SAN FRANCISCO–(BUSINESS WIRE)–Castlight Health, Inc. (NYSE:CSLT), a pioneer of the Enterprise Healthcare Cloud, today announced results for its fourth quarter and full year ended December 31, 2014.
“We delivered strong results across the business in 2014. Revenue growth exceeded 250%, we ended the year with 168 customers, including 45 Fortune 500 firms, and we were successful in expanding our business with existing customers,” said Giovanni Colella, M.D., co-founder and Chief Executive Officer of Castlight. “2015 brings tremendous opportunity to continue our growth and invest to secure our leadership position in the emerging Enterprise Healthcare Management software category.”
Fourth Quarter Results
- Total revenues were $14.5 million, an increase of 182% from the fourth quarter of 2013. Subscription revenue was $13.3 million, an increase of 188% on a year-over-year basis.
- Gross margin was 54.3%, compared to a negative gross margin of 4.8% in the fourth quarter of 2013. Non-GAAP gross margin was 58.3% compared to a negative gross margin of 4.1% in the same period in 2013.
- Operating loss was $19.7 million, compared to an operating loss of $20.0 million during the fourth quarter of 2013. Non-GAAP operating loss was $15.3 million, compared to a non-GAAP operating loss of $18.8 million in the fourth quarter of 2013.
- Net loss per basic and diluted share was $0.22 compared to a net loss per share of $1.90 in the fourth quarter of 2013. The non-GAAP net loss per share was $0.17 compared to a net loss per share of $1.79 in the fourth quarter of 2013.
- Cash used in operations for the fourth quarter of 2014 was $11.5 million, compared to $14.5 million used in operations during the same period in 2013.
Full Year 2014 Results
- Total revenues were $45.6 million, an increase of 252% over 2013. Subscription revenue was $41.6 million, an increase of 257% on a year-over-year basis.
- Gross margin was 39.1%, compared to a negative gross margin of 33.4% in 2013. Non-GAAP gross margin was 42.2% compared to a negative gross margin of 32.4% in 2013.
- Operating loss was $86.2 million, compared to an operating loss of $62.3 million during the year 2013. Non-GAAP operating loss was $69.6 million, compared to a non-GAAP operating loss of $59.8 million during 2013.
- Net loss per basic and diluted share was $1.16, compared to a net loss per share of $6.28 in 2013. The non-GAAP net loss per share was $0.93, compared to a net loss per share of $6.03 in 2013. For both GAAP and non-GAAP purposes, the weighted average basic and diluted share count for 2014 was 74.4 million compared to 9.9 million in 2013.
- Total cash, cash equivalents and marketable securities were $198.7 million at the end of the fourth quarter of 2014.
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
Full Year 2015 Guidance: Revenue for 2015 is expected to be in the range of $74.0 million to $77.0 million, an increase of 62% to 69% year-over-year. Non-GAAP operating loss is expected to be in the range of $64.0 million to $67.0 million. Non-GAAP basic and diluted loss per share is expected to be in the range of $0.69 to $0.73 based on 92 to 93 million weighted average basic and diluted common shares outstanding. We are projecting cash used in operations of $44 million to $47 million in 2015.
Q1 2015 Guidance: Revenue for the company’s first quarter is expected to be in the range of $15.3 million to $15.6 million, an increase of 82% to 86% year-over-year. Non-GAAP operating loss is expected to be in the range of $16.5 million to $17.5 million. Non-GAAP basic and diluted loss per share is expected to be approximately $0.18 to $0.19 based on 91 million weighted average basic and diluted common shares outstanding.
For both the first quarter and the full year 2015, non-GAAP estimates exclude the effects of stock-based compensation expense, warrant expense and capitalization and amortization of internal-use software.
Quarterly Conference Call
Castlight Health will host a conference call to discuss its fourth quarter and full year 2014 results 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. In addition, an archive of the audiocast can be accessed through the same link. Participants who choose to call in to the conference call can do so by dialing 1-201-689-8562. A replay will be available at 1-858-384-5517, passcode 13598721, until midnight (Eastern Time) February 25, 2015.
About Castlight Health
Castlight Health, Inc. (NYSE:CSLT) is a leader in Enterprise Healthcare Management. We believe great healthcare builds great business, and U.S. enterprises can gain control over the $620 billion spent annually on healthcare, transforming a crippling cost into a strategic business advantage. Recognized as a top 2014 software platform by the HR Technology Conference & Exposition, the Castlight Enterprise Healthcare Cloud enables employers to understand and manage their healthcare investments while helping employees make the best possible healthcare decisions. Castlight is a great place to work, honored with a Glassdoor Employees’ Choice award and recognized by Rock Health for Diversity in Leadership. For more information visit www.castlighthealth.com. Follow us on Twitter and LinkedIn and Like us on Facebook. Source: Castlight Health.
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 margin (loss), non-GAAP operating expense, non-GAAP operating loss and non-GAAP net loss per share. These non-GAAP financial measures differ from GAAP financial measures in that they exclude stock-based compensation, expense for a warrant issued to a third-party service provider, capitalization and amortization of internal-use software 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 first quarter and fiscal year of 2015 to comparable GAAP operating loss and net loss per share guidance because we do not provide guidance for stock-based compensation expense, warrant 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, warrant 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.
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 first quarter and 2015 year projections, our expectations for future performance of our business, market growth and business conditions, future innovation by the company and future developments with respect to the digital healthcare industry. 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 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.
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