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What were the key takeaways from iRhythm’s earnings call?

- **Record Q3 Growth**: $192.9M revenue (+31% YoY), driven by Zio Monitor and AT expansion.
- **EHR Integration Success**: 76% of top 100 customers now integrated, boosting utilization by 25%.
- **AI & Sleep Innovations**: Expanding into sleep diagnostics with multi-sensing platform.
- **Free Cash Flow Positive**: $565M cash, first annual free cash flow positive.
- **2025 Guidance**: $735-740M revenue, 8.25-8.75% EBITDA margin.

**【CEO Summary Section】**
- Q3 revenue of $192.9 million, up 31% YoY, driven by Zio Monitor and Zio AT growth.
- 76% of top 100 customers now EHR-integrated, with 25% utilization increase post-integration.
- AI partnerships and sleep diagnostics expansion highlight strategic initiatives.
- Free cash flow positive for the first time, with $565.2 million in cash.

**【CFO Financial Commentary】**
- Adjusted EBITDA margin of 11.2%, up 300 bps YoY.
- Gross margin 71.1%, improving 230 bps YoY due to scale and cost efficiencies.
- Full-year 2025 guidance: $735-740 million revenue (24-25% growth), 8.25-8.75% EBITDA margin.
- Tariffs expected to impact 2025 gross margin by ~50 bps.

**【Q&A Key Highlights】**
- **New Accounts Growth**: 60% of Q3 volume from new accounts, driven by EHR-integrated systems.
- **Zio MCT**: FDA submission in September, potential 2026 launch with same manufacturing line as Zio Monitor.
- **Innovative Channel**: 18 active partnerships, targeting asymptomatic patients with comorbidities.
- **Sleep Diagnostics**: Multi-sensing platform in development, leveraging existing Zio form factor.
- **Margins**: 2027 target of 72-73% gross margin, 400 bps annual EBITDA expansion.

iRhythm Technologies, Inc. (IRTC) Q3 2025 Earnings Call Transcript

- **Revenue Growth Accelerates**: Q2 2025 revenue up 26.1% YoY to $186.7 million, driven by core monitoring (Zio monitor) and Zio AT, with 68% of growth from new accounts.
- **Innovative Channels Scaling**: 12 active partners covering 2M patients, with 40+ pipeline discussions targeting 100+ potential partners.
- **Zio MCT Launch Imminent**: 510(k) filing expected Q3, featuring 21-day wear time and enhanced detection.
- **Profitability Improves**: Adjusted EBITDA margin 8.4% (vs. 3.4% Q2 2024), with 500 bps improvement.
- **FDA Compliance Progress**: Remediation costs ~$15M, with third-party audit planned for H2 to demonstrate best-in-class quality.

**【CEO Summary Section】**
- Q2 2025 revenue of $186.7 million, up 26.1% YoY, driven by core long-term monitoring (Zio monitor) and Zio AT growth, as well as contributions from innovative channel partners.
- Record new account openings in long-term monitoring, with 68% of YoY volume growth coming from new stores (accounts open <12 months).
- Zio AT revenue reached a record quarter, with dual-pronged growth from expanding adoption within existing customers and new account integrations.
- 12 innovative channel partners now active, covering ~2 million patients, with 40+ pipeline discussions targeting 100+ potential partners.
- Zio MCT 510(k) filing expected this quarter, featuring 21-day wear time, same form factor as Zio monitor, and enhanced detection parameters.
- International expansion in Japan (8 new commercial accounts) and Europe (4 additional countries), with U.K. private market showing steady momentum.
- Adjusted EBITDA margin improved 500 basis points YoY to 8.4%, with $10.2 million adjusted net loss.

**【CFO Financial Commentary】**
- Q2 gross margin 71.2%, up due to volume leverage and operational efficiencies, despite higher Zio AT mix.
- Full year 2025 revenue guidance raised to $720-730 million (vs. prior $705-715 million), driven by core business strength and innovative channel contributions.
- Adjusted EBITDA margin guidance updated to 8-8.5% of revenue, up from prior 7-8% range, reflecting operating leverage.
- Tariffs expected to impact gross margin by 20-40 bps YoY, partially offset by supply chain mitigation.
- $545.5 million cash on hand, with free cash flow negative in 2025 but positive expected in 2026.

**【Q&A Highlights】**
- Guidance raise ($30M) split: ~2/3 from core business, 1/4 from Zio AT and innovative channels.
- FDA remediation costs ~$15 million in 2025, with Q3 gross margin expected to decline slightly due to clinical ops hiring.
- Zio MCT filing will run in parallel with FDA warning letter resolution, with third-party audit planned for H2.
- Lucem Health partnership enables AI-driven early arrhythmia detection in high-risk populations, with pilot hit rates >80%.
- CMS 2026 fee schedule proposed flat to +2% rates for Zio services, representing ~24% of revenue.

iRhythm Technologies, Inc. (IRTC) Q2 2025 Earnings Call Transcript

- **Record Q1 Growth**: $158.7M revenue (+20.3% YoY) fueled by new accounts and primary care penetration.
- **Zio AT Breakthrough**: 14-day wear rate outperforms competitors, driving 2x market share gains.
- **Japan Expansion**: PMDA-cleared Zio launched with 10x diagnostic yield vs. Holter, despite reimbursement challenges.
- **Profitability Leap**: Adjusted EBITDA margin improved 750bps to -1.7%, on track for 7.5-8.5% full-year target.
- **MCT Innovation**: Zio MCT submission planned for Q3, targeting 2026 free cash flow positivity.

**【CEO Opening Remarks】**
- Q1 2025 revenue reached $158.7 million, up 20.3% YoY, driven by strong demand for Zio Monitor and Zio AT, as well as international expansion.
- Key growth drivers: 65% of YoY volume growth from new accounts, 23% of U.S. volume from home enrollment, and 10 million cumulative patient reports milestone.
- Strategic focus on upstream care pathways: 30% of Zio Monitor prescriptions now originate from primary care physicians.
- Japan launch achieved PMDA clearance for Zio with 14-day AI-enabled monitoring, despite suboptimal reimbursement rates.

**【CFO Financial Review】**
- Adjusted EBITDA margin improved 750bps to -1.7% of revenue, driven by operational efficiency and volume leverage.
- Gross margin held steady at 68.8%, despite 50-75bps headwind from tariffs on global imports.
- Q1 adjusted net loss of $30.3 million (-$0.95 per share) reflects $15 million annualized FDA remediation costs.
- Full-year 2025 guidance raised to $690-700 million, with EBITDA margin target of 7.5-8.5%.

**【Q&A Key Themes】**
- **Zio AT Momentum**: 14-day wear rate of 13.8 days vs. competitor average of 12.8 days, with 2 consecutive quarters of >20% YoY growth.
- **Japan Strategy**: Targeting $2 million+ annual contribution despite initial reimbursement challenges; planning real-world evidence studies to support rate upgrades.
- **Epic Integration**: Early adopters show 20-40% prescribing uplift; pipeline of 50+ health systems for Aura platform.
- **Tariff Mitigation**: Building raw material inventory buffer, exploring alternative supply chains to offset 50-75bps margin impact.

**【Long-Term Vision】**
- Addressing 27 million undiagnosed arrhythmia patients in U.S. primary care; Zio MCT submission planned for Q3 2025.
- Expanding clinical evidence base with 1M+ patient studies showing Zio's superior diagnostic yield vs. Holter monitors.
- Targeting 2026 free cash flow positivity through operational excellence and capital allocation discipline.

iRhythm (IRTC)-1 May 25-2025 Q1 Earnings call transcript

- **Revenue Surge**: 2024 full year revenue exceeded $675 million (+20% YoY), with Q4 at $164.3 million (+24% YoY), driven by Zio monitor/AT growth and primary care expansion.
- **Primary Care Traction**: 50%+ of IDNs now use Zio in primary care, cutting diagnosis time from 4-6 months to 3-4 weeks.
- **Epic Partnership Payoff**: 2 million+ EHR-integrated registrations, with low-cost IT integration enabling faster adoption.
- **International Expansion**: Japan launch mid-2025, targeting $2 million+ contribution, while Europe sees early-stage growth.
- **FDA Compliance Progress**: On track for Q2 2025 remediation completion, with $15 million in 2025 expenses.
- **Zio AT Growth**: 2025 guidance assumes mid-20s growth, but Q4 disruption could drive higher if sustained.
- **Free Cash Flow Outlook**: 2025: slightly negative; 2026: positive, supported by $30M+ Q4 2024 free cash flow.


**【CEO Business Overview】**
- **Revenue Growth**: Full year 2024 revenue exceeded $675 million, driven by 20% year-over-year growth, with Q4 revenue of $164.3 million (+24% YoY). Key contributors included Zio monitor and Zio AT volume growth, new account openings, and primary care channel expansion.
- **Strategic Expansion**: 
  - **Primary Care Integration**: Over 50% of large IDNs now have primary care physicians prescribing Zio, reducing time to diagnosis from 4-6 months to 3-4 weeks.
  - **Epic Partnership**: 2 million+ registrations through EHR-integrated accounts, with low-effort IT initiatives enabling faster time-to-value.
  - **International Markets**: Launched Zio Services in Austria, Netherlands, Switzerland, Spain, and Japan (pending reimbursement). UK private contracts drove record billable registrations.
- **FDA Compliance**: On track to complete remediation activities by Q2 2025, with $15 million incremental expenses expected in 2025.

**【CFO Financial Review】**
- **Q4 2024 Results**: 
  - Adjusted EBITDA: $19.3 million (11.7% of revenue), vs. -$25.8 million (adjusted net loss) in Q4 2023.
  - Gross Margin: 70% (up from 66% at start of 2024), driven by clinical ops and manufacturing efficiencies.
  - Free Cash Flow: $30+ million generated in last 3 quarters of 2024.
- **2025 Guidance**: 
  - Revenue: $675-$685 million (+18-20% YoY), with 1% growth contribution from international markets.
  - Adjusted EBITDA Margin: 7-8% of revenue, excluding tariffs (50-75bps headwind).
  - Free Cash Flow: Slightly negative for 2025, positive in 2026.
- **Cost Management**: 
  - $25 million+ savings from organizational restructuring.
  - $11 million in FDA-related expenses in 2024, expected to rise to $15 million in 2025.

**【Q&A Key Takeaways】**
- **Zio AT Momentum**: Q4 2024 saw competitive disruption, with Zio AT contributing to 24% YoY growth. 2025 guidance assumes mid-20s growth, but upside potential if Q4 momentum persists.
- **Epic Integration**: Early accounts report workflow efficiency gains, with plans to expand to 100+ accounts in 2025.
- **Japan Market**: Regulatory approval for Zio Monitor in September 2024, with commercial launch expected mid-2025. 2025 contribution: ~$2 million.
- **Sleep Apnea Strategy**: No 2025 revenue contribution, but R&D underway for multi-sensor platform targeting undiagnosed populations.
- **Tariff Impact**: 50-75bps gross margin headwind if Mexico/China tariffs implemented, offset by manufacturing automation savings.


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