UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
April 29, 2021
Date of Report (Date of earliest event reported)
CASTLIGHT HEALTH, INC.
(Exact name of registrant as specified in its charter)

Delaware
	001-36330	26-1989091
	
(State or other jurisdiction of
incorporation)	(Commission File Number)	(I.R.S. Employer
Identification Number)	
150 Spear Street, Suite 400
San Francisco, CA 94105
(Address of principal executive offices)
(415) 829-1400
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)
Not applicable

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered	
Class B Common Stock, par value $0.0001 per share	CSLT	New York Stock Exchange	

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.    Results of Operations and Financial Condition.

The information in Item 2.02 of this Current Report, including the accompanying Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of Section 18. The information in Item 2.02 of this Current Report shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language contained in such filing.

On April 29, 2021, Castlight Health, Inc. (the "Company") issued a press release announcing its financial results for the three months ended March 31, 2021. A copy of the press release is furnished herewith as Exhibit 99.1.

The Company's senior management will host a conference call to discuss its first quarter 2021 results and business outlook on Thursday, April 29, 2021, at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through the Company’s Investor Relations website at http://ir.castlighthealth.com. An archive of the webcast can also be accessed through the same link. The live conference call can be accessed by dialing (833) 238-7953 and the replay will be available for one week at (800) 585-8367. The conference ID number for the live call and replay is 2847469.

Item 9.01.     Financial Statements and Exhibits.

(d) Exhibits

Exhibit        Description

99.1 Press Release, dated April 29, 2021, entitled “Castlight Health Announces First Quarter 2021 Results”
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CASTLIGHT HEALTH, INC.	
Date:	April 29, 2021	By:		/s/ Will Bondurant	
				Will Bondurant	
				Chief Financial Officer	

Castlight Health Announces First Quarter 2021 Results

Company Demonstrates Sequential Increase in ARR and Increases 2021 Outlook

SAN FRANCISCO - April 29, 2021 - Castlight Health, Inc. (NYSE:CSLT), a leading health navigation platform provider, today announced results for its first quarter ended March 31, 2021.

“We executed well in the first quarter and made meaningful progress against each of our three priorities for 2021 while delivering strong financial results, including sequential ARR growth and our fourth straight quarter of non-GAAP profitability,” said Maeve O’Meara, chief executive officer of Castlight Health. “We were pleased with our pipeline generation activity in the quarter, reported our lowest churn quarter since 2016, and expanded a key health plan partnership. We demonstrated our commitment and ability to innovate in the category of next generation navigation with the launch of our market-leading vaccine navigation solution. Finally, we expanded and extended our work with Boston Children’s Hospital to support the nation’s ongoing COVID-19 vaccination effort. Our progress in the first quarter allows us to increase our financial guidance for 2021.”

Financial performance for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 includes:
•Total revenue of $35.1 million, compared to $39.0 million
•GAAP gross margin of 63.6%, compared to 62.9%
•Non-GAAP gross margin of 66.8%, compared to 65.1%
•GAAP operating loss of $3.1 million, compared to $56.6 million
•Non-GAAP operating income of $1.2 million, compared to an operating loss of $2.2 million

•GAAP net loss per basic and diluted share of $0.02, compared to a net loss per basic and diluted share of $0.38
•Non-GAAP net income per basic and diluted share of $0.01, compared to a net loss per basic and diluted share of $0.01
•Cash provided by operations of $7.6 million, compared to cash used in operations of $14.4 million

Total cash was $56.5 million as of March 31, 2021.

A reconciliation of GAAP to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.”

Business Outlook
For the full year 2021, the Company is increasing its outlook and now expects:
•Revenue in the range of $135 million to $140 million
•Non-GAAP operating income between income of $1 million and a loss of $4 million
•Non-GAAP net income per share between income of $0.01 and a loss of $0.03, based on approximately 160 million to 161 million shares
For the second quarter of 2021, the Company now expects:
•Revenue in the range of $33 million to $35 million

Quarterly Conference Call
Castlight Health senior management will host a conference call to discuss its first quarter 2021 results and business outlook today at 2:00 p.m. Pacific Time (5:00 p.m. Eastern Time). A live audio webcast of the conference call, together with detailed financial information, can be accessed through the Company’s Investor Relations website at http://ir.castlighthealth.com. An

archive of the webcast can also be accessed through the same link. The live conference call can be accessed by dialing (833) 238-7953 and the replay will be available for one week at (800) 585-8367. The conference ID number for the live call and replay is 2847469.

About Castlight Health
Castlight is on a mission to make it as easy as humanly possible for people to navigate the healthcare system and live happier, healthier, more productive lives. As a leader in healthcare navigation, we provide a world-class digital platform with a team of clinical and benefits experts to help members easily connect and engage with the right programs and care, at the right time. Castlight partners with Fortune 500 companies and health plans to transform employee and member benefits into one comprehensive health and wellbeing experience to deliver better health outcomes and maximize returns on healthcare investments.

For more information visit www.castlighthealth.com. Follow us on Twitter and LinkedIn and Like us on Facebook.

Non-GAAP Financial Measures
To supplement Castlight Health’s financial statements presented in accordance with generally accepted accounting principles (GAAP), we also use and provide investors and others with non-GAAP measures of certain components of financial performance, including non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating income (loss), non-GAAP net income (loss) and non-GAAP net income (loss) per share. Non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating income (loss), and non-GAAP net income (loss) exclude goodwill impairment, stock-based compensation, certain legal expenses, amortization of intangibles, restructuring charges, capitalization and amortization of internal-use software, and lease exit and related charges.

We believe that these non-GAAP financial measures provide useful supplemental information to investors and others, facilitate the analysis of the company’s core operating results and comparison of operating results across reporting periods, and can help enhance overall understanding of the company’s historical financial performance. However, these non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP.

The non-GAAP measures we provide may differ from the non-GAAP information used by other companies, including peer companies, and therefore comparability may be limited. Castlight Health encourages investors and others to review the Company’s financial information in its entirety and not rely on a single financial measure.

We have provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, except that we have not reconciled our non-GAAP operating loss and net loss per share guidance for the full year 2021 to comparable GAAP

measures because we do not provide guidance for stock-based compensation expense, and capitalization and amortization of internal-use software, which are reconciling items between GAAP and non-GAAP. The factors that may impact our future stock-based compensation expense, and capitalization and amortization of internal-use software, are out of our control and/or cannot be reasonably predicted, and therefore we are unable to provide such guidance without unreasonable effort. Factors include our market capitalization and related volatility of our stock price and our inability to project the cost or scope of internally produced software.

Safe Harbor for Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the federal securities laws, which statements involve substantial risks and uncertainties. Words such as "anticipates," "expects," "intends," "plans," "projects," "believes," "seeks," "estimates," "can," "may," "will," "would" and similar expressions identify such forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. The forward-looking statements about Castlight Health’s expectations, plans, intentions, and strategies include, but are not limited to, statements regarding certain 2021 financial projections, and our expectations for our future business and financial performance. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include those described in Castlight Health’s documents filed with or furnished to the Securities and Exchange Commission, including the risks set forth in our annual report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on February 24, 2021, and our quarterly reports on Form 10-Q, including the quarterly report for the three months ended March 31, 2021, when filed with the SEC. All forward-looking statements in this

press release are expressly qualified in their entirety by these cautionary statements and are based on information available to Castlight Health as of the date hereof. Castlight Health assumes no obligation to update these forward-looking statements, except as required by law. 

Copyright 2021 Castlight Health, Inc. Castlight Health® is the registered trademark of Castlight Health, Inc. Other company and product names may be trademarks of the respective companies with which they are associated.

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(unaudited)

	As of	
	March 31, 2021		December 31, 2020	
Assets				
Current assets:				
Cash and cash equivalents	$	56,501 			$	49,242 		
	
Accounts receivable and other, net	25,035 			31,740 		
Prepaid expenses and other current assets	6,772 			3,800 		
Total current assets	88,308 			84,782 		
Property and equipment, net	4,966 			5,321 		
Restricted cash, non-current	1,144 			1,144 		
Deferred commissions	8,190 			9,556 		
Deferred professional service costs	4,205 			4,462 		
Intangible assets, net	6,872 			7,930 		
Goodwill	41,485 			41,485 		
Operating lease right-of-use assets, net	9,131 			10,238 		
Other assets	1,838 			1,855 		
Total assets	$	166,139 			$	166,773 		
Liabilities and stockholders’ equity				
Current liabilities:				
Accounts payable	$	4,383 			$	5,145 		
Accrued expenses and other current liabilities	7,057 			7,898 		
Accrued compensation	4,755 			8,633 		
Deferred revenue	13,135 			6,848 		
Operating lease liabilities	5,939 			5,789 		
Total current liabilities	35,269 			34,313 		
Deferred revenue, non-current	122 			663 		
	
Operating lease liabilities, non-current	5,907 			7,446 		
Other liabilities, non-current	480 			485 		
Total liabilities	41,778 			42,907 		
Stockholders’ equity	124,361 			123,866 		
Total liabilities and stockholders’ equity	$	166,139 			$	166,773 		

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)

 	Three Months Ended March 31,	
	2021		2020	
Revenue:				
Subscription	$	32,110 			$	38,383 		
Professional services and other	2,949 			662 		
Total revenue, net	35,059 			39,045 		
Cost of revenue:				
Cost of subscription(1)	8,099 			10,232 		
Cost of professional services and other(1)	4,657 			4,241 		
Total cost of revenue	12,756 			14,473 		
Gross profit	22,303 			24,572 		
Operating expenses:				
Sales and marketing(1)	6,913 			10,472 		
Research and development(1)	12,113 			13,822 		
General and administrative(1)	6,366 			6,576 		
Goodwill impairment	— 			50,300 		
Total operating expenses	25,392 			81,170 		
Operating loss	(3,089)			(56,598)		
Other income, net	93 			263 		

Net loss	$	(2,996)			$	(56,335)		
Net loss per share, basic and diluted	$	(0.02)			$	(0.38)		
Weighted-average shares used to compute basic and diluted net loss per share	156,781 			148,872 		

(1)Includes stock-based compensation expense as follows:
												
 	Three Months Ended March 31,	
 	2021		2020	
Cost of revenue:				
Cost of subscription	$	257 			$	169 		
Cost of professional services and other	236 			116 		
Sales and marketing	350 			672 		
Research and development	1,069 			1,163 		
General and administrative	1,195 			1,066 		

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
												
 	Three Months Ended March 31,	
 	2021		2020	
Operating activities:				
Net loss	$	(2,996)			$	(56,335)		
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:				
Depreciation and amortization	1,623 			1,535 		
Goodwill impairment	— 			50,300 		
Stock-based compensation	3,107 			3,186 		
Amortization of deferred commissions	1,340 			2,383 		
Amortization of deferred professional service costs	580 			925 		
Non-cash operating lease expense	1,107 			1,400 		

	
Accretion and amortization of marketable securities	— 			2 		
Changes in operating assets and liabilities:				
Accounts receivable and other, net	6,705 			(6,676)		
Deferred commissions	26 			(318)		
Deferred professional service costs	(300)			(416)		
Prepaid expenses and other assets	(2,955)			(494)		
Accounts payable	(759)			(7,462)		
Operating lease liabilities	(1,389)			(1,516)		
Accrued expenses and other liabilities	(382)			19 		
Deferred revenue	5,746 			3,573 		
Accrued compensation	(3,878)			(4,465)		
Net cash provided by (used in) operating activities	7,575 			(14,359)		
Investing activities:				
Purchase of property and equipment	(212)			(1,264)		
Purchase of marketable securities	— 			(1,989)		
	
Maturities of marketable securities	— 			12,400 		
	
Net cash (used in) provided by investing activities	(212)			9,147 		
Financing activities:				
	
Proceeds from exercise of stock options	128 			155 		
Proceeds from ESPP offering	233 			186 		
Principal payments on long-term debt	(465)			(465)		
Net cash used in financing activities	(104)			(124)		
				
Net increase (decrease) in cash, cash equivalents and restricted cash	7,259 			(5,336)		
Cash, cash equivalents and restricted cash at beginning of period	50,386 			44,342 		
Cash, cash equivalents and restricted cash at end of period	$	57,645 			$	39,006 		
				
Reconciliation of cash, cash equivalents and restricted cash:				
Cash and cash equivalents	$	56,501 			$	37,681 		
Restricted cash included in Prepaid expenses and other current assets	— 			181 		
Restricted cash, non-current	1,144 			1,144 		
Total cash, cash equivalents and restricted cash	$	57,645 			$	39,006 		

CASTLIGHT HEALTH, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(unaudited)

																		
	Three Months Ended	
	March 31, 2021		December 31, 2020		March 31, 2020	
Gross profit:						
GAAP gross profit subscription	$	24,011 			$	26,487 			$	28,151 		
Stock-based compensation	257 			215 			169 		
Amortization of internal-use software	79 			80 			26 		
Amortization of intangibles	530 			530 			530 		

Non-GAAP gross profit subscription	$	24,877 			$	27,312 			$	28,876 		
GAAP gross margin subscription	74.8 	%		77.0 	%		73.3 	%	
Non-GAAP gross margin subscription	77.5 	%		79.4 	%		75.2 	%	
						
GAAP gross loss professional services	$	(1,708)			$	(2,322)			$	(3,579)		
Stock-based compensation	236 			219 			116 		

Non-GAAP gross loss professional services	$	(1,472)			$	(2,103)			$	(3,463)		
GAAP gross margin professional services	(58)	%		(87)	%		(541)	%	
Non-GAAP gross margin professional services	(50)	%		(79)	%		(523)	%	
						
GAAP gross profit	$	22,303 			$	24,165 			$	24,572 		
Impact of non-GAAP adjustments	1,102 			1,044 			841 		
Non-GAAP gross profit	$	23,405 			$	25,209 			$	25,413 		
GAAP gross margin	63.6 	%		65.2 	%		62.9 	%	
Non-GAAP gross margin	66.8 	%		68.0 	%		65.1 	%	
						
Operating expense:						
GAAP sales and marketing	$	6,913 			$	7,713 			$	10,472 		
Stock-based compensation	(350)			(326)			(672)		
Amortization of intangibles	(528)			(528)			(528)		
	
Non-GAAP sales and marketing	$	6,035 			$	6,859 			$	9,272 		
						
GAAP research and development	$	12,113 			$	11,418 			$	13,822 		
Stock-based compensation	(1,069)			(1,041)			(1,163)		

Certain legal expenses	— 			— 			191 		
Capitalization of internally developed software	— 			— 			21 		
	
Non-GAAP research and development	$	11,044 			$	10,377 			$	12,871 		
						
GAAP general and administrative	$	6,366 			$	6,405 			$	6,576 		
Stock-based compensation	(1,195)			(1,085)			(1,066)		
	
Amortization of intangibles	— 			— 			(17)		

	
Non-GAAP general and administrative	$	5,171 			$	5,320 			$	5,493 		
						
GAAP goodwill impairment	$	— 			$	— 			$	50,300 		
Goodwill impairment	— 			— 			(50,300)		
Non-GAAP goodwill impairment	$	— 			$	— 			$	— 		
						
GAAP operating expense	$	25,392 			$	25,536 			$	81,170 		
Impact of non-GAAP adjustments	(3,142)			(2,980)			(53,534)		
Non-GAAP operating expense	$	22,250 			$	22,556 			$	27,636 		

CASTLIGHT HEALTH, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(unaudited)

Operating loss:						
GAAP operating loss	$	(3,089)			$	(1,371)			$	(56,598)		
Impact of non-GAAP adjustments	4,244 			4,024 			54,375 		
Non-GAAP operating income (loss)	$	1,155 			$	2,653 			$	(2,223)		

	

	
						
Net loss and net loss per share:						
GAAP net loss	$	(2,996)			$	(1,197)			$	(56,335)		
Total pre-tax impact of non-GAAP adjustments	4,244 			4,024 			54,375 		
	
Non-GAAP net income (loss)	$	1,248 			$	2,827 			$	(1,960)		
GAAP net loss per share, basic and diluted	$	(0.02)			$	(0.01)			$	(0.38)		
Non-GAAP net income (loss) per share, basic and diluted	$	0.01 			$	0.02 			$	(0.01)		
Shares used in basic and diluted net loss per share computation	156,781 			154,739 			148,872 		

Castlight Media Contact:
Caroline Kawashima
press@castlighthealth.com
415-246-0313

Castlight Investor Contact:
ir@castlighthealth.com
443-213-0500