CSLT - Earnings call transcript Q4 2018

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Operator

Good afternoon. My name is Jeffrey and I will be your conference operator today. At this time, I would like to welcome everyone to the Castlight Q4 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. you. Thank Instructions] [Operator of you Head conference. begin Investor Fuges, may Relations, your Gary

Gary Fuges

afternoon Health Call. XXXX Castlight welcome Quarter Good to Year Fourth and and Full Conference

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

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

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

John Doyle

in joining position call as million you users. history XXXX leadership on evolution innovator a of capped buyers navigation. digital today from serves The technology for to Thank health today. the in place our Castlight transparency for our provider four-year solution that the us XX

costs for health large navigation with XXXX, health opportunity and complex, retention By navigation. business customer the users backdrop generating and in their leader the $X.X associated a position related thesis flow go-to we investments history. been sales time, on digital are transformation address proved delivering right major in the fully legacy as our first the million threshold against clear requiring issues on model, cash our mission-critical ranges right to these at comprehensive could performance flow market accomplishments, positive of navigate Executing operations inability with to the in and of partnerships market well this effectively. products. benefits against multi-year our that performed R&D product and in In extremely business bottom we the revenue and milestones focusing platform offering objectives. employers' the that QX, and cash exceeded Our users guidance Further, strong out in a crossed our from the quarter associated channel guides in on opportunity we resource health is rising Based our simple. has believe in a Castlight's we full-year we line

of on-track through to invasion. increased are cash the product and in result flows new ARR offerings, with lead and our in positive our sales customer XXXX, a new from deliver extend As further we growth market retention, investments operations improved reaccelerate product in

performance for call Adjusting I we'll loss your financial essentially outlook, our and the retention Then major million dollar highlights and our flat ended plans On for annual QX of review recurring today, Siobhan with XXXX XXXX. July, a We customer year-over-year. in to XX%. take of ARR $XXX.X XXXX net questions. financial the in covers after was annualized revenue will XXXX of

the meet the ourselves not in did with metrics impact QX. these faced in goals are growth for behind launch we year we tough clear. us highly-successful last set sales been While The headwinds of Complete the Castlight has XXXX,

engaged I'll first three the Our sales track for channel this Jiff of majority has offering to with sustainability this, buyer's XXXX into the began goals, than on At the of was in navigation sharply last accelerating clear in our top had. direct-to-employer two half work sales. financial our channel our churn flagship plan of logos. delivered of year, we employers' to velocity ARR as than sustainability bottom the you that about a sales, goals, We starting quarter begun last achieving adding for stronger and XXXX, forecast performance level since results our against told QX from by delivered In Castlight took Complete on focus than the Castlight in acquisition. less have health product first is objectives discuss The tremendous key we with product growth logo our the we year. and seen goal, is below down growth XXXX, a our well early line beginning get year-end four best our we've launching Siobhan we at foundation driving channel It ever bookings ago, although time we on so in accelerated amount the goals On years be here. our is than financial segment new in the increased market. new more more first bundling the channel. penetration outstanding XX will in relationships, initiative doubling spades. in sales help We now by dramatically that

and is This experience rates Guidance integrated an integrated decision neither deeply-personalized Most Some consistently clear. importantly solution idea validate business we higher delighted. Users part our to for of most that the combines idea further for Wellbeing cycles results the behind an navigation engagement capabilities engage JIFF our that many a long the which and buy customers and the shorter XXXX this package. encouraging seen achieves of Care are alone. evidence the was value have are and conversion in users in large in prefer sale to proving drives acquire health capability core was that that both and employers gains user and in run,

meaningful rates. We monthly metrics such into in is have closure a in active XX% and translated which users as care improvement gaps increase uptick seen a in key

were year. in While were the well-below direct-to-employer for goals sales XXXX, channel strong our sales

live and change testing. length Since on many discussed in for a perspective see thrilled behavior we adapt most the With strong for user of the and been and Castlight mobile MAU platform prospects ROI became launch, hands-on benefit and to wait-and-see Complete have launched. products satisfaction and previous calls. metrics consultants successfully user available legacy the challenges have challenges its above key north on have These engagement it to with We XX%, ever at we we face powerful went cost that all improvements across MPS track. XX completed before we

Of proof course, ultimately that turning growth we're is the corner best closed-deals. on the

season by already our rates in QX QX. this continued year. execution the momentum excited we're keys and business channel are We're core stronger be as The achieving on already seeing direct we've both our of and QX, pleased good year on sales this our Although our pipeline. selling to conversion evidence to goals seen

initiative great partnership begin that next new on to summer new continuing to as would to are a contributing channel year. We kicked well off progress last add make the we sales

We with more are in discussions share stage information to soon. that late front hope and on you

the to means will up be the spend. to investments readily This channel over cost startup existing leverage with manageable years and we relationship. two timeline to the new platform stand Importantly, we've R&D made plan last an

new book renewal There continue. dollars positive up are to to reasons buyer business. trend response, also user the we much for improved versus platform in XXXX, Fewer health ARR are and each we the churns mentioned, as this we I did two seeing anticipated are pleased far than same improving lower the expect offerings and we of it As years. last our this. We're and year for the of our so of period several during the

platform renewed already begun is offerings customers, we've these XX% up end migration And customers Specifically, of migrate current prices. either have ARR XX% and signed transparency-only down is ARR or the to at XXXX. committed at them to of of over accounts. from from total most from the this for year XX% The at remaining process the market customers all

than and of continued our book on healthiest Support proposition we of more customer at mix of in it's our the telecom team's products support XX user-end Based the increased with company's experience, and history years experience we've part headwinds a in Vice hired performance been support, of us. As customer on optimizing that behind elevated leading Customer our are churn President focus customer improving value the companies. this platform and the the investment believe is

R&D business. year complete created growth To our launch of all significantly XX support and extending health XXXX the year we pivotal will beginning of In in and Complete profitability legacy relationship, terms poised innovation, channel the rapid Castlight pace successful company. up our accelerate lead the end product engaged of market. a navigation of after half in June was additional of small we this new to an but for up, sum The as product products. XX% free This our reaching on focus a our second customer the migrations for to dawn of a of our are capacity handful

the navigation, shown in opportunity the company As to that is simpler at they turn care us the us of every I the have leader Castlight. tens motivates the before improving for now dedication colleagues users an to that find it right day. time. the This Siobhan. every of for have I'll at my at am health ever right ahead millions enormous goal our call to to make one than day the business we grateful of deeply over every of

Siobhan Mangini

and also Thanks, your QX our QX questions. second everyone all built XXXX John. you generation call. and joining operating us outlook. profitability. in trends results let of I'll we'll our QX on quarter on review of Good take included today's non-GAAP consecutive in thank our me that, afternoon, for solid After and revenue execution

$XXX.X Additionally occurring with generating quarter, or goal delivered we from the quarter. our in net fourth operations the revenue the ARR We annualized of on million. in of cash quarter ended flow

John flat Wal-Mart. As ARR mentioned, was year-over-year for essentially adjusting

We from years our Care delighting and referencable ago are meaningful ARR four deliver end engage to platform. This love who into our Wellbeing to our launch is engaging Complete, at on particular, platform is in end us translated where users The to either XX% and provided business book products. users and and our of our XXXX committed direct-to-employer today, as compared In the our to priced products. our stood offering has in our channel to newest customers to proud is platform success product a be transformation value or our Guidance and XX% growth buyer. in our at accounts about are we of of nearly products

grade Total an see John innovation, of as XX% we which mentioned well customer business expect end new improvements total million and revenue, revenue revenue increase above, QX approximately of $X.X this year-over-year. in fourth related XX% as acceleration increased to Subscription million quarter [indiscernible] year-over-year. XX% performance the contracts a to was customer retention. significant of non-recurring the an $XX.X industrial revenue, result guarantees. As in of was of

of $XXX,XXX As we last you with XXXX. as dynamic recall, QX a similar revenue year in non-recurring may had well

second services QX of one-time the ending with the revenue period. the Professional compared implementations local completed Excluding the to Anthem revenue and the are subscription Revenues the the product. half revenues non-recurring of XX% professional subscription of in XXXX declined with drove associated primarily to year-over-year services growth. in successful amounts, our grew launch year a year-ago of function development due fees XX% activity

percentage and turn financials. to was we fourth QX to year-over-year levels continue saw $XX.X period. operating continued non-GAAP down expenses let's growth in QX expectations the our expense and year-ago solid quarter margin We during range lines revenue was our in-line X% margin expect was gross respective period. all million, be three of margin Now against the consistent quarter XX% customers in XX% as non-GAAP and quarter, ranges Total growth XX% improving our XX% long with execution the sequentially a XX%, will the Gross sales and the in fourth migrated non-GAAP with to legacy fourth of compared mid-XXXX. successfully half offering platform the operating of of our most to revenue. hit this year operating to to year-over-year model marketing revenue. second within XX% XX% of G&A of and by were target the to to X% long-term in term Wellbeing In the as to

expense growth. XX% the of non-GAAP second and of to While future to the loss we we QX, invest delivered Based quarter generating year in million innovation target support operating in range on million of continue to platform income approximately performance above ago compared $X.X and $X.X discipline, our a period. profitability to revenue consecutive our XX% R&D in

For With from million of used cash, which revenue, team million respective their of guidance $XXX target. will throughout operating speaks XXXX improved that, to We loss XXXX, revenue This of and ranges. equivalents with of mid-$XX million year. in turn was the XXXX to and Cash was expect their XXXX, operating operations the admirably million EPS all the I highlighted the flow of our by beat cash This $XX.X ended cash year and QX. to year outlook. focus marketable high-end $XX.X in across $XXX performance $X.X in Castlight. million. the non-GAAP the beat maintain non-GAAP We our range execution securities. The in operations currently performed levels million full

first in XXXX XXXX XXXX, a full at effective seasonality, In terms be impact becoming to contribution. the XXXX revenue XXXX half QX revenue expect Similar to churn year in all we the to to year end, quarter the of range year. launches the due expect one-time and QX revenue decline mid-XX% first customer the we the half revenue contribution of for to with remainder of second while ramp notified and

a as implementation both with expect we already sequentially. almost as well to QX growth engaged under we products and to complete, we we the revenue have XXXX. of Complete year can in deliver million As decline Castlight expect Engage. a and to result, of see critical XXXX customers due second to prove in Later improved including half by year-over-year was XXXX XXXX Anthem revenue $X scalable the on-schedule timeline we have seen contract launches

improve XXXX positive support to with be to starting the dip year earnings of to the over invest per Drilling to first in margin margin on launches in to in the down we non-GAAP record-number of million million expect expect QX. income further, we quarter sequential XXX of $X.XX to the in based breakeven in the non-GAAP QX shares. growth be as the a gross course of and range to operating $X XXX We million range $X.XX share

term We second XX% of of expect to as growth our hit margin off the of half to complete the legacy infrastructure. we migrations XXXX long XX% Wellbeing majority the targets in

For G&A the term to marketing in we be ranges. full long target and their the within year sales expect XXXX in

product introductions, our its Given we in to again to in target uptick in our term continue R&D over-invest relative conviction XXXX. the new to market opportunity of recent range the around plan long

XXXX and cash the in to million operations be $X timing quarters with third of from certain and usage occurring between Finally, cash payments. the we expect to first million flow $X due

position the our from we than cash year by $XX quarter highlighted XXXX while going now Thank end. in more note, financial forward. annual strong the and have hand cash growth summary, flow on product revenue and on a history. basis to cash ended million record company's The In from the by in All first to expect to and sales year us in of platform. We launches in should questions. operation's improve you, and your XXXX well an invest accelerate take model continue Operator our retention on operations we'll we generate

Operator

Your Instructions] Blair comes Garro from first Jeff [Operator with Co. & William question

open. is line Your

Jeff Garro

renewals good afternoon. single for in pipeline want the the building question. about the platform. I and taking Thanks the context Yes, to of ask

job done it the platform. one understand different You I choose a If clients benefits there. have money correctly of nice guys there in that single are options still detail of the there, and platform some configurations can

deploying clients selecting meaningful platform? any how So in so and one, single theme are is there the far

John Doyle

you, Thank Jeff.

is one and is and First, want touch the important year of talking year who the pipeline we're going before of experiences circuit out and the every Castlight last I in important customers versus the launched really year to period that Complete to on because beginning with conference bill year their differences of pipeline we've launches. on this fall, year the the successes the be the had with about the in all those an

So the that's the years start. bill and a off seen during strongest in we've prime to should period be pipeline this great

excited So about that. we're

of by terms benefits utilization, every in Guidance combining of terms we you engagement among single the the Wellbeing In focus doing the would particular, about say platform and together and of get of prospects, the that. that in of and conversations in I power the a one have then Care market theme ultimately the ROI is in

towards is the full that trajectory Complete is making of employer-customers Castlight selection dominant deployment we've that been and selected and our of that configured the So virtually time over reason Wellbeing with key say start either might case, have one or in some while a would customers Care we the of in who I to packages choose a today. Guidance, relationship headed are every

the So actually in platform. full selling most cases, we are

Siobhan Mangini

numbers some XX% is contract form the we combined the of Siobhan. just suite. put is some or now maybe This against in Jeff, fashion ARR to have And under it.

and is a Guidance it offering in So single those application. Wellbeing functionality Care

In suite XX% to the be the terms combined then other opportunities to we over renewals, of for obviously able of people do to have that bring ARR.

on a are this dollar I did couple composition X-digit than to is renewals It's think his point XX% year it's like piece -- what just for XXXX. an the don't fine ARR John on put in we as in necessarily have a We on basis mentioned just script renewals we customers it less across well. the this another smaller XXXX. and about absolute -- saw different

a really that we're on I migrations a the too. to and exciting through we and we're in single So we've position renewal get renewed in obviously about folks really worked the we've that up got think for stat strong are customers that with spot over, talked be this architecture migrates able to now and

Jeff Garro

up it. follow migrate was Got lot. remaining that update have was That a Complete. since about To migrations then point? four any and planned as schedule think maybe any that schedule I more ask of if this those and firmly wondering broadly in call visible customers base guess and implementations highly the broadly, for or we helps material for should I'll implementation I scheduled have to the there last on Castlight up, at customer moves top the you back the the

John Doyle

the on-track. great Yes. and headline much We've progress had very is

Complete a from who overall this relationship migrating to the migrate a legacy we've first that actually has full in question Care Guidance Castlight cases are question post-migration. experience Wellbeing some customers overlapped and with actually taking experience had opportunity to So your a business -- actually Wellbeing couple add to of --

the migration data on of say a new new product. experience previous a experience capture when we've full migrations made, in the In I the registration successfully the of progress we successfully means now engagement on-time all with previous completed the from terms that successfully, the user into and of of three very and

to to all very aware, in to free there, a of of track but completed about capacity really the we're year have said remarks, and transition. company it's So prepared I about middle up you're progress that be and we'd as well at for the be that R&D XX% continue a point, handful exciting of the the the making as time I the think migrations excited on by

Siobhan Mangini

of terms of a And maybe business. on just migrations. place the through these visibility we're P&L, very obviously follow how to that up in degree across focused high It's the

services, support our as We can imagine, these in investing to are professional migrations. services, organization you

of So, quarter-over-quarter second that impact term the that the or is the of also first the XX% in of margin. XX% to increase that our year. of we've of in decline migrations you're half terms in seeing But driving majority year, the half long in part the finished in them to range of as margins growth those target

Jeff Garro

Got it. again, Thanks guys.

John Doyle

Jeff. Thanks,

Operator

comes with question Cowen. Charles Rhyee next from Your

open. Your line is

Charles Rhyee

talked and we Should then trying have about in we can down loss? million think we Thanks marketing guidance issues. gross about the across as full being kind it think about Wal-Mart $X with should question just first think of sales the first for quarter operating Should the the you of turning we EBITDA When on guidance, margin, the back think kind to the been the the away, operating profits. being, talk G&A Obviously about year-over-year how how about down here expenses. transitioning question. quarter, think to you obviously but sorry, $X I'm the biggest step guess think I million. about we about the up -- about year deleverage should any

we give on Thanks. year? how can us think color you any the of kind progression should If through about

Siobhan Mangini

Super. Absolutely.

outperform obviously can a top as sustainability. then revenue to of excited our Let about start overall, Complete Engage while how executing And year I'd me launching, driving perform and P&L. move guidance team we function into the was and say the and well line obviously with as as that really all I profitability. this the

ago, same we a launches. have essentially the of that's and customer amount as XXXX variance One, the about we when identical that a over by we actually the we ARR is XX% to start year driven The beginning launched. amount fact it's of year as into business, of So enter year is XXXX. a just think have did our visibility we

as to XXXX. what in in cadence. revenue subscription a expecting you It's XXXX very we're saw similar So

of done customers our great XXXX our So incorporates this plain what's difference guidance before. than the say and signed I'd are this then What revenue launch the timeline faster have news launching. is ever. implementation product is who the we've year,

we've So timelines the launched. levels a but QX, I average at are on five under basis, actually weighted in mentioned record also months.

three months as fast of quickly it's in customers. how locking terms Sometimes we're

function of a scalability as the a just technology. that's So

intra-year piece about is half we've that other the little into moved had got from bookings revenue QX we of in talked to The conversion second We QX. this, but bit a deals 'XX. over

and late-stage Some then of forecast. implementations our they closed that those have deals we've got incorporated already planned have some into that's we're tapering [ph] XXXX and and

products the really think news possibly. out the top very I got Engage we I is incorporated and restoring in line great Complete we're we've business into launch there, of driving growth guidance, because like can That, terms and excited the quickly. think customers

second happening innovation growth. think sell in able on of the fund I the to positioning be of part we to of question, lines, the ourselves what's and been terms good operating your In expense is terms news have

to a So do we're that. position in

but there then see right, out. strong an be there progression will You're very loss, in you'll on QX, operating from

expect will Not I see from John hitting bit a in XX% more QX we'll a range the that gain be as the there and XX% talked effectively from sales some $X they're bit restructuring about for revenues there but think quarter rate and to that rate marketing drive contracts you G&A on restructuring the the to significant, full can similar of slight the we think full will revenues year. of XXXX. R&D, both mentioned. had to of X% we year. That run of XX% the investment incorporating that I in in after what were be a into And and savings run year We to that to of third that million are terms at I then effect, million full operating hitting guidance. had basis, that $X and in in

Charles Rhyee

of way build give we be would of ramp what year? the for can Any us first kind through quarter can we the the you in expect kind of as so you of the loss operating off sense that a course to

Siobhan Mangini

It in couple be of any dollars. would million order of

the quarter-over-quarter dollars over getting -- of you as and off million the of that's of going to the at to see lying subscription, loss. kind seven-ish that out strong terms all you're and if almost then give well improvements. that's nothing In there you're are on of then terms think in rest I as drive think operating their being slight from steady items in able the And just to you the through loss, they can state to QX walk of PS a

Charles Rhyee

Great. up And just one here. more follow

model our the thinking of beyond on scalability be ability recognize [ph]? the and recognition to into ARR periods You in and models. and we clip? start look as we you're a this we fast their we for should of Historically a talked technology time. about as talk as about terms model XXXX, able with faster Should Complete that our ARR that implementation Should Castlight mean take we to to that build

Siobhan Mangini

would say twofold. I Yes. it's

in we right, are conversion. improvement seeing absolutely ARR You're

that We have quarter. started to last talk about

in of to stabilize about time time we've seeing starting of the this launch I like of terms seen five in this accelerated launch very prove on think we're time in terms average mentioned, the out I those on lines of QX months year. average to for it much lines year. customers in in And first terms quarter

As it conversion, about that ARR guidance into line worth, mentioned, have close did move deals QX the of and talking handful to top how QX. we from they as just pertains its to just a

had launch time minutes tapering selecting XXXX. and guidance have of been in into all closed, anticipated of lines they incorporated we've more That's them, Some already forecast. some them our of

as through time revenue As a to the function to you of that lines, opposed ARR that, that quarters ARR four that means think can improved of five subscription that as time to moving we to we've three lines in seen are four see conversion going quarters past. and almost

Charles Rhyee

close Did At you customer end? Okay. year quarter? the total at give

Siobhan Mangini

are It's around XXX. less XXX fortune than customers. XX% Little

Charles Rhyee

Great. Thanks, guys.

John Doyle

Charles. you, Thank

Operator

Your Genuity. next Close question Canaccord from with comes Richard

line Your is open.

Richard Close

Great. progress Thanks. the Congratulations on throughout year the here.

John Doyle

Rich. Thanks,

Richard Close

in guess terms product? question to you for your think help any you into Is on want way maybe from what first any that. where a makes that go up sense the of more around additional about us details conceptualize on R&D. add-on my freeing detail time, guys would little I to spend that is there you innovation, as bit Just

John Doyle

it Q using score fourth forth. Care metric is and quality all proprietary distinguish and launched very across absolutely with data claims about. innovation advance methodology, as gives sources recent so third a providers. of a Yes, those our me part in we're that scores quarter Castlight's and own first is that Guidance Coverage quality insights quality that among analytics an help users Q our that and opportunity And generate terrific we that clinical we're well is which excited of a using from as the internal real we represents which book XX data to in business our metric Trumpet,

we and the company navigation be level frame as high look most effective Now going sustained health in that ROI. the that is is the work winner here forward, engagement is at driving to

product have out higher those other And of launches when in think, capacity believe even specific Complete. involve. very come and at will there they experiences the in transaction that sustain like we the elements financial two year, personalized think of we we when we've complete airlines, analogies healthcare. basic can on consumers we're So about of second industries engagement expect than where be guide, better where include goals investing examples contribute that or that the particular, question, ever of in are the those about to are these seen levels coming deeply that typically that engagement These Castlight retail frees good we to services half the think frankly that focused industries a domains to up in

the take banking example. So

to be use going content. deposit like that easier bring can in Whether navigation They're it's use the scheduling platform and their something that more accomplished. things check because app got think lives a it the so the We bill transactions convenient. or into executing is be they're trying appointment their threshold interface to specifically pay. bunch and get health going users next because camera anybody to a banking they exciting or with compelling of have user don't their makes to it banking the You app a core

pilots additional year significant of the of a for and they have on second We half the focus activities both represent capacity. those that in

So I context the it of about helpful think then the specifics. for would we you how and to give it be think some

Richard Close

add share. And then terms What you along thought those customers increasing lines about you eventually. let's does and say -- the any wallet in that? do around think what of in that there functionality Is

John Doyle

Well, pricing ROI. about is space all ultimately in our

is at Xx view the search our backwards we're point forward from looking rates, of validated That leading dramatically business, indicator engagement improved increases a now that and the look to given of have launch So you of ROI as Care with which all only Castlight Xx. driving Complete. the Guidance of

into the we view way you of bill behaviorally execute things more very something and process ultimately the to get helpful path ROI you those that of least and pricing a think do data leading As path supports their appointment and highest greater in such tend when resistance terms and kind step Castlight the like able you many ROI engage of or make. scheduling like the is you're we've pricing where How world differentiation same delivering curation then the healthcare ROI. with if bill number observed they to genre, charger levers been becomes a options, marry And that customers, goes employers that the ROI And a health something so that users has for to least that a that of appointment of differentiation engagement that? of it options value and think with does that nice making can a the elusive. market capabilities expect are addition other and power the networks user clearly pay, of to function level that you consumers they as activities, leads paths any product folks be greater navigation more up, a or we to turn in think is one scheduling want where of product imagine very again show and Well, the And of that of care in at experiences. to to introduced capabilities health out have do the those that super our pay in network the would does many least things doing must-have in and you follow have in about we're of that choices the those if that from you've in users [ph] resistance virtual for power. the you resistance which essentially the

into how see line. we translating top it So that's

Richard Close

to on shorter wanted Okay. stage or partner, something on lines of The in said in maybe a along startup commentary dive you the expenses. second partners Very channel channel the timeline the commentary timeline I helpful. the there. late a

remind If end for and and with terms that you then little of in bit relationship and can how Compare? dive a timeline just engage do us to theme deeper back the into

John Doyle

think well net Absolutely. and things a we build question. embarking business, to the our point Anthem that that needs almost most were we're channel new entire important do at with this what go not year to a at it's was Engage, devoted net Very the start large partner in We is overlap don't support. that significant. gave Anthem of I'll doing with already do was back nor you necessary that interested that we of the is economic large say and are models. I The that Castlight at a build satisfy the scale investments partners, of Complete challenges of the investments And these not operating needs in plans immediately, the plans that to if potential are fit confront you area of platform health regional that products think their to possibly can health of into digital about navigation plans. imagine would have generally health the number that They're health channel could the start complex believe build products absolutely for we of the building build. new kind we in on most whose deliver days Engage. regional for resources the us on What making an When Castlight. navigation, thought can product a product

that partnered for economically interesting kinds groups. a those approach So more makes much of

I the product point remarks. this experience contrast was new trying in net in the was get to out to So building Engage core was Anthem my which and to

Anthem where absolutely single-stack deliver configure deliver leverage now that new previously. We each we We product to that in can the for we can Engage net we another position use of capabilities Complete to a Castlight and partner. flavor are capabilities built out of those

So a and Anthem it's much much for comparator. that a than the lower faster associated with when Does process as the we standing example that, Engage timelines talk up a doing cost the and cost a new about help question? your partner

Richard Close

helpful. That's just But Yes. that. one on final

that? would we say you when think do then channel have incremental -- you sales and to initial second let's about think from As be okay, partner, you able find your ARR

John Doyle

that from Well, has our that existing support very results success to certainly about I along very to been the plan are think demonstrated were we've continuing clearly relationships existing in all sales we those and that of channel and XXXX working continue. XXXX our effectively expect relationships

On programs everything achieve rates the in to goals the need and there growth business, think up for to got Complete year. Castlight conversion place direct that our of we set drive for the in we side our this pipeline us we've

channel revenue in relationship about really XXXX. new and So sales in XXXX is the

perspective, to planning certainly, there's go a the think modeling. assumed our I faster that's than from what's that, but in potential

Richard Close

you much very for information. the Thank Okay.

John Doyle

you. Thank

Operator

with Your Steve Cantor next question comes from Fitzgerald. Halper

open. Your line is

Steven Halper

All right.

Just questions. two quick

unrelated What count that, about share please? in count a headcount You the XXXX, in through went a what's what was XXXX are plans behind cost impacted. you and that, had higher obviously reduction guidance, your to and program talk then

Siobhan Mangini

Sure.

So, at post XXXX in your restructuring. we to employees were headcount, at of XXX and of the was point a that terms end

the restructuring. to minimal In little and growth bit stilled I some growth also example had to us you, from We've in line in in say question, to It's what the here There item a -- the of had my were to alluded in have there. is is get P&L with marketing, from that into related. headcount non-FTE through terms marketing. of more of discussion I of for the and nominal a cost-savings be definitely What play all of there's be savings personnel. and your taken channel headcount little terms little and sales would the certainly in Charles out. will on restructuring headcount, terms moved this benefit restructuring then non-FTE account have related for they in of are a agreements and from bit marketing sales

on a XXXX. to that range. higher count, had a of similar In amount almost We saw share really actually it's terms effectively level of similar what we

expected based it's the scheduled just that's growth, expected grants really given our for to that and of we've date off terms been In of that.

ordinary. of nothing out the So

Steven Halper

you. Thank

Operator

Your Instructions] Mannheimer with comes Dougherty. [Operator from next Gene question

Your line is open.

Eugene Mannheimer

to congrats Hey, thanks. XXXX. a and good finish on Good afternoon

John Doyle

Thanks, Gene.

Eugene Mannheimer

Two questions.

of flattish Just ARR to that flat a there conversion of little in year of at wouldn't looking of area provided versus the last that is at year ARR going this same high with or conservatism growth this as outlook level. at the to is you If here? suggest see an built this time we're seeing the faster revenue, bit

Siobhan Mangini

you, Eugene. It to nice back to It's talk Yes. goes about. I've to what talked

but I've to have launched and seeing of seeing fashion. I the talking this we're guidance done is timely in that and and I then to confident of we're that a mix had and And a feeling have We're into position strong of terms that Engage terms these the your and of come deliver we've into moved having about that. complete Complete, going down deals in are we're customers in feeling think launching, QX in year. the success two, XXXX on really QX. what in into are really good pleased we've new then am and XX quarter engaged launch to the in we're QX I been timelines that time a point, them incorporating we launching we're think it, almost really launch some

us think ourselves seen what I as So of XXXX. repeating of in guidance terms in we've do it

Eugene Mannheimer

Xx And expect grow in revenue to to you to services when with professional expect does XXXX and respect moderate? of you services be why revenue the that would and we receive to the would continue about cause services,

Siobhan Mangini

All great questions.

but at the terms cost lower expect of series do our fully-insured revenues, of not the associated of XXXX distribute with build lower product do step the the We in revenue, in engaged revenues revenues. I necessarily into of services the slightly of Not terms definitely saw that business we did think so we down the first have in we of revenue we've that piece and and you some of expect not growth. thought level QX. in services changed, sort services beginning you one-time

the activity pieces a that been there's it's customers with and the these historically supporting why question. a the that latency of terms is say couple a is cost cost there's great platforms. one In of has team cost There of associated also structure, I'd some doing. launching

that alluded actually cost services making to related legacy investment support fact supporting from you an customers an is that's platforms. that we're to platform, to extend the accounting legacy perspective, that There legacy the in I've frankly when in services bucket and So immediately.

architecture. to in over we're see migrating cost So services finished the off cost efficiencies legacy expect do as revenue bucket year we of of the the customers the

Eugene Mannheimer

you. Okay, Thank great.

John Doyle

Thanks, Gene.

Operator

no this further are There questions at time.

CEO. Doyle, John to over back call the turn I'll So,

John Doyle

hope We're you a foundation help the of Thank Conference Healthcare evening. at we see you in for in Have at solutions some the market. and excited digital the powerful the call. about to March. deliver great joining that Cowen today's us navigation on Castlight to We scalable most built

Operator

This call. concludes conference today's

You may disconnect. now

Castlight Health (CSLT) 28 Feb 192018 Q4 Earnings call transcript