CSLT - Earnings call transcript Q2 2018

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Operator

Good afternoon. My name is Mike and I will be your conference operator today. At this time, I would like to welcome everyone to the Castlight Health Q2 2018 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. now Investor call Relations. will Fuges, to I of Head Instructions] turn over the Gary [Operator

You begin may your conference.

Gary Fuges

Good Health's afternoon second Castlight quarter XXXX and conference call. welcome to

Officer, are Joining questions. John Officer. take will will remarks Doyle, me open call prepared Siobhan Nolan today their then on Chief Chief the and Executive your and and offer Financial the Siobhan Mangini, to John we call

XX, our webcast that of and call future risk the factors statements the differ important our our contained release, actual press Commission trends, the cause efforts refer company's Exchange from factors any results non-renewals replayed press and update in public XXXX website. revise we operating on regarding forward-looking If savings the and and current and forward-looking July We statements of statements. call We time included our contains guidance the to or may of cash a reflect the do or forward-looking to breakeven, and call, may statements. this guidance are our XX, are performance further on Please the is filings call in Our management's assumptions. anticipated XXXX provide quarter subject events or guidance non-GAAP provide after during that timing on PowerPoint or uncertainties forum. available will in any of This expectations in Securities performance those obligation any and not including no with These July our but XX, longer we so risks, flows disclaim company's be discussion for to accurate. updates unless views and materially of XXXX, the full to of strategies the the various business, at and impact position. and cash are July made as cost XXXX, presentation information our year for release

diluted on we Our presentation our expenses, such aid that share in loss metrics, gross also to results. financial loss the of and comparable margin, as includes non-GAAP believe certain non-GAAP operating per Reconciliation operating net With before be understanding turn over Castlight's historical I'll our the the in filed call. to John? the earnings of basis Chief a GAAP release that, John metrics call found Officer. Appendix Executive can Doyle, section

John Doyle

strongly joining for as the you individuals the integrate, simplify Thank for on more technologies that ours ecosystem. and healthcare, today. believe on direct take we call they'll increasingly Castlight, personalize, At us their rely responsibility like healthcare fragmented that

make airlines ideal have like have which in tools and make organizations employers, to is patients must members to happening is best and options. increasingly Large navigate the seek easy influencing consumers, Castlight their as same verticals and healthcare provider to banking and technology apps it thing for and of to employee, the become possible healthcare. at as plans center for them humanly as Just for trend. health engaging leverage users, their this

time. the ago ended the well and of the momentum closed and main total to partners year. Approximately achieved strong last we offer million translated more in same versus high with the Fortune right improve the year positioned XX% churn, formula results new XXX These into QX companies. drive logos continue A trend. increase to Castlight's revenues of in is are business and XX% Net quarter our our progress customers in new for in new underscore for the that $XX evidence of we XX on in to the results new stream. almost with collaboration and QX we've navigation with first health Our channel efforts which period. made XX we're with new customers than ARR $XXX.X million compared quarter the increase customers signed into business focus XX% that We a record XXX ARR customers

head circumstances. course to two face have successes, results equally to important the and a on for company. success While necessary make changing to Behind in us is corrections factors recognizing headline position difficult led when it decision QX, restructure our challenges but us needed for the to

sales First, below our forecast. are customers non-Anthem to

that instead broader not many not While contract was This does of enthusiasm unexpected us Complete to with is headwind availability see needs when at Castlight This from migrate reality one taking weren't compounded informed Complete promptly. with approach that and to high the of year. seeing, purchasing our will prospects customers the suggesting a are Wal-Mart than was their product. general financial prior recently Castlight our and let they wait us will a we're in rather largest these cost XXXX impact the market align this but developments news, structure expire the but end of is

change breakeven the consultants efforts new year XXXX, In quarter. expenses which reduce with otherwise this Anthem, we operating on more restructuring, we breakeven non-GAAP XX%. and quarter. successful the but will Complete committed take will QX your of of that XX% planned to plan remain grow full in for our of about would will Our in and relationships line by operating by growth savings healthy trajectory main in a strongly our channel business. with to in it we forecasted our discussion important benefits, and clearly outlook to we'll I'll say Refocusing of it's shortly, leveraging context including complete be first although enablers then enough follow Siobhan later our QX it XXXX, our and touch as the rate our reaching be this cost this this XXXX partners on financial the rules. plan wake spending not reestablish results of year the circumstances and this the initial our as cash launch schedule questions. on in success Engage have flow to to will previously is to at revenue The not we intend been and bottom is meet confidence

Engage last have they As twice purchasing did we at been rate expected year. the employers

programs user that's store been form a appointment few. Importantly, mobile usage capabilities, to frequency care personalized a member Engage in date tele-health first interactions, Engage these is from of every to off dimension behavior, customer had response The our chat previously and NPS in delivers market. to is and product scheduling health and guides, integrations been the labs health to also the of the many impact ratings wellbeing to click customers solutions name purchase navigation comprehensive to most businesses most including satisfaction of clinical advanced and is of our on terms to combination of highly start. the are that unwilling in app solution directly. Across for great virtually guidance Anthem

to the competitor large Wal-Mart's not will with delivers. offering close For vendor. through Returning value and Engage self-insured right employers assemble, are with it health that now for single to launch we Engage product our believe Complete our they deploy technology comes to us large solution configurable With a for late of of be customers best with. the Anthem, business work us renew a on highly Complete this that track health no to quarter. will finished, business. initial digital the navigation as which leverages and enable regardless agreed launch first customers the a learning's plans they we Castlight decision health to on is XXXX, employers is date beyond deliver platform do integrate, infrastructure to development same solutions giving can powerful which Complete most schedule our draw personalize important to work

the Wal-Mart respect six great have has enormously team for we benefited our from First, and partnership. Castlight year

team priorities was Castlight their adding as and very leadership evolved. associates was We opportunity significant value benefits that add also more untapped for that believe have there and strongly Wal-Mart to their and

health success not that disappointing, navigation solve long-term our delivering needs depends this that important the the adopted products employers thousands solution. is yet have of on While for large scalable a

Complete is do We are confident it. product that very to the Castlight

us from For for which in wellbeing, It drives integrated stickier offer we've value we solutions powerful more for to efficient what success of alone. products have our reinforces than critical importance the and capabilities a early solution, Castlight distribution supports users deeply enterprise. and Engage, ecosystem to functionality Castlight with the broader also support more learned our and our and customers experience our partners, implementing that including solution also this full makes partners the deliver and way most channel

necessary market financial destiny. these moving taking forward opportunity With our on three steps and Complete attack controlling our platform, to focusing go and mind, one supporting adding channels core in our strategy for by long-term we're priorities, to to

health committed the call to I'll to in dedication are decisions our we to But build Before where seriously. not Siobhan, of for outlook. healthcare. Castlight today's I very a the group navigation a discussed solutions resilient thank our them market. corporate the to in QX as their over deliver who on strong to call take your comprehensive we over the and call turn destiny are and we at easy making and I everyone financial review to results turn mission, difference determined will control The most Siobhan, people want now

Siobhan Nolan Mangini

million. me and Thanks, annualized At QX QX, questions. recurring of start revenue, from the outlook, or Starting non-renewal. overall cash non-GAAP also take operations. our totaled on joining to XXXX include Wal-Mart with $XXX.X track everyone our that QX afternoon then our loss impact negative our by This after does thank XXXX of quarter, John. the of all not and for discuss Good operating and us for today's expectations results results used ARR let your revenue net I'll you end the reviewing call. the we'll

of which due on revenue approximately is year-over-year. we customers was XX% down expected onetime was customers the decline which primarily XX% sequentially the QX revenue convert which of increased total year-over-year, we reflects to revenue continue million, transparency is with revenue Services revenues the and development $XXX,XXX XX% a launching fee ARR was from Subscription second quarter only further result We the fees. and the Anthem our from Anthem revenue QX revenue local platform product, services QX Total basis. and recognized XX% XX% now in sequential increased Anthem as in to last professional the development and of $XX.X associated year-over-year. Services is January. only as to customers. increased expect local quarter of revenue launched for to a

to compared in margin XX% non-GAAP and Now, financials. let's XX% year quarter turn quarter to gross prior second a the XX% non-GAAP QX was ago. our

expectation time improve at margin in profound decision support our a with wellbeing the of investing platform. post additional made to sequentially, tactical QX legacy the we call our gross to the last While for

quarter-over-quarter. gross a was As down margin result,

We to support the middle infeasible for is year. beyond it next have of to platforms legacy concluded us continue

on more in use our these migrations a major ease represent our are Complete Engage For for forward delivering sets and scalable customers stage executing the health of for powerful comprehensiveness. on and leap And navigation the efficient and vision, for make for user more will mission. migrations and accelerating Castlight, business solutions, personal innovation

growth remain now result in was expense for second operations Rewards we of time was multimillion customers $X.X from basis same a hit QX. the XXXX. cash discipline Cash invest breakeven equivalents the an year securities margin. XX% flow track some maintain period. X% at after by for million million dollar the expense in quarter million most large of for compared the platform of we losses XXXX. legacy in essentially was of compared revenue the ago the R&D long-term with legacy a non-GAAP our the reduction prior our of is the operating integrated loss thoughts We operating QX to $X.X during in with on to our With regarding margin $X.Xmillion $XX.X which impact We end to prepayment operating non-GAAP the of As operating gross innovation support QX, year-over-year flat outlook we million, of Complete be changes, offset in expense continue in such XX% offering. provide operations on as expect Total mid ended wellbeing to wellbeing partially quarter. improvement to future and migrates compared used that, $XX.X revenue by a quarter, of let gross and at down these from XX% We result for benefited the approximately quarter to cash the marketplace. on growth the marketable cash, This me period. to

$XXX between revenue $XXX million loss and million. expect operating between $XX to and $XX continue and million We non-GAAP million

year-end. at continue more also expect We $XX cash to have than to in million

will our year-end We XXXX XXXX reserve guidance until for call.

million efforts our know to provide million $XX XXXX However, are we our be Wal-Mart's already revenue At to $XX expected negatively approximately XXXX for operating the performance restructuring impacted due cost will that QX $XX full-year same million to savings time, decision. by XXXX. the in

while on non-GAAP is our operating the there quarter-to-quarter to be the breakeven basis result, full-year goal would business at to for fluctuations, from XXXX. a least As a

are and long-term our As the and to summary, sales Complete QX provided we bring market priorities additional aligned channel channels In our broadening to to that do so a the growth key Engage to market. through the model offerings initiatives restore positive and product with signals business.

in and on in of the have products front have of to but the We lot we capitalize strategy work market a place opportunity. us,

difficult our it is Finally, to for announced as able that the questions. help pursue the our our directly mission, acknowledge and decisions for impacted be grateful Thank navigation. we're part me thank and Operator, Castlight dedicated and are restructuring mission we'll I of will would to now not be by their Castlight. want job take at you. These commitments their those contributions to and our your important who we are employees colleague eliminations to especially today. without happening we many make to

Operator

[Operator question Rhyee first Instructions] & Company. comes Your from with Cowen Charles

Charles Rhyee

Maybe to client of to what the you and understanding what Hey, Wal-Mart you Can characteristic them? decisions Yeah. get vendor the platform? that here. what they think they a the for decision, looking questions. they're you to were start able taking maybe you about went weren't out their My thanks of that the going about they - talk when think capabilities think the sort with they think were from sort what supply that where you think - –that I what this made for versus they new they seeking that were the

John Doyle

Thanks, I'll here, Charles. about John. but Really Wal-Mart This tell a for little dialogue. can't we've that is understand, speak sure bit I'm been you where you in

to plans number fully a Complete. forward months with spent until Castlight of expected on closely last to working week go we've migrating So Wal-Mart be

of really That broader at conference said the they've number here don't have on Complete new we're that's in relative been get what clearly obviously two adding we lots the call of If I go to context outside large perfect a As value on a fact was that direction. because but and the migrating new think we process platform we've scale and and testing direction very I going little we to very the a important different think of XXX that well. insight know years of already to is reasons want excited we are the for those as understand a is, for customers, Wal-Mart an to Wal-Mart really into base. really decided user other to customer well. acceptance one Castlight customer for there's

our other moving the all Castlight are forward with four fact, of In five top Complete. customers

to company. outlier aggressive ways I this a And is capable inferences own in drop to focus from I using of a employer the of of heart not with products in speak the very where and way the it's is on the think so we are resources think think there need our that pursuing mainstream an to too of its that thousands navigation huge we important Whereas a experience building number think employers market health certainly of many issues priorities solutions. ultimately Wal-Mart in be that

to that tradeoffs here some be we we some adjustments category. market and So falls mainstream make that require think that learning one the as that is big happen move some that to there business the into think I can absolutely this that pretty in us

Charles Rhyee

if else of just the Engage do things as - as Castlight been you now it, that enhance other anything seeing product. the can with you're you that And we would not on do do? that well help point think don't you to maybe but competitive, a that need you in, Complete products did, down more road it's have think obviously in with capabilities Are the early this doing lot but we're emerging competitors the only to have at

John Doyle

a that health Yeah. of mean a space particularly of see that among fragmented lot a is solutions you look you on of different digital doing reasons a broadening they're one And we've is things got resources. have for capabilities the needs vendors their large to of find focus in very that as I very be choosing our platform, small are employers lot bespoke able the new and about we companies that for that disciplined and think general employers will lot to broadly in applicable about market.

of a were XX% for solution this So large that new was in appeal of a for Jiff broader example, we company itself was XX purchased has that second of the these Anthem and quarter conversations population and that wellbeing roughly across capabilities. up the logos for success Engage, speaks in when opened aimed think we the a us new of and for bunch sales adopted employer at purchasing mainstream of opportunities market I kind terms

And so Anthem and that don't work with all about to we Complete products we the offers excited are of of building right that number Castlight bring employers to Engage will large the more Anthem. are happen functionality who now the

would we overtime don't today think to really see course do going I to we're well feel we but need position that news to very capabilities future light something even will of of aggressively so market the we're in this And an in the foreseeable and need add urgent that for we that.

Charles Rhyee

last I XX compares sort you. at looking of citing If for speak XX year? in the Engage one of just you it's we're full-year the of year and terms you're the last quite Engage two far Great, that as target one of said could thank so sort next

John Doyle

of season with so selling the is and remember if in in improvement year get we for Engage to about quarter twice selling logos of engage the the is and that QX second that last which and see to forecasting terms for to seen were main balance of the was in in volume terrific, you do of pretty QX into Engage with in QX but even QX second So our main for the expect about are that number us quarter first we half logos, of logos excited our and a relative two QX. sequential feeling rate had QX quarters we're XX pipeline Engage want logos those don't year total specific well the have the

Charles Rhyee

you. thank Great,

John Doyle

Thank you, Charles.

Operator

Your next Gale & William from question comes from Jeff Blair Company. [ph]

Unidentified Analyst

Thanks ask a announcing I sales Yeah. taking the ROI little questions. Castlight's you a back want for about what's provide new are to guarantee maybe just we expand bit if isn't the and and to Good expectation within group own there? for help that force, afternoon. catalyst what working

John Doyle

Yeah. think I general I'll frustrated The have not exciting pretty get it start of business of with has be ROI who've been us the industry It's needs bridge it to ROI what the and consultants rigor our for kind in long ROI customers in made following been time is an for been a to time. that guarantees. folks for commitments our by broadly. claims

the very been savings consultants well able change by and a market that's we the annual to modeling were approach generated develop customers all to customers so to did a decided and in of an of and enabled received ROI customers business to alike. by that robust and in put across the guarantee that portfolio us that that model reviews we've we reviews as And with we use validated shared quarterly our actuarially business

more wait for the I very see are them that for it's consultants reason to belief going product confidence To we're The of far. of Castlight they testing need among is we're and in take like production experience cases, the is of ramping comfortable Anthem had a not get planned be we'd the many gives certainly customers market few in reason so Engage But populations. Castlight in can and completing acceptance the market with about anyway. about a a our already that will and their more we've really it see Complete user change a with think that be good a than the we've slowly test about sales going and great to approach. we do than talked Castlight think deal as I already

from Importantly, we time cases. deals is lots we're to not the We but their exciting are pipeline competitively companies haven't those seen of that away great losses Castlight think there value for in opportunities losses going complete time of in and and a bit be there's a ton I for add deals that to do us customers will here. delay terrific but obviously of a for little seeing

statement people cases Anthem the in value point are important this that's sales business to customers out that force and propositions a of to in super model. book sales Anthem the effective even a not out, our the selling Now sense in with effectiveness many do that is and Anthem, been partnering about

side the the again it in I to tough. business proposition point installed our without the already think as that value think a complete while act just customers do job folks inability that partner of forward putting references can good I makes to who

Unidentified Analyst

more Maybe of follow-up helpful. That's two the though.

hands on the would Engage first get can having launch type channel is where the And more do most hands look opportunity prospect their looking providing The was in of really that a exploring what you for experience. you What and it type you of convert? why experience on that then channel see are product there? to see around expand second initial and partners of customers as not to than partnerships be customers

John Doyle

Sure.

our to with selling resources So that deeply the Complete. experience that we've and ecosystem to the Anthem we of health diverse relates case, to and very integrations a party for yet. clinical ability already attributes integrated demo have and very testable so different as of Engage population the not a partners, reflected customers. of One to invested makes customers haven't an just of set think programs start is promise that advocate first of experience customers incentives again Anthem material, outside offering with variety being for powerful which and integrating view the all, with of other third user that especially partners with most data which get of of flow through Castlight of the that in many When you have which that some and including in Anthem that built you're Engage experience we plans, a enormous is important integrations integrations will and we of the excellent difference solution predictor we've of which the in customers full there

As I it will soon couple months the here enough said but wasn't complete to saw QX the of really over same for in that soon we be ramp next drive that with Engage.

On I the health is think today. us as I to it's robust user clear every channel of that question, very that deliver much the partner's going one to than script experience plans they need said do in a the more to

Anthem a the and even with and Engage functionality ultimately today a for market that with Now we means great product. think I have deal ties in that leading that we're roadmap more

think and that's no partner to. Castlight with we to folks about with As other of speaking Complete group health that partners restrictions so other there one our are plans ability we're on

of products with buyers the overall business different and with in to a that consultants kind for benefits product I done set way entities benefits opportunities interesting think technology the were with And think that other is is the in category of looking relationship they've that and do but think this Complete a Castlight part business already already and capabilities a then really segment synergies I important business for teams the are a is sell third we of chasm, important consolidated. of to another a is because nice lot companies message there us their across speaking create the the getting where long time from equally are our companies into channel there. the some

is is implement as us we strong for quickly as point Anthem really approach proof Castlight we're marks kind with And quarter Complete so going can. a second the of same with the so and to

Unidentified Analyst

Great, in I'll the jump back queue. Thanks.

John Doyle

Jeff. Thanks,

Operator

from question from Close Richard Canaccord next comes Genuity. Your

Richard Close

Great, thanks for the questions.

we the the channel we the to just back as for contribute that third the quarter delays these at respect specifically. that to First I'd that we with in second to going are into here delays how the delay next about And really they ARR are I these year to and Castlight does missed clarify they are the potentially contribute that come head selling quarter quarter as season along ARR all guess, talking the year impacted XX then to that relate [indiscernible] saying or I

John Doyle

question Siobhan Richard. and I will take on can the address Thanks, then ARR channel.

Siobhan Nolan Mangini

the will of of Yeah, direct with - talking - ARR then does of and at so about what end John $XXX.X channels Richard, terms not in impact a we're include about QX the and and the million then talk John that Wal-Mart versus as the business.

John Doyle

adjusted the And the Wal-Mart? number with

Siobhan Nolan Mangini

Oh, I'm Adjusted ARR. $XXX million number of sorry. is

Richard Close

year's I'm that direct I I'm selling interested saying So just I - delays guess are just mean the Castlight these are we this can the in channel. going away season? completely for the

John Doyle

which being the can expand about? lays but are you on talking probably secure I'm Richard,

Richard Close

comfortable and now. - some sudden people one you all do just customer a then and just are this gauge decisions of up trying And off you on completely Where to and XXXX the pushing of should putting I are start are picks they XXXX sort is signing say line right like in looking throw I'm get away people here as up we or really a XXXX. we're really complete dotted on just out or more

John Doyle

me more clear. a let be little Yeah bit

to product with of just a risk. other only a anticipated set So quick of always move we've with that certain are that make launched, the to products to inclined willing with opportunity of every be ever Complete we new going an take launch of that kind buyers Castlight that year was one

to we so expected in customers And are our I think that wait choosing what is communicating than forecasts. that more we're

working XXX we're we QX drive is looks going begins think pipeline big change with going still reasonable think stronger QX, I year As far opportunity always than Castlight be be to that We've to meaningfully XXXX but additional to here. Castlight was well. that as how certainly first we the quickly sales in dynamic and QX the a meaningful on Complete as continuum to here felt see Complete and for

it good is for of a this Wal-Mart do a the away to path make the not back here particular to in suggest to product, impact next as short expression of I the we But quarters we time. don't couple that what comparative going relative up financial that's in is set for the year periods. expect the relates want period of the to throw use see momentum a So your to look to really

Richard Close

you Hitting the the like the margin in commentary you stop over process just Excellent. you thought that the old talking pop the margins all it do mid products discussion Can pop over again margins is if XXXX not when and you then just target supporting threw about can migrating. the go supporting of there, on or out that? sudden go that

Siobhan Nolan Mangini

I bit but functions, both customers as about up quarter and talked as that particular professional the team user and little to question stabilize support we their the in Difficult well ramping talked once services at wellbeing a last really platform. about both

architecture, we time say this because actually hit XX% half expect get or than that the need And period year overtime of margins to starting in second second of more XXXX. of which said less more provide will support margins the they and this term so you there XXXX. as of through start to you the our long so half professional an a just support like ongoing over the at scalable it's progression efficient and is complete and quarter-over-quarter half said next I really working in I will customers would user to see quarter to services, at It's you'll and is in in we we will that path as happening way in XX% see target two. a a is second and much both pretty migrate wellbeing progress over with starting

John Doyle

think understand in familiar I margins was purchased of on in talk to we to for the some and some believe space a context as and generally made offering Jiff earlier space. additional we important purchase is the Richard area we in with that unique our adopted a XXXX, the product. brought legacy ecosystem the the I saying was wellbeing you're to rationale offering that that that launches strategic as as guidance together the to our about navigation When out we and target wellbeing supporting investments this in into broaden which an care make widely Castlight I we markets creates very health built leader is think in

important the product was Engage became the basis and becoming is for the then Castlight that All the critically Anthem was basis of for that's an Complete. and that product

stack. I how we think on reflect the to resource going in to have we Castlight acquisition technology and is were that we can what that much lessons underestimated to be porting into that functionality learned work dedicate just if the the

think make about. have a And two, been talking that it as so is the one the we more legacy two scalable want just product that business. impacted investments former making because in a And decision we more as to sell doing made and been do legacy of by we've product things make had the bigger has as as not number the can us future this have we or to we margins as install rotate we were critical is of robust that to products that which of to can we're wellbeing true, led quickly we doing those it customers supporting solution a transition decision provide reliable quarter to base to out

margins so linked a healthy numbers a that move guides here bit the is return more than migrations. revenue you some it's tightly that had have in different we've color why the little cost they to direction expected on to and you for we that we of those so reason Siobhan And give no

Richard Close

you. thank Great,

John Doyle

Thanks.

Operator

The from comes Markets. Sheridan next from question Wardle Capital Stephen

Stephen Wardle

for Thanks guys. taking my Hey, question.

John Doyle

Steve. Thanks,

Stephen Wardle

this tell level? What their What Jiff. they looking can that you How what's is this future what strong level Engage to you time year? prospects and year are functionality their and seeing for what you're last interest interest at? they're compared the interested hearing about So demand are And Castlight from prospects prospects to that customers seeing about among from interest in? are customers from you

John Doyle

Jiff. then with then back and start Engage we So and to come

that than that's just product to and been the and standalone are setup. we're in a few context Anthem experience makes situations competing a broader really not we're when with deeper there bundled competitors the business when now we've that functionality almost it's quite are side, quite on competitor competitive very Anthem table. is in operating basis. and our formidable bringing a against because Engage for and is of at partners losing and with kind the It us no And On our vendors bundled our an

packages capabilities. we things now, see Jiff our are more business say on is On And own of not packages very in Jiff you selling packages prospects influencers space about for so the very lot is broader able that because wellness with support traditional the that at steady seen wellbeing fall all that with forward I believe you've asked what some were for wellness navigation the that saying the we particularly offering a the the it offerings product don't lot positioned we're we question the specific and wellbeing in cited towards is convinces one well to response in category conversations that and very going a comments and march RFPs business I that wellbeing our consultants terrific dominant the a wellness new be the grows as is belief it of the go complete standalone consolidation customer than multiple position taking there And and more is that. not in to market was we're anymore. think but excited we're - again linked a us a needs be Richard, We Complete consultants to right and to to any think standalone those there's multiple out wellbeing, is of standalone of these going consultants conversations lot strong not are wellbeing to package. a the back of a with What making to technically businesses consolidation would we're in employers in in us we that is one our product about going health solution. our so Castlight market benefits real and work

Stephen Wardle

Great, thank you.

John Doyle

Thanks.

Operator

comes Sparacino Frank from next Your Analysis. from First question

Frank Sparacino

that it Hi, of the terms both side of you, the modest starting you logo in a weakness But with function doesn't or there. QX Siobhan, in was of I how the on would just and things guys. churn growth, have ARR Wal-Mart sequential characterize of maybe that? know

Siobhan Nolan Mangini

on non-Anthem more and I actually about that driven business. would a that, talked say Sure. the that John It bit was

through So amount down going ARR, had and and complete tremendous talked our we Engage really ARR in to had ago a was sale new complete. the base are about of the customers Anthem that last activity so we QX quarter we cross saw the on which And the driver knew growth to of into year incremental that selling come the for Jiff side where plans as and customer that but Castlight performing factors the a we growth. new being

John Doyle

a not so big QX, view do that vendors integrated trumpet value Wal-Mart five And turn purchased of work think we can broad implemented been last not critical were one the our preparing very circling about again set years. going it's deployed Frank position that as purchased is long had important lower that had actually the had wellbeing just fundamentals something but we engagement In term the being is a talking as perspective good churn they'd driving just I ecosystem I back and than in improvement we week until any we or I. think allied fact to in to and obviously of with the for be this Wal-Mart, a that as to with. a capabilities Of quarter. we're that it's today news our call We two it

setback but it's as As this important don't we about is minimize really health it business. the think said the a think want I I to underlying of

developments very working of return. we've time including long aside things to a for seeing setting are been a We relative on moment a positive number

Frank Sparacino

I'm just following-up guess talk are maybe you curious your that complete. other for us and what when be earlier aside those and with put on does four they you characterize say both yeah mean I'm we're how of I major the And around the top we risk accounts? other to if accounts, commentary that right profile there Suppose complete forward Wal-Mart of moving forward just moving

John Doyle

Yeah.

year. this be already two to is customer. we'll and or So second the largest are in launching work our of The including four underway first

So we're that that pleased middle in about of of by phases are for XXXX. others very all them most launches after the planning

of migration absolutely I'm to the have Complete So translating talk is is about standpoint, very the year with is I for continue into these contracted customers kinds are much have a buy my be just those about guess business enthusiasm reflecting From ahead us we of that with who the the migration those think. among to just value things and that excited on proposition that of I renewals a that comments capability was we'll so given how the continue customers those in the and will what we strong. making comments Castlight and is risk of relevant

Frank Sparacino

Great, you. thank

John Doyle

Thanks, Frank.

Operator

Eugene Dougherty [Operator next from from Mannheimer & question Instructions] Company. is The

Eugene Mannheimer

might area? expect you with Can share that years through that of your are how bookings percent today increase and afternoon. you out as good efforts us to what partners you ARR Thanks, to in your channel three is look two

John Doyle

that channel particularly channels consultants certainly view speak of the year a are which relationship we've about Castlight talked a level business what plans also the On dynamics regular Anthem that take time that we one take standalone proportion. basis another you to Anthem growth have them we than of doubling the of first half virtually to myself, a or of a year spends work that channels. last benefits the relative fair Well virtually view Complete you with but way close roughly get bigger been Yeah. to for numbers it's if all large because broad are a one the but it. a partners anticipated do we a we is of amount on the has I a deals tracking in channel to by bigger we the had we The all basis it's influenced out about Anthem when contributor when that team in

carve companies. vendors the kind to direct you than about in imagine number business of market that opportunity somewhere I forward, basis out and high if United by Looking with XXX or you XXXX be that on the think very, customers about penetration. States of individual opportunity so if want our be think and share are it's to think exists our continues interesting XXXX limited there more willing XXXX between but it's to and majority employers employers an large I that our my to in category of there in opinion talking more of direct is About I'm clear in very the given XXX a those I and think employees the I selling

I environment. being of benefits, you are dealing you're soon much think start a accepted work larger so motion and and I solutions, broader lower XXXX, sales with employers rest you think those friction you're as of is in with by part and vendors that already plans just to health as the those a XXXX

partners partnership business we so close working we'd to certainly expect well to XXXX And coming as our look and sales of Complete be stronger XXXX a with half our partner with on Castlight's forward people. relationship through about in channel Castlight

Eugene Mannheimer

terms you. of you being cuts there? Okay. It force where can makes provide sales any are Thanks. in further in reduction good around the made re-org sense, and cuts And the is Thank color there the any John. in

Siobhan Nolan Mangini

do help that. expecting to The above to be you goal investments the can restructuring I marketing. self-funding obviously position sales color business at of rate where in we and million of to directional terms we think your OpEx QX in that guess be hopefully are significant run of rate. model. going is of in Eugene, terms this can made be commentary - a can in most some and $XXX we We're above fairly run

in XX% going are and that revenues target QX. targeting hitting to revised We range term XX% long be at driving a of to

the do As leverage thought amplify get were more sale and team to channels this is channels. really able here that through

QX steady onetime also and then And eventually year. in of half saw the As targeting to anticipated of XXXX. from XXXX XX% in a half in QX really share breakeven the keeping both first continue adjustment previously years, is an this to that and from I more keep from so is going first SG&A profitability XX% to that heading to at revenue at relatively steady the state be we're year. you combination R&D business of outer the of target XX% what in putting X% state the in that behalf And

Eugene Mannheimer

Thanks, Siobhan. Thanks great Well John. color. that's

John Doyle

Eugene. Thanks,

Operator

this further John are I CEO. time. to at There turn the call questions Doyle, over no will back

John Doyle

Thanks everybody on joining again the for call us today.

us to plans the forward make large products facts to better and of While seeing been and we Thank a our have our look some discuss business, you help opportunity ahead nor urgent our team meet to investors and to person. with in that are adjustments navigation. never aligned our have address We We're your with soon. very stronger in eager you. questions

Operator

This concludes today's call. conference

disconnect. now may You

Castlight Health (CSLT) 30 Jul 182018 Q2 Earnings call transcript