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Castlight HealthQ3 2019 Financial & Business Update

October 24, 2019

(NYSE:CSLT)

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Safe HarborStatement

This presentation contains forward-looking statements regarding our trends, our strategiesand the anticipated performance of our business, which involve risks and uncertainties,including our guidance for the full year of 2019, expected ARR growth, our licenseagreement with Anthem, our executive leadership, timing of platform migrations, costsavings efforts, impact of non-renewals, direct and channel sales momentum, our ability toadd additional channel partners, future churn risk, future cash position, and the other risksset forth in our filings with the Securities and Exchange Commission, including the risks setforth in our Annual Report on Form 10-K for the year ended December 31, 2018 and ourQuarterly Report on Form 10-Q for the three months ended September 30, 2019. Thesestatements were made as of October 24, 2019, and reflect management’s views andexpectations at that time, and are subject to various risks, uncertainties and assumptions. Ifthis call is replayed after October 24, 2019, the information in the call may no longer becurrent or accurate. We disclaim any obligation to update or revise any forward-lookingstatements.

We provide guidance in this presentation, but we will not provide any further guidance orupdates on our performance during the quarter unless we do so in a public forum. Pleaserefer to today’s press release and the risk factors included in the company’s filings with theSecurities and Exchange Commission for discussion of important factors that may causeactual events or results to differ materially from those contained in our forward-lookingstatements.

This presentation also includes certain non-GAAP metrics, such as non-GAAP gross profitand non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating incomeand non-GAAP operating loss, and non-GAAP net income and loss per diluted share thatwe believe aid in the understanding of our financial results. A reconciliation to comparableGAAP metrics, on a historical basis, can be found in the appendix section of thispresentation.

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Maeve O’MearaCEO

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Solidify our relationship with Anthem

Jump-start our health plan growth strategy

Reinvigorate the employer book of business

Q3: Progress Against Key Priorities

Build out our executive leadership team

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1. Renews and expands the Engage health navigation relationship

2. Provides Anthem a non-exclusive enterprise license for components of our underlying platform technology

1. ~$170 million total contract value (TCV)

2. Estimated ARR* impact: ~20% increase vs. Anthem ARR level at end of Q3 2019

3. 30-month agreement, effective 01/01/20

SummaryIncreased Revenue

Stability & Visibility

Anthem Enterprise License Agreement

1. Technology leverageable across Anthem digital solutions

2. Anthem referenceable partner and health plan customer

Proof Point for Health Plan Growth Strategy

* Annualized Recurring Revenue

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Assembled an accountable health plan (HP) sales team

Put infrastructure in place to sell & deliver for HPs

CEO-led meetings with over a dozen senior HP leaders

Health Plan Strategy Progress

Confidence in our technology’s ability to improve the HP

member experience and lower the cost of care

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• Unique high-touch offering

• Combines the best of CSLT’s digital navigation with clinician services

• Launched Customer Charter Program in Q4, including F500 client

• Buy-up for Care Guidance and Complete customers

• August Customer Advisory Board with 20+ large clients

• Launched four innovation-focused Customer Councils

• Customer Center of Excellence (Utah)

Castlight Care Guides Customer Partnership

Reinvigorating Direct-to-Employer Business

• Two dozen completed YTD, including five large clients in October

• Four customers left to migrate

• Once done, can shift resources from supporting legacy offering to investing in innovation and growth

Migrations

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• Experienced healthcare operations leader

• Chief of Staff at NY Presbyterian Brooklyn Methodist Hospital

• Passionate about leveraging technology to improve the user experience

• Great combination of digital health and deep Blues plan experience

• Held roles at Rally Health, Prime Therapeutics and Health Care Services Corp. (#2 Blues plan in the market)

• Will lead strategic sales and partnership development with health plan and ecosystem partners

Helen Kotchoubey

EVP & COO

Matt Moran

SVP of Corp. Dev.

Building Out the Executive Leadership Team

• Joined CSLT in 2013

• Experience across finance, corporate planning, health plan development, product marketing and operations

• Key contributor to Anthem relationship

Will Bondurant

SVP & CFO

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Leadership team

New growth vectors

Health direct-to-employer business

Priorities for 2020 Positioning

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Siobhan Nolan ManginiCFO

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• $137.4 million as of 09/30/19

• ~50% of Q3 bookings from existing customers upgrading to full health navigation products

• ~30% of total ARR on Castlight Complete

• Signed in October, does not impact Q3 quarter-end ARR and backlog

• Non-cancellable backlog impact: ~$250 million post-Anthem vs.$122 million at Q3 quarter-end

• Year-end ARR: Expect a range of ~$140-$145 million

Annualized Recurring Revenue (ARR)Go-Forward Impact of

Anthem Enterprise License Agreement

ARR and Related Metrics

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Income Statement Review

Category Metric Commentary

Revenue $35.5 million• Tracking to full year guidance range

• Reflects growing mix of Anthem revenue

Non-GAAP*

Gross Margin 62%

• Reflects costs from legacy wellbeing customer

migrations and support service levels

• Subscription gross margin at 78%

Operating Expenses $27.4 million

• Sales & Marketing in 20-24% of rev. target

• G&A reflects spending on people, SOX 404(b)

• R&D: investing for future growth

Operating

Income/(Loss)$(5.4) million

* Please see Appendix for definition of non-GAAP financial measures

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$56.0 million

Cash Metrics

Cash* as of September 30, 2019

$7.4 million

Q3 2019 Cash Used in Operations

* Cash, cash equivalents and marketable securities

Expects to end 2019 with more than $60 million in cash*

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2019 Guidance

Guidance as of 10/24/19. Please see Appendix for definition of non-GAAP financial measures.

MetricPreviously-Issued

RangeComment

GAAP Revenue $140mm – $145mm In Range

Non-GAAP Operating

Income/(Loss)$(8)mm – $(13)mm

Loss to exceed $(13)mm due to investments

in customers and operations

Non-GAAP EPS $(0.06) – $(0.09) Loss per share to exceed $(0.09)

Weighted Avg. Shares

Outstanding145mm – 146mm In Range

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Q&A Session

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Appendix

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Gross Profit: Reconciliation of GAAP to Non-GAAP

September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019

Gross profit:

GAAP gross profit subscription $ 28,144 $ 31,589 $ 25,640 $ 25,730 $ 26,383

Stock-based compensation 322 222 219 196 180

Amortization of internal-use software 220 120 - - -

Amortization of intangibles 678 678 587 587 660

Reduction in workforce 130 - - - -

Non-GAAP gross profit subscription $ 29,494 $ 32,609 $ 26,446 $ 26,513 $ 27,223

GAAP gross margin subscription 76.7 % 80.2 % 75.8 % 75.8 % 75.6 %

Non-GAAP gross margin subscription 80.4 % 82.7 % 78.2 % 78.1 % 78.0 %

GAAP gross loss professional services and other $ (2,898) $ (4,210) $ (4,260) $ (3,983) $ (5,423)

Stock-based compensation 322 239 265 236 236

Reduction in workforce 173 - - - -

Non-GAAP gross loss professional services $ (2,403) $ (3,971) $ (3,995) $ (3,747) $ (5,187)

GAAP gross margin professional services and other (86.8)% (156)% (253)% (205)% (967)%

Non-GAAP gross margin professional services and other (72.0)% (148)% (237)% (193)% (925)%

GAAP gross profit $ 25,246 $ 27,379 $ 21,380 $ 21,747 $ 20,960

Impact of non-GAAP adjustments 1,845 1,259 1,071 1,019 1,076

Non-GAAP gross profit $ 27,091 $ 28,638 $ 22,451 $ 22,766 $ 22,036

GAAP gross margin 63.1 % 65.0 % 60.2 % 60.6 % 59.1 %

Non-GAAP gross margin 67.7 % 68.0 % 63.3 % 63.4 % 62.1 %

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Operating Expense: Reconciliation of GAAP to Non-GAAP

September 30, 2018 December 31, 2018 March 31, 2019 June 30, 2019 September 30, 2019

Operating expenses:

GAAP sales and marketing $ 11,497 $ 10,419 $ 9,215 $ 8,889 $ 9,829

Stock-based compensation (699) (615) (627) (662) (678)

Amortization of intangibles (271) (273) (272) (272) (528)

Reduction in workforce (1,055) - - - -

Non-GAAP sales and marketing $ 9,472 $ 9,531 $ 8,316 $ 7,955 $ 8,623

GAAP research and development $ 15,028 $ 14,531 $ 15,725 $ 14,487 $ 14,295

Stock-based compensation (1,798) (1,854) (1,704) (1,733) (1,294)

Certain legal expenses - - (191) - -

Lease exit and related charges (253) (167) - - -

Reduction in workforce (522) - - - -

Non-GAAP research and development $ 12,455 $ 12,510 $ 13,830 $ 12,754 $ 13,001

GAAP general and administrative $ 6,193 $ 6,220 $ 7,293 $ 7,010 $ 6,440

Stock-based compensation (1,129) (1,193) (1,162) (2,030) (625)

Amortization of intangibles (16) (17) (17) (17) (16)

Certain legal expenses - - - (533) - -

Reduction in workforce (172) - - - -

Non-GAAP general and administrative $ 4,876 $ 5,010 $ 5,581 $ 4,963 $ 5,799

GAAP operating expense $ 32,718 $ 31,170 $ 32,233 $ 30,386 $ 30,564

Impact of non-GAAP adjustments (5,915) (4,119) (4,506) (4,714) (3,141)

Non-GAAP operating expense $ 26,803 $ 27,051 $ 27,727 $ 25,672 $ 27,423

Operating loss:

GAAP operating loss $ (7,472) $ (3,791) $ (10,853) $ (8,639) $ (9,604)

Impact of non-GAAP adjustments 7,760 5,378 5,577 5,733 4,217

Non-GAAP operating loss (income) $ 288 $ 1,587 $ (5,276) $ (2,906) $ (5,387)

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Non-GAAP Financial MeasuresTo supplement Castlight Health’s financial statements presented in accordance with generally accepted accountingprinciples (GAAP), we also use and provide investors and others with non-GAAP measures of certain components offinancial performance, including non-GAAP gross profit and margin, non-GAAP operating expense, non-GAAPoperating loss, non-GAAP net loss and non-GAAP net loss per share. Non-GAAP gross profit and margin, non-GAAPoperating expense, non-GAAP operating loss, and non-GAAP net loss exclude stock-based compensation, certain legalexpenses, amortization of intangibles, amortization of internal-use software, and lease exit and related charges.

We believe that these non-GAAP financial measures provide useful supplemental information to investors and others,facilitate the analysis of the company’s core operating results and comparison of operating results across reportingperiods, and can help enhance overall understanding of the company’s historical financial performance.

We have provided a reconciliation of each non-GAAP financial measure to the most directly comparable GAAPfinancial measure, except that we have not reconciled our non-GAAP operating loss and net loss per share guidancefor the full year 2019 to comparable GAAP operating loss and net loss per share guidance because we do not provideguidance for stock-based compensation expense, and capitalization and amortization of internal-use software, whichare reconciling items between GAAP and non-GAAP operating loss. The factors that may impact our future stock-based compensation expense, and capitalization and amortization of internal-use software are out of our controland/or cannot be reasonably predicted, and therefore we are unable to provide such guidance without unreasonableeffort. Factors include our market capitalization and related volatility of our stock price and our inability to project thecost or scope of internally produced software.

These non-GAAP financial measures should be considered in addition to, not as a substitute for or in isolation from,measures prepared in accordance with GAAP. Further, these non-GAAP measures may differ from the non-GAAPinformation used by other companies, including peer companies, and therefore comparability may be limited.Castlight Health encourages investors and others to review the company’s financial information in its entirety and notrely on a single financial measure.