Q3 2016 FINANCIAL

& BUSINESS
UPDATE
November 2, 2016

SAFE HARBOR
This presentation contains forward-looking statements regarding our trends, our strategies
and the anticipated performance of our business, including our guidance for the full year of
2016. These statements are made as of today, and reflect managements current views
and expectations, and are subject to various risks, uncertainties and assumptions. If this
call is replayed or viewed after today, the information in the presentation may no longer be
current or accurate. We disclaim any obligation to update or revise any forward-looking
statements. We will provide guidance on todays call, but we will not provide any further
guidance or updates on our performance during the quarter unless we do so in a public
forum. Please refer to the press release and the risk factors included in the companys
filings with the Securities and Exchange Commission for discussion of important factors
that may cause actual events or results to differ materially from those contained in our
forward-looking statements. This presentation also includes certain non-GAAP metrics,
such as non-GAAP gross margin, operating expenses, net loss and net loss per share, that
we believe aid in the understanding of our financial results. A reconciliation to comparable
GAAP metrics, on a historical basis, can be found in the earnings release dated November
2, 2016, which is available on our website and as an exhibit to the form 8-K filed with the
SEC just before this call.

Confidential

GIOVANNI COLELLA, M.D.

CO-FOUNDER & CEO

THIRD QUARTER UPDATE

$100+ million annual revenue run rate

$$$

Lowest non-GAAP net loss in four years

Continued progress building channels

Increased logo velocity

Expansion of our health benefits platform

Confidential

JOHN DOYLE
PRESIDENT & COO

KEY THEMES IN Q3 2016

New logo velocity

has improved

Strong uptake of
our full platform
solution

On track to reach
cash flow
breakeven by
mid-2017

Implementation
timelines are
condensing

Reduced nonGAAP net loss by

almost two-thirds
y-o-y

Non-GAAP gross
margin reached
long-term target

Confidential

CASTLIGHT SIGNED ARR

Annualized Quarterly Subscription Revenue
Signed ARR

$120

$103.0

$110.0

$111.2

$100

($M)

$80

$72.9

$117.8

$118.1
$95.5

$79.7

$84.1

$87.8

Q4 15

Q1 16

Q2 16

Q3 16

$60
$40
$20

$0
Q3 15
Signed ARR
Q/Q Growth

10%

7%

1%

6%

0%

Y/Y Growth

41%

41%

30%

26%

15%

Subscription Revenue
Q/Q Growth

6%

9%

6%

4%

9%

Y/Y Growth

62%

50%

41%

27%

31%
Confidential

PROGRESS ON THE ANTHEM COLLABORATION

Began
Beganroll-out
roll-outof
ofAnthem
Anthemcost
costand
andquality
qualitytransparency
transparencypowered
poweredby
byCastlight.
Castlight.
Channel
Channelpartnership
partnershipshowing
showingpromise.
promise.Working
Workingto
toextend
extendititfurther.
further.
Intend
Intendto
tosell
sellCastlight
Castlightplatform
platformas
asAnthem
Anthemengagement
engagementoffering
offeringstarting
startingQ1
Q12017.
2017.
Streamlined go-to-market approach expected to improve pipeline conversion in 2017

Confidential

CASTLIGHT HEALTH BENEFITS PLATFORM

EMPLOYEES

Cost and quality navigation

Personalized single view
into health benefits
Integrated partner programs

BENEFIT LEADERS

Targeted, timely communications

Visibility into program performance
Strategic insight

Confidential

FINANCIAL OVERVIEW

CASTLIGHT REVENUE

Revenue by Quarter ($M)

$30
$25
$20

Services
Subscription
$19.5
$1.3

$21.3
$1.4

$22.7
$1.7

$23.6
$1.6

$25.5
$1.6

$15
$10

$18.2

$23.9

$19.9

$21.0

$22.0

Q4 15

Q1 16

Q2 16

Q3 16

$5
$0
Q3 15

Q/Q Growth

6%

9%

7%

4%

8%

Y/Y Growth

60%

47%

42%

27%

31%

Confidential

11

CASTLIGHT NON-GAAP GROSS PROFIT & MARGIN

Gross Profit by Quarter ($M)

72%

75%
70%

66%
65%

63%

$15

59%

59%

60%

$10

$5

$18.4

$11.6

$12.5

$14.3

55%

$15.6
50%
45%

$0

Gross Margin by Quarter (%)

$20

Gross Profit
Gross Margin

40%
Q3 15

Q4 15

Q1 16

Q2 16

Q3 16

Q/Q Growth

7%

8%

14%

9%

17%

Y/Y Growth

114%

48%

54%

45%

59%

Note: Non-GAAP figures adjusted for Stock Based Comp and Capitalization and Amortization of Software.

Confidential

12

CASTLIGHT NON-GAAP OPERATING EXPENSE

$35

G&A

Operating Expense ($M)

$30

$25

R&D

S&M

$27.5

$27.4

$27.2

$5.1

$4.9

$4.5

$26.3
$4.8

$23.9
$4.1

$20

$7.7

$7.7

$8.7

$8.6
$8.9

$15
$10
$14.7

$14.8

$14.0

$12.9

Q4 15

Q1 16

Q2 16

Q3 16

$5

$10.9

$0
Q3 15
Q/Q Growth

(3%)

(1%)

0%

(4%)

(9%)

Y/Y Growth

28%

15%

7%

(7%)

(13%)

Note: Non-GAAP figures adjusted for Stock Based Comp and Capitalization and Amortization of Software.

Confidential

13

CASTLIGHT NON-GAAP OPERATING LOSS

Non-GAAP Net Loss ($M)

$0
($5.5)
($5)

($10.6)
($13.0)

($15.9)

($14.9)

Q3 15

Q4 15

Q1 16

Q2 16

Q3 16

($10)

($15)

($20)

Q/Q Growth

(9%)

(7%)

(13%)

(18%)

(48%)

Y/Y Growth

(1%)

(3%)

(20%)

(40%)

(65%)

Note: Non-GAAP figures adjusted for Stock Based Comp, Warrant Expense , Capitalization and
Amortization of Software, and Litigation Settlement

Confidential

14

CASH BALANCE (AS OF SEPTEMBER 30, 2016)

Cash at End of Q3 2016

Q3 2016 Cash Used in

Operations

$116.4 M

($9.4 M)

Forecasting meaningful cash balance on hand

at cash flow breakeven mid-2017

Confidential

15

CASTLIGHT EARNINGS GUIDANCE

$ in millions except per share data

Total Revenue
Y/Y Growth

Non-GAAP Operating Loss

FY 2016

Comments

$99.0 - $102.0

Tracking to the
midpoint

31% - 35%

($40.0) ($42.0)

Wtd Avg Basic & Diluted

Shares Outstanding

100.0 101.0

Non-GAAP Net Loss Per

Share

($0.40) ($0.42)

Tracking to smaller
operating loss

Tracking to smaller
net loss per share

Confidential

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