This past quarter, Castlight Health continued to see a growth in revenue, as it looks forward to the release of its “Castlight Complete” platform, which offers customers an integrated digital health platform.
Castlight announced that its total revenue was $36.5 million in Q1. That was an increase of 32 percent year-over year. The total year’s revenue is still expected to be between $150 and $155 million, according to the earnings call.
As the company looks ahead to the future, it is putting an emphasis on the new Castlight Complete platform, which is expected to be released later this year. The product is expected to include features from Castlight and Jiff, which was acquired by Castlight for $135 million in August 2017.
“Complete is part of an evolution from the time of the merger when we brought Castlight and Jiff together. Castlight is bringing care guidance capabilities, Jiff bringing wellbeing capabilities,” Siobhan Nolan Mangini, chief financial officer at Castlight, said during the earnings call. “[We are] integrating those capabilities in a phased way. The launch of Anthem Engage in the first part of this year offers the first proof points on a number of important dimension.”
This quarter Castlight and Anthem finally launched Anthem Engage, a comprehensive digital health platform for Anthem members. The platform has been years in the making. The two companies first announced the collaboration in 2015. Going forward, it will serve as the foundation for the health plan's digital operations.
Castlight reported that Engage has higher user rates than expected, reporting that half of registered users return once a month to the platform. John Doyle, Castlight CEO, said this could potentially be an indicator of how Castlight Complete will fare.
“And we see both of these, the launching of the product at scale, Anthem Engage, and the response of users as important proof points, if you will, for the launch of Castlight Complete, which is essentially similar capabilities rolled out for non-Anthem populations. So it's a really exciting start,” Doyle said.
Castlight is continuing to look for partners in the future. While a lot of its focus remains on the Anthem partnership, Doyle said the company is also looking into partnering with additional health plans to build out long term relationships.
Also in the earnings call, the company reported having 250 signed customers. At the end of Q1 customers accounted for 81 percent of the total annualized recurring revenue.
However, the company did see a decrease in Non-GAAP gross margin this quarter. This year it reported a margin of 63 percent compared with 68 percent in the prior quarter and 74 percent a year ago.
“As I mentioned in our last call, we expected gross margin to dip sequentially as we invested in both professional services and our user support teams to ensure the success of the record number of launches we had in the first quarter,” Mangini said. “From here, we continue to expect gross margins to improve sequentially starting in Q2.”