Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
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 $0.0001 per share | |
Trading Symbol | CSLT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001433714 | |
Current Fiscal Year End Date | --12-31 | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 35,028,171 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 118,751,393 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 46,804 | $ 43,017 |
Marketable securities | 0 | 16,411 |
Accounts receivable and other, net | 30,471 | 31,397 |
Prepaid expenses and other current assets | 4,399 | 4,645 |
Total current assets | 81,674 | 95,470 |
Property and equipment, net | 5,721 | 4,856 |
Restricted cash, non-current | 1,144 | 1,144 |
Deferred commissions | 10,597 | 14,718 |
Deferred professional service costs | 5,277 | 6,711 |
Intangible assets, net | 8,988 | 12,178 |
Goodwill | 41,485 | 91,785 |
Operating lease right-of-use assets, net | 11,383 | 13,906 |
Other assets | 1,687 | 2,016 |
Total assets | 167,956 | 242,784 |
Current liabilities: | ||
Accounts payable | 4,698 | 19,596 |
Accrued expenses and other current liabilities | 8,184 | 10,454 |
Accrued compensation | 6,821 | 8,770 |
Deferred revenue | 10,202 | 10,173 |
Operating lease liabilities | 5,687 | 5,914 |
Total current liabilities | 35,592 | 54,907 |
Deferred revenue, non-current | 443 | 572 |
Debt, non-current | 0 | 1,395 |
Operating lease liabilities, non-current | 8,954 | 11,823 |
Other liabilities, non-current | 909 | 1,213 |
Total liabilities | 45,898 | 69,910 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Additional paid-in capital | 638,071 | 627,899 |
Accumulated other comprehensive income | 0 | 2 |
Accumulated deficit | (516,028) | (455,042) |
Total stockholders’ equity | 122,058 | 172,874 |
Total liabilities and stockholders’ equity | 167,956 | 242,784 |
Class A common stock | ||
Stockholders’ equity: | ||
Common stock | 4 | 4 |
Class B common stock | ||
Stockholders’ equity: | ||
Common stock | $ 11 | $ 11 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Class A common stock | ||
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) | 35,028,171 | 35,032,053 |
Common stock outstanding (in shares) | 35,028,171 | 35,032,053 |
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) | 118,746,788 | 113,177,162 |
Common stock outstanding (in shares) | 118,746,788 | 113,177,162 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Revenue: | |||||
Total revenue, net | $ 35,078 | $ 35,461 | $ 109,623 | $ 106,861 | |
Cost of revenue: | |||||
Total cost of revenue | 11,887 | 14,501 | 39,121 | 42,774 | |
Gross profit | 23,191 | 20,960 | 70,502 | 64,087 | |
Operating expenses: | |||||
Sales and marketing | [1] | 6,158 | 9,829 | 24,313 | 27,933 |
Research and development | [1] | 11,182 | 14,295 | 38,047 | 44,507 |
General and administrative | [1] | 6,341 | 6,440 | 19,257 | 20,743 |
Goodwill impairment | 0 | 0 | 50,300 | 0 | |
Total operating expenses | 23,681 | 30,564 | 131,917 | 93,183 | |
Operating loss | (490) | (9,604) | (61,415) | (29,096) | |
Other income, net | 43 | 268 | 429 | 840 | |
Net loss | $ (447) | $ (9,336) | $ (60,986) | $ (28,256) | |
Net loss per share, basic and diluted (in usd per share) | $ 0 | $ (0.06) | $ (0.41) | $ (0.20) | |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 152,146 | 145,701 | 150,372 | 144,434 | |
Subscription | |||||
Revenue: | |||||
Total revenue, net | $ 34,069 | $ 34,900 | $ 106,741 | $ 102,670 | |
Cost of revenue: | |||||
Total cost of revenue | [1] | 8,013 | 8,517 | 27,064 | 24,917 |
Professional services and other | |||||
Revenue: | |||||
Total revenue, net | 1,009 | 561 | 2,882 | 4,191 | |
Cost of revenue: | |||||
Total cost of revenue | [1] | $ 3,874 | $ 5,984 | $ 12,057 | $ 17,857 |
[1] | Includes stock-based compensation expense as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Cost of revenue: Cost of subscription $ 224 $ 180 $ 598 $ 595 Cost of professional services and other 171 236 431 737 Sales and marketing 282 678 1,702 1,967 Research and development 1,026 1,294 3,503 4,731 General and administrative 1,401 625 3,325 3,817 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Subscription | ||||
Stock-based compensation expense | $ 224 | $ 180 | $ 598 | $ 595 |
Professional services and other | ||||
Stock-based compensation expense | 171 | 236 | 431 | 737 |
Sales and marketing | ||||
Stock-based compensation expense | 282 | 678 | 1,702 | 1,967 |
Research and development | ||||
Stock-based compensation expense | 1,026 | 1,294 | 3,503 | 4,731 |
General and administrative | ||||
Stock-based compensation expense | $ 1,401 | $ 625 | $ 3,325 | $ 3,817 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (447) | $ (9,336) | $ (60,986) | $ (28,256) |
Other comprehensive (loss) income: | ||||
Net change in unrealized (loss) gain on available-for-sale marketable securities | 0 | 0 | (2) | 7 |
Other comprehensive (loss) income | 0 | 0 | (2) | 7 |
Comprehensive loss | $ (447) | $ (9,336) | $ (60,988) | $ (28,249) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Class A and B Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2018 | 141,927,205 | ||||
Beginning balance at Dec. 31, 2018 | $ 194,671 | $ 14 | $ 609,697 | $ 0 | $ (415,040) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 3,004,471 | ||||
Exercise of stock options, net (in shares) | 1,234,290 | ||||
Issuance of common stock upon exercise of stock options | 1,924 | $ 1 | 1,923 | ||
Stock-based compensation | 11,953 | 11,953 | |||
Comprehensive income (loss) | (28,249) | 7 | (28,256) | ||
Ending balance (in shares) at Sep. 30, 2019 | 146,165,966 | ||||
Ending balance at Sep. 30, 2019 | 180,299 | $ 15 | 623,573 | 7 | (443,296) |
Beginning balance (in shares) at Jun. 30, 2019 | 145,198,887 | ||||
Beginning balance at Jun. 30, 2019 | 186,510 | $ 14 | 620,449 | 7 | (433,960) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 913,573 | ||||
Exercise of stock options, net (in shares) | 53,506 | ||||
Issuance of common stock upon exercise of stock options | 79 | $ 1 | 78 | ||
Stock-based compensation | 3,046 | 3,046 | |||
Comprehensive income (loss) | (9,336) | (9,336) | |||
Ending balance (in shares) at Sep. 30, 2019 | 146,165,966 | ||||
Ending balance at Sep. 30, 2019 | 180,299 | $ 15 | 623,573 | 7 | (443,296) |
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) | 4,925,493 | ||||
Exercise of stock options, net (in shares) | 172,729 | 172,729 | |||
Issuance of common stock upon exercise of stock options | $ 178 | 178 | |||
Issuance of common stock under the ESPP (in shares) | 467,522 | ||||
Issuance of common stock under the ESPP | 371 | 371 | |||
Stock-based compensation | 9,623 | 9,623 | |||
Comprehensive income (loss) | (60,988) | (2) | (60,986) | ||
Ending balance (in shares) at Sep. 30, 2020 | 153,774,959 | ||||
Ending balance at Sep. 30, 2020 | 122,058 | $ 15 | 638,071 | 0 | (516,028) |
Beginning balance (in shares) at Jun. 30, 2020 | 150,626,427 | ||||
Beginning balance at Jun. 30, 2020 | 119,164 | $ 15 | 634,730 | 0 | (515,581) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Vesting of restricted stock units (in shares) | 2,893,017 | ||||
Exercise of stock options, net (in shares) | 30,000 | ||||
Issuance of common stock upon exercise of stock options | 23 | 23 | |||
Issuance of common stock under the ESPP (in shares) | 225,515 | ||||
Issuance of common stock under the ESPP | 185 | 185 | |||
Stock-based compensation | 3,133 | 3,133 | |||
Comprehensive income (loss) | (447) | (447) | |||
Ending balance (in shares) at Sep. 30, 2020 | 153,774,959 | ||||
Ending balance at Sep. 30, 2020 | $ 122,058 | $ 15 | $ 638,071 | $ 0 | $ (516,028) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (60,986) | $ (28,256) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,907 | 4,368 |
Goodwill impairment | 50,300 | 0 |
Stock-based compensation | 9,559 | 11,847 |
Amortization and impairment of deferred commissions | 5,517 | 7,403 |
Amortization and impairment of deferred professional service costs | 2,417 | 3,110 |
Non-cash operating lease expense | 3,765 | 3,919 |
Accretion and amortization of marketable securities | 2 | (244) |
Changes in operating assets and liabilities: | ||
Accounts receivable and other, net | 926 | (8,626) |
Deferred commissions | (1,396) | (4,503) |
Deferred professional service costs | (918) | (1,301) |
Prepaid expenses and other assets | 242 | (822) |
Accounts payable | (14,048) | 2,378 |
Operating lease liabilities | (4,186) | (4,267) |
Accrued expenses and other liabilities | (2,576) | (3,072) |
Deferred revenue | (100) | (2,890) |
Accrued compensation | (1,949) | (428) |
Net cash used in operating activities | (8,524) | (21,384) |
Investing activities: | ||
Purchase of property and equipment | (3,431) | (712) |
Purchase of marketable securities | (2,994) | (23,069) |
Sales of marketable securities | 2,001 | 0 |
Maturities of marketable securities | 17,400 | 14,670 |
Net cash provided by (used in) investing activities | 12,976 | (9,111) |
Financing activities: | ||
Proceeds from exercise of stock options | 178 | 1,924 |
Proceeds from ESPP offering | 371 | 0 |
Principal payments on debt | (1,395) | (1,394) |
Net cash (used in) provided by financing activities | (846) | 530 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,606 | (29,965) |
Cash, cash equivalents and restricted cash at beginning of period | 44,342 | 67,330 |
Cash, cash equivalents and restricted cash at end of period | 47,948 | 37,365 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | $ 47,948 | $ 37,365 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2020 | |
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 deliver a personalized and simplified user experience that helps connect individuals with the right provider or available benefit at the right time. Castlight’s navigation offerings have demonstrated measurable results, driving increased levels of user satisfaction and program utilization 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. |
Accounting Standards and Signif
Accounting Standards and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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, 2019. 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 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. Marketable Securities The Company's marketable securities consist of U.S. agency obligations and U.S. treasury securities, with maturities at the time of purchase of greater than three months. Marketable securities with remaining maturities in excess of one year are classified as non-current. The Company classifies its marketable securities as available-for-sale at the time of purchase based on its intent and are recorded at their estimated fair value. Unrealized gains for available-for-sale securities are recorded in other comprehensive income/loss. Unrealized losses for available-for-sale securities are recorded in other comprehensive income/ loss, unless the losses relate to deterioration in credit risk or if it is likely securities will be sold before the recovery of their cost basis. In these cases, the unrealized losses are reported in other income, net in the consolidated statement of operations. Realized gains and losses are determined based on the specific identification method and are reported in other income, net in the consolidated statements of operations. Concentrations of Risk and Significant Customers The Company had one customer, Anthem Inc. ("Anthem"), that accounted for 49% and 47% of total revenue during the three and nine months ended September 30, 2020, respectively. No other customers had over 10% of total revenues during this period. Anthem also accounted for 25% of accounts receivable, excluding contract assets, as of September 30, 2020. Additionally, the Company had one other customer that accounted for 14% of accounts receivable, excluding contract assets, as of September 30, 2020. Recently Adopted Accounting Pronouncements Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses, and subsequent amendments (“ASC 326”). The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The adoption of this standard did not have a material impact on the Company’s financial statements. The Company will continue to actively monitor the impact of the current coronavirus (“COVID-19”) pandemic on expected credit losses. Effective January 1, 2020, the Company adopted ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations. 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 nine months ended September 30, 2020 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results. |
Revenue, Deferred Revenue, Cont
Revenue, Deferred Revenue, Contract Balances and Performance Obligations | 9 Months Ended |
Sep. 30, 2020 | |
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. Starting January 1, 2020, the effective date of the Anthem enterprise license agreement, the Company began treating Anthem as a direct health plan customer rather than a channel partner. As a result, substantially all of the Company's revenues are generated through direct sales. Deferred revenue as of September 30, 2020 and December 31, 2019 was $10.6 million and $10.7 million, respectively. Contract assets as of September 30, 2020 and December 31, 2019 were $7.0 million and $0.4 million, respectively. The increase in contract assets is primarily due to the Anthem enterprise license agreement that results in revenue recognized ahead of invoicing. Revenue of $7.8 million and $11.3 million was recognized during the three months ended September 30, 2020 and 2019, respectively, that was included in the Company’s deferred revenue balances at the beginning of the respective periods. Revenue of $9.8 million and $18.5 million was recognized during the nine months ended September 30, 2020 and 2019, 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 $0.2 million during the three months ended September 30, 2020 and unfavorable cumulative catch-up adjustments of $0.1 million during the three months ended September 30, 2019, arising from changes in estimates of transaction price. The Company recorded favorable cumulative catch-up adjustments to revenue of $2.3 million and $1.8 million during the nine months ended September 30, 2020 and 2019, respectively, arising from changes in estimates of transaction price. |
Deferred Costs
Deferred Costs | 9 Months Ended |
Sep. 30, 2020 | |
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 nine months ended September 30, 2020 are as follows (in thousands): As of December 31, 2019 Expense recognized As of September 30, 2020 Additions Deferred commissions $ 14,718 $ 1,396 $ (5,517) $ 10,597 Deferred professional service costs 6,711 983 (2,417) 5,277 Total deferred commissions and professional service costs $ 21,429 $ 2,379 $ (7,934) $ 15,874 These costs are reviewed for impairment quarterly. Impairment charges were $0.2 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively, and were $1.5 million and $0.8 million for the nine months ended September 30, 2020 and 2019, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Impairment 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 during the first quarter of 2020. 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 June 30, 2020 and September 30, 2020, 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, further 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 September 30, 2020, 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 September 30, 2020 Useful Life Gross Accumulated Amortization Net Customer relationships 6 $ 10,900 $ (5,092) $ 5,808 Developed technology 5 10,600 (7,420) 3,180 Total identifiable intangible assets $ 21,500 $ (12,512) $ 8,988 As of December 31, 2019 Useful Life Gross Accumulated Amortization Net Customer relationships 6 $ 10,900 $ (3,509) $ 7,391 Developed technology 5 10,600 (5,830) 4,770 Backlog 2.5 1,500 (1,500) — Other acquired intangible assets 1 - 3 900 (883) 17 Total identifiable intangible assets $ 23,900 $ (11,722) $ 12,178 Amortization expense from acquired intangible assets for the three months ended September 30, 2020 and 2019 was $1.1 million and $1.2 million, respectively. Amortization expense from acquired intangible assets for the nine months ended September 30, 2020 and 2019 was $3.2 million and $3.0 million, respectively. 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 2020 $ 1,058 2021 4,232 2022 2,642 2023 1,056 Total amortization expense $ 8,988 |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Marketable Securities | Marketable Securities The amortized cost and fair value of marketable securities was $0.8 million as of September 30, 2020, all of which consisted of money market mutual funds and was included in cash and cash equivalents. Marketable securities consisted of the following (in thousands): As of December 31, 2019 Amortized Unrealized Unrealized Fair Value U.S. treasury securities $ 13,602 $ 1 $ — $ 13,603 U.S. agency obligations 6,400 1 — 6,401 Money market mutual funds 8,736 — — 8,736 28,738 2 — 28,740 Included in cash and cash equivalents 12,329 — — 12,329 Included in marketable securities $ 16,409 $ 2 $ — $ 16,411 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company measures its financial assets and liabilities, if any, at fair value at each reporting period using a fair value hierarchy that requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The fair value of marketable securities included in the Level 2 category is based on observable inputs, such as quoted prices for similar assets at the measurement date; quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly. These values were obtained from a third-party pricing service and were evaluated using pricing models that vary by asset class and may incorporate available trade, bid and other market information and price quotes from well-established third party pricing vendors and broker-dealers. There have been no changes in valuation techniques in the periods presented. There were no significant transfers between fair value measurement levels as of September 30, 2020 and December 31, 2019. As of September 30, 2020 and December 31, 2019, there were no securities within Level 3 of the fair value hierarchy. The Company's assets that are measured at fair value consisted of $0.8 million of money market mutual funds that were included in cash and cash equivalents as of September 30, 2020, all of which were classified as Level 1 within the fair value hierarchy. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): As of December 31, 2019 Level 1 Level 2 Total Cash equivalents: Money market mutual funds $ 8,736 $ — $ 8,736 U.S. treasury securities — 3,593 3,593 Marketable securities: U.S. agency obligations — 6,401 6,401 U.S. treasury securities — 10,010 10,010 $ 8,736 $ 20,004 $ 28,740 Gross unrealized gains for cash equivalents and marketable securities as of September 30, 2020 and December 31, 2019 were not material. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following (in thousands): As of September 30, 2020 December 31, 2019 Leasehold improvements $ 4,719 $ 2,834 Computer equipment 7,613 8,126 Software 908 1,110 Internal-use software 3,878 2,925 Furniture and equipment 1,639 1,048 Construction in progress 128 1,164 Total 18,885 17,207 Less: accumulated depreciation (13,164) (12,351) Property and equipment, net $ 5,721 $ 4,856 Depreciation and amortization expense for the three months ended September 30, 2020 and 2019 was $0.7 million and $0.5 million, respectively. Depreciation and amortization expense for the nine months ended September 30, 2020 and 2019 was $1.7 million and $1.4 million, respectively. Depreciation and amortization are recorded on a straight-line basis. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
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 on the Term Loan is payable monthly. The maturity date of the Term Loan is September 1, 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. The future maturities of the Term Loan by year as of September 30, 2020 are as follows (in thousands): Remainder of 2020 $ 465 2021 (1) 1,395 Total future maturities of debt (2) $ 1,860 (1) Excludes the $0.5 million required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan. (2) Classified within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2020. Per 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 September 30, 2020. Revolving Line of Credit |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
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. |
Stock Compensation
Stock Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Compensation | Stock Compensation Restricted Stock Units (“RSUs”) Activity A summary of unvested restricted stock unit activity for the nine months ended September 30, 2020 is as follows: Number of Weighted- Balance as of December 31, 2019 11,615,884 $ 2.44 Granted 14,164,946 $ 0.91 Vested (4,925,493) $ 1.98 Forfeited and canceled (4,224,836) $ 2.24 Balance as of September 30, 2020 16,630,501 $ 1.32 As of September 30, 2020, there was a total of $20.4 million in unrecognized compensation cost related to restricted stock units, which is expected to be recognized over a weighted-average period of approximately 2.7 years. The Company granted approximately 0.9 million performance stock units ("PSUs") during the third quarter of 2019. During the third quarter of 2020, the performance targets related to these PSUs were fully achieved and approved by the Compensation and Talent Committee of the Company’s board of directors. For the three and nine months ended September 30, 2020, the Company recognized compensation expense of approximately $0.2 million and $0.9 million, respectively, related to these performance awards. Stock Option Activity A summary of stock option activity for the nine months ended September 30, 2020 is as follows: Options Weighted- Aggregate Balance as of December 31, 2019 7,207,733 $ 1.94 $ 412 Granted 1,927,111 $ 1.18 Exercised (172,729) $ 1.03 Forfeited and canceled (2,787,141) $ 1.71 Balance as of September 30, 2020 6,174,974 $ 1.83 $ 227 The total grant-date fair value of stock options granted during the nine months ended September 30, 2020 and 2019 was $1.5 million and $2.6 million, respectively. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-valuation model with the following assumptions: Nine Months Ended September 30, 2020 2019 Volatility 73% - 75% 57% - 58% Expected life (in years) 6.1 6.1 Risk-free interest rate 0.34% - 1.47% 1.62% - 2.57% Dividend yield —% —% As of September 30, 2020, the Company had $2.9 million in unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 3.2 years. Inducement Grants On September 3, 2020, in connection with the appointment of a member of senior management, the Company granted the individual 760,870 inducement restricted stock units and an inducement stock option to purchase 1,178,000 shares of Class B common stock. These grants were issued outside the Company’s 2014 Equity Incentive Plan in accordance with NYSE Listed Company Rule 303A.08, and were approved by the Compensation and Talent Committee of the Company’s board of directors. The information related to these grants is included in the previous tables. 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”): Nine Months Ended September 30, 2020 Volatility 71% - 103% Expected life equals length of offering period (in years) 0.5 Risk-free interest rate 0.13% - 0.95% Dividend yield —% Stock-based compensation expense related to the ESPP was immaterial for the three and nine months ended September 30, 2020, respectively. As of September 30, 2020, 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 offering period. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rate for the three and nine months ended September 30, 2020 and 2019 was zero percent, primarily as a result of the estimated tax loss for the year and the change in valuation allowance. At September 30, 2020, all unrecognized tax benefits are subject to a full valuation allowance and, if recognized, will not affect the effective tax rate. |
Net Loss per Share
Net Loss per Share | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B Net loss $ (103) $ (344) $ (2,245) $ (7,091) $ (14,207) $ (46,779) $ (7,009) $ (21,247) Weighted-average shares used to compute basic and diluted net loss per share 35,028 117,118 35,041 110,660 35,030 115,342 35,827 108,607 Basic and diluted net loss per share $ — $ — $ (0.06) $ (0.06) $ (0.41) $ (0.41) $ (0.20) $ (0.20) 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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options and restricted stock units 22,805 19,811 22,805 19,811 Shares issuable under the ESPP 269 — 269 — Warrants 115 115 115 115 Total 23,189 19,926 23,189 19,926 |
Restructuring Program
Restructuring Program | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Program | Restructuring Program On May 4, 2020, the Company announced its intent to undertake a program to reduce its workforce as part of the Company’s efforts to respond to the COVID-19 pandemic and ensure longer-term financial stability for the Company in light of the ongoing economic challenges resulting from COVID-19 and its impact on the Company’s business (the “Program”). The Program involved the termination of approximately 60 employees, representing 13% of the Company’s headcount. During the second quarter of 2020, the Company incurred charges of approximately $2.0 million related to employee severance and benefits costs under the Program, all of which are cash expenditures. As of September 30, 2020, all costs were fully paid out.In addition, as part of its cost reductions in light of the COVID-19 pandemic, the Company implemented reductions in base salary for its employees, effective May 16, 2020, consisting of a 30% reduction for the Company’s Chief Executive Officer, 25% reduction for the Company’s Chief Financial Officer, 20% reduction for members of the Company’s executive leadership team, and tiered reductions of 10-15% for other employees with salaries above $100,000, which the Company anticipated would last at least six months, and would be re-evaluated at that time. Members of the Company’s Board of Directors also voluntarily agreed to forego 50% of their cash compensation for the duration of the employee salary reductions. In early November 2020, management, in consultation with the Board of Directors, determined that it would reinstate full salaries for those who were impacted by the salary reduction and restore the Board’s cash compensation to its original levels, effective November 16, 2020. |
Accounting Standards and Sign_2
Accounting Standards and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2019. 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 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. |
Marketable Securities | Marketable Securities The Company's marketable securities consist of U.S. agency obligations and U.S. treasury securities, with maturities at the time of purchase of greater than three months. Marketable securities with remaining maturities in excess of one year are classified as non-current. The Company classifies its marketable securities as available-for-sale at the time of purchase based on its intent and are recorded at their estimated fair value. Unrealized gains for available-for-sale securities are recorded in other comprehensive income/loss. Unrealized losses for available-for-sale securities are recorded in other comprehensive income/ |
Recently Adopted Accounting Pronouncements and Recently Issued Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2020, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments-Credit Losses, and subsequent amendments (“ASC 326”). The standard changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The adoption of this standard did not have a material impact on the Company’s financial statements. The Company will continue to actively monitor the impact of the current coronavirus (“COVID-19”) pandemic on expected credit losses. Effective January 1, 2020, the Company adopted ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (“ASU 2018-15”), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations. 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 nine months ended September 30, 2020 are either not applicable or are expected to have minimal impact on the Company's condensed consolidated financial results. |
Deferred Costs (Tables)
Deferred Costs (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
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 nine months ended September 30, 2020 are as follows (in thousands): As of December 31, 2019 Expense recognized As of September 30, 2020 Additions Deferred commissions $ 14,718 $ 1,396 $ (5,517) $ 10,597 Deferred professional service costs 6,711 983 (2,417) 5,277 Total deferred commissions and professional service costs $ 21,429 $ 2,379 $ (7,934) $ 15,874 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 September 30, 2020 Useful Life Gross Accumulated Amortization Net Customer relationships 6 $ 10,900 $ (5,092) $ 5,808 Developed technology 5 10,600 (7,420) 3,180 Total identifiable intangible assets $ 21,500 $ (12,512) $ 8,988 As of December 31, 2019 Useful Life Gross Accumulated Amortization Net Customer relationships 6 $ 10,900 $ (3,509) $ 7,391 Developed technology 5 10,600 (5,830) 4,770 Backlog 2.5 1,500 (1,500) — Other acquired intangible assets 1 - 3 900 (883) 17 Total identifiable intangible assets $ 23,900 $ (11,722) $ 12,178 |
Schedule of Amortization Expense for Acquired Intangible Assets | Future estimated amortization expense for acquired intangible assets is as follows (in thousands): Remainder of 2020 $ 1,058 2021 4,232 2022 2,642 2023 1,056 Total amortization expense $ 8,988 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Available-for-sale Securities | Marketable securities consisted of the following (in thousands): As of December 31, 2019 Amortized Unrealized Unrealized Fair Value U.S. treasury securities $ 13,602 $ 1 $ — $ 13,603 U.S. agency obligations 6,400 1 — 6,401 Money market mutual funds 8,736 — — 8,736 28,738 2 — 28,740 Included in cash and cash equivalents 12,329 — — 12,329 Included in marketable securities $ 16,409 $ 2 $ — $ 16,411 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value, Assets Measured on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): As of December 31, 2019 Level 1 Level 2 Total Cash equivalents: Money market mutual funds $ 8,736 $ — $ 8,736 U.S. treasury securities — 3,593 3,593 Marketable securities: U.S. agency obligations — 6,401 6,401 U.S. treasury securities — 10,010 10,010 $ 8,736 $ 20,004 $ 28,740 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and equipment consisted of the following (in thousands): As of September 30, 2020 December 31, 2019 Leasehold improvements $ 4,719 $ 2,834 Computer equipment 7,613 8,126 Software 908 1,110 Internal-use software 3,878 2,925 Furniture and equipment 1,639 1,048 Construction in progress 128 1,164 Total 18,885 17,207 Less: accumulated depreciation (13,164) (12,351) Property and equipment, net $ 5,721 $ 4,856 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Maturities of Long-term Debt | The future maturities of the Term Loan by year as of September 30, 2020 are as follows (in thousands): Remainder of 2020 $ 465 2021 (1) 1,395 Total future maturities of debt (2) $ 1,860 (1) Excludes the $0.5 million required to be paid as final payment on the earlier of maturity, termination or prepayment of the Term Loan. (2) Classified within accrued expenses and other current liabilities on the condensed consolidated balance sheet as of September 30, 2020. |
Stock Compensation (Tables)
Stock Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Other Share-based Compensation, Activity | A summary of unvested restricted stock unit activity for the nine months ended September 30, 2020 is as follows: Number of Weighted- Balance as of December 31, 2019 11,615,884 $ 2.44 Granted 14,164,946 $ 0.91 Vested (4,925,493) $ 1.98 Forfeited and canceled (4,224,836) $ 2.24 Balance as of September 30, 2020 16,630,501 $ 1.32 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of stock option activity for the nine months ended September 30, 2020 is as follows: Options Weighted- Aggregate Balance as of December 31, 2019 7,207,733 $ 1.94 $ 412 Granted 1,927,111 $ 1.18 Exercised (172,729) $ 1.03 Forfeited and canceled (2,787,141) $ 1.71 Balance as of September 30, 2020 6,174,974 $ 1.83 $ 227 |
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: Nine Months Ended September 30, 2020 2019 Volatility 73% - 75% 57% - 58% Expected life (in years) 6.1 6.1 Risk-free interest rate 0.34% - 1.47% 1.62% - 2.57% Dividend yield —% —% Nine Months Ended September 30, 2020 Volatility 71% - 103% Expected life equals length of offering period (in years) 0.5 Risk-free interest rate 0.13% - 0.95% Dividend yield —% |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Class A Class B Class A Class B Class A Class B Class A Class B Net loss $ (103) $ (344) $ (2,245) $ (7,091) $ (14,207) $ (46,779) $ (7,009) $ (21,247) Weighted-average shares used to compute basic and diluted net loss per share 35,028 117,118 35,041 110,660 35,030 115,342 35,827 108,607 Basic and diluted net loss per share $ — $ — $ (0.06) $ (0.06) $ (0.41) $ (0.41) $ (0.20) $ (0.20) |
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 September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Stock options and restricted stock units 22,805 19,811 22,805 19,811 Shares issuable under the ESPP 269 — 269 — Warrants 115 115 115 115 Total 23,189 19,926 23,189 19,926 |
Accounting Standards and Sign_3
Accounting Standards and Significant Accounting Policies - Concentrations of Risk and Significant Customers (Details) - Customer Concentration Risk | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Anthem | Total Revenue | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 49.00% | 47.00% |
Anthem | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 25.00% | |
One customer | Accounts Receivable | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.00% |
Revenue, Deferred Revenue, Co_2
Revenue, Deferred Revenue, Contract Balances and Performance Obligations - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Deferred revenue | $ 10.6 | $ 10.6 | $ 10.7 | ||
Contract with customer, asset, net | 7 | 7 | $ 0.4 | ||
Contract with customer liability, revenue recognized | 7.8 | $ 11.3 | 9.8 | $ 18.5 | |
Contract with customer, liability, cumulative catch-up adjustment to revenue, change in estimate of transaction price | $ 0.2 | $ (0.1) | $ 2.3 | $ 1.8 |
Revenue, Deferred Revenue, Co_3
Revenue, Deferred Revenue, Contract Balances and Performance Obligations - Performance Obligations (Details) $ in Millions | Sep. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Revenue, remaining performance obligation | $ 171 |
Revenue, remaining performance obligation, percent | 60.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Deferred Costs (Details)
Deferred Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Deferred commissions | ||||
As of beginning of period | $ 14,718 | |||
Additions | 1,396 | |||
Expense recognized | (5,517) | |||
As of end of period | $ 10,597 | 10,597 | ||
Deferred professional service costs | ||||
As of beginning of period | 6,711 | |||
Additions | 983 | |||
Expense recognized | (2,417) | |||
As of end of period | 5,277 | 5,277 | ||
Total deferred commissions and professional service costs | ||||
As of beginning of period | 21,429 | |||
Additions | 2,379 | |||
Expense recognized | (7,934) | |||
As of end of period | 15,874 | 15,874 | ||
Impairment charges | $ 200 | $ 200 | $ 1,500 | $ 800 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Goodwill impairment | $ 0 | $ 0 | $ 50,300 | $ 0 |
Gross goodwill | 91,800 | 91,800 | ||
Accumulated goodwill impairment | 50,300 | 50,300 | ||
Amortization expense | $ 1,100 | $ 1,200 | $ 3,200 | $ 3,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | $ 21,500 | $ 23,900 |
Accumulated Amortization | (12,512) | (11,722) |
Total | $ 8,988 | $ 12,178 |
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 | (5,092) | (3,509) |
Total | $ 5,808 | $ 7,391 |
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 | (7,420) | (5,830) |
Total | $ 3,180 | $ 4,770 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 2 years 6 months | |
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | $ 1,500 | |
Accumulated Amortization | (1,500) | |
Total | 0 | |
Other acquired intangible assets | ||
Finite-lived Intangible Assets [Roll Forward] | ||
Gross | 900 | |
Accumulated Amortization | (883) | |
Total | $ 17 | |
Other acquired intangible assets | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 1 year | |
Other acquired intangible assets | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 3 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Schedule of Amortization Expense for Acquired Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2020 | $ 1,058 | |
2021 | 4,232 | |
2022 | 2,642 | |
2023 | 1,056 | |
Total | $ 8,988 | $ 12,178 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 800 | $ 28,738 |
Unrealized Gains | 2 | |
Unrealized Losses | 0 | |
Fair Value | $ 800 | 28,740 |
Included in cash and cash equivalents | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 12,329 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | 12,329 | |
Included in marketable securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 16,409 | |
Unrealized Gains | 2 | |
Unrealized Losses | 0 | |
Fair Value | 16,411 | |
U.S. treasury securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 13,602 | |
Unrealized Gains | 1 | |
Unrealized Losses | 0 | |
Fair Value | 13,603 | |
U.S. agency obligations | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 6,400 | |
Unrealized Gains | 1 | |
Unrealized Losses | 0 | |
Fair Value | 6,401 | |
Money market mutual funds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 8,736 | |
Unrealized Gains | 0 | |
Unrealized Losses | 0 | |
Fair Value | $ 8,736 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 800 | $ 28,740 |
Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 8,736 | |
U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 13,603 | |
U.S. agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 6,401 | |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 28,740 | |
Fair Value, Measurements, Recurring | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 8,736 | |
Fair Value, Measurements, Recurring | U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,593 | |
Marketable securities | 10,010 | |
Fair Value, Measurements, Recurring | U.S. agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 6,401 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 8,736 | |
Fair Value, Measurements, Recurring | Level 1 | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 800 | 8,736 |
Fair Value, Measurements, Recurring | Level 1 | U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Marketable securities | 0 | |
Fair Value, Measurements, Recurring | Level 1 | U.S. agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets, fair value disclosure | 20,004 | |
Fair Value, Measurements, Recurring | Level 2 | Money market mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | |
Fair Value, Measurements, Recurring | Level 2 | U.S. treasury securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 3,593 | |
Marketable securities | 10,010 | |
Fair Value, Measurements, Recurring | Level 2 | U.S. agency obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable securities | $ 6,401 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 18,885 | $ 17,207 |
Less: accumulated depreciation | (13,164) | (12,351) |
Property and equipment, net | 5,721 | 4,856 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 4,719 | 2,834 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,613 | 8,126 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 908 | 1,110 |
Internal-use software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 3,878 | 2,925 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,639 | 1,048 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 128 | $ 1,164 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 0.7 | $ 0.5 | $ 1.7 | $ 1.4 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | May 05, 2020 | Sep. 30, 2020 |
Line of Credit Facility [Line Items] | ||
Term Loan | $ 5,600,000 | |
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 | |
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% |
Debt - Future Maturities (Detai
Debt - Future Maturities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
Remainder of 2020 | $ 465 |
2021 | 1,395 |
Total future maturities of debt(2) | 1,860 |
Early repayment of senior debt | $ 500 |
Stock Compensation - Summary of
Stock Compensation - Summary of Restricted Stock Unit Activity (Details) - RSUs | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Number of Shares | |
Balance as of beginning of period (in shares) | shares | 11,615,884 |
Granted (in shares) | shares | 14,164,946 |
Vested (in shares) | shares | (4,925,493) |
Forfeited and canceled (in shares) | shares | (4,224,836) |
Balance as of end of period (in shares) | shares | 16,630,501 |
Weighted- Average Grant Date Fair Value | |
Balance as of beginning of period (in usd per share) | $ / shares | $ 2.44 |
Granted (in usd per share) | $ / shares | 0.91 |
Vested (in usd per share) | $ / shares | 1.98 |
Forfeited and canceled (in usd per share) | $ / shares | 2.24 |
Balance as of end of period (in usd per share) | $ / shares | $ 1.32 |
Stock Compensation - Narrative
Stock Compensation - Narrative (Details) - USD ($) $ in Millions | Sep. 03, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
RSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost | $ 20.4 | $ 20.4 | |||
Employee service share-based compensation, nonvested awards, compensation cost not yet recognized, period for recognition | 2 years 8 months 12 days | ||||
Granted (in shares) | 14,164,946 | ||||
RSUs | Class B | Senior management | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 760,870 | ||||
PSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 900,000 | ||||
Stock-based compensation expense | 0.2 | $ 0.9 | |||
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 | 3 years 2 months 12 days | ||||
Stock granted, value, share-based compensation, gross | $ 1.5 | $ 2.6 | |||
Employee service share-based compensation, nonvested awards, compensation not yet recognized, stock options | $ 2.9 | $ 2.9 | |||
Stock Option | Class B | Senior management | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Granted (in shares) | 1,178,000 |
Stock Compensation - Summary _2
Stock Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($) | |
Options Outstanding | ||
Balance as of beginning of period (in shares) | shares | 7,207,733 | |
Granted (in shares) | shares | 1,927,111 | |
Exercised (in shares) | shares | (172,729) | |
Forfeited and canceled (in shares) | shares | (2,787,141) | |
Balance as of end of period (in shares) | shares | 6,174,974 | |
Weighted- Average Exercise Price | ||
Balance as of beginning of period (in usd per share) | $ / shares | $ 1.94 | |
Granted (in usd per share) | $ / shares | 1.18 | |
Exercised (in usd per share) | $ / shares | 1.03 | |
Forfeited and canceled (in usd per share) | $ / shares | 1.71 | |
Balance as of end of period (in usd per share) | $ / shares | $ 1.83 | |
Aggregate Intrinsic Value (in thousands) | ||
Aggregate Intrinsic Value | $ | $ 227 | $ 412 |
Stock Compensation - Assumption
Stock Compensation - Assumptions Related to Share-based Compensation (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stock Option | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 6 years 1 month 6 days | 6 years 1 month 6 days |
Dividend yield | 0.00% | 0.00% |
Stock Option | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 73.00% | 57.00% |
Risk-free interest rate | 0.34% | 1.62% |
Stock Option | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 75.00% | 58.00% |
Risk-free interest rate | 1.47% | 2.57% |
ESPP | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (in years) | 6 months | |
Dividend yield | 0.00% | |
ESPP | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 71.00% | |
Risk-free interest rate | 0.13% | |
ESPP | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Volatility | 103.00% | |
Risk-free interest rate | 0.95% |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate reconciliation, percent | 0.00% | 0.00% | 0.00% | 0.00% |
Net Loss per Share - Calculatio
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Class of Stock [Line Items] | ||||
Net loss | $ (447) | $ (9,336) | $ (60,986) | $ (28,256) |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 152,146 | 145,701 | 150,372 | 144,434 |
Basic and diluted net loss per share (in usd per share) | $ 0 | $ (0.06) | $ (0.41) | $ (0.20) |
Class A | ||||
Class of Stock [Line Items] | ||||
Net loss | $ (103) | $ (2,245) | $ (14,207) | $ (7,009) |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 35,028 | 35,041 | 35,030 | 35,827 |
Basic and diluted net loss per share (in usd per share) | $ 0 | $ (0.06) | $ (0.41) | $ (0.20) |
Class B | ||||
Class of Stock [Line Items] | ||||
Net loss | $ (344) | $ (7,091) | $ (46,779) | $ (21,247) |
Weighted-average shares used to compute basic and diluted net loss per share (in shares) | 117,118 | 110,660 | 115,342 | 108,607 |
Basic and diluted net loss per share (in usd per share) | $ 0 | $ (0.06) | $ (0.41) | $ (0.20) |
Net Loss per Share - Summary of
Net Loss per Share - Summary of Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted net loss per share (in shares) | 23,189 | 19,926 | 23,189 | 19,926 |
Stock options and restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Securities excluded from the calculation of diluted net loss per share (in shares) | 22,805 | 19,811 | 22,805 | 19,811 |
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) | 269 | 0 | 269 | 0 |
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 | 115 | 115 |
Restructuring Program (Details)
Restructuring Program (Details) $ in Millions | May 16, 2020 | May 04, 2020employee | Jun. 30, 2020USD ($) |
Chief Executive Officer | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 30.00% | ||
Chief Financial Officer | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 25.00% | ||
Executive leadership team | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 20.00% | ||
Other employees with salaries above $100,000 | Minimum | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 10.00% | ||
Other employees with salaries above $100,000 | Maximum | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 15.00% | ||
Board of directors | |||
Restructuring Cost and Reserve [Line Items] | |||
Salary reduction percent | 50.00% | ||
The Program | |||
Restructuring Cost and Reserve [Line Items] | |||
Terminated employees | employee | 60 | ||
Reduction in workforce, percent | 13.00% | ||
Employee severance and benefits costs | $ | $ 2 |