What happened

Shares of Castlight Health (NYSE:CSLT) are down a whopping 48% at 3:18 p.m. EDT following disappointing second-quarter earnings that were announced after the closing bell yesterday.

The health navigation expert also named a new CEO, Maeve O'Meara, who was serving as executive vice president of product and customer experience, following the departure of former CEO John Doyle. Chief financial officer Siobhan Nolan Mangini will also take on the role of the company's president.

Castlight Health's new management lowered 2019 guidance and now expects to bring in $140 million to $145 million this year, down from previous guidance of $153 million to $158 million. On the bottom line, management now expects to lose between $0.06 and $0.09 per share on an adjusted basis, compared to previous guidance for an income of $0.00 to $0.03 per share.

Stethoscope on a cell phone.

Image source: Getty Images.

So what

Mangini explained the issues that caused the lower revenue:

First, sales were behind plan as we did not generate meaningful sales from new customers in the quarter. The pipeline continued to track our expectations, but conversions lagged. We have opportunities to improve. Second, we experienced elevated out-of-period turn in Q2, driven primarily by customers of Care Guidance, our product that combines transparency and data-driven personalization.

Basically, the company didn't get new customers and lost current ones. Not a good combination.

Now what

The new management plans to focus on selling its technology platform to health plans. It'll still sell to employers, but that's become increasingly challenging since employers started going with free, check-the-box offerings from large payers. This isn't completely uncharted territory -- Castlight Health already has a partnership with health benefits company Anthem (NYSE:ANTM) -- but it's hard to know how successful the company will be and how long it'll take to right the ship, so the large haircut investors are giving the company's share price today seems completely warranted.