CASTLIGHT HEALTH, INC., 10-Q filed on 4/28/2017
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2017
Apr. 24, 2017
Class A [Member]
Apr. 24, 2017
Class B [Member]
Class of Stock [Line Items]
 
 
 
Document Type
10-Q 
 
 
Amendment Flag
false 
 
 
Document Period End Date
Mar. 31, 2017 
 
 
Document Fiscal Year Focus
2017 
 
 
Document Fiscal Period Focus
Q1 
 
 
Trading Symbol
CSLT 
 
 
Entity Registrant Name
CASTLIGHT HEALTH, INC. 
 
 
Entity Central Index Key
0001433714 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Accelerated Filer 
 
 
Entity Common Stock, Shares Outstanding
 
54,288,009 
76,226,187 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Current assets:
 
 
Cash and cash equivalents
$ 56,198 
$ 48,722 
Marketable securities
47,007 
65,882 
Accounts receivable, net
16,497 
14,806 
Deferred commissions
7,861 
8,218 
Prepaid expenses and other current assets
4,578 
3,382 
Total current assets
132,141 
141,010 
Property and equipment, net
5,106 
5,285 
Restricted cash, noncurrent
1,144 
1,144 
Deferred commissions, noncurrent
3,734 
5,050 
Other assets
5,276 
4,677 
Total assets
147,401 
157,166 
Current liabilities:
 
 
Accounts payable
2,462 
2,288 
Accrued expenses and other current liabilities
5,344 
6,369 
Accrued compensation
6,111 
9,443 
Deferred revenue
33,576 
30,623 
Total current liabilities
47,493 
48,723 
Deferred revenue, noncurrent
5,379 
5,245 
Other liabilities, noncurrent
1,193 
1,236 
Total liabilities
54,065 
55,204 
Commitments and contingencies
   
   
Stockholders’ equity (deficit):
 
 
Additional paid-in capital
464,151 
457,596 
Accumulated other comprehensive income
(19)
0 
Accumulated deficit
(370,806)
(355,644)
Total stockholders’ equity (deficit)
93,336 
101,962 
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)
147,401 
157,166 
Class A [Member]
 
 
Stockholders’ equity (deficit):
 
 
Common stock value issued
$ 10 
$ 10 
Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Revenue:
 
 
Subscription
$ 25,766 
$ 21,037 
Professional services
1,979 
1,680 
Total revenue
27,745 
22,717 
Cost of revenue:
 
 
Cost of subscription
4,246 1
4,136 1
Cost of professional services
3,988 1
5,113 1
Total cost of revenue
8,234 
9,249 
Gross profit
19,511 
13,468 
Operating expenses:
 
 
Sales and marketing
14,443 1
16,282 1
Research and development
11,071 1
10,085 1
General and administrative
8,998 1
8,545 1
Total operating expenses
34,512 
34,912 
Operating loss
(15,001)
(21,444)
Other income, net
192 
89 
Net loss
$ (14,809)
$ (21,355)
Net loss per Class A and B share, basic and diluted
$ (0.14)
$ (0.22)
Weighted-average shares used to compute basic and diluted net loss per Class A and B share
104,935 
96,291 
Consolidated Statements of Operations Parenthetical (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Cost of subscription [Member]
 
 
Allocated Share-based Compensation Expense
$ 127 
$ 108 
Cost of professional services [Member]
 
 
Allocated Share-based Compensation Expense
461 
477 
Sales and marketing [Member]
 
 
Allocated Share-based Compensation Expense
2,154 
2,235 
Research and development [Member]
 
 
Allocated Share-based Compensation Expense
1,790 
1,405 
General and administrative [Member]
 
 
Allocated Share-based Compensation Expense
$ 1,295 
$ 1,269 
Consolidated Statements of Comprehensive Loss (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
 
 
Net loss
$ (14,809)
$ (21,355)
Other comprehensive income:
 
 
Net change in unrealized (loss) gain on available-for-sale marketable securities
(19)
103 
Other comprehensive (loss) income
(19)
103 
Comprehensive loss
$ (14,828)
$ (21,252)
Consolidated Statements of Cash Flows (USD $)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Operating activities:
 
 
Net loss
$ (14,809,000)
$ (21,355,000)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
Depreciation and amortization
698,000 
783,000 
Stock-based compensation
5,827,000 
5,494,000 
Amortization of deferred commissions
2,089,000 
1,162,000 
Accretion and amortization of marketable securities
64,000 
176,000 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(1,691,000)
(1,282,000)
Deferred commissions
(416,000)
(289,000)
Prepaid expenses and other assets
(1,183,000)
36,000 
Accounts payable
177,000 
605,000 
Accrued expenses and other liabilities
(4,755,000)
(3,732,000)
Deferred revenue
3,087,000 
4,412,000 
Net cash used in operating activities
(10,912,000)
(13,990,000)
Investing activities:
 
 
Investment in related party
(1,000,000)
 
Purchase of property and equipment
(166,000)
(466,000)
Purchase of marketable securities
(16,007,000)
(29,486,000)
Maturities of marketable securities
34,799,000 
58,637,000 
Net cash provided by investing activities
18,626,000 
28,685,000 
Financing activities:
 
 
Proceeds from the exercise of stock options
374,000 
1,266,000 
Payments of issuance costs related to equity
(612,000)
0 
Net cash (used in) provided by financing activities
(238,000)
1,266,000 
Net increase in cash and cash equivalents
7,476,000 
15,961,000 
Cash and cash equivalents at beginning of period
48,722,000 
 
Cash and cash equivalents at end of period
$ 56,198,000 
 
Organization and Description of Business
Organization and Description of Business
Organization and Description of Business
Description of Business
Castlight Health Inc. ("the Company") offers a health benefits platform that engages employees to make better health care decisions and enables employers to communicate and measure their benefit programs. The Company provides a simple, personalized, and powerful way for employees to shop for and manage their health care. At the same time, the Company enables employers to understand their employees’ needs and guide them to the right care, right providers and right programs at the right time. On April 3, 2017, the Company completed its acquisition of Jiff, Inc. The acquisition enables the Company to provide the full spectrum of wellbeing, healthcare decision support and benefits hub all in one complete package. The Company's comprehensive technology offering aggregates complex, large-scale data and applies sophisticated analytics to make health care data actionable and useful. The Company was incorporated in the State of Delaware in January 2008. The Company's principal executive offices are located in San Francisco, California.
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”), Regulation S-X. 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 and cash flows. The condensed consolidated financial statements include the results of Castlight and its wholly owned U.S. subsidiary. The results for the interim periods presented are not necessarily indicative of the results expected for any future period.
The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date. 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, 2016. There have been no changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K that have had a material impact on its condensed 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 the relative selling prices for the Company’s products and services, certain assumptions used in the valuation of the Company’s equity awards, annual bonus attainment and the capitalization and estimated useful life of internal-use software development costs. Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.
Recently Issued and Adopted Accounting Pronouncements
Stock-based Compensation
In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment.” The guidance will change how companies account for certain aspects of share-based payments to employees. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted this guidance on January 1, 2017 and accordingly recorded a cumulative-effect adjustment charge of approximately $0.4 million to the beginning accumulated deficit for the impact of electing to account for forfeiture as it occurs. The adoption of this standard did not have any impact to the Statement of Operations or the Statement of Cash Flows. The Company is subject to full valuation allowance and thus has not utilized any excess tax benefits or realized any cash tax benefit related to stock compensation expense.

Goodwill

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-4, “Intangibles—Goodwill and Other.” The standard eliminates Step 2 from the goodwill impairment test, under which an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, instead requiring an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The standard will become effective for the Company beginning January 1, 2020, and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. Based on the Company’s evaluation, the standard will not have a material impact on its consolidated financial statements.

Business Combinations

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-1, “Business Combinations.” The standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will become effective for the Company beginning January 1, 2018, and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. Based on the Company’s evaluation, the standard will not have a material impact on its consolidated financial statements.

Consolidation

In October 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-17, “Consolidation.” The standard addresses how companies evaluate whether a reporting entity is the primary beneficiary of a VIE by changing how the reporting entity that is a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The standard became effective for the Company beginning January 1, 2017. Based on the Company’s evaluation, the standard did not have a material impact on its consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases.” The guidance will require lessees to put all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The guidance will be effective for the Company beginning January 1, 2019 and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.     

Financial Instruments

In January 2016, the FASB issued ASU 2016-1, “Financial Instruments.” The guidance provides a new measurement alternative for equity investments that don’t have readily determinable fair values and don’t qualify for the net asset value practical expedient. Under this alternative, these investments can be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment if the same issuer. This guidance will be effective for the Company beginning January 1, 2018 and earlier adoption is not permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption at this point in time.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and has since updated the ASU. This ASU replaces existing revenue recognition standards with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. The new standard will be effective for the Company beginning January 1, 2018 with early adoption permitted beginning January 1, 2017. The Company has elected not to early adopt the new standard.

The new standard permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently plans to adopt under the full retrospective method. However, a final decision regarding the adoption method has not been finalized at this time.

The Company is currently assessing the impact of the new standard on its accounting policies, processes, and controls, including system requirements and has assigned internal resources and has also engaged a third party service provider to assist in its assessment.

Based on its assessment to date, the Company currently believes a significant impact from the adoption of the new standard will be related to the Company’s costs to fulfill as well as its costs to obtain contracts with customers. For fulfillment costs, the new standard states that an entity shall recognize an asset from the costs incurred to fulfill a contract if certain criteria are met. The Company believes these criteria will be met and these costs will be recognized as an asset under the new standard.  The costs to fulfill a contract that are recognized as an asset are then amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. The Company currently expenses costs to fulfill a contract when they are incurred. Similar to fulfillment costs, for costs to obtain a contract (which are primarily sales commissions), the standard states that costs to obtain a contract shall be amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. The Company currently capitalizes certain sales commissions and amortizes those costs over the non-cancelable portion of its subscription contracts. Under the new standard, the amortization period for the Company’s costs to obtain a contract could be longer. Lastly, based on its assessment, the Company currently believes areas of impact related to the Company’s revenue recognition will be related to the estimation of variable consideration, the accounting for contract modifications, and the allocation of the transaction price to the Company’s multiple performance obligations.

While the Company continues to assess the potential impacts of the new standard, including the areas described above, and anticipates the standard could have a material impact on its consolidated financial statements, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the new standard on the Company’s financial statements at this time.
Marketable Securities
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 shareholders’ equity.

At March 31, 2017 and December 31, 2016, respectively, marketable securities consisted of the following (in thousands):
 
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
March 31, 2017
 
 
 
 
 
 
 
U.S. agency obligations
$
44,999

 
$
—

 
$
(16
)
 
$
44,983

U.S. treasury securities
12,503

 
—

 
(3
)
 
12,500

Money market mutual funds
16,430

 
—

 
—

 
16,430

 
73,932

 
—

 
(19
)
 
73,913

Included in cash and cash equivalents
26,906

 
—

 
—

 
26,906

Included in marketable securities
$
47,026

 
$
—

 
$
(19
)
 
$
47,007


 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
December 31, 2016
 
 
 
 
 
 
 
U.S. agency obligations
$
33,019

 
$
5

 
$
(3
)
 
$
33,021

U.S. treasury securities
37,864

 
—

 
(2
)
 
37,862

Money market mutual funds
7,965

 
—

 
—

 
7,965

 
78,848

 
5

 
(5
)
 
78,848

Included in cash and cash equivalents
12,966

 
—

 
—

 
12,966

Included in marketable securities
$
65,882

 
$
5

 
$
(5
)
 
$
65,882

Fair Value Measurements
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. The Company has no financial assets or liabilities measured using Level 3 inputs. There were no significant transfers between Levels 1 and 2 assets as of March 31, 2017 and December 31, 2016. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
 
 
Level 1
 
Level 2
 
Total
March 31, 2017
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
16,430

 
$
—

 
$
16,430

U.S. agency obligations
—

 
10,476

 
10,476

Marketable securities:
 
 
 
 
 
U.S. agency obligations
—

 
34,507

 
34,507

U.S. treasury securities
—

 
12,500

 
12,500

 
$
16,430

 
$
57,483

 
$
73,913

 
 
Level 1
 
Level 2
 
Total
December 31, 2016
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
7,965

 
$
—

 
$
7,965

U.S. treasury securities
—

 
5,000

 
5,000

Marketable securities:
 
 
 
 
 
U.S. agency obligations
—

 
33,021

 
33,021

U.S. treasury securities
—

 
32,862

 
32,862

 
$
7,965


$
70,883


$
78,848


Gross unrealized gains and losses for cash equivalents and marketable securities as of March 31, 2017 and December 31, 2016 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 March 31, 2017 and December 31, 2016.
There were no realized gains or losses during the three months ended March 31, 2017. All of the Company’s marketable securities at March 31, 2017 and December 31, 2016 mature within one year. Marketable securities on the balance sheets consist of securities with original or remaining maturities at the time of purchase of greater than three months, and the remainder of the securities is reflected in cash and cash equivalents.
Property and equipment, net
Property and equipment
Property and Equipment
Property and equipment consisted of the following (in thousands):
 
As of
 
March 31, 2017
 
December 31, 2016
Leasehold improvements
$
2,482

 
$
2,061

Computer equipment
5,443

 
5,487

Software
1,079

 
1,099

Capitalization of internal-use software
2,925

 
2,925

Furniture and equipment
1,047

 
931

Total
12,976

 
12,503

Accumulated depreciation
(7,870
)
 
(7,218
)
Property and equipment, net
$
5,106

 
$
5,285


Depreciation and amortization expense for the three months ended March 31, 2017 and 2016, was $0.7 million and $0.8 million, respectively. Depreciation and amortization are recorded on a straight-line basis.
Related Party Transactions (Notes)
Related Party Transactions and Variable Interest Entity
Note 6. Related Party Transactions and Variable Interest Entity

Lyra Health    

In 2015, the Company made a preferred stock investment in Lyra Health (”Lyra”) of $4.1 million, associated with a strategic alliance with Lyra. Lyra is considered a related party to the Company because two of the Company’s directors, Dr. Roberts and Mr. Ebersman, serve on the Lyra board of directors and Mr. Ebersman is the Lyra chief executive officer. The Company has evaluated all its transactions with Lyra and has determined that Lyra is a variable interest entity (“VIE”) for the Company but that it is not required to consolidate the operations of the VIE. The Company’s maximum exposure to loss as a result of its involvement with this unconsolidated VIE is limited to its investment of $4.1 million and it is not obligated to provide incremental financial support to Lyra.

The investment in Lyra is accounted for under the cost method and is included under other assets in the Company’s consolidated financial statements. The Company has not estimated the fair value of its investment because there have been no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment. The Company assesses its investment for impairment on a quarterly basis or based on facts or circumstances that may require it to reassess the fair value of its investment. Based on the facts and circumstances as of March 31, 2017, the Company concluded that its investment was appropriately valued.

Jiff Acquisition

On April 3, 2017, the Company acquired Jiff, Inc. for approximately 27 million in shares and options. Bryan Roberts, Chairman of the board of directors of the Company prior to the completion of the merger, is a Partner at Venrock, which beneficially owns 16,825,301 shares of the Company's Class A and Class B common stock, or approximately 16% of Castlight’s total issued and outstanding capital stock. Venrock also owns 8,040,910 shares of Jiff capital stock, or approximately 18% of the total issued and outstanding Jiff capital stock. Accordingly, this is a related party transaction.
Commitments and Contingencies
Commitments and Contingencies
Commitments and 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.
    
Leases and Contractual Obligations

The Company’s principal commitments primarily consist of obligations under leases for office space and co-location facilities for data center capacity. The Company’s existing lease agreements provide it with the option to renew and generally provide for rental payments on a graduated basis. The Company’s future operating lease obligations would change if it entered into additional operating lease agreements as the Company expands its operations and if it exercised these options.

There were no material changes in the Company’s contractual obligations from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2016. Please see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in the Company’s Annual Report on Form 10-K for a description of its contractual obligations.
Stock Compensation
Shareholders' Equity and Share-based Payments [Text Block] 
Stock Compensation
Stock Options Activity
A summary of stock option activity for the three months ended March 31, 2017 is as follows (in thousands, except share and per share amounts): 
 
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
Balance at December 31, 2016
7,642,953

 
$
3.71

 
$
18,537

Stock option grants
—

 
$
—

 
 
Stock options exercised
(273,769
)
 
$
1.37

 
 
Stock options canceled
(176,980
)
 
$
3.23

 
 
Balance at March 31, 2017
7,192,204

 
$
3.81

 
$
9,232


The total grant-date fair value of stock options granted during the three months ended March 31, 2017 and 2016 was $0.0 million and $2.5 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:
 
Three Months Ended March 31,
 
2017
 
2016
Volatility
—%
 
45%
Expected life (in years)
—
 
6.0
Risk-free interest rate
—%
 
1.37%
Dividend yield
—%
 
—%

As of March 31, 2017, the Company had $8.6 million in unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 2.0 years.    
Restricted Stock Units

A summary of restricted stock unit activity for the three months ended March 31, 2017 is as follows:
 
Number of
Shares
Outstanding
 
Weighted-
Average
Grant Date Fair Value
Balance at December 31, 2016
10,541,666

 
$
4.82

Restricted Stock Units granted (1)
1,420,200

 
$
3.22

Restricted Stock Units vested
(832,288
)
 
$
3.63

Restricted Stock Units forfeited/canceled (2)
(1,388,897
)
 
$
3.94

Balance at March 31, 2017
9,740,681

 
$
4.71

(1) Includes performance stock units (“PSUs”) that were granted in the three months ended March 31, 2017.
(2) Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
As of March 31, 2017, there was a total of $41.1 million in unrecognized compensation cost related to restricted stock units and performance stock units, which is expected to be recognized over a weighted-average period of approximately 2.73 years.

During 2017, the Company awarded PSUs to certain employees. The number of shares that will eventually vest depends on achievement of performance targets for 2017, as determined by the compensation committee of the Company's board of directors, and may range from 0 to 150% of the targeted award amount. Once the performance is determined and a targeted award amount is fixed, the target number of PSUs, if any, will vest in eight quarterly installments, subject to recipients' continued service, beginning on February 15, 2018. The compensation expense associated with the PSUs is recognized using the accelerated method. For the period ended March 31, 2017, the Company has recognized approximately $0.3 million related to all performance awards.
Stockholders' Equity 
A summary of restricted stock unit activity for the three months ended March 31, 2017 is as follows:
 
Number of
Shares
Outstanding
 
Weighted-
Average
Grant Date Fair Value
Balance at December 31, 2016
10,541,666

 
$
4.82

Restricted Stock Units granted (1)
1,420,200

 
$
3.22

Restricted Stock Units vested
(832,288
)
 
$
3.63

Restricted Stock Units forfeited/canceled (2)
(1,388,897
)
 
$
3.94

Balance at March 31, 2017
9,740,681

 
$
4.71

(1) Includes performance stock units (“PSUs”) that were granted in the three months ended March 31, 2017.
(2) Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
Stockholders' Equity (Notes)
Stockholders’ Equity
Note 9. Stockholders’ Equity
Common Stock
As of March 31, 2017, the Company had 54,288,009 shares of Class A common stock and 51,128,971 shares of Class B common stock outstanding.
Transactions with SAP Technologies, Inc.

In May 2016, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with SAP Technologies, Inc. (“SAP”) pursuant to which it sold and issued to SAP approximately 4.7 million shares (“Shares”) of its Class B Common Stock and a warrant (“Warrant”) to purchase up to approximately 1.9 million shares of its Class B Common Stock. The net proceeds from this transaction were $17.8 million and will be used for working capital and other general corporate purposes.
The exercise price of the Warrant remains at $4.91 per share and will expire four years from the date the Company enters into an agreement with SAP related to the distribution and the reselling of the Company’s solutions (the “Alliance Agreement”). The Alliance Agreement will be focused on a strategic, multi-pronged business relationship aimed at delivering integrated healthcare technologies that can help lower healthcare costs, improve outcomes and increase benefits satisfaction for customers.

The Shares and Warrant are considered freestanding instruments from each other and are classified within stockholders’ equity. The Company preliminarily allocated the net proceeds to the Shares and Warrant and also to a customer prepayment liability classified within accrued expenses and other current liabilities that represents the future benefits of the Alliance Agreement. Additional accounting for the Warrants and the customer prepayment liability is dependent on, if and when, the Alliance Agreement is executed.
In the second quarter of 2017, the Company and SAP modified the Warrant to extend the time period allowed to execute the Alliance Agreement from May 17, 2017 to November 17, 2017. If the Company does not enter into the Alliance Agreement with SAP by that time, then the Warrant will become void. The warrant is not exercisable until the Alliance Agreement is signed. The Company will update its preliminary allocation of the net proceeds in the second quarter as a result of this modification.
Income Taxes
Income Taxes
Income Taxes
The effective tax rate for the three months ended March 31, 2017 and 2016 was zero percent, primarily as a result of the estimated tax loss for the year and the change in valuation allowance. At March 31, 2017, all unrecognized tax benefits are subject to a full valuation allowance and, if recognized, will not affect the effective tax rate.
Net Loss per Share
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 Preferred Stock and 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 March 31,
 
2017
 
2016
 
Class A
 
Class B
 
Class A
 
Class B
Net loss
$
(7,661
)
 
$
(7,148
)
 
$
(12,091
)
 
$
(9,264
)
Weighted-average shares used to compute basic and diluted net loss per share
54,288

 
50,647

 
54,518

 
41,773

Basic and diluted net loss per share
$
(0.14
)
 
$
(0.14
)
 
$
(0.22
)
 
$
(0.22
)

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 March 31,
 
2017
 
2016
Stock options and restricted stock units
16,933

 
20,172

Warrants*
2,020

 
115

Total
18,953

 
20,287


*includes 1.9 million warrants issued to SAP that are exercisable upon execution of the Alliance Agreements as described in Note 9.
Subsequent Events
Subsequent Events
Subsequent Events

Jiff Acquisition
    
On April 3, 2017, the Company acquired Jiff, Inc. for approximately 27 million in shares and options. Jiff is an enterprise health benefits platform provider that serves as a central hub for wellbeing and other benefit programs, with a single point of access for employees. The acquisition enables the Company to provide the full spectrum of wellbeing, healthcare decision support and benefits hub all in one complete package. The close date of this acquisition occurred subsequent to our fiscal quarter-end, therefore purchase price allocation to the underlying assets acquired and liabilities assumed or consolidated pro forma financial information for this transaction has not yet been finalized. Although the Company has not completed the acquisition accounting for this transaction, it expects a substantial majority of the purchase price will be allocated to goodwill and intangible assets.

Term loan and Revolving Line of Credit

In connection with the Company’s acquisition of Jiff, on April 3, 2017, the Company, Jiff and Silicon Valley Bank (“Bank”) agreed to refinance the existing term loan facility owed by Jiff to the Bank (“The Loan Agreement”) for an approximately $5.6 million term loan (the “Term Loan”).

Also, the Loan Agreement provides for up to a $25 million revolving credit facility (the “Revolving Line”). The Company may request borrowings under the Revolving Line prior to April 3, 2019, on which date the Revolving Line terminates.
Summary of Significant Accounting Policies (Policies)
Basis of Accounting Presentation and Principles of Consolidation 
Basis of Presentation and Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), for interim financial information and with the instructions to Form 10-Q and Article 10 of Securities and Exchange Commission (“SEC”), Regulation S-X. 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 and cash flows. The condensed consolidated financial statements include the results of Castlight and its wholly owned U.S. subsidiary. The results for the interim periods presented are not necessarily indicative of the results expected for any future period.
The condensed consolidated balance sheet as of December 31, 2016 included herein was derived from the audited financial statements as of that date. 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, 2016. There have been no changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K that have had a material impact on its condensed 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 the relative selling prices for the Company’s products and services, certain assumptions used in the valuation of the Company’s equity awards, annual bonus attainment and the capitalization and estimated useful life of internal-use software development costs. Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.
Recently Issued and Adopted Accounting Pronouncements 
Recently Issued and Adopted Accounting Pronouncements
Stock-based Compensation
In March 2016, the FASB issued ASU 2016-09, “Compensation-Stock Compensation: Improvements to Employee Share-Based Payment.” The guidance will change how companies account for certain aspects of share-based payments to employees. The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. The Company adopted this guidance on January 1, 2017 and accordingly recorded a cumulative-effect adjustment charge of approximately $0.4 million to the beginning accumulated deficit for the impact of electing to account for forfeiture as it occurs. The adoption of this standard did not have any impact to the Statement of Operations or the Statement of Cash Flows. The Company is subject to full valuation allowance and thus has not utilized any excess tax benefits or realized any cash tax benefit related to stock compensation expense.

Goodwill

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-4, “Intangibles—Goodwill and Other.” The standard eliminates Step 2 from the goodwill impairment test, under which an entity had to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities, instead requiring an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. The standard will become effective for the Company beginning January 1, 2020, and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. Based on the Company’s evaluation, the standard will not have a material impact on its consolidated financial statements.

Business Combinations

In January 2017, the Financial Accounting Standards Board (“FASB”) issued ASU 2017-1, “Business Combinations.” The standard clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard will become effective for the Company beginning January 1, 2018, and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. Based on the Company’s evaluation, the standard will not have a material impact on its consolidated financial statements.

Consolidation

In October 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-17, “Consolidation.” The standard addresses how companies evaluate whether a reporting entity is the primary beneficiary of a VIE by changing how the reporting entity that is a single decision maker of a VIE treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The standard became effective for the Company beginning January 1, 2017. Based on the Company’s evaluation, the standard did not have a material impact on its consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, “Leases.” The guidance will require lessees to put all leases on their balance sheets, whether operating or financing, while continuing to recognize the expenses on their income statements in a manner similar to current practice. The guidance states that a lessee would recognize a lease liability for the obligation to make lease payments and a right-to-use asset for the right to use the underlying asset for the lease term. The guidance will be effective for the Company beginning January 1, 2019 and early adoption is permitted. At this point in time, the Company does not intend to adopt the standard early. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.     

Financial Instruments

In January 2016, the FASB issued ASU 2016-1, “Financial Instruments.” The guidance provides a new measurement alternative for equity investments that don’t have readily determinable fair values and don’t qualify for the net asset value practical expedient. Under this alternative, these investments can be measured at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment if the same issuer. This guidance will be effective for the Company beginning January 1, 2018 and earlier adoption is not permitted. The Company is evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption at this point in time.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, and has since updated the ASU. This ASU replaces existing revenue recognition standards with a comprehensive revenue measurement and recognition standard and expanded disclosure requirements. The new standard will be effective for the Company beginning January 1, 2018 with early adoption permitted beginning January 1, 2017. The Company has elected not to early adopt the new standard.

The new standard permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (modified retrospective method). The Company currently plans to adopt under the full retrospective method. However, a final decision regarding the adoption method has not been finalized at this time.

The Company is currently assessing the impact of the new standard on its accounting policies, processes, and controls, including system requirements and has assigned internal resources and has also engaged a third party service provider to assist in its assessment.

Based on its assessment to date, the Company currently believes a significant impact from the adoption of the new standard will be related to the Company’s costs to fulfill as well as its costs to obtain contracts with customers. For fulfillment costs, the new standard states that an entity shall recognize an asset from the costs incurred to fulfill a contract if certain criteria are met. The Company believes these criteria will be met and these costs will be recognized as an asset under the new standard.  The costs to fulfill a contract that are recognized as an asset are then amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. The Company currently expenses costs to fulfill a contract when they are incurred. Similar to fulfillment costs, for costs to obtain a contract (which are primarily sales commissions), the standard states that costs to obtain a contract shall be amortized on a systematic basis that is consistent with the transfer to the customer of the goods or services to which the asset relates. The Company currently capitalizes certain sales commissions and amortizes those costs over the non-cancelable portion of its subscription contracts. Under the new standard, the amortization period for the Company’s costs to obtain a contract could be longer. Lastly, based on its assessment, the Company currently believes areas of impact related to the Company’s revenue recognition will be related to the estimation of variable consideration, the accounting for contract modifications, and the allocation of the transaction price to the Company’s multiple performance obligations.

While the Company continues to assess the potential impacts of the new standard, including the areas described above, and anticipates the standard could have a material impact on its consolidated financial statements, the Company does not know or cannot reasonably estimate quantitative information related to the impact of the new standard on the Company’s financial statements at this time.
Marketable Securities (Tables)
Available-for-sale Securities
At March 31, 2017 and December 31, 2016, respectively, marketable securities consisted of the following (in thousands):
 
 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
March 31, 2017
 
 
 
 
 
 
 
U.S. agency obligations
$
44,999

 
$
—

 
$
(16
)
 
$
44,983

U.S. treasury securities
12,503

 
—

 
(3
)
 
12,500

Money market mutual funds
16,430

 
—

 
—

 
16,430

 
73,932

 
—

 
(19
)
 
73,913

Included in cash and cash equivalents
26,906

 
—

 
—

 
26,906

Included in marketable securities
$
47,026

 
$
—

 
$
(19
)
 
$
47,007


 
Amortized
Cost
 
Unrealized
Gains
 
Unrealized
Losses
 
Fair Value
December 31, 2016
 
 
 
 
 
 
 
U.S. agency obligations
$
33,019

 
$
5

 
$
(3
)
 
$
33,021

U.S. treasury securities
37,864

 
—

 
(2
)
 
37,862

Money market mutual funds
7,965

 
—

 
—

 
7,965

 
78,848

 
5

 
(5
)
 
78,848

Included in cash and cash equivalents
12,966

 
—

 
—

 
12,966

Included in marketable securities
$
65,882

 
$
5

 
$
(5
)
 
$
65,882

Fair Value Measurements (Tables)
Fair Value, Assets Measured on Recurring Basis
The following tables present information about the Company’s assets that are measured at fair value on a recurring basis using the above input categories (in thousands):
 
 
Level 1
 
Level 2
 
Total
March 31, 2017
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
16,430

 
$
—

 
$
16,430

U.S. agency obligations
—

 
10,476

 
10,476

Marketable securities:
 
 
 
 
 
U.S. agency obligations
—

 
34,507

 
34,507

U.S. treasury securities
—

 
12,500

 
12,500

 
$
16,430

 
$
57,483

 
$
73,913

 
 
Level 1
 
Level 2
 
Total
December 31, 2016
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
Money market mutual funds
$
7,965

 
$
—

 
$
7,965

U.S. treasury securities
—

 
5,000

 
5,000

Marketable securities:
 
 
 
 
 
U.S. agency obligations
—

 
33,021

 
33,021

U.S. treasury securities
—

 
32,862

 
32,862

 
$
7,965


$
70,883


$
78,848

Property and equipment, net (Tables)
Property, Plant and Equipment
Property and equipment consisted of the following (in thousands):
 
As of
 
March 31, 2017
 
December 31, 2016
Leasehold improvements
$
2,482

 
$
2,061

Computer equipment
5,443

 
5,487

Software
1,079

 
1,099

Capitalization of internal-use software
2,925

 
2,925

Furniture and equipment
1,047

 
931

Total
12,976

 
12,503

Accumulated depreciation
(7,870
)
 
(7,218
)
Property and equipment, net
$
5,106

 
$
5,285

Stock Compensation (Tables)
Schedule of Share-based Compensation, Stock Options, Activity 
A summary of stock option activity for the three months ended March 31, 2017 is as follows (in thousands, except share and per share amounts): 
 
Options
Outstanding
 
Weighted-
Average
Exercise
Price
 
Aggregate
Intrinsic
Value
Balance at December 31, 2016
7,642,953

 
$
3.71

 
$
18,537

Stock option grants
—

 
$
—

 
 
Stock options exercised
(273,769
)
 
$
1.37

 
 
Stock options canceled
(176,980
)
 
$
3.23

 
 
Balance at March 31, 2017
7,192,204

 
$
3.81

 
$
9,232

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions 
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:
 
Three Months Ended March 31,
 
2017
 
2016
Volatility
—%
 
45%
Expected life (in years)
—
 
6.0
Risk-free interest rate
—%
 
1.37%
Dividend yield
—%
 
—%
Schedule of Other Share-based Compensation, Activity 
A summary of restricted stock unit activity for the three months ended March 31, 2017 is as follows:
 
Number of
Shares
Outstanding
 
Weighted-
Average
Grant Date Fair Value
Balance at December 31, 2016
10,541,666

 
$
4.82

Restricted Stock Units granted (1)
1,420,200

 
$
3.22

Restricted Stock Units vested
(832,288
)
 
$
3.63

Restricted Stock Units forfeited/canceled (2)
(1,388,897
)
 
$
3.94

Balance at March 31, 2017
9,740,681

 
$
4.71

(1) Includes performance stock units (“PSUs”) that were granted in the three months ended March 31, 2017.
(2) Includes PSUs that were granted in the prior year, which were canceled because performance targets were not achieved.
Net Loss per Share (Tables)
Schedule of Earnings Per Share, Basic and Diluted 
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 March 31,
 
2017
 
2016
 
Class A
 
Class B
 
Class A
 
Class B
Net loss
$
(7,661
)
 
$
(7,148
)
 
$
(12,091
)
 
$
(9,264
)
Weighted-average shares used to compute basic and diluted net loss per share
54,288

 
50,647

 
54,518

 
41,773

Basic and diluted net loss per share
$
(0.14
)
 
$
(0.14
)
 
$
(0.22
)
 
$
(0.22
)
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share 
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 March 31,
 
2017
 
2016
Stock options and restricted stock units
16,933

 
20,172

Warrants*
2,020

 
115

Total
18,953

 
20,287

Summary of Significant Accounting Policies (Details) (New Accounting Pronouncement, Early Adoption, Effect, ASU 2016-09, Forfeiture Rate Component, Accumulated deficit, USD $)
In Millions, unless otherwise specified
Jan. 1, 2017
New Accounting Pronouncement, Early Adoption, Effect |
ASU 2016-09, Forfeiture Rate Component |
Accumulated deficit
 
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
 
Cumulative-effect adjustment charge
$ 0.4 
Marketable Securities (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
$ 73,932 
$ 78,848 
Unrealized Gains
0 
5 
Unrealized Losses
(19)
(5)
Fair Value
73,913 
78,848 
Included in cash and cash equivalents [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
26,906 
12,966 
Unrealized Gains
0 
0 
Unrealized Losses
0 
0 
Fair Value
26,906 
12,966 
Included in marketable securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
47,026 
65,882 
Unrealized Gains
0 
5 
Unrealized Losses
(19)
(5)
Fair Value
47,007 
65,882 
U.S. agency obligations [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
44,999 
33,019 
Unrealized Gains
0 
5 
Unrealized Losses
(16)
(3)
Fair Value
44,983 
33,021 
U.S. treasury securities [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
12,503 
37,864 
Unrealized Gains
0 
0 
Unrealized Losses
(3)
(2)
Fair Value
12,500 
37,862 
Money market mutual funds [Member]
 
 
Schedule of Available-for-sale Securities [Line Items]
 
 
Amortized Cost
16,430 
7,965 
Unrealized Gains
0 
0 
Unrealized Losses
0 
0 
Fair Value
$ 16,430 
$ 7,965 
Fair Value Measurements - Summary of Assets Measured at Fair Value on a Recurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Marketable securities:
 
 
Marketable securities
$ 73,913 
$ 78,848 
Money market mutual funds
 
 
Marketable securities:
 
 
Marketable securities
16,430 
7,965 
U.S. agency obligations
 
 
Marketable securities:
 
 
Marketable securities
44,983 
33,021 
U.S. treasury securities
 
 
Marketable securities:
 
 
Marketable securities
12,500 
37,862 
Fair Value, Measurements, Recurring
 
 
Marketable securities:
 
 
Assets, Fair Value Disclosure
73,913 
78,848 
Fair Value, Measurements, Recurring |
Money market mutual funds
 
 
Cash equivalents:
 
 
Cash equivalents
16,430 
7,965 
Fair Value, Measurements, Recurring |
U.S. agency obligations
 
 
Cash equivalents:
 
 
Cash equivalents
10,476 
 
Marketable securities:
 
 
Marketable securities
34,507 
33,021 
Fair Value, Measurements, Recurring |
U.S. treasury securities
 
 
Cash equivalents:
 
 
Cash equivalents
 
5,000 
Marketable securities:
 
 
Marketable securities
12,500 
32,862 
Fair Value, Measurements, Recurring |
Level 1
 
 
Marketable securities:
 
 
Assets, Fair Value Disclosure
16,430 
7,965 
Fair Value, Measurements, Recurring |
Level 1 |
Money market mutual funds
 
 
Cash equivalents:
 
 
Cash equivalents
16,430 
7,965 
Fair Value, Measurements, Recurring |
Level 1 |
U.S. agency obligations
 
 
Cash equivalents:
 
 
Cash equivalents
0 
 
Marketable securities:
 
 
Marketable securities
0 
0 
Fair Value, Measurements, Recurring |
Level 1 |
U.S. treasury securities
 
 
Cash equivalents:
 
 
Cash equivalents
 
0 
Marketable securities:
 
 
Marketable securities
0 
0 
Fair Value, Measurements, Recurring |
Level 2
 
 
Marketable securities:
 
 
Assets, Fair Value Disclosure
57,483 
70,883 
Fair Value, Measurements, Recurring |
Level 2 |
Money market mutual funds
 
 
Cash equivalents:
 
 
Cash equivalents
0 
0 
Fair Value, Measurements, Recurring |
Level 2 |
U.S. agency obligations
 
 
Cash equivalents:
 
 
Cash equivalents
10,476 
 
Marketable securities:
 
 
Marketable securities
34,507 
33,021 
Fair Value, Measurements, Recurring |
Level 2 |
U.S. treasury securities
 
 
Cash equivalents:
 
 
Cash equivalents
 
5,000 
Marketable securities:
 
 
Marketable securities
$ 12,500 
$ 32,862 
Fair Value Measurements (Details) (USD $)
3 Months Ended 12 Months Ended
Mar. 31, 2017
Dec. 31, 2016
Fair Value Disclosures [Abstract]
 
 
Available-for-sale Securities, Gross Realized Gain (Loss)
$ 0 
 
Available-for-sale Securities, Maturity Period
1 year 
1 year 
Property and equipment, net (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Property, Plant and Equipment [Abstract]
 
 
Depreciation Expense
$ 0.7 
$ 0.8 
Property and equipment, net - Schedule of Property, Plant and Equipment (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2017
Dec. 31, 2016
Property, Plant and Equipment [Line Items]
 
 
Property and Equipment
$ 12,976 
$ 12,503 
Capitalization of internal-use software
2,925 
2,925 
Accumulated depreciation
(7,870)
(7,218)
Property and equipment, net
5,106 
5,285 
Leasehold Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and Equipment
2,482 
2,061 
Computer Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and Equipment
5,443 
5,487 
Software [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and Equipment
1,079 
1,099 
Furniture and Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and Equipment
$ 1,047 
$ 931 
Related Party Transactions (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 12 Months Ended 3 Months Ended 0 Months Ended
Mar. 31, 2017
Mar. 31, 2017
Initial Investment
Dec. 31, 2015
Initial Investment
Mar. 31, 2017
Lyra
Apr. 3, 2017
Subsequent Event
Shares and options
Jiff, Inc.
Apr. 3, 2017
Castlight
Subsequent Event
Partner at Venrock
Apr. 3, 2017
Jiff, Inc.
Subsequent Event
Partner at Venrock
Related Party Transaction [Line Items]
 
 
 
 
 
 
 
Payments to acquire interest in related party
$ 1.0 
$ 3.1 
$ 4.1 
$ 4.1 
 
 
 
Shares and options paid to acquire business (in shares)
 
 
 
 
27,000,000 
 
 
Shares owned by related party (in shares)
 
 
 
 
 
16,825,301 
8,040,910 
Ownership interest (as a percent)
 
 
 
 
 
16.00% 
18.00% 
Commitments and Contingencies Commitments and Contingencies (Details) (USD $)
In Millions, unless otherwise specified
0 Months Ended 3 Months Ended
Mar. 28, 2016
Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
 
 
Litigation settlement, amount
$ (9.5)
 
Litigation settlement, expense
 
$ 2.9 
Stockholders' Equity Narrative (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 1 Months Ended 0 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Mar. 31, 2017
Class A [Member]
Mar. 31, 2017
Class B [Member]
May 31, 2016
SAP Technologies, Inc. [Member]
May 31, 2016
SAP Technologies, Inc. [Member]
Class B [Member]
Mar. 31, 2017
SAP Technologies, Inc. [Member]
Class B [Member]
Apr. 24, 2017
Subsequent Event
Class of Stock [Line Items]
 
 
 
 
 
 
 
 
Common Stock, Shares, Issued
 
 
54,288,009 
51,128,971 
 
 
 
 
Shares issued during the period
 
 
 
 
 
4,700,000 
 
 
Number of Securities Called by Warrants or Rights (in shares)
 
 
 
 
 
1,900,000 
1,900,000 
 
Proceeds from Issuance of common stock and warrants
$ 374 
$ 1,266 
 
 
$ 17,800 
 
 
 
Class Of Warrant Or Right, Initial Expiration Period
 
 
 
 
 
 
 
4 years 
Class Of Warrant Or Right, Amended Expiration Period
 
 
 
 
 
 
 
4 years 
Class of Warrant or Right, Exercise Price of Warrants or Rights
 
 
 
 
$ 4.91 
 
 
 
Stock Compensation - Summary of Stock Option Activity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Options Outstanding
 
Beginning Balance
7,642,953,000 
Stock option grants
0 
Stock options exercised
(273,769,000)
Stock options canceled
(176,980,000)
Ending Balance
7,192,204,000 
Weighted- Average Exercise Price
 
Beginning Balance
$ 3.81 
Stock option grants
$ 0.00 
Stock options exercised
$ 1.37 
Stock options canceled
$ 3.23 
Ending Balance
$ 3.71 
Aggregate Intrinsic Value
 
Beginning Balance
$ 18,537 
Ending Balance
$ 9,232 
Stock Compensation - Stock Options Activity and Stock-based Compensation (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Equity and Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
 
Stock Granted, Value, Share-based Compensation, Gross
$ 0 
$ 2.5 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options
$ 8.6 
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition
1 year 11 months 23 days 
 
Share-based Compensation Arrangement by Share-based Payment Award, Options, Forfeitures in Period
176,980,000 
 
Stock options canceled, exercise price
$ 3.23 
 
Stock option grants
0 
 
Stock option grants, exercise price
$ 0.00 
 
Stock Compensation - Assumptions Related to Share-based Compensation (Details) (Stock Option [Member])
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Stock Option [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Volatility
0.00% 
45.00% 
Expected life (in years)
0 years 
6 years 
Risk-free interest rate
0.00% 
1.37% 
Dividend yield
0.00% 
0.00% 
Stock Compensation - Summary of Restricted Stock Unit Activity (Details) (USD $)
Share data in Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition
1 year 11 months 23 days 
Restricted Stock Units (RSUs)
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
 
Balance at December 31, 2016
10,541,666 
Restricted Stock Units granted (1)
1,420,200 
Restricted Stock Units vested
(832,288)
Restricted Stock Units forfeited/canceled (2)
(1,388,897)
Balance at March 31, 2017
9,740,681 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Balance at December 31, 2016
$ 4.82 
Restricted Stock Units granted (1)
$ 3.22 
Restricted Stock Units vested
$ 3.63 
Restricted Stock Units forfeited/canceled (2)
$ 3.94 
Balance at March 31, 2017
$ 4.71 
Unrecognized compensation cost
$ 41,100,000 
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition
2 years 8 months 23 days 
Performance awards
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Compensation expense recognized
$ 300,000 
Vesting percentage in year 1 |
Performance awards
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Vesting percentage
50.00% 
Vesting percentage in year 2 |
Performance awards
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Vesting percentage
50.00% 
Minimum |
Performance awards
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Shares the will eventually vest (as a percent)
0.00% 
Maximum |
Performance awards
 
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
 
Shares the will eventually vest (as a percent)
150.00% 
Income Taxes (Details)
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Income Tax Disclosure [Abstract]
 
 
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent
0.00% 
0.00% 
Net Loss per Share - Calculation of Basic and Diluted EPS for Common Stock (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2017
Mar. 31, 2016
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Table] [Line Items]
 
 
Net loss
$ (14,809)
$ (21,355)
Weighted-average shares used to compute basic and diluted net loss per Class A and B share
104,935 
96,291 
Basic and diluted net loss per share (in usd per share)
$ (0.14)
$ (0.22)
Class A [Member]
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Table] [Line Items]
 
 
Net loss
(7,661)
(12,091)
Weighted-average shares used to compute basic and diluted net loss per Class A and B share
54,288 
54,518 
Basic and diluted net loss per share (in usd per share)
$ (0.14)
$ (0.22)
Class B [Member]
 
 
Schedule of Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Table] [Line Items]
 
 
Net loss
$ (7,148)
$ (9,264)
Weighted-average shares used to compute basic and diluted net loss per Class A and B share
50,647 
41,773 
Basic and diluted net loss per share (in usd per share)
$ (0.14)
$ (0.22)
Net Loss per Share - Summary of Antidilutive Securities (Details)
3 Months Ended
Mar. 31, 2017
Class A [Member]
Mar. 31, 2016
Class A [Member]
Mar. 31, 2017
Class A [Member]
Stock Options and Restricted Common Stock [Member]
Mar. 31, 2016
Class A [Member]
Stock Options and Restricted Common Stock [Member]
Mar. 31, 2017
Class A [Member]
Warrants [Member]
Mar. 31, 2016
Class A [Member]
Warrants [Member]
Mar. 31, 2017
SAP Technologies, Inc. [Member]
Common Class B [Member]
May 31, 2016
SAP Technologies, Inc. [Member]
Common Class B [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount
18,953,000 
20,287,000 
16,933,000 
20,172,000 
2,020,000 
115,000 
 
 
Number of Securities Called by Warrants or Rights (in shares)
 
 
 
 
 
 
1,900,000 
1,900,000.0 
Subsequent Events (Details) (Subsequent Event, USD $)
In Millions, unless otherwise specified
0 Months Ended
Apr. 3, 2017
Jiff, Inc. |
Shares and options
 
Subsequent Event [Line Items]
 
Shares and options paid to acquire business (in shares)
27 
Bank |
Term Loan
 
Subsequent Event [Line Items]
 
Credit facility, maximum borrowing capacity
$ 5.6 
Bank |
Revolving Line
 
Subsequent Event [Line Items]
 
Credit facility, maximum borrowing capacity
$ 25.0