Core Insights - iRhythm Technologies, Inc. announced the results of the AVALON study, which is the largest real-world comparative evaluation of ambulatory cardiac monitoring (ACM) among commercially insured patients, demonstrating the clinical superiority of the Zio long-term continuous monitoring (LTCM) service [1][3][19] Study Findings - The AVALON study involved a cohort of 428,707 commercially insured patients, focusing on diagnostic yield, likelihood of repeat testing, and cardiovascular (CV) events [1][6][18] - Zio LTCM service showed the highest diagnostic yield at 26.5%, significantly outperforming other modalities such as non-iRhythm LTCM (18.4%), ambulatory event monitors (AEM) (17.0%), and Holter monitoring (14.7%) [10][19] - Zio LTCM service was 2.04 times more likely to result in a new arrhythmia diagnosis compared to Holter monitors and 1.69 times more likely compared to AEM [11][19] - The likelihood of retesting within 180 days was lowest for Zio LTCM, with all non-iRhythm LTCMs being 1.95 times more likely to require a retest [12][19] - Zio LTCM service was associated with the lowest adjusted odds of cardiovascular events within one year compared to other ACM modalities [13][19] Digital Engagement - The MyZio App, designed to enhance patient engagement and symptom logging, was associated with increased symptom reporting and improved symptom-rhythm correlation [4][21] - Among 164,563 patients, 18.4% used the MyZio App, which led to a 1.85-fold increase in rhythm-correlated diary entries compared to non-users [23][24] - The app users demonstrated greater engagement, with higher rates of episodes identified through both button presses and diary entries [23][24] Clinical Evidence Base - iRhythm has a comprehensive clinical evidence program with over 125 original research manuscripts and insights derived from more than 2 billion hours of curated heartbeat data [15][19] - The AVALON study builds on previous findings from the CAMELOT study, expanding the understanding of Zio LTCM's clinical impact across different patient demographics [3][8][19]

Core Viewpoint - iRhythm Technologies, Inc. will release its financial results for Q1 2025 on May 1, 2025, followed by a conference call to discuss the results [1]. Company Overview - iRhythm Technologies is a leading digital health care company focused on creating solutions that detect, predict, and prevent disease [3]. - The company utilizes wearable biosensors and cloud-based data analytics combined with proprietary algorithms to transform data from millions of heartbeats into clinically actionable information [3]. - iRhythm's vision emphasizes improving patient care through better data, insights, and health outcomes [3]. Conference Call Details - The conference call will begin at 1:30 p.m. PT / 4:30 p.m. ET on the same day as the financial results release [1]. - Interested parties can access a live and archived webcast of the conference call on the company's investor website [2].

Core Insights - iRhythm Technologies, Inc. has published its 2024 Corporate Sustainability Report, showcasing its commitment to sustainability and inclusivity in healthcare [1][2] Quality and Sustainable Technology Innovation - The company has enhanced its quality systems and improved customer experience through Electronic Health Record (EHR) integration and innovative product launches [5] - A strategic licensing agreement has been secured to advance connected patient care [5] - An Artificial Intelligence (AI) Governance Steering Committee has been formed to address AI risks and opportunities [5] Access and Health Equity - iRhythm has expanded globally by launching commercially in four European countries: Austria, the Netherlands, Spain, and Switzerland [5] - The company received regulatory approval from the Japanese Pharmaceutical and Medical Device Agency for the Zio 14-day, long-term continuous ECG monitoring system [5] Workforce and Inclusion - The company has refreshed its core values to shape its desired workplace culture [5] - The code of conduct has been revised to provide employees with resources and guidance for operating with integrity [5] - New recognition opportunities have been introduced to celebrate employees who embody the company's values [5] Environmental Impact - iRhythm completed an inventory of Scope 3 greenhouse gas emissions [5] - The company achieved 89.5% landfill waste diversion across its operations [5] - iRhythm obtained ISO 14001:2015 Environmental Management Systems Certification [5] - A life cycle analysis (LCA) of its products has been completed [5] - The company was named to Newsweek's list of America's Greenest Companies for 2025 [5]

Core Insights - Two large studies involving over 1.1 million patients indicate that short-term Holter monitoring often fails to detect actionable arrhythmias, even in patients with reported daily symptoms, highlighting the limitations of current monitoring practices [1][4][7] Group 1: Study Findings - 64% of patients with daily symptoms and actionable arrhythmias were undetected within the first 48 hours of monitoring, suggesting that short-term Holter monitoring is inadequate [6][9] - Non-daily symptom patients had a higher arrhythmia yield of 80.9% compared to 69.1% for daily-symptom patients, indicating that symptom frequency does not correlate with arrhythmia burden [6] - The mean time to the first detected arrhythmia episode exceeded 48 hours across all types, reinforcing the inadequacy of short-term monitoring [6][9] Group 2: Clinical Implications - The findings challenge the assumption that frequent symptoms justify short-duration monitoring and emphasize the need for long-term continuous monitoring (LTCM) for better detection of arrhythmias [4][7] - Zio LTCM provides uninterrupted monitoring for up to 14 days, which can lead to more accurate and timely detection of actionable arrhythmias compared to Holter monitoring [7][8] - The CAMELOT study supports that Zio LTCM has the highest yield for arrhythmia diagnosis and the lowest likelihood of repeat testing among monitoring services [7] Group 3: Economic Impact - Approximately 16 million Americans experience arrhythmias, with undiagnosed atrial fibrillation alone costing the U.S. $3 billion annually, highlighting the financial burden of undetected arrhythmias [5] - The economic rationale for long-term continuous monitoring is underscored by the projected costs of heart failure reaching $70 billion by 2030 [5] Group 4: Company Background - iRhythm Technologies is a leading digital health care company focused on creating solutions for disease detection and prevention, utilizing wearable biosensors and cloud-based analytics [11]

Core Viewpoint - iRhythm Technologies (IRTC) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on a company's changing earnings picture, with the Zacks Consensus Estimate tracking EPS estimates from sell-side analysts [1][2]. - Changes in future earnings potential, reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for iRhythm Technologies indicate an improvement in the company's underlying business, suggesting that investors may push the stock higher [5][8]. Zacks Rank System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7][9]. - The upgrade of iRhythm Technologies to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for near-term price movement [10]. Earnings Estimate Revisions for iRhythm Technologies - iRhythm Technologies is expected to earn -$1.75 per share for the fiscal year ending December 2025, reflecting a year-over-year change of 43.2% [8]. - Over the past three months, the Zacks Consensus Estimate for iRhythm Technologies has increased by 16% [8].

iRhythm Technologies Fourth Quarter 2024 Results February 20, 2025 Cautionary statement re forward-looking statements, non-GAAP measures and other matters Certain data in this presentation was obtained from various external sources, and neither "iRhythm Technologies, Inc. ("iRhythm" or the "Company") nor its affiliates, advisers or representatives has verified such data with independent sources. Accordingly, neither the Company nor any of its affiliates, advisers or representatives makes any representations ...

Financial Data and Key Metrics Changes - For Q4 2024, iRhythm reported revenue of $164.3 million, representing a 24% year-over-year growth, driven by record volume demand and new account openings [34][35] - The gross margin improved from 66% at the beginning of the year to 70% by Q4 2024, reflecting operational efficiencies [30] - Adjusted net income for Q4 2024 was $0.2 million, or $0.01 per share, compared to an adjusted net loss of $25.8 million, or $0.84 per share, in Q4 2023 [38] Business Line Data and Key Metrics Changes - The Zio Monitor and Zio AT both saw balanced growth, with new store growth accounting for approximately 56% of year-over-year volume growth [35] - Home enrollment for Zio services in the U.S. was approximately 22% of volume in Q4 [36] - The company celebrated registering 1 million patients for the Zio monitor in 2024, contributing to the growth in long-term continuous monitoring [12] Market Data and Key Metrics Changes - The U.S. market for ambulatory cardiac monitoring tests is approximately 6.5 million tests annually, with a potential expansion to 25 million to 27 million patients visiting primary care physicians [13][71] - iRhythm is expanding its international presence, with notable progress in the UK, Europe, and Japan, where it received regulatory approval for Zio monitor [26][27] Company Strategy and Development Direction - iRhythm aims to capitalize on the shift towards proactive monitoring in primary care, enhancing workflow efficiency and reducing time to diagnosis [14][15] - The company is focusing on integrating Zio within electronic medical record systems to improve clinical workflows and patient care [16][17] - iRhythm is also pursuing a precision AI approach to enhance monitoring for arrhythmias, targeting high-risk patient populations [22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum from 2024 continuing into 2025, with expectations of sustained volume growth in core U.S. markets [41][72] - The company anticipates a low-single-digit percentage pricing headwind in 2025, but remains confident in its growth strategy [42][66] - Regulatory and quality matters are prioritized, with ongoing remediation efforts expected to be completed by mid-2025 [31][84] Other Important Information - iRhythm generated over $30 million in free cash flow during the last three quarters of 2024, demonstrating operational discipline [48] - The company expects to be slightly free cash flow negative in 2025 but anticipates becoming free cash flow positive in 2026 [49] Q&A Session Summary Question: Guidance and growth catalysts for 2025 - Management acknowledged multiple growth levers for 2025, including record account openings and continued momentum in primary care [62][66] Question: Momentum in 2025 - Management noted strong momentum from 2024 is expected to continue into 2025, particularly from new channels and Zio AT [71][72] Question: 483 observations and remediation progress - Management reported significant progress in remediation activities, targeting completion by mid-2025, with ongoing communication with the FDA [81][84] Question: Zio MCT timeline - Management confirmed the timeline for Zio MCT submission remains on track for Q3 2025, independent of 483 remediation [88] Question: Epic integration and demand generation - Management highlighted positive feedback from Epic integration, with early signs of volume uplift but emphasized the need for broader data before making forecasts [95][96] Question: International market trends - Management indicated early positive trends in new international markets, with Japan expected to contribute in mid-2025 [100][101] Question: Sleep apnea contribution to revenue - Management stated there is no revenue contribution from sleep apnea in the 2025 guidance but expects progress in the business model [105][106] Question: Primary care volume expectations - Management believes primary care will continue to grow as a significant component of the business, with ongoing efforts to enhance early diagnosis [110][112]

Company Performance - iRhythm Technologies reported quarterly earnings of $0.01 per share, exceeding the Zacks Consensus Estimate of a loss of $0.30 per share, and showing improvement from a loss of $1.26 per share a year ago, resulting in an earnings surprise of 103.33% [1] - The company posted revenues of $164.33 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.19% and increasing from year-ago revenues of $132.51 million [2] - Over the last four quarters, iRhythm Technologies has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - iRhythm Technologies shares have increased approximately 25.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.65 on revenues of $154.31 million, and for the current fiscal year, it is -$1.98 on revenues of $679.24 million [7] Industry Outlook - The Medical Info Systems industry, to which iRhythm Technologies belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact stock performance [5][6]

Revenue Sources and Financial Performance - Approximately 24% of the company's total revenue for the twelve months ended December 31, 2024, came from the Medicare program, including Medicare Advantage[130]. - Revenue from non-contracted third-party commercial payors accounted for approximately 7% of total revenue during the year ended December 31, 2024[230]. - The company reported net losses of $113.3 million and $123.4 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of $758.9 million as of December 31, 2024[233]. - The company has a history of operating losses and may not achieve or sustain profitability in the future[232]. - The company's revenue relies on orders from licensed healthcare providers, and maintaining strong relationships with them is crucial for the adoption of its Zio Services[214]. - The company’s revenue and operating results may fluctuate significantly from quarter to quarter due to various factors, including seasonal variations in prescription rates[229]. Regulatory Compliance and Risks - The company faces risks related to compliance with Medicare regulations, which could result in penalties or loss of reimbursement if not adhered to[129]. - Future reimbursement rates for Zio Services may be adversely affected by changes in healthcare policies aimed at reducing costs[137]. - The billing process for Zio Services is complex and highly regulated, requiring substantial resources to ensure compliance[147]. - Compliance with extensive regulatory requirements is critical, as noncompliance could lead to enforcement actions, recalls, and significant financial impacts[160]. - The company is subject to regulatory scrutiny and potential penalties related to healthcare fraud and abuse laws, which could impact its operations[224]. - Non-compliance with healthcare regulations could result in substantial penalties, adversely affecting the company's business and financial condition[206]. - The company received a warning letter from the FDA on May 25, 2023, alleging non-conformities related to the Zio AT System, and has submitted a response while continuing to work with the FDA[169]. Research and Development - The company is in various stages of research and development for new diagnostic solutions, but there is no assurance of successful commercialization[143]. - The company emphasizes the importance of maintaining adequate research and development resources to meet market demands and compete effectively[182]. - The company acknowledges that many competitors allocate significantly greater funds to research and development, which could impact its competitive position[183]. - The company is investing in research and development to differentiate its biosensor and digital platform, but regulatory challenges, such as the FDA warning letter received in 2023, may impact future opportunities[186]. Market Competition and Challenges - The remote cardiac monitoring market is highly competitive, with significant competition from both large manufacturers and smaller regional service providers[144]. - The evolving landscape of wearable technology and digital health may introduce new competitors that could impact the company's market position[146]. - The company must continue to innovate to remain competitive in the medical device market, as failure to do so could lead to a decline in revenue[181]. - The company is focusing on proactive monitoring of undiagnosed arrhythmias, but there are risks that the clinical community may not adopt the recommended screening criteria[197]. Legal and Intellectual Property Issues - The company is involved in legal proceedings, including a putative securities class action lawsuit and patent litigation, which could adversely affect its business and financial condition[238]. - The company relies on patents and other intellectual property protections for its Zio Services, and potential infringement claims could lead to significant costs and operational disruptions[248]. - If found to infringe third-party patents, the company could face significant damages, including treble damages for willful infringement and legal fees[252]. - Future litigation to enforce intellectual property rights could result in substantial costs and resource diversion, impacting the company's financial condition[257]. Financial Health and Capital Requirements - The company may require additional capital to support business growth, which might not be available on acceptable terms[234]. - The company has increased its debt following the offering of 1.50% Convertible Senior Notes due 2029, which may adversely affect its financial health and operational flexibility[280]. - The company does not intend to pay dividends for the foreseeable future, focusing instead on retaining funds for operations and expansion[279]. - The company faces foreign exchange risk from transactions in currencies such as British Pound Sterling, Philippine Pesos, Euros, and Swiss Francs, but does not consider this risk to be material as of December 31, 2024[421]. Cybersecurity and Data Protection - Cybersecurity risks, including data breaches and system vulnerabilities, could harm the company's operations and expose it to legal liabilities[259]. - The company experienced a temporary delay in cash collections due to a cybersecurity incident involving a third-party vendor, highlighting vulnerabilities in its billing processes[260]. - Compliance with evolving cybersecurity regulations in the EU and the UK is critical, with new directives potentially impacting the company's operations and product distribution[266]. - The company is subject to complex U.S. and foreign laws regarding privacy and data protection, which could result in increased operational costs and potential penalties[267]. Executive Leadership and Organizational Changes - The company has experienced significant changes in executive leadership, which may create uncertainty and impact operational effectiveness[191]. - The company may face challenges in integrating acquired companies and technologies, which could divert management attention and lead to operational disruptions[199]. Environmental and ESG Considerations - The company is subject to various environmental regulations, and any violations could result in substantial liabilities and negatively impact its financial condition[247]. - Increasing focus on ESG regulations may complicate the company's supply chain and affect relationships with stakeholders, leading to enhanced compliance risks and costs[294].

Revenue Performance - Revenue for Q4 2024 increased 24.0% to $164.3 million, compared to $132.5 million in Q4 2023[4] - Full year 2024 revenue increased 20.1% to $591.8 million, up from $492.7 million in 2023[8] - Revenue for Q4 2024 reached $164.3 million, a 24% increase from $132.5 million in Q4 2023[23] Profitability Metrics - Gross profit for Q4 2024 was $115.1 million, with a gross margin of 70.0%, up from 66.0% in Q4 2023[5] - Full year 2024 gross margin improved to 68.9%, compared to 67.3% in 2023[9] - Gross profit for Q4 2024 was $115.1 million, up 32% from $87.4 million in Q4 2023[23] - Adjusted EBITDA for Q4 2024 was $19.3 million, compared to $2.4 million in Q4 2023, indicating a substantial improvement[25] Net Loss and Expenses - Net loss for Q4 2024 improved to $1.3 million, compared to a net loss of $38.7 million in Q4 2023[7] - Operating expenses for the full year 2024 were $523.0 million, a 14.5% increase compared to 2023[10] - Total operating expenses decreased to $119.2 million in Q4 2024 from $126.6 million in Q4 2023, a reduction of approximately 6%[23] - The net loss for Q4 2024 was $1.3 million, significantly improved from a net loss of $38.7 million in Q4 2023[23] - The company incurred $32.4 million in acquired in-process research and development expenses for the year ended December 31, 2024[26] Cash and Financial Position - Cash, cash equivalents, and marketable securities totaled $535.6 million as of December 31, 2024[11] Future Projections - iRhythm projects 2025 revenue between $675 million to $685 million, with an adjusted EBITDA margin of 7.0% to 8.0%[12] Company Growth and Developments - The company achieved record new account onboarding and expanded into multiple international markets in 2024[3] - Upcoming data presentations at the American College of Cardiology's Annual Scientific Session & Expo from March 29 – 31, 2025[6] Shareholder Information - The weighted-average shares outstanding for Q4 2024 were 31.3 million, compared to 30.7 million in Q4 2023[27] - The net loss per share for Q4 2024 was $0.04, a significant improvement from $1.26 per share in Q4 2023[27] Research and Development - Research and development expenses increased to $19.1 million in Q4 2024, up from $15.4 million in Q4 2023, reflecting a focus on innovation[23] - The company reported an adjusted net income of $240,000 for Q4 2024, contrasting with an adjusted net loss of $25.8 million in Q4 2023[27]