At Castlight Health Inc. (NYSE: CSLT), the management believes that the company has not exhausted its growth opportunities. The management sees revenue expanding 33% in 2016.
It turns out that to generate long-term topline and bottom-line improvement, Castlight has set its sight on growing recurring revenues. CEO Giovanni Coletta revealed that they added close to $7 million in signed recurring revenue in 2Q2016 and the amount of recurring revenue should be improving in the coming quarters and years.
Big ticket clients
As part of driving recurring revenue growth and overall financial performance improvement, Castlight Health Inc. (NYSE: CSLT) is working to win over large enterprise clients. The latest quarter results have demonstrated that Castlight is steadily gaining traction among big ticket clients. The company now counts Genentech and Caterpillar Inc. (NYSE:CAT) among its large enterprise clients.
The other approach that Castlight is taking to improve its financial performance is strategic partnerships. The company is working with partners who are not only helping it to recruit more clients, but also adding credibility to its business. One such partner is technology giant SAP SE (ADR) (NYSE: SAP).
Castlight Health Inc. (NYSE: CSLT) is a partner of SAP’s Connected Health platform. On top of that, it has got the opportunity to integrate its health benefits platform into the HR Suite offered by SAP.
What transpired in 2Q?
Castlight managed to exceed expectations in 2Q2016. Revenue of $23.6 million grew 27% over a similar quarter last year and outpaced the consensus estimate of $23.1 million.
Continued cost controls also enabled the company to improve its gross margin, which rose to 62.1% from 58.3% a year ago. With that, Castlight was able to narrow its EPS loss to just $0.11, down from $0.13 displayed a year ago and $0.13 that analysts were expecting for the latest quarter.
2016 outlook – Castlight Health Inc. (NYSE: CSLT)
For full-year 2016, Castlight Health Inc. (NYSE: CSLT) is looking for revenue reading in the range of $99 to $102 million, suggesting a topline growth of about 33% at the midpoint. If revenue falls in the guided range, EPS loss is expected to be in the band of $0.40 to $0.42.