deferred commissions and deferred professional services costs; and
Assumptions used in the calculation of right-of-use (“ROU”) assets and lease liabilities for operating leases, including lease terms and the Company’s incremental borrowing rate.

Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.
Leases
Leases

The Company determines if an arrangement is a lease and its classification at lease inception. Operating lease liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the lease commencement date to
compute the present value of lease payments when the implicit rate is not readily determinable. ROU assets are measured at lease inception based on the initial measurement of the lease liability, plus any prepaid lease amounts, less any lease incentives. The Company does not recognize ROU assets or lease liabilities for leases with a term of 12 months or less. Lease terms do not include options to extend or terminate the lease unless it is reasonably certain that the option will be exercised. Generally, lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company's lease agreements have both lease and non-lease components. The Company has elected to account for the non-lease components of its leases as part of their related lease components.
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements Recently Adopted Accounting Pronouncements
Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) 2016-02, Leases, and subsequent amendments ("ASC 842") using the modified retrospective method, and chose to apply the provisions at the beginning of the period of adoption. The guidance requires lessees to put all leases that have a term of more than one year on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-of-use ("ROU") asset for the right to use the underlying asset for the lease term. 

As a result of the adoption of ASC 842 as of January 1, 2019, reporting periods beginning on and after January 1, 2019 are presented under ASC 842, while prior period amounts were not adjusted and continue to be reported in accordance with prior accounting guidance under ASC 840. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. As a result of the adoption of the new lease accounting guidance, the Company recognized on January 1, 2019 an operating lease ROU asset of approximately $17.3 million and an operating lease liability of approximately $20.7 million. The difference between the operating lease ROU asset and lease liability resulted from the reclass of the deferred rent liability to the operating lease ROU asset. The standard did not materially impact the Company’s condensed consolidated statement of operations and had no impact on the cash flows. See Note 10 - Leases for more information on leases.

Recently Issued Accounting Pronouncements

The Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined that the ASUs issued by the FASB during the nine months ended September 30, 2019 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results.
v3.19.3
Deferred Costs (Tables)
9 Months Ended
Sep. 30, 2019
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Changes in Balance of Total Deferred Commissions and Total Deferred Professional Service Costs
Changes in the balance of total deferred commissions and total deferred professional service costs during the nine months ended September 30, 2019 are as follows (in thousands):
As of December 31, 2018Expense recognizedAs of September 30, 2019  
Additions
Deferred commissions$20,142  $4,503  $(7,403) $17,242  
Deferred professional service costs  10,133  1,406  (3,110) 8,429  
Total deferred commissions and professional service costs
$30,275  $5,909  $(10,513) $25,671  
v3.19.3
Goodwill and Intangible Assets (Tables)
9 Months Ended
Sep. 30, 2019
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Finite-Lived Intangible Assets
The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands):
As of September 30, 2019
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900  $(2,980) $7,920  
Developed technology510,600  (5,300) 5,300  
Backlog2.51,500  (1,500) —  
Other acquired intangible assets1-3900  (867) 33  
Total identifiable intangible assets$23,900  $(10,647) $13,253  

As of December 31, 2018
Useful LifeGrossAccumulated AmortizationNet
Customer relationships10$10,900  $(1,908) $8,992  
Developed technology510,600  (3,710) 6,890  
Backlog31,500  (1,256) 244  
Other acquired intangible assets1-3900  (817) 83  
Total identifiable intangible assets$23,900  $(7,691) $16,209  
Schedule of Amortization Expense for Acquired Intangible Assets
Amortization expense for acquired intangible assets for the following five years is as follows (in thousands):
Remainder of 2019$1,075  
20204,248  
20214,232  
20222,642  
20231,056  
Total amortization expense$13,253  
v3.19.3
Marketable Securities (Tables)
9 Months Ended
Sep. 30, 2019
Investments, Debt and Equity Securities [Abstract]  
Available-for-sale Securities
Marketable securities consisted of the following (in thousands):
As of September 30, 2019
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. treasury securities $9,504  $ $—  $9,507  
U.S. agency obligations10,466   —  10,470  
Money market mutual funds11,703  —  —  11,703  
31,673   —  31,680  
Included in cash and cash equivalents11,703  —  —  11,703  
Included in marketable securities$19,970  $ $—  $19,977  

As of December 31, 2018
Amortized
Cost
Unrealized
Gains
Unrealized
Losses
Fair Value
U.S. treasury securities$7,980  $—  $—  $7,980  
U.S. agency obligations18,158  —  —  18,158  
Money market mutual funds7,115  —  —  7,115  
33,253  —  —  33,253  
Included in cash and cash equivalents21,926  —  —  21,926  
Included in marketable securities$11,327  $—  $—  $11,327  
v3.19.3
Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2019
Fair Value Disclosures [Abstract]  
Fair Value, Assets Measured on Recurring Basis
The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands):
As of September 30, 2019
Level 1Level 2Total
Cash equivalents:
Money market mutual funds$11,703  $—  $11,703  
Marketable securities:
U.S. treasury securities—  9,507  9,507  
U.S. agency obligations—  10,470  10,470  
$11,703  $19,977  $31,680  
 
As of December 31, 2018
Level 1Level 2Total
Cash equivalents:
U.S. agency obligations $—  $14,811  $14,811  
Money market mutual funds7,115  —  7,115  
Marketable securities:
U.S. treasury securities—  7,980  7,980  
U.S. agency obligations—  3,347  3,347  
$7,115  $26,138  $33,253  
v3.19.3
Property and Equipment (Tables)
9 Months Ended
Sep. 30, 2019
Property, Plant and Equipment [Abstract]  
Property, Plant and Equipment
Property and equipment consisted of the following (in thousands):
As of
 September 30, 2019December 31, 2018
Leasehold improvements$3,102  $3,102  
Computer equipment7,373  6,860  
Software1,110  1,097  
Internal-use software2,925  2,925  
Furniture and equipment1,085  1,018  
Total15,595  15,002  
Less: accumulated depreciation(12,277) (11,039) 
Property and equipment, net$3,318  $3,963  
v3.19.3
Debt (Tables)
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Maturities of Long-term Debt
The future maturities of the Term Loan by year as of September 30, 2019 are as follows (in thousands):
Remainder of 2019$465  
20201,859  
2021(1)
1,395  
Total future maturities of debt3,719  
Less current maturities(2)
(1,859) 
Debt, non-current$1,860  
(1) Excludes the $0.5 million required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan.
(2) Classified within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2019.
v3.19.3
Leases (Tables)
9 Months Ended
Sep. 30, 2019
Leases [Abstract]  
Information About Operating Leases Information about these operating leases is disclosed in the following table (dollars in thousands):
Three Months Ended September 30, 2019Nine Months Ended September 30, 2019
Lease cost:
Operating lease cost$1,654  $4,942  
Variable lease cost (1)
206  586  
Short-term lease cost34  41  
Sublease income(680) (1,873) 
Total lease cost$1,214  $3,696  
Other information:
Operating cash flows used in the measurement of operating lease liabilities$5,290  
Weighted-average remaining lease term - operating leases (in years)
3.1
Weighted-average discount rate - operating leases
7.48 %
(1) Includes variable payments such as common area maintenance, property taxes and insurance.
Maturities of Lease Liabilities
As of September 30, 2019, the future minimum lease payments under non-cancellable operating leases are as follows (in thousands):
Remainder of 2019$1,795  
20206,524  
20215,355  
20223,050  
2023677  
2024 and later1,111  
Total lease payments (1)
18,512  
Less: Interest(2,041) 
Present value of lease liabilities16,471  
Less: current portion (5,897) 
Operating lease liabilities, non-current$10,574  
(1) In October 2019, the Company entered into a lease agreement, which commenced in the same month, for an office space in Salt Lake City, Utah. The lease agreement stipulates monthly payments over five years with total minimum lease payments of approximately $3.4 million and is excluded from the table above.
v3.19.3
Stock Compensation (Tables)
9 Months Ended
Sep. 30, 2019
Share-based Payment Arrangement [Abstract]  
Schedule of Other Share-based Compensation, Activity
A summary of unvested restricted stock unit activity for the nine months ended September 30, 2019 is as follows:
Number of
Shares
Weighted-
Average
Grant Date Fair Value
Balance as of December 31, 20189,528,602  $3.54  
Granted (1)
9,334,664  $2.51  
Vested(3,004,471) $3.77  
Forfeited and canceled (2) (3)
(3,502,993) $3.42  
Balance as of September 30, 201912,355,802  $2.71  
(1) Includes 896,553 performance stock units ("PSUs") that were granted during the nine months ended September 30, 2019.
(2) Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
(3) Includes market-based RSUs that were granted in the current year, which were canceled due to employee termination.
Schedule of Share-based Compensation, Stock Options, Activity
A summary of stock option activity for the nine months ended September 30, 2019 is as follows: 
Options
Outstanding
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value (in thousands)
Balance as of December 31, 20186,265,223  $2.65  $3,499  
Granted2,792,000  $1.70  
Exercised(1,234,290) $1.56  
Forfeited and canceled(367,391) $3.27  
Balance as of September 30, 20197,455,542  $2.45  $760