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He added that Castlight needs more such partnerships.ĭespite the success with Anthem, customer churn continues to be a problem to this day. On the July 30 conference call, management pointed out that customers were eschewing Castlight for the free Rally Health solution offered by United Healthcare. Castlight created Anthem Engage for Anthem’s self-insured customers based on its Castlight Complete product and to this day continues to deliver on that, Close, the Canaccord analyst said. Still, the bright spot in the business was the Anthem channel partnership. However, not all customers jumped on the Castlight Complete bandwagon including Walmart, which ended its relationship with Castlight at the end of 2018.
Castlight Complete was heralded as the product that would effectively end the company’s churn issues and bring growth in 2019. Doyle admitted in a conference call in the third quarter of 2018 to some customers leaving as Castlight wasn’t able to properly support the standalone Jiff product and the customers became “exasperated.” Castlight was moving to create an integrated solution focused on wellness, price transparency and care guidance which they named Castlight Complete – that launch occurred in the third quarter of 2018. That made it attractive.īut like so many acquisitions, the Jiff integration was bumpy. Jiff had a mobile, wellness solution for employees and at the time Doyle, then Castlight’s COO, explained that Jiff had been able to apply engagement strategies to the broader area of engaging employees in wellness. That led to a desire the broaden the Castlight platform, Close said, and ultimately to acquiring Jiff in 2017. So, employers were not getting the most bang for their benefits buck. That is not always 100 percent of the employee universe, 100 percent of the time. were not necessarily maybe fully recognizing a return on their investment.”Īn employee will likely shop around for doctors and hospitals when they are in need of a procedure or have some kind of difficult health situation. “They went through a time when they were able to get through the initial contracts and then they experienced some churn,” Close said in a recent phone interview. Richard Close, an analyst with investment bank Canaccord Genuity, said that Castlight which had one product when it went public - price transparency - was initially “relatively successful in adding customers.” Soon enough, though things were less rosy. It’s important to understand Castlight’s recent history and the dynamics of the employer benefits market, to comprehend the challenge that O’Meara faces. With the board’s blessing, Maeve O’Meara, previously Castlight’s executive vice president of product and customer experience, has replaced Doyle.Ĭan she turn around the struggling company? Doyle had been with Castlight since 2012 and been promoted to CEO). What’s more, Castlight announced that John Doyle who had been CEO at the company since just April 2017 was leaving (the usual niceties around executive departures were conspicuously absent from the press release. In fact, in the past five years, the vaunted digital health company hasn’t once achieved its IPO-day high price again.
The stock tumbled and currently trades at around $1.60. It missed analyst expectations for both revenue and earnings per share. It reported a second-quarterly revenue of $35.9 million, which declined 5 percent from a year ago. Fast forward to 2019 and investors have punished the company for poor performance. On July 30, Castlight Health slashed its earnings outlook for the year even though management had reiterated its 2019 guidance in just the previous quarter.
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