Castlight Health continued to lose money in the first months of its second year as a publicly traded company, though rising revenue led to a smaller deficit and allowed the company to beat analysts' expectations.
The San Francisco-based company's software provides price transparency tools and other features intended to help employers analyze and manage their healthcare costs. Castlight said renewals were strong during the first quarter and that its two largest nongovernmental customers made increased investments.
Analysts Richard Davis Jr. and David Hynes Jr. of Canaccord Genuity called it a “so-so quarter,” noting that Castlight only added six new customers in the three months ended March 31, the lowest since they began tracking the metric. They acknowledged, however, that the first quarter can be a seasonally slow period for booking new business.
Some of Castlight's new customers include media giant Viacom, the state of Mississippi and McKesson Corp., the healthcare technology and pharmaceutical distribution conglomerate, executives said.
But Castlight beat analysts' expectations for net income by about 7%, reporting a loss of about $19.6 million in the quarter compared with $24.3 million during the same period the year before.
Revenue came in just slightly above estimates, at $16 million. That was up 90.4% over the $8.4 million reported during the first quarter of last year. The company saw particular improvement in subscription revenue, which was up 100% to $14.9 million.
Castlight reiterated its full-year revenue guidance of $74 million to $77 million.