What happened

Shares of Castlight Health (CSLT) closed down 25.8% today, after the company released second-quarter earnings that have investors worried about the healthcare information technology company's future.

So what

Revenue during the second quarter was up 16% year over year, which isn't too shabby and is in line with what the company expected. In fact, management reiterated its 2018 revenue guidance of $150 million to $155 million. This year's earnings are also expected to fall within previous guidance.

It's 2019 that investors are worried about, because Castlight Health disclosed that it will lose Walmart, one of its biggest customers, when its contract runs out next year. Management thinks the company can make up for the loss with other customers, but 2019 growth won't be what it expected with the lack of Walmart revenue.

To make up for the slower growth, management plans to restructure and cut its operating expenses by 10% to 15%, resulting in a charge in the third quarter. With the cuts, Castlight Health is looking to get to breakeven on a cash flow basis by the fourth quarter and to be breakeven for its non-GAAP operating income in 2019.

Stethoscope on cell phone

Image source: Getty Images.

Now what

Today's drop might be an opportunity to grab shares of Castlight Health on the cheap, but investors should keep in mind that the company is launching a new product, Castlight Complete, later this quarter that will be crucial to Castlight Health's mid-term future. Investors should tread lightly, considering that Walmart decided not to sign up for the new product and that other companies are taking a "wait-and-see approach rather than purchasing Castlight Complete prior to general availability of the product," according to CEO John Doyle.