CASTLIGHT HEALTH, INC., 10-Q filed on 4/30/2021
Quarterly Report
v3.21.1
Cover - shares
3 Months Ended
Mar. 31, 2021
Apr. 27, 2021
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2021  
Document Transition Report false  
Entity File Number 001-36330  
Entity Registrant Name CASTLIGHT HEALTH, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 26-1989091  
Entity Address, Address Line One 150 Spear Street  
Entity Address, Address Line Two Suite 400  
Entity Address, City or Town San Francisco  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 94105  
City Area Code 415  
Local Phone Number 829-1400  
Title of 12(b) Security Class B Common Stock, par value $0.0001 per share  
Trading Symbol CSLT  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Amendment Flag false  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Entity Central Index Key 0001433714  
Current Fiscal Year End Date --12-31  
Class A    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   28,397,210
Class B    
Document Information [Line Items]    
Entity Common Stock, Shares Outstanding   129,521,529
v3.21.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
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
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
Commitments and contingencies
Stockholders’ equity:    
Additional paid-in capital 644,566 641,075
Accumulated deficit (520,221) (517,225)
Total stockholders’ equity 124,361 123,866
Total liabilities and stockholders’ equity 166,139 166,773
Class A    
Stockholders’ equity:    
Common stock 3 4
Class B common stock    
Stockholders’ equity:    
Common stock $ 13 $ 12
v3.21.1
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2021
Dec. 31, 2020
Class A    
Par value (usd per share) $ 0.0001 $ 0.0001
Common stock authorized (in shares) 200,000,000 200,000,000
Common stock issued (in shares) 28,397,210 34,998,171
Common stock outstanding (in shares) 28,397,210 34,998,171
Class B    
Par value (usd per share) $ 0.0001 $ 0.0001
Common stock authorized (in shares) 800,000,000 800,000,000
Common stock issued (in shares) 129,521,529 120,768,900
Common stock outstanding (in shares) 129,521,529 120,768,900
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Revenue:    
Total revenue, net $ 35,059 $ 39,045
Cost of revenue:    
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 0 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 (in usd per share) $ (0.02) $ (0.38)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 156,781 148,872
Subscription    
Revenue:    
Total revenue, net $ 32,110 $ 38,383
Cost of revenue:    
Total cost of revenue [1] 8,099 10,232
Professional services and other    
Revenue:    
Total revenue, net 2,949 662
Cost of revenue:    
Total cost of revenue [1] $ 4,657 $ 4,241
[1] Includes stock-based compensation expense as follows:
 Three Months Ended March 31,
 20212020
Cost of revenue:
Cost of subscription$257 $169 
Cost of professional services and other236 116 
Sales and marketing350 672 
Research and development1,069 1,163 
General and administrative1,195 1,066 
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Subscription    
Stock-based compensation expense $ 257 $ 169
Professional services and other    
Stock-based compensation expense 236 116
Sales and marketing    
Stock-based compensation expense 350 672
Research and development    
Stock-based compensation expense 1,069 1,163
General and administrative    
Stock-based compensation expense $ 1,195 $ 1,066
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Statement of Comprehensive Income [Abstract]    
Net loss $ (2,996) $ (56,335)
Other comprehensive income:    
Net change in unrealized gain on available-for-sale marketable securities 0 11
Other comprehensive income 0 11
Comprehensive loss $ (2,996) $ (56,324)
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)
$ in Thousands
Total
Class A and B Common Stock
Additional Paid-In Capital
Accumulated Other Comprehensive Income
Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2019   148,209,215      
Beginning balance at Dec. 31, 2019 $ 172,874 $ 15 $ 627,899 $ 2 $ (455,042)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   923,693      
Exercise of stock options, net (in shares)   142,729      
Issuance of common stock upon exercise of stock options 155   155    
Issuance of common stock under the ESPP (in shares)   242,007      
Issuance of common stock under the ESPP 186   186    
Stock-based compensation 3,205   3,205    
Comprehensive income (loss) (56,324)     11 (56,335)
Ending balance (in shares) at Mar. 31, 2020   149,517,644      
Ending balance at Mar. 31, 2020 120,096 $ 15 631,445 13 (511,377)
Beginning balance (in shares) at Dec. 31, 2020   155,767,071      
Beginning balance at Dec. 31, 2020 $ 123,866 $ 16 641,075 0 (517,225)
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Vesting of restricted stock units (in shares)   1,843,767      
Exercise of stock options, net (in shares) 93,961 93,961      
Issuance of common stock upon exercise of stock options $ 128   128    
Issuance of common stock under the ESPP (in shares)   213,940      
Issuance of common stock under the ESPP 233   233    
Stock-based compensation 3,130   3,130    
Comprehensive income (loss) (2,996)     0 (2,996)
Ending balance (in shares) at Mar. 31, 2021   157,918,739      
Ending balance at Mar. 31, 2021 $ 124,361 $ 16 $ 644,566 $ 0 $ (520,221)
v3.21.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 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 0 50,300
Stock-based compensation 3,107 3,186
Expense recognized 1,340 2,383
Amortization and impairment of deferred professional service costs 580 925
Non-cash operating lease expense 1,107 1,400
Accretion and amortization of marketable securities 0 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 0 (1,989)
Maturities of marketable securities 0 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 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:    
Total cash, cash equivalents and restricted cash $ 57,645 $ 39,006
v3.21.1
Organization and Description of Business
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization and Description of Business Organization and Description of Business Castlight Health, Inc. (“Castlight” or “the Company”) provides health navigation solutions for large U.S. employers and health plans (“customers”) and their respective employees and members (“users”). Castlight’s offerings help individuals connect and engage with the right provider, benefit, or virtual care solution, at the right time, leveraging a combination of sophisticated technology and an expert team. Castlight’s navigation offerings have demonstrated measurable results, driving high engagement and user satisfaction, increased program utilization, steerage to the right care and provider, and lower healthcare costs for its customers and millions of users. The Company was incorporated in the State of Delaware in January 2008. The Company's principal executive offices are located in San Francisco, California, and its Customer Center of Excellence is located in Sandy, Utah.
v3.21.1
Accounting Standards and Significant Accounting Policies
3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Accounting Standards and Significant Accounting Policies Accounting Standards and Significant Accounting Policies
Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include Castlight and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity and cash flows. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 

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

Use of Estimates

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

Variable consideration included in the transaction price of the Company’s contracts with customers;
The standalone selling price of the performance obligations in the Company’s contracts with customers;
Assumptions used in the valuation of certain equity awards;
Assumptions used in the calculation of goodwill impairment, including the forecast of future cash flows and discount rate; and
Assumptions used in the calculation of right-of-use assets ("ROU") and lease liabilities for operating leases, including lease terms and the Company’s incremental borrowing rate.

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

Concentrations of Risk and Significant Customers

The Company had one customer, Anthem Inc. ("Anthem"), that accounted for approximately 50% of total revenue during the three months ended March 31, 2021. The Company had four customers that accounted for approximately 15%, 12%, 12% and 10%, respectively, of accounts receivable, excluding contract assets, as of March 31, 2021.

Recently Issued Accounting Pronouncements
The Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined that the ASUs issued by the FASB during the three months ended March 31, 2021 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results.
v3.21.1
Revenue, Deferred Revenue, Contract Balances and Performance Obligations
3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue, Deferred Revenue, Contract Balances and Performance Obligations Revenue, Deferred Revenue, Contract Balances and Performance Obligations
The Company sells to customers based in the United States.

Deferred revenue as of March 31, 2021 and December 31, 2020 was $13.3 million and $7.5 million, respectively. Contract assets as of March 31, 2021 and December 31, 2020 were $7.7 million and $9.4 million, respectively. The decrease in contract assets is primarily due to the Anthem enterprise license agreement that results in invoicing ahead of revenue recognition in the second year of that agreement.

Revenue of $5.7 million and $6.5 million was recognized during the three months ended March 31, 2021 and 2020, respectively, that was included in the Company’s deferred revenue balances at the beginning of the respective periods.

The Company recorded favorable cumulative catch-up adjustments to revenue of $1.2 million and $1.7 million during the three months ended March 31, 2021 and 2020, respectively, arising from changes in variable consideration.

The aggregate balance of remaining performance obligations from non-cancelable contracts with customers as of March 31, 2021 was $143.2 million. The Company expects to recognize approximately 80% of this balance over the next 12 months, with the remaining balance recognized thereafter. Remaining performance obligations are defined as deferred revenue and amounts yet to be billed for the non-cancelable portion of contracts.
v3.21.1
Deferred Costs
3 Months Ended
Mar. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Deferred Costs Deferred Costs
Changes in the balance of total deferred commissions and total deferred professional service costs during the three months ended March 31, 2021 are as follows (in thousands):

As of December 31, 2020AdditionsAdjustment to prior year additionsExpense recognizedAs of March 31, 2021
Deferred commissions$9,556 $175 $(201)$(1,340)$8,190 
Deferred professional service costs4,462 323 — (580)4,205 
Total deferred commissions and professional service costs
$14,018 $498 $(201)$(1,920)$12,395 

    These costs are reviewed for impairment quarterly. Impairment charges were $0.3 million and $1.1 million for the three months ended March 31, 2021 and 2020, respectively.
v3.21.1
Goodwill and Intangible Assets
3 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Goodwill and Intangible Assets
Impairment

During the first quarter of 2020, the Company determined that the significant decline in the U.S. economy as a result of the COVID-19 pandemic, together with the decline in the Company’s stock price, constituted a triggering event which required the Company to perform interim impairment analyses related to its long-lived assets and goodwill. The impairment analysis for long-lived assets indicated that the assets were recoverable; therefore, no impairment was recorded. After assessing long-lived assets, the Company performed a goodwill impairment analysis and determined that the carrying value of its only reporting unit exceeded its fair value by approximately $50.3 million. The fair value was determined using the income approach. The Company believes that the income approach is the most reliable indication of fair value since it incorporates future estimated revenues and expenses for the reporting unit that the market approach may not directly incorporate. In addition to future estimated revenue and expenses, the determination of fair value included assumptions related to a discount rate.
As of March 31, 2021, the Company determined that there were no indicators present to suggest that it was more likely than not that the fair value of the reporting unit was less than its carrying amount. The Company will continue to monitor its goodwill on a quarterly basis for indicators of impairment, including, but not limited to, future declines in the stock price. Accordingly, there may be future impairments.

Goodwill

The Company’s goodwill relates entirely to the acquisition of Jiff in 2017. As of March 31, 2021, the gross amount of goodwill was $91.8 million and accumulated goodwill impairment was $50.3 million, all of which was recorded in the first quarter of 2020. The goodwill impairment did not involve any cash expenditures.

Intangible assets, net

Identified intangible assets are recorded at their estimated fair values at the date of acquisition and are amortized over their respective estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are used.

The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands):
As of March 31, 2021
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900 $(6,148)$4,752 
Developed technology510,600 (8,480)2,120 
Total identifiable intangible assets$21,500 $(14,628)$6,872 

As of December 31, 2020
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900 $(5,620)$5,280 
Developed technology510,600 (7,950)2,650 
Total identifiable intangible assets$21,500 $(13,570)$7,930 

Amortization expense from acquired intangible assets for the three months ended March 31, 2021 and 2020 was $1.1 million. Amortization expense is included in cost of subscription, sales and marketing, and general and administrative expenses.

Future estimated amortization expense for acquired intangible assets is as follows (in thousands):
Remainder of 2021$3,174 
20222,642 
20231,056 
Total estimated amortization expense$6,872 
v3.21.1
Property and Equipment
3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following (in thousands):
As of
 March 31, 2021December 31, 2020
Leasehold improvements$4,606 $4,606 
Computer equipment7,885 7,655 
Software897 908 
Internal-use software3,878 3,878 
Furniture and equipment1,493 1,492 
Construction in progress102 128 
Total18,861 18,667 
Accumulated depreciation/amortization(13,895)(13,346)
Property and equipment, net$4,966 $5,321 
Depreciation and amortization expense for the three months ended March 31, 2021 and 2020 was $0.6 million and $0.5 million, respectively. Depreciation and amortization are recorded on a straight-line basis.
v3.21.1
Debt
3 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Debt Debt
Term Loan

The Company has a term loan facility (the “Loan Agreement”) with Silicon Valley Bank (the “Bank”) that provided for a term loan of approximately $5.6 million (the “Term Loan”). Obligations under the Term Loan accrue interest at a floating per annum rate equal to the greater of (A) the prime rate as published in the money rates section of The Wall Street Journal (“Prime Rate”) minus 1% or (B) 0%. Interest and principal on the Term Loan are payable monthly. The maturity date of the Term Loan is September 1, 2021, and the outstanding principal balance of $0.9 million, as well as the final payment discussed below, are classified within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of March 31, 2021.

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

In accordance with the Loan Agreement, the Company is subject to certain reporting covenants, and the debt obligations are secured by a security interest in the assets of the Company, excluding intellectual property and certain other exceptions. The Company was in compliance with all reporting covenants in the Loan Agreement related to the outstanding principal balance as of March 31, 2021.

Revolving Line of Credit
On May 5, 2020, the Company entered into the Third Amended and Restated Loan and Security Agreement (the "Amended Loan Agreement") with the Bank. The Amended Loan Agreement amended and restated its existing Loan Agreement. Under the Amended Loan Agreement, the Bank agreed to extend a $25.0 million revolving credit facility to the Company (the “Revolving Line”). Borrowings under the Revolving Line accrue interest at a floating per annum rate equal to the Prime Rate plus 1%, and such interest is payable monthly. The Company may request borrowings under the Revolving Line prior to May 4, 2023, on which date the Revolving Line terminates. In relation to the Revolving Line, the Company is subject to certain financial and reporting covenants. As of March 31, 2021, no borrowings have been made under the Revolving Line, and the Company was in compliance with all financial and reporting covenants.
v3.21.1
Contingencies
3 Months Ended
Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Contingencies Contingencies Legal Matters From time to time, the Company may become subject to legal proceedings, claims or litigation arising in the ordinary course of business. In addition, the Company may receive notices 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 the Company will incur the loss and when it can reasonably estimate the amount of the loss or range of loss.
v3.21.1
Stock Compensation
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Stock Compensation Stock Compensation
Restricted Stock Units (“RSUs”) Activity

A summary of unvested restricted stock unit activity for the three months ended March 31, 2021 is as follows:

Number of
Shares
Weighted-Average Grant Date Fair Value
Balance as of December 31, 202015,152,043 $1.31 
Granted4,377,950 $1.92 
Vested (1,843,767)$1.31 
Forfeited and canceled
(304,068)$1.19 
Balance as of March 31, 202117,382,158 $1.46 


As of March 31, 2021, the Company had $23.0 million of unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of approximately 2.9 years.

The Company granted approximately 1.1 million performance-based RSUs ("PSUs") to certain employees during the first quarter of 2021. The number of shares that will eventually vest depends on achievement of the performance target for 2021, as determined by the Compensation and Talent Committee of the Company's board of directors, and may range from 0% to 125% of the award amount. Once performance is determined, one third of the PSUs, if any, will vest one year after the grant date, and the remainder will vest in eight quarterly installments thereafter, subject to recipients' continued service. For the three months ended March 31, 2021, the Company recognized compensation expense of approximately $0.1 million related to PSUs.

Stock Option Activity

A summary of stock option activity for the three months ended March 31, 2021 is as follows: 
Options
Outstanding
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value (in thousands)
Balance as of December 31, 20205,987,243 $1.82 $568 
Granted— $— 
Exercised(93,961)$1.39 
Forfeited and canceled(40,049)$1.59 
Balance as of March 31, 20215,853,233 $1.83 $1,124 

There were no stock options granted during the three months ended March 31, 2021. The weighted-average grant-date fair value of stock options granted during the three months ended March 31, 2020 was $0.75.
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:

 Three Months Ended March 31, 2020
Volatility73%
Expected life (in years)6.1
Risk-free interest rate
0.84% - 1.47%
Dividend yield—%

As of March 31, 2021, the Company had $2.4 million of unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 2.8 years.    
Employee Stock Purchase Plan
The Company used the following Black-Scholes assumptions in estimating the fair value of the shares under the 2014 Employee Stock Purchase Plan (the “ESPP”):

Three Months Ended March 31,
20212020
Volatility71%71%
Expected life equals length of offering period (in years)0.50.5
Risk-free interest rate0.07%0.95%
Dividend yield—%—%

Stock-based compensation expense related to the ESPP was immaterial for the three months ended March 31, 2021 and 2020. As of March 31, 2021, the unrecognized stock-based compensation expense related to the ESPP was also immaterial, and is expected to be recognized over the remaining term of the current offering period.
v3.21.1
Income Taxes
3 Months Ended
Mar. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes The effective tax rate for the three months ended March 31, 2021 and 2020 was zero percent, primarily as a result of the estimated tax loss for the year and the change in valuation allowance. At March 31, 2021, all unrecognized tax benefits are subject to a full valuation allowance and, if recognized, will not affect the effective tax rate.
v3.21.1
Net Loss per Share
3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Net Loss per Share Net Loss per Share
Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including outstanding stock options and warrants, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive.
Net loss is allocated based on the contractual participation rights of the Class A and Class B common stock as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the net loss is allocated on a proportionate basis.

The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except per share data):
 Three Months Ended March 31,
 20212020
Class AClass BClass AClass B
Net loss$(630)$(2,366)$(13,257)$(43,078)
Weighted-average shares used to compute basic and diluted net loss per share
32,943 123,838 35,032 113,840 
Basic and diluted net loss per share
$(0.02)$(0.02)$(0.38)$(0.38)

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,
 20212020
Stock options and RSUs
23,235 20,016 
Shares issuable under the ESPP292 297 
Warrants115 115 
Total23,642 20,428 
v3.21.1
Accounting Standards and Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2021
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation
Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements include Castlight and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. In the opinion of management, the information herein reflects all adjustments, consisting only of normal recurring adjustments except as otherwise noted, considered necessary for a fair statement of results of operations, financial position, stockholders’ equity and cash flows. The results for the interim periods presented are not necessarily indicative of the results expected for any future period. The following information should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. 

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

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

Variable consideration included in the transaction price of the Company’s contracts with customers;
The standalone selling price of the performance obligations in the Company’s contracts with customers;
Assumptions used in the valuation of certain equity awards;
Assumptions used in the calculation of goodwill impairment, including the forecast of future cash flows and discount rate; and
Assumptions used in the calculation of right-of-use assets ("ROU") and lease liabilities for operating leases, including lease terms and the Company’s incremental borrowing rate.

Actual results could differ from those estimates, and such differences could be material to the Company’s consolidated financial position and results of operations.
Recently Issued Accounting Pronouncements Recently Issued Accounting PronouncementsThe Company considers the applicability and impact of all ASUs issued by the FASB. The Company determined that the ASUs issued by the FASB during the three months ended March 31, 2021 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results.
v3.21.1
Deferred Costs (Tables)
3 Months Ended
Mar. 31, 2021
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Schedule of Changes in Balance of Total Deferred Commissions and Total Deferred Professional Service Costs
Changes in the balance of total deferred commissions and total deferred professional service costs during the three months ended March 31, 2021 are as follows (in thousands):

As of December 31, 2020AdditionsAdjustment to prior year additionsExpense recognizedAs of March 31, 2021
Deferred commissions$9,556 $175 $(201)$(1,340)$8,190 
Deferred professional service costs4,462 323 — (580)4,205 
Total deferred commissions and professional service costs
$14,018 $498 $(201)$(1,920)$12,395 
v3.21.1
Goodwill and Intangible Assets (Tables)
3 Months Ended
Mar. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Finite-Lived Intangible Assets
The following tables set forth the fair value components of identifiable acquired intangible assets (dollars in thousands):
As of March 31, 2021
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900 $(6,148)$4,752 
Developed technology510,600 (8,480)2,120 
Total identifiable intangible assets$21,500 $(14,628)$6,872 

As of December 31, 2020
Useful LifeGrossAccumulated AmortizationNet
Customer relationships6$10,900 $(5,620)$5,280 
Developed technology510,600 (7,950)2,650 
Total identifiable intangible assets$21,500 $(13,570)$7,930 
Schedule of Amortization Expense for Acquired Intangible Assets
Future estimated amortization expense for acquired intangible assets is as follows (in thousands):
Remainder of 2021$3,174 
20222,642 
20231,056 
Total estimated amortization expense$6,872 
v3.21.1
Property and Equipment (Tables)
3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment
Property and equipment consisted of the following (in thousands):
As of
 March 31, 2021December 31, 2020
Leasehold improvements$4,606 $4,606 
Computer equipment7,885 7,655 
Software897 908 
Internal-use software3,878 3,878 
Furniture and equipment1,493 1,492 
Construction in progress102 128 
Total18,861 18,667 
Accumulated depreciation/amortization(13,895)(13,346)
Property and equipment, net$4,966 $5,321 
v3.21.1
Stock Compensation (Tables)
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Schedule of Other Share-based Compensation, Activity
A summary of unvested restricted stock unit activity for the three months ended March 31, 2021 is as follows:

Number of
Shares
Weighted-Average Grant Date Fair Value
Balance as of December 31, 202015,152,043 $1.31 
Granted4,377,950 $1.92 
Vested (1,843,767)$1.31 
Forfeited and canceled
(304,068)$1.19 
Balance as of March 31, 202117,382,158 $1.46 
Schedule of Share-based Compensation, Stock Options, Activity
A summary of stock option activity for the three months ended March 31, 2021 is as follows: 
Options
Outstanding
Weighted-
Average
Exercise
Price
Aggregate
Intrinsic
Value (in thousands)
Balance as of December 31, 20205,987,243 $1.82 $568 
Granted— $— 
Exercised(93,961)$1.39 
Forfeited and canceled(40,049)$1.59 
Balance as of March 31, 20215,853,233 $1.83 $1,124 
Schedule of Share-based Payment Award, 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:

 Three Months Ended March 31, 2020
Volatility73%
Expected life (in years)6.1
Risk-free interest rate
0.84% - 1.47%
Dividend yield—%
The Company used the following Black-Scholes assumptions in estimating the fair value of the shares under the 2014 Employee Stock Purchase Plan (the “ESPP”):

Three Months Ended March 31,
20212020
Volatility71%71%
Expected life equals length of offering period (in years)0.50.5
Risk-free interest rate0.07%0.95%
Dividend yield—%—%
v3.21.1
Net Loss per Share (Tables)
3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Schedule of Calculation of Basic and Diluted Earnings per Share 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,
 20212020
Class AClass BClass AClass B
Net loss$(630)$(2,366)$(13,257)$(43,078)
Weighted-average shares used to compute basic and diluted net loss per share
32,943 123,838 35,032 113,840 
Basic and diluted net loss per share
$(0.02)$(0.02)$(0.38)$(0.38)
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,
 20212020
Stock options and RSUs
23,235 20,016 
Shares issuable under the ESPP292 297 
Warrants115 115 
Total23,642 20,428 
v3.21.1
Accounting Standards and Significant Accounting Policies - Concentrations of Risk and Significant Customers (Details) - Customer Concentration Risk
3 Months Ended
Mar. 31, 2021
Anthem | Total Revenue  
Concentration Risk [Line Items]  
Concentration risk, percentage 50.00%
One customer | Accounts Receivable  
Concentration Risk [Line Items]  
Concentration risk, percentage 15.00%
Two Customer | Accounts Receivable  
Concentration Risk [Line Items]  
Concentration risk, percentage 12.00%
Three Customer | Accounts Receivable  
Concentration Risk [Line Items]  
Concentration risk, percentage 12.00%
Four Customer | Accounts Receivable  
Concentration Risk [Line Items]  
Concentration risk, percentage 10.00%
v3.21.1
Revenue, Deferred Revenue, Contract Balances and Performance Obligations - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]      
Deferred revenue $ 13.3   $ 7.5
Contract with customer, asset, net 7.7   $ 9.4
Contract with customer liability, revenue recognized 5.7 $ 6.5  
Contract with customer, liability, cumulative catch-up adjustment to revenue, change in estimate of transaction price $ 1.2 $ 1.7  
v3.21.1
Revenue, Deferred Revenue, Contract Balances and Performance Obligations - Performance Obligations (Details)
$ in Millions
Mar. 31, 2021
USD ($)
Revenue from Contract with Customer [Abstract]  
Revenue, remaining performance obligation $ 143.2
Revenue, remaining performance obligation, percent 80.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01  
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]  
Revenue, remaining performance obligation, expected timing of satisfaction, period 12 months
v3.21.1
Deferred Costs (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Capitalized Contract Cost [Roll Forward]    
As of December 31, 2020 $ 14,018  
Additions 498  
Adjustment to prior year additions (201)  
Expense recognized (1,920)  
As of March 31, 2021 12,395  
Impairment charges 300 $ 1,100
Deferred commissions    
Capitalized Contract Cost [Roll Forward]    
As of December 31, 2020 9,556  
Additions 175  
Adjustment to prior year additions (201)  
Expense recognized (1,340)  
As of March 31, 2021 8,190  
Deferred professional service costs    
Capitalized Contract Cost [Roll Forward]    
As of December 31, 2020 4,462  
Additions 323  
Adjustment to prior year additions 0  
Expense recognized (580)  
As of March 31, 2021 $ 4,205  
v3.21.1
Goodwill and Intangible Assets - Narrative (Details) - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]    
Goodwill impairment $ 0 $ 50,300
Gross goodwill 91,800  
Accumulated goodwill impairment 50,300  
Amortization expense $ 1,100 $ 1,100
v3.21.1
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Finite-lived Intangible Assets [Roll Forward]    
Gross $ 21,500 $ 21,500
Accumulated Amortization (14,628) (13,570)
Total $ 6,872 $ 7,930
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Useful Life 6 years 6 years
Finite-lived Intangible Assets [Roll Forward]    
Gross $ 10,900 $ 10,900
Accumulated Amortization (6,148) (5,620)
Total $ 4,752 $ 5,280
Developed technology    
Finite-Lived Intangible Assets [Line Items]    
Useful Life 5 years 5 years
Finite-lived Intangible Assets [Roll Forward]    
Gross $ 10,600 $ 10,600
Accumulated Amortization (8,480) (7,950)
Total $ 2,120 $ 2,650
v3.21.1
Goodwill and Intangible Assets - Schedule of Amortization Expense for Acquired Intangible Assets (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]    
Remainder of 2021 $ 3,174  
2022 2,642  
2023 1,056  
Total $ 6,872 $ 7,930
v3.21.1
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Property, Plant and Equipment [Line Items]    
Property and equipment $ 18,861 $ 18,667
Accumulated depreciation/amortization (13,895) (13,346)
Property and equipment, net 4,966 5,321
Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment 4,606 4,606
Computer equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment 7,885 7,655
Software    
Property, Plant and Equipment [Line Items]    
Property and equipment 897 908
Internal-use software    
Property, Plant and Equipment [Line Items]    
Property and equipment 3,878 3,878
Furniture and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment 1,493 1,492
Construction in progress    
Property, Plant and Equipment [Line Items]    
Property and equipment $ 102 $ 128
v3.21.1
Property and Equipment - Narrative (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Property, Plant and Equipment [Abstract]    
Depreciation expense $ 0.6 $ 0.5
v3.21.1
Debt - Narrative (Details) - USD ($)
3 Months Ended
May 05, 2020
Mar. 31, 2021
Line of Credit Facility [Line Items]    
Term Loan   $ 5,600,000
Early repayment of senior debt   900,000
Early repayment of senior debt   500,000
Line of Credit | Revolving credit    
Line of Credit Facility [Line Items]    
Line of credit facility, maximum borrowing capacity $ 25,000,000.0  
Borrowings   $ 0
Interest Rate Option A    
Line of Credit Facility [Line Items]    
Spread on variable rate   1.00%
Interest Rate Option B    
Line of Credit Facility [Line Items]    
Debt instrument, interest rate, stated percentage   0.00%
Prime rate | Line of Credit | Revolving credit    
Line of Credit Facility [Line Items]    
Spread on variable rate 1.00%  
v3.21.1
Stock Compensation - Summary of Restricted Stock Unit Activity (Details) - RSUs
3 Months Ended
Mar. 31, 2021
$ / shares
shares
Number of Shares  
Balance as of beginning of period (in shares) | shares 15,152,043
Granted (in shares) | shares 4,377,950
Vested (in shares) | shares (1,843,767)
Forfeited and canceled (in shares) | shares (304,068)
Balance as of end of period (in shares) | shares 17,382,158
Weighted-Average Grant Date Fair Value  
Balance as of beginning of period (in usd per share) | $ / shares $ 1.31
Granted (in usd per share) | $ / shares 1.92
Vested (in usd per share) | $ / shares 1.31
Forfeited and canceled (in usd per share) | $ / shares 1.19
Balance as of end of period (in usd per share) | $ / shares $ 1.46
v3.21.1
Stock Compensation - Narrative (Details) - USD ($)
$ / shares in Units, $ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
RSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation cost $ 23.0  
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition 2 years 10 months 24 days  
Granted (in shares) 4,377,950  
Stock granted, value, share-based compensation, gross $ 1.92  
PSUs    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Granted (in shares) 1,100,000  
Stock-based compensation expense $ 0.1  
PSUs | Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Awards granted vesting percentage 0.00%  
PSUs | Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Awards granted vesting percentage 125.00%  
Stock Option    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition 2 years 9 months 18 days  
Stock granted, value, share-based compensation, gross $ 0 $ 0.75
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options $ 2.4  
Volatility   73.00%
Stock Option | Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate   0.84%
Stock Option | Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate   1.47%
ESPP    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Unrecognized compensation cost 0.0  
Stock-based compensation expense $ 0.0 $ 0.0
Volatility 71.00% 71.00%
Risk-free interest rate 0.07% 0.95%
v3.21.1
Stock Compensation - Summary of Stock Option Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Options Outstanding    
Balance as of beginning of period (in shares) 5,987,243  
Granted (in shares) 0  
Exercised (in shares) (93,961)  
Forfeited and canceled (in shares) (40,049)  
Balance as of end of period (in shares) 5,853,233  
Weighted- Average Exercise Price    
Balance as of beginning of period (in usd per share) $ 1.82  
Granted (in usd per share) 0  
Exercised (in usd per share) 1.39  
Forfeited and canceled (in usd per share) 1.59  
Balance as of end of period (in usd per share) $ 1.83  
Aggregate Intrinsic Value (in thousands)    
Aggregate Intrinsic Value $ 1,124 $ 568
v3.21.1
Stock Compensation - Assumptions Related to Share-based Compensation (Details)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Stock Option    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Volatility   73.00%
Expected life (in years)   6 years 1 month 6 days
Dividend yield   0.00%
Stock Option | Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate   0.84%
Stock Option | Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Risk-free interest rate   1.47%
ESPP    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Volatility 71.00% 71.00%
Expected life (in years) 6 months 6 months
Risk-free interest rate 0.07% 0.95%
Dividend yield 0.00% 0.00%
v3.21.1
Income Taxes (Details)
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Income Tax Disclosure [Abstract]    
Effective income tax rate reconciliation, percent 0.00% 0.00%
v3.21.1
Net Loss per Share - Calculation of Basic and Diluted Earnings per Share (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Class of Stock [Line Items]    
Net loss $ (2,996) $ (56,335)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 156,781 148,872
Basic and diluted net loss per share (in usd per share) $ (0.02) $ (0.38)
Class A    
Class of Stock [Line Items]    
Net loss $ (630) $ (13,257)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 32,943 35,032
Basic and diluted net loss per share (in usd per share) $ (0.02) $ (0.38)
Class B    
Class of Stock [Line Items]    
Net loss $ (2,366) $ (43,078)
Weighted-average shares used to compute basic and diluted net loss per share (in shares) 123,838 113,840
Basic and diluted net loss per share (in usd per share) $ (0.02) $ (0.38)
v3.21.1
Net Loss per Share - Summary of Antidilutive Securities (Details) - shares
shares in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from the calculation of diluted net loss per share (in shares) 23,642 20,428
Stock options and RSUs    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from the calculation of diluted net loss per share (in shares) 23,235 20,016
Shares issuable under the ESPP    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from the calculation of diluted net loss per share (in shares) 292 297
Warrants    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Securities excluded from the calculation of diluted net loss per share (in shares) 115 115
v3.21.1
Label Element Value
Restricted Cash, Current us-gaap_RestrictedCashCurrent $ 0
Restricted Cash, Current us-gaap_RestrictedCashCurrent $ 181,000