Attached files
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| 8-K - 8-K - CASTLIGHT HEALTH, INC. | a8-k01182017investorpresen.htm |
CASTLIGHT HEALTH
Strategic acquisition
of Jiff
January 2017
2 Confidential
This presentation contains forward-looking statements regarding our trends, our strategies and the anticipated
performance of our business, including, but not limited to, the closing of the proposed transaction, contributions that we
expect Jiff’s business to make to Castlight’s business, the anticipated benefits of the proposed transaction, anticipated
future combined operations, products and services, expected quarter and year ended December 31, 2016 financial
results for Jiff and Castlight and expected pro forma financial results of the combined business. These statements are
made as of the date of this presentation and reflect management’s current views and expectations, and are subject to
various risks, uncertainties and assumptions. Factors that could cause actual results to differ materially include risks and
uncertainties such as those relating to the ability of the parties to complete the proposed transaction, obtaining Castlight
and Jiff stockholder approval and required regulatory clearances, and customer and partner reception to the proposed
transaction. Given these risks and uncertainties, you should not place undue reliance on these forward-looking
statements.
Please refer to the press release dated January 4, 2017 and the risk factors included in the company’s Form 10-Q filed
on November 2, 2016, and other 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.
Forward-looking statements made in this presentation are being made as of the date of this presentation. After the date
of this presentation, the information contained in this presentation may no longer be current or accurate. We disclaim
any obligation to update or revise any forward-looking statements. This presentation contains guidance but we will not
provide any further guidance or updates on our performance during the quarter unless we do so in a public forum.
This presentation also includes certain non-GAAP metrics, including, but not limited to, non-GAAP revenue, non-GAAP
operating loss, non-GAAP net loss and free cash flow that we believe aid in the understanding of our financial results.
For more information about our use of non-GAAP metrics, please see our press release dated January 4, 2017, which is
available on our website and as an exhibit to the Form 8-K filed with the Securities and Exchange Commission.
SAFE HARBOR
3 Confidential
LEGEND
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IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
In connection with the proposed transaction between Castlight Health, Inc. (“Castlight”) and Jiff, Inc. (“Jiff”), Castlight
intends to file a registration statement on Form S-4 with the Securities and Exchange Commission ("SEC"). This
registration statement will contain a joint proxy statement/prospectus/information statement and relevant materials
concerning the proposed transaction. Additionally, Castlight intends to file with the SEC other relevant materials in
connection with the proposed transaction. After the registration statement is declared effective by the SEC, Castlight
and Jiff will deliver a definitive joint proxy statement/prospectus/information statement to their respective stockholders.
STOCKHOLDERS OF CASTLIGHT AND JIFF ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH
THE SEC, INCLUDING THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS/INFORMATION STATEMENT,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors
and security holders will be able to obtain the documents free of charge at the SEC’s web site, http://www.sec.gov.
Documents will also be available for free from Castlight at www.castlighthealth.com.
This presentation shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to
buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of
securities in connection with the proposed transaction shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
Castlight and its executive officers and directors may be deemed to be participants in the solicitation of proxies from
Castlight’s stockholders with respect of the matters relating to the proposed transaction. Jiff and its officers and
directors may also be deemed a participant in such solicitation. Information regarding any interest that Castlight, Jiff or
any of the executive officers or directors of Castlight or Jiff may have in the proposed transaction with Jiff will be set
forth in the joint proxy statement/prospectus/information statement that Castlight intends to file with the SEC in
connection with its stockholder vote on matters relating to the proposed transaction. Information about the directors and
executive officers of Castlight, including their respective interest in security holding of Castlight, is set forth in the proxy
statement for Castlight’s 2016 Annual Meeting of Stockholders, which was filed with the SEC on April 29, 2016.
Stockholders may obtain additional information regarding the interest of such participants by reading the definitive joint
proxy statement/prospectus/information statement regarding the proposed transaction when it becomes available.
These documents can be obtained free of charge from the sources indicated above.
4 Confidential
TRANSACTION TERMS
Consideration • Castlight to issue approximately 27M shares and options
Earnout
• Issuance of up to 4M shares issuable upon achievement of specific
growth objectives for the Jiff business in FY 2017
‐ 3M additional shares upon Jiff achieving $25M in net new bookings
‐ 1M additional shares upon Jiff achieving $25M in GAAP revenue
Pro Forma
Ownership
• Castlight shareholders to own ~80% of Company and Jiff shareholders
to own ~20% of the combined company on a fully-diluted basis
Leadership /
Board
Changes at
Closing
• John Doyle to become CEO of combined company
• Derek Newell to become President of combined company
• Giovanni Colella will continue in role of executive chairman
• Two members of current Jiff board will be appointed to Castlight board
Closing
Conditions
• Subject to Castlight and Jiff shareholder approval
• Expected to close in the first half of 2017
5 Confidential
• Castlight and Jiff are strong businesses focused on delivering a
health benefits platform to large employers
• Consumerism and proliferation of point solutions are driving
employers and consultants to seek a comprehensive health
benefits platform solution
• Prior to this combination, no single firm was well positioned to
offer a comprehensive platform solution spanning wellbeing
and decision support
• Together, Castlight and Jiff will offer the most comprehensive
health benefits platform in the market
• The combined business creates a clear path to larger scale,
faster growth, and cost efficiencies driven by highly
complementary business models
EXECUTIVE SUMMARY
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6 Confidential
• Approximately 35% revenue growth to $102 million in 2016
• Gross margin reached long-term target of 70% to 75% in Q3 2016
• Operating loss in Q4’16 of <$3 million was 75% lower than Q4’15
• Stand alone business on track to reach cash flow breakeven in H2 2017
• Platform product accounted for 2/3rds of new logo wins in 2016
• Forecasted ~20% revenue growth in 2017 pre-acquisition
• Strong channel relationships, including Anthem and SAP, expected to
drive reacceleration of net new bookings in 2017 and 2018, respectively
CASTLIGHT CREATED A STRONG FOUNDATION IN 2016
Strong financial and strategic position in an accelerating platform market
7 Confidential
• Central hub for wellbeing that
drives employee engagement
• App store approach integrates
with over 50+ solutions that sync
seamlessly
• Mobile-first technology with a
world-class user experience
• Model: PEPM-based subscription
and service fees, contract terms
typically three-years paid
monthly, quarterly or annually
• Financials:
— ARR: $17M at year-end ‘16
— ARR up 100% from end of first half of
‘16
JIFF OVERVIEW
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8 Confidential
• Total population solution
that spans wellbeing and
decision support
• Data infrastructure enables
deep personalization
• Ecosystem partnerships
streamline experience for
employers and employees
• The most comprehensive
health benefits platform in
the market
COMPREHENSIVE HEALTH BENEFITS PLATFORM
9 Confidential
END-TO-END ENGAGEMENT SOLUTION
Castlight and Jiff serve different ends of the care spectrum but are
converging towards an engagement platform. Combining the two platforms
allows us to offer the most comprehensive platform in the market.
Wellbeing
Decision Support
Comprehensive
Engagement
Platform
• Decision support/
“cost” wallet
• Personalization
• Data assets
• Communication
channels (email,
push, social, etc.)
• Content
• Wellness wallet
• Mobile-First Platform
• Ecosystem
• International & non-
benefits eligible
populations
Shared Capabilities
• Program “hub”
• Insights dashboard
10 Confidential
COMPREHENSIVE HEALTH
BENEFITS SOLUTION
• Total population solution spanning
wellbeing and decision support
• Strongly differentiated by breadth,
data personalization, and
ecosystem partnerships
THE POWER OF THE COMBINATION
COMPLEMENTARY CUSTOMER
LISTS
• Combined company will serve 240+
customers, including 70 Fortune
500
STRONG CHANNEL
PARTNERSHIPS
• Major players in HR and health
benefits industry, including:
ACCELERATED REVENUE
GROWTH PROFILE
• Pro forma non-GAAP revenue
growth forecasted to be ~27-30%
in 2017 (vs. 20% standalone)
• Combined company expected to
generate non-GAAP revenue of
$138-142mm in 2017
11 Confidential
$102
$123
$7
$19
$109
2016E 2017E
ACCELERATED REVENUE GROWTH PROFILE
($ in Millions)
Castlight Jiff
$122
$17
$139
2016YE
$138 - $142
Pro-Forma Non-GAAP Revenue Annual Recurring Revenue (ARR)
($ in Millions)
12 Confidential
• Castlight and Jiff are strong businesses focused on delivering a
health benefits platform to large employers
• Consumerism and proliferation of point solutions are driving
employers and consultants to seek a comprehensive health
benefits platform solution
• Prior to this combination, no single firm was well positioned to
offer a comprehensive platform solution spanning wellbeing
and decision support
• Together, Castlight and Jiff will offer the most comprehensive
health benefits platform in the market
• The combined business creates a clear path to larger scale,
faster growth, and cost efficiencies driven by highly
complementary business models
EXECUTIVE SUMMARY
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