Last year was an important one for San Francisco-based Castlight Health, as it was the first full year of availability for their health benefits platform, and that led to a strong finish in the final quarter of 2016 in the form of $101.7 million in total revenue and $95 million in subscription revenue, which each represent a 35 percent increase year over year.
On a call with investors, Castlight Health CEO Giovanni Colella and President and COO John Doyle said two-thirds of the company’s new customers are purchasing the full platform, and they expect that upward trend to continue thanks to their recent acquisition of digital health benefits platform Jiff for $135 million.
Castlight offers a suite of transparency tools that employers can offer their employees to save money on healthcare costs, while Jiff provides a platform for connecting employees to different vendors for health and wellness programs. The combined platform, the companies said in a press release at the time of the acquisition "will seek to improve every aspect of an employee’s health experience: from staying healthy, to accessing care, to managing a condition."
Added to their partnership with Anthem, which they announced in the second quarter and their investment from SAP, the company expects the year ahead with the boost from Jiff to bring even more growth.
“As we announced on January 4, we believe our strategic acquisition of Jiff will create the most comprehensive health benefits platform on the market,” said Colella, in what will be his last call as Castlight’s CEO as he moves into the Executive Chair role. “Response to the merger from our clients, prospects and partners has been extraordinarily positive. We are confident that our combined business offers the health benefits solutions our customers are looking for and will put us on an accelerated path towards a multi-year goal of $500 million in annual revenue.”
They also added 29 new customers in the second half of 2016 – compared to 10 in the first half – and 12 of those that closed in the fourth quarter included some big names like Chevron, US Foods, and Dover Corporation. Altogether, Castlight ended 2016 with 211 signed customers.
“I agree that Castlight's best days are ahead of us,” Doyle said on the call. “During 2016, the first full year of availability for Castlight's platform solution, two out of every three new customers purchased the platform. By the end of year, 23 percent of all Castlight customers had purchased Action and 44 percent have purchased three or more products from us. These results reflect a strong start to the evolution of our sales mix beyond transparency. We think our momentum in the market for health benefit platform solutions puts Castlight in a very strong position to leverage our acquisition of Jiff to pull further ahead of our competition.”
Along with more customers purchasing the full platform, the Anthem relationship has provided “robust go-to-market” support, which they expect to take them through the next level as they close the acquisition of Jiff at the end of the 2017’s first quarter. They actually began work with their Jiff colleagues in the fourth quarter before the deal was even finalized that, so we they could be prepared to work on a combined solution for Anthem should the need arise.
“The last several years have seen an explosion of new ways for employers to manage health benefits. Telemedicine, tech-enabled disease management and concierge offerings are just a few of the areas that have seen a lot of innovation,” said Doyle. “We have the right solutions to address growing market demand for our comprehensive health benefits platform and we expect to see very healthy growth for the business as we put two market leaders together in Castlight and Jiff.”