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

July 30, 2018
Date of Report (Date of earliest event reported)

CASTLIGHT HEALTH, INC.
(Exact name of registrant as specified in its charter)
______________________________________

			
Delaware
(State or other jurisdiction of
incorporation or organization)	001-36330
(Commission File Number)	26-1989091
(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)

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 [x]
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. [x]

Item 2.02 Results of Operations and Financial Condition.

On  July 30, 2018 , Castlight Health, Inc. (“the Company”) issued a press release announcing its results for the three and six months ended June 30, 2018 . The press release is attached to this current report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any registration statement or other document filed by the Company with the Securities and Exchange Commission, whether made before or after the date of this Current Report on Form 8-K, regardless of any general incorporation language in such filing (or any reference to this Current Report on Form 8-K generally), except as shall be expressly set forth by specific reference in such filing.

Item 2.05 Costs Associated with Exit or Disposal Activities.

On  July 30, 2018 , the Company announced its intent to undertake a program to reduce its workforce in order to reduce 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 intends to reduce total expenses by 10-15% including a reduction of its workforce.The actions associated with this program are expected to be largely completed by September 30, 2018.

The Company is unable at this time to make a good faith estimate of the major costs associated with this program, including charges it will incur or related cash expenditures.  Once the Company is able to estimate these costs, the Company will provide its estimates in an amendment to this Current Report on Form 8-K or another of the Company’s filings with the Securities and Exchange Commission.

Forward-Looking Statements

This report contains forward-looking statements. All statements other than statements of historical facts contained herein are forward-looking statements reflecting the current beliefs and expectations of management made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements regarding the impact of the Company’s restructuring program and expectations for future business and financial performance. Statements including words such as “anticipate,” “believe,” “estimate,” “will,” “continue,” “expect,” or “future,” and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause the Company’s results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include those described in the Company’s documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this report are based on information available to the Company as of the date hereof. The Company assumes no obligation to update these forward-looking statements.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

	
		
Exhibit	Description	
99.1      Press Release, dated July 30, 2018, entitled “Castlight Health Announces Second Quarter 2018 Results”

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:	July 30, 2018	By:	 	/s/ Siobhan Nolan Mangini	
 	 	 	 	Siobhan Nolan Mangini	
 	 	 	 	Chief Financial Officer (Principal Financial Officer)	

 

Castlight Health Announces Second Quarter 2018 Results

Total Revenue of $37.8 million , Up 16% Year-over-Year

SAN FRANCISCO - July 30, 2018 - Castlight Health, Inc. (NYSE:CSLT), a leading health benefits platform provider, today announced results for its second quarter ended  June 30, 2018 .

“We’ve seen strong validation over the last two quarters that our health navigation solution is penetrating the market efficiently, which demonstrates the strategic value to us of our platform and channel collaborations,” said John Doyle, chief executive officer of Castlight Health. “Based on these results, we will increase our focus on adding new channel partners and align our costs accordingly. We will reduce operating expenses by 10 to 15 percent, which will position us to break even beginning in Q4, while continuing to make the critical platform investments needed to lead the health navigation market.”

Financial performance for the three months ended June 30, 2018 compared to the three months ended June 30, 2017 includes:
		
•	GAAP total revenue of $37.8 million , representing an increase of 16%	
		
•	GAAP gross margin of 58.4% , compared to 62.2%	
		
•	Non-GAAP gross margin of 62.2% compared to 67.4%	
		
•	GAAP operating loss of $14.1 million , compared to a loss of $17.6 million	
		
•	Non-GAAP operating loss of $6.9 million , compared to a loss of $8.7 million	
		
•	GAAP net loss per basic and diluted share of $0.10 , compared to a net loss per basic and diluted share of $0.09	

		
•	Non-GAAP net loss per basic and diluted share of $0.05 , compared to a net loss per basic and diluted share of $0.07	
		
•	Cash used in operations of $1.1 million , compared to $4.1 million	

Total cash, cash equivalents and marketable securities was $74.5 million as of June 30, 2018 .

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.”

Restructuring Program
Today, the Company is announcing a restructuring program to align its operations with its evolving business needs. This is also due, in part, to the recent unexpected churn of a large customer. Under this program, the Company intends to reduce operating expenses by 10 to 15 percent. The actions associated with this program are expected to be largely completed by September 30, 2018. The Company expects to take a restructuring charge in the third quarter of 2018, which will be excluded from its full year 2018 non-GAAP operating loss and non-GAAP net loss per share calculation.

Business Outlook
The Company is reiterating its previously-issued 2018 outlook. For the full year 2018, the Company expects:
• GAAP revenue in the range of $150 million to $155 million
		
•	Non-GAAP operating loss in the range of $15 million to $20 million	
		
•	Non-GAAP net loss per share of approximately $0.11 to $0.15 based on approximately 137 million to 138 million shares	

Quarterly Conference Call

Castlight Health senior management will host a conference call to discuss its second quarter 2018 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 (866) 393-4306 and the replay will be available for one week at (855) 859-2056 .  The conference ID number for the live call and replay is 3899475.

About Castlight Health
Castlight is on a mission to make it as easy as humanly possible to navigate healthcare and live happier, healthier, more productive live s.  Our health navigation platform connects with hundreds of health vendors, benefits resources, and plan designs, giving rise to the world’s first comprehensive app for all health needs. We guide individuals - based on their unique profile - to the best resources available to them, whether they are healthy, chronically ill, or actively seeking medical care. In doing so, we help companies regain control over rising healthcare costs and get more value from their benefits investments. Castlight revolutionized the healthcare sector with the introduction of data-driven price transparency tools in 2008 and the first consumer-grade wellbeing platform in 2012. Today, Castlight serves as the health navigation platform for millions of people and is a trusted partner to many of the largest employers in the world.

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 loss, non-GAAP other income, net, non-GAAP net loss and non-GAAP net loss per share. Non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAP operating loss, non-GAAP other income, net and non-GAAP net loss exclude stock-based compensation, litigation settlement, amortization of intangibles, amortization of internal-use software, lease exit and related charges, changes in fair value of contingent consideration liability, restructuring charges and charges related to the acquisition of Jiff and the associated tax impact of these items, where applicable.

We believe that these non-GAAP financial measures provide useful supplemental information to investors and others, facilitate the analysis of the company’s core operating results and comparison of operating results across reporting periods, and can help enhance overall understanding of the company’s historical financial performance.

We have provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, except that we have not reconciled our non-GAAP operating loss and net loss per share guidance for the full year 2018 to comparable GAAP operating loss and net loss per share guidance because we do not provide guidance for stock-based compensation expense, and capitalization and amortization of internal-use software, which are reconciling items between GAAP and non-GAAP operating loss. The factors that may impact our future stock-based compensation expense, and capitalization and amortization of internal-use software are out of our control and/or cannot be reasonably predicted, and therefore we are unable to provide such guidance without unreasonable effort. 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.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from, measures prepared in accordance with GAAP.

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

Safe Harbor For Forward-Looking Statements
This press release contains forward-looking statements about Castlight Health’s expectations, plans, intentions, and strategies, including, but not limited to, statements regarding Castlight Health’s 2018 full year projections, success of our strategy, impact of the restructuring program and our expectations for our future business and financial performance. Statements including words such as “anticipate,” “believe,” “estimate,” “will,” “continue,” “expect,” or “future,” and statements in the future tense are forward-looking statements. These forward-looking statements involve risks and uncertainties, as well as assumptions, which, if they do not fully materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. The risks and uncertainties include those described in Castlight Health’s documents filed with or furnished to the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Castlight Health as of the date hereof. Castlight Health assumes no obligation to update these forward-looking statements.

Copyright 2018 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	
 	June 30, 2018	 	December 31, 2017	
 		 	(as adjusted) (1)	
Assets	 	 	 	
Current assets:	 	 	 	
Cash and cash equivalents	$	44,642		 	$	61,319		
Marketable securities	29,833		 	32,025		
Accounts receivable and other, net	28,184		 	21,933		
Prepaid expenses and other current assets	5,742		 	3,991		
Total current assets	108,401		 	119,268		
Property and equipment, net	5,247		 	5,263		
Restricted cash, non-current	1,325		 	1,325		
Deferred commissions	24,691		 	27,512		
Deferred professional service costs	11,855		 	12,480		
Intangible assets, net	18,144		 	20,253		
Goodwill	91,785		 	91,785		
Other assets	2,141		 	1,997		
Total assets	$	263,589		 	$	279,883		
Liabilities and stockholders’ equity	 	 	 	
Current liabilities:	 	 	 	
Accounts payable	$	4,619		 	$	3,907		
Accrued expenses and other current liabilities	17,829		 	13,178		
Accrued compensation	9,530		 	13,941		
Deferred revenue	26,509		 	25,985		
Total current liabilities	58,487		 	57,011		
Deferred revenue, non-current	2,723		 	4,457		
Debt, non-current	4,183		 	4,958		
Other liabilities, non-current	2,964		 	1,900		
Total liabilities	68,357		 	68,326		
Stockholders’ equity	195,232		 	211,557		
Total liabilities and stockholders’ equity	$	263,589		 	$	279,883		
_______________
		
(1)	Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), which we adopted in the first quarter of 2018.	

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

	
																
 	Three Months Ended June 30,	 	Six Months Ended June 30,	
 	2018	 	2017	 	2018	 	2017	
 	 	 	(as adjusted) (1)	 	 	 	(as adjusted) (1)	
Revenue:	 	 	 	 	 	 	 	
Subscription	$	34,802		 	$	30,382		 	$	67,791		 	$	56,279		
Professional services and other	2,982		 	2,250		 	6,472		 	4,056		
Total revenue, net	37,784		 	32,632		 	74,263		 	60,335		
Cost of revenue:	 	 	 	 	 	 	 	
Cost of subscription (2)	9,140		 	7,706		 	18,314		 	11,952		
Cost of professional services and other (2)	6,590		 	4,628		 	12,359		 	8,437		
Total cost of revenue	15,730		 	12,334		 	30,673		 	20,389		
Gross profit	22,054		 	20,298		 	43,590		 	39,946		
Operating expenses:	 	 	 	 	 	 	 	
Sales and marketing (2)	13,306		 	15,935		 	27,218		 	30,081		
Research and development (2)	16,425		 	15,194		 	31,796		 	26,265		
General and administrative (2)	6,382		 	6,766		 	13,207		 	15,764		
Total operating expenses	36,113		 	37,895		 	72,221		 	72,110		
Operating loss	(14,059	)	 	(17,597	)	 	(28,631	)	 	(32,164	)	
Other income, net	101		 	12		 	229		 	205		
Income before income taxes	(13,958	)	 	(17,585	)	 	(28,402	)	 	(31,959	)	
Income tax benefit	—		 	(5,206	)	 	—		 	(5,206	)	
Net loss	$	(13,958	)	 	$	(12,379	)	 	$	(28,402	)	 	$	(26,753	)	
Net loss per share, basic and diluted	$	(0.10	)	 	$	(0.09	)	 	$	(0.21	)	 	$	(0.23	)	
Weighted-average shares used to compute basic and diluted net loss per share	136,682		 	130,537		 	135,843		 	117,807		
_______________________
		
(1)	Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), which we adopted in the first quarter of 2018.	
		
(2)	Includes stock-based compensation expense as follows:	

																
 	Three Months Ended June 30,	 	Six Months Ended June 30,	
 	2018	 	2017	 	2018	 	2017	
 	 	 	(as adjusted) (1)	 	 	 	(as adjusted) (1)	
Cost of revenue:	 	 	 	 	 	 	 	
Cost of subscription	$	231		 	$	253		 	$	473		 	$	380		
Cost of professional services and other	315		 	363		 	616		 	609		
Sales and marketing	1,318		 	2,441		 	2,456		 	4,595		
Research and development	1,908		 	2,254		 	3,562		 	4,044		
General and administrative	1,375		 	1,169		 	2,632		 	2,464		
_______________________
		
(1)	Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), which we adopted in the first quarter of 2018.	

CASTLIGHT HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)

																
 	Three Months Ended June 30,	 	Six Months Ended June 30,	
 	2018	 	2017	 	2018	 	2017	
 	 	 	(as adjusted) (1)	 	 	 	(as adjusted) (1)	
Operating activities:	 	 	 	 	 	 	 	
Net loss	$	(13,958	)	 	$	(12,379	)	 	$	(28,402	)	 	$	(26,753	)	
Adjustments to reconcile net loss to net cash used in operating activities:	 	 	 	 	 	 	 	
Depreciation and amortization	1,713		 	2,060		 	3,573		 	2,758		
Stock-based compensation	5,147		 	6,480		 	9,739		 	12,092		
Amortization of deferred commissions	2,947		 	2,356		 	5,800		 	4,289		
Amortization of deferred professional service costs	1,151		 	1,071		 	2,097		 	1,958		
Lease exit and related charges	901		 	—		 	1,817		 	 	
Release of deferred tax valuation allowance due to business combination	—		 	(5,206	)	 	—		 	(5,206	)	
Change in fair value of contingent consideration liability	—		 	(643	)	 	—		 	(643	)	
Accretion and amortization of marketable securities	(135	)	 	20		 	(266	)	 	84		
Changes in operating assets and liabilities:	 	 	 	 	 	 	 	
Accounts receivable and other, net	4,944		 	(1,426	)	 	(6,252	)	 	(3,117	)	
Deferred commissions	(1,808	)	 	(2,895	)	 	(2,979	)	 	(3,452	)	
Deferred professional service costs	(647	)	 	(1,002	)	 	(1,389	)	 	(1,853	)	
Prepaid expenses and other assets	(2,102	)	 	323		 	(1,896	)	 	(859	)	
Accounts payable	(1,272	)	 	(685	)	 	511		 	(508	)	
Accrued expenses and other liabilities	6,398		 	4,230		 	(1,229	)	 	(527	)	
Deferred revenue	(4,393	)	 	3,582		 	(1,210	)	 	6,711		
Net cash used in operating activities	(1,114	)	 	(4,114	)	 	(20,086	)	 	(15,026	)	
Investing activities:	 	 	 	 	 	 	 	
Purchase of property and equipment	(916	)	 	(764	)	 	(1,304	)	 	(930	)	
Purchase of marketable securities	(13,954	)	 	(15,768	)	 	(23,979	)	 	(31,775	)	
Maturities of marketable securities	10,700		 	28,938		 	26,450		 	63,737		
Business combination, net of cash acquired	—		 	(2,264	)	 	—		 	(2,264	)	
Net cash (used in) provided by investing activities	(4,170	)	 	10,142		 	1,167		 	28,768		
Financing activities:	 	 	 	 	 	 	 	
Proceeds from exercise of stock options	1,752		 	457		 	2,242		 	831		
Payments of issuance costs related to equity	—		 	(119	)	 	—		 	(731	)	
Net cash provided by financing activities	1,752		 	338		 	2,242		 	100		
 	 	 	 	 	 	 	 	
Net (decrease) increase in cash, cash equivalents and restricted cash	(3,532	)	 	6,366		 	(16,677	)	 	13,842		
Cash, cash equivalents and restricted cash at beginning of period	49,499		 	57,342		 	62,644		 	49,866		
Cash, cash equivalents and restricted cash at end of period	$	45,967		 	$	63,708		 	$	45,967		 	$	63,708		
 	 	 	 	 	 	 	 	
Reconciliation of cash, cash equivalents and restricted cash:	 	 	 	 	 	 	 	
Cash and cash equivalents	$	44,642		 	$	62,201		 	$	44,642		 	$	62,201		
Restricted cash	1,325		 	1,507		 	1,325		 	1,507		
Total cash, cash equivalents and restricted cash	$	45,967		 	$	63,708		 	$	45,967		 	$	63,708		
_______________________
		
(1)	Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), which we adopted in the first quarter of 2018, and ASU No. 2016-18, Statement of Cash Flows, Restricted Cash (ASC 230), which we adopted in the fourth quarter of 2017.	

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

	
																				
 	Three Months Ended	 	Six Months Ended	
 	June 30, 2018	 	March 31, 2018	 	June 30, 2017	 	June 30, 2018	 	June 30, 2017	
 	 	 	 	 	(as adjusted) (1)	 	 	 	(as adjusted) (1)	
Gross profit:	 	 	 	 	 	 	 	 	 	
GAAP gross profit subscription	$	25,662		 	$	23,815		 	$	22,676		 	$	49,477		 	$	44,327		
Stock-based compensation	231		 	242		 	253		 	473		 	380		
Amortization of internal-use software	219		 	219		 	244		 	438		 	488		
Amortization of intangibles	678		 	678		 	751		 	1,356		 	751		
Acquisition related costs	—		 	—		 	52		 	—		 	52		
Non-GAAP gross profit subscription	$	26,790		 	$	24,954		 	$	23,976		 	$	51,744		 	$	45,998		
GAAP gross margin subscription	73.7	 %	 	72.2	 %	 	74.6	 %	 	73.0	 %	 	78.8	 %	
Non-GAAP gross margin subscription	77.0	 %	 	75.6	 %	 	78.9	 %	 	76.3	 %	 	81.7	 %	
 	 	 	 	 	 	 	 	 	 	
GAAP gross loss professional services	$	(3,608	)	 	$	(2,279	)	 	$	(2,378	)	 	$	(5,887	)	 	$	(4,381	)	
Stock-based compensation	315		 	301		 	363		 	616		 	609		
Acquisition related costs	—		 	—		 	17		 	—		 	164		
Non-GAAP gross loss professional services	$	(3,293	)	 	$	(1,978	)	 	$	(1,998	)	 	$	(5,271	)	 	$	(3,608	)	
GAAP gross margin professional services	(121	)%	 	(65.3	)%	 	(106	)%	 	(91.0	)%	 	(108	)%	
Non-GAAP gross margin professional services	(110	)%	 	(56.7	)%	 	(88.8	)%	 	(81.4	)%	 	(89.0	)%	
 	 	 	 	 	 	 	 	 	 	
GAAP gross profit	$	22,054		 	$	21,536		 	$	20,298		 	$	43,590		 	$	39,946		
Impact of non-GAAP adjustments	1,443		 	1,440		 	1,680		 	2,883		 	2,444		
Non-GAAP gross profit	$	23,497		 	$	22,976		 	$	21,978		 	$	46,473		 	$	42,390		
GAAP gross margin	58.4	 %	 	59.0	 %	 	62.2	 %	 	58.7	 %	 	66.2	 %	
Non-GAAP gross margin	62.2	 %	 	63.0	 %	 	67.4	 %	 	62.6	 %	 	70.3	 %	
 	 	 	 	 	 	 	 	 	 	
Operating expense:	 	 	 	 	 	 	 	 	 	
GAAP sales and marketing	$	13,306		 	$	13,912		 	$	15,935		 	$	27,218		 	$	30,081		
Stock-based compensation	(1,318	)	 	(1,138	)	 	(2,441	)	 	(2,456	)	 	(4,595	)	
Amortization of intangibles	(273	)	 	(448	)	 	(448	)	 	(721	)	 	(448	)	
Acquisition related costs	—		 	—		 	(518	)	 	—		 	(923	)	
Non-GAAP sales and marketing	$	11,715		 	$	12,326		 	$	12,528		 	$	24,041		 	$	24,115		
 	 	 	 	 	 	 	 	 	 	
GAAP research and development	$	16,425		 	$	15,371		 	$	15,194		 	$	31,796		 	$	26,265		
Stock-based compensation	(1,908	)	 	(1,654	)	 	(2,254	)	 	(3,562	)	 	(4,044	)	
Acquisition related costs	—		 	—		 	(126	)	 	—		 	(393	)	
Lease exit and related charges	(842	)	 	(916	)	 	—		 	(1,758	)	 	—		
Non-GAAP research and development	$	13,675		 	$	12,801		 	$	12,814		 	$	26,476		 	$	21,828		
 	 	 	 	 	 	 	 	 	 	
GAAP general and administrative	$	6,382		 	$	6,825		 	$	6,766		 	$	13,207		 	$	15,764		
Stock-based compensation	(1,375	)	 	(1,257	)	 	(1,169	)	 	(2,632	)	 	(2,464	)	
Litigation settlement	—		 	—		 	—		 	—		 	(250	)	
Amortization of intangibles	(17	)	 	(17	)	 	(17	)	 	(34	)	 	(17	)	
Change in fair value of contingent consideration liability	—		 	—		 	643		 	—		 	643		
Acquisition related costs	—		 	—		 	(899	)	 	—		 	(3,239	)	
Non-GAAP general and administrative	$	4,990		 	$	5,551		 	$	5,324		 	$	10,541		 	$	10,437		
 	 	 	 	 	 	 	 	 	 	
GAAP operating expense	$	36,113		 	$	36,108		 	$	37,895		 	$	72,221		 	$	72,110		
Impact of non-GAAP adjustments	(5,733	)	 	(5,430	)	 	(7,229	)	 	(11,163	)	 	(15,730	)	
Non-GAAP operating expense	$	30,380		 	$	30,678		 	$	30,666		 	$	61,058		 	$	56,380		
 	 	 	 	 	 	 	 	 	 	
Operating loss:	 	 	 	 	 	 	 	 	 	
GAAP operating loss	$	(14,059	)	 	$	(14,572	)	 	$	(17,597	)	 	$	(28,631	)	 	$	(32,164	)	
Impact of non-GAAP adjustments	7,176		 	6,870		 	8,909		 	14,046		 	18,174		
Non-GAAP operating loss	$	(6,883	)	 	$	(7,702	)	 	$	(8,688	)	 	$	(14,585	)	 	$	(13,990	)	

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

	

Net loss and net loss per share:	 	 	 	 	 	 	 	 	 	
GAAP net loss	$	(13,958	)	 	$	(14,444	)	 	$	(12,379	)	 	$	(28,402	)	 	$	(26,753	)	
Total pre-tax impact of non-GAAP adjustments	7,176		 	6,870		 	8,909		 	14,046		 	18,174		
Income tax impact of non-GAAP adjustments	—		 	—		 	(5,206	)	 	—		 	(5,206	)	
Non-GAAP net loss	$	(6,782	)	 	$	(7,574	)	 	$	(8,676	)	 	$	(14,356	)	 	$	(13,785	)	
GAAP net loss per share, basic and diluted	$	(0.10	)	 	$	(0.11	)	 	$	(0.09	)	 	$	(0.21	)	 	$	(0.23	)	
Non-GAAP net loss per share, basic and diluted	$	(0.05	)	 	$	(0.06	)	 	$	(0.07	)	 	$	(0.11	)	 	$	(0.12	)	
Shares used in basic and diluted net loss per share computation	136,682		 	134,994		 	130,537		 	135,843		 	117,807		
_______________________
		
(1)	Prior-period information has been adjusted for the adoption of ASU No. 2014-09, Revenue from Contracts with Customers (ASC 606), which we adopted in the first quarter of 2018.	

Castlight Media Contact:
Shannon Magill
press@castlighthealth.com
415-829-1500

 Castlight Investor Contact:
Gary J. Fuges, CFA
ir@castlighthealth.com
415-829-1680