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What: Shares of Castlight Health (NYSE:CSLT), a software company primarily focused on employee health benefits, are up nearly 30% as of 11:15 a.m. EST today in response to the company reporting second-quarter sales that topped expectations.

So what: Castlight Health reported second-quarter revenue of $23.6 million, which was up 27% over the year-ago period. That was slightly ahead of the $23.1 million analysts were expecting.

Gross margins for the period also showed improvements, growing to 62.1% on a non-GAAP basis. That was a nice gain from the 58.3% displayed in the same quarter last year.

The higher revenue and margins allowed the company to shrink its non-GAAP net loss to $10.5 million, or $0.11 per share, which is an improvement from the $12.8 million net loss, or $0.13 per share, it showed in the second quarter of 2015. That result also compared favorably to the $0.13 net loss the markets expected.

John Doyle, Caslight's CFO, offered up a lot of positive commentary on the company's quarterly performance:

Compared to last year, our Q2 non-GAAP gross margins expanded by 800 basis points, operating expenses declined by approximately 740 basis points, and at the same time, we continued to generate solid growth in our business. This enabled our Q2 net loss to reach its lowest level in more than three years. Overall, we are pleased to see results from our growth initiatives as we also make clear progress on our path to profitability.

Now what: Giovanni Coletta, Caslight's CEO, offered up some additional color on the company's strong quarterly performance, stating:

In the second quarter Castlight added nearly $7 million of signed annual recurring revenue and continued to gain traction among large enterprises, including notable customers such as Caterpillar and Genentech. We had strong adoption of Castlight's health benefits platform across our new customers and saw increased contribution from our channel relationships, in particular Anthem, which provide validation of both our expanding value proposition and the evolution of our go-to-market strategy.

He also credited the company's recently announced strategic relationship with tech giant SAP as a catalyst for growth, which lends a lot of credibility to Castlight's platform. From here, the company reaffirmed its plans to be an early partner of SAP's Connected Health platform and to integrate Castlight's health benefits platform into SAP's HR Suite.

For the full year, Castlight is guiding for revenue of $99 million to $102 million, the midpoint of which would represent growth of roughly 33%. That should translate into a net loss per share between $0.40 and $0.42. 

Given the better-than-expected results and upbeat forecast, it's hard to blame the markets for bidding up shares today.

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