iRhythm Technologies, Inc. (NASDAQ:IRTC) Q2 2021 Earnings Conference Call August 5, 2021 4:30 PM ET Company Participants Leigh Salvo - Head, Investor Relations Doug Devine - Interim Chief Executive Officer & Chief Financial Officer Dan Wilson - Executive Vice President of Strategy, Corporate Development Mark Day - Executive Vice President of Research & Development Conference Call Participants Brandon Vazquez - William Blair Calvin Chu - Morgan Stanley Bill Plovanic - Canaccord Sam Brodovsky - Truist Suraj K ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ Form 10-Q _______________________________________________________________________ (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-37918 ___________ ...

Financial Data and Key Metrics Changes - Revenue for Q1 2021 was $74.3 million, representing a year-over-year growth of 17% despite a negative impact of $13 million from updated Novitas rates [32][38] - Gross margins were 68.4%, down 6.3% year-over-year and 5.6% quarter-on-quarter [38][40] - Adjusted EBITDA was negative $5.2 million, an increase of $2.2 million year-on-year but down $11.7 million quarter-on-quarter [38][42] - Cash and short-term investments were $262 million at quarter end, down $73 million from Q4 2020 [39][42] - Net loss for Q1 2021 was negative $27.8 million or a loss of $0.95 per share compared to a net loss of $9.1 million or $0.34 per share in the same period of the prior year [44] Business Line Data and Key Metrics Changes - Zio XT volume in the U.S. drove the majority of growth in Q1, while Zio AT in the U.S. and Zio XT in the U.K. outpaced overall company growth on a percentage basis [39][33] - New account onboarding increased by 11% compared to Q4 2020, reaching historically high levels [39] - Zio AT has seen significant traction as a best-in-class mobile cardiac telemetry service, with strong volume growth exceeding initial expectations [32][35] Market Data and Key Metrics Changes - The U.K. market showed very strong volume growth, outpacing overall company growth, driven by the AI award and NICE recommendation [34] - The company estimates it is near 20% penetrated in its core market, with continued growth driving toward becoming the new standard of care in cardiac arrhythmia monitoring [33] Company Strategy and Development Direction - The company is committed to achieving pricing that reflects the benefits of its technology and is actively pursuing multiple paths for revised Medicare pricing [10][12] - There is a focus on operational efficiencies to support profitability and growth, with initiatives in manufacturing, clinical operations, and revenue cycle management [12][46] - International expansion and expanding indications for use are seen as substantial opportunities for sustainable growth and value creation [13][35] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the strong demand for Zio XT and the clinical and economic value it provides [50][51] - The company acknowledges the need to adapt to lower reimbursement levels while continuing to invest in growth areas [52] - There is a commitment to ensuring access to Zio XT for Medicare patients until all paths for appropriate pricing have been fully explored [51][31] Other Important Information - The company is holding discussions with Novitas and other MACs to establish more appropriate rates for long-term continuous ECG monitoring [20][21] - Advocacy efforts are ongoing to highlight the clinical value of long-term continuous monitoring, with over 140 letters sent to Novitas [24][25] Q&A Session Summary Question: Can you provide insights into conversations with payors and upcoming contract renewals? - Management reported constructive discussions with payors, with 90% of negotiations completed and a focus on addressing Medicare pricing concerns [55][56] Question: What has changed in Novitas's approach to pricing? - The methodology used by Novitas is based on direct product costs, and management is working to include broader variable costs in discussions [61][62] Question: What factors influenced the Q2 guidance? - The guidance reflects a conservative approach due to the need for staffing to meet demand, despite strong performance in Q1 [68] Question: What are the next steps for national coverage decisions? - The process involves comment periods and decision-making phases, with key milestones expected in July/August and November/December [86][89]

iRhythm Technologies, Inc. (NASDAQ:IRTC) Q4 2020 Earnings Conference Call February 25, 2021 4:30 PM ET Company Participants Leigh Salvo - Investor Relations Mike Coyle - Chief Executive Officer Doug Devine - Chief Financial Officer Conference Call Participants David Lewis - Morgan Stanley Robbie Marcus - JPMorgan Brandon Vazquez - William Blair Kaila Krum - Truist Marie Thibault - BTIG Bill Plovanic - Canaccord Suraj Kalia - Oppenheimer Operator Ladies and gentlemen, thank you for standing by and welcome to ...

PART I [Business](index=4&type=section&id=Item%201.%20Business) iRhythm Technologies is a digital healthcare company specializing in ambulatory cardiac monitoring with its Zio service, reporting **$265.2 million revenue** and a **$43.8 million net loss** in 2020 - iRhythm is a digital healthcare company diagnosing cardiac arrhythmias via its Zio service, which has served over **three million patients** and accumulated over **750 million hours** of heartbeat data[14](index=14&type=chunk) Financial Performance (2019-2020) | Metric | 2020 (million $) | 2019 (million $) | | :--- | :--- | :--- | | Revenue | $265.2 | $214.6 | | Net Loss | $43.8 | $54.6 | - The Zio service platform features the Zio XT monitor for continuous monitoring and the Zio AT monitor for timely transmission of significant arrhythmia events[19](index=19&type=chunk)[23](index=23&type=chunk) - Growth strategy focuses on U.S. market penetration, sales force expansion, international growth (U.K.), and new clinical use cases for high-risk asymptomatic patients and post-procedure monitoring[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - In September 2019, iRhythm collaborated with Verily Life Sciences to develop next-generation atrial fibrillation screening and detection products, involving upfront and milestone payments[71](index=71&type=chunk) - As of December 31, 2020, the company employed **1,157 full-time staff**, including **145 direct sales representatives**[23](index=23&type=chunk)[97](index=97&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from reimbursement changes, intense competition, operational execution, and the ongoing impact of the COVID-19 pandemic, alongside a history of net losses - Adverse changes in CMS reimbursement rates for the Zio service, particularly new CPT code rates published in January 2021, pose a significant risk to revenue if not favorably renegotiated[160](index=160&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) - The COVID-19 pandemic adversely impacted operations through limited sales access, deferred diagnostic procedures, and supply chain disruptions[160](index=160&type=chunk)[161](index=161&type=chunk)[163](index=163&type=chunk) - The company has a history of net losses, reporting **$43.8 million** in 2020 and **$54.6 million** in 2019, with continued losses expected due to growth investments[170](index=170&type=chunk) - Business success is highly dependent on broad physician adoption of the Zio service; failure to achieve this would adversely impact operations[160](index=160&type=chunk)[171](index=171&type=chunk) - The ambulatory cardiac monitoring market is highly competitive, with recent industry consolidation intensifying pressure from rivals possessing greater resources[160](index=160&type=chunk)[212](index=212&type=chunk)[213](index=213&type=chunk) - Recent management turnover, including the CEO's retirement and CFO/COO resignations, introduces operational uncertainty[160](index=160&type=chunk)[222](index=222&type=chunk) [Unresolved Staff Comments](index=60&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - Not applicable[313](index=313&type=chunk) [Properties](index=60&type=section&id=Item%202.%20Properties) The company leases all its facilities, including corporate headquarters in San Francisco, clinical centers, and manufacturing in Cypress, deemed sufficient for current needs Leased Facilities | Facility Type | Location | Size (sq. ft.) | | :--- | :--- | :--- | | Corporate Headquarters | San Francisco, CA | 117,560 | | Clinical Center | Lincolnshire, IL | 41,500 | | Clinical Center | Houston, TX | 20,276 | | Manufacturing/Distribution | Cypress, CA | 17,558 | [Legal Proceedings](index=60&type=section&id=Item%203.%20Legal%20Proceedings) The company faces a putative class action lawsuit filed February 1, 2021, alleging Exchange Act violations, which it believes is without merit - A putative class action lawsuit was filed on February 1, 2021, alleging violations of Sections 10(b) and 20(a) of the Exchange Act for the period August 4, 2020, to January 28, 2021[319](index=319&type=chunk) - The company believes the lawsuit lacks merit and intends to defend itself vigorously[319](index=319&type=chunk) [Mine Safety Disclosures](index=61&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[320](index=320&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=62&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under "IRTC"; it has never paid cash dividends and plans to retain earnings for business development Quarterly Stock Price (2020) | Quarter | High ($) | Low ($) | | :--- | :--- | :--- | | First | 101.40 | 57.79 | | Second | 131.18 | 72.13 | | Third | 238.11 | 111.60 | | Fourth | 261.17 | 180.80 | - The company has never declared or paid cash dividends and does not anticipate paying any in the foreseeable future[325](index=325&type=chunk) [Selected Consolidated Financial Data](index=64&type=section&id=Item%206.%20Selected%20Consolidated%20Financial%20Data) Selected financial data for 2016-2020 shows consistent revenue growth to **$265.2 million** in 2020, alongside continuous net losses, reaching **$43.8 million** in 2020 Selected Financial Data (2016-2020, in thousands) | Metric | 2020 (thousands $) | 2019 (thousands $) | 2018 (thousands $) | 2017 (thousands $) | 2016 (thousands $) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $265,166 | $214,552 | $147,277 | $99,129 | $64,551 | | Gross Profit | $194,889 | $162,067 | $108,482 | $70,926 | $43,660 | | Net Loss | $(43,830) | $(54,568) | $(50,378) | $(29,740) | $(20,795) | | Total Assets | $511,739 | $306,212 | $117,523 | $133,379 | $138,635 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=65&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2020, revenue grew **24% to $265.2 million**, while gross margin declined to **73%**; operating loss decreased to **$43.7 million**, and liquidity improved with a **$206.8 million** public offering despite COVID-19 disruptions Results of Operations Comparison (2019 vs. 2020) | Metric (thousands $) | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $265,166 | $214,552 | $50,614 | 24% | | Gross Profit | $194,889 | $162,067 | $32,822 | 20% | | Gross Margin | 73% | 76% | - | - | | Loss from Operations | $(43,673) | $(54,755) | $11,082 | 20% | | Net Loss | $(43,830) | $(54,568) | $10,738 | 20% | - The **24% revenue growth** in 2020 was driven by increased Zio service volume, while gross margin decreased due to product mix and fixed costs during the COVID-19 pandemic[355](index=355&type=chunk)[357](index=357&type=chunk) - COVID-19 caused a mid-March 2020 decline in patient registrations, but volumes recovered in the second half, supported by increased "Home Enrollment" services[340](index=340&type=chunk)[342](index=342&type=chunk) Cash Flow Summary (in thousands) | Activity | 2020 (thousands $) | 2019 (thousands $) | 2018 (thousands $) | | :--- | :--- | :--- | :--- | | Net cash used in Operating | $(13,759) | $(21,863) | $(29,093) | | Net cash (used in) provided by Investing | $(132,391) | $(89,274) | $34,142 | | Net cash provided by Financing | $214,316 | $111,576 | $6,303 | - As of December 31, 2020, the company held **$88.6 million** in cash and equivalents and **$246.6 million** in short-term investments, with liquidity significantly enhanced by a **$206.0 million** public offering in August 2020[373](index=373&type=chunk)[383](index=383&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=78&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks, primarily from interest rate sensitivity and British Pound Sterling foreign currency exposure, are not considered material by management - The company faces interest rate risk on cash, investments, and variable-rate debt, but a hypothetical **10%** interest rate change would not materially impact financial statements[419](index=419&type=chunk)[421](index=421&type=chunk) - Foreign currency exchange risk, mainly from British Pound Sterling transactions, is not considered material[422](index=422&type=chunk) [Financial Statements and Supplementary Data](index=79&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited financial statements for 2020, with PricewaterhouseCoopers LLP identifying a material weakness in internal control over financial reporting due to an ineffective control environment - PricewaterhouseCoopers LLP concluded that internal control over financial reporting was ineffective as of December 31, 2020, citing a material weakness from an ineffective control environment and insufficient accounting expertise[428](index=428&type=chunk)[429](index=429&type=chunk) - The auditor identified the estimation of Contractual Allowance and Allowance for Doubtful Accounts for third-party payors as a Critical Audit Matter, given significant management judgment[437](index=437&type=chunk)[438](index=438&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2020 (thousands $) | Dec 31, 2019 (thousands $) | | :--- | :--- | :--- | | Cash, cash equivalents, & short-term investments | $335,217 | $140,551 | | Total Assets | $511,739 | $306,212 | | Total Liabilities | $170,127 | $170,803 | | Total Stockholders' Equity | $341,612 | $135,409 | Consolidated Statement of Operations (in thousands) | Account | 2020 (thousands $) | 2019 (thousands $) | 2018 (thousands $) | | :--- | :--- | :--- | | Revenue | $265,166 | $214,552 | $147,277 | | Gross Profit | $194,889 | $162,067 | $108,482 | | Loss from Operations | $(43,673) | $(54,755) | $(45,691) | | Net Loss | $(43,830) | $(54,568) | $(50,378) | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=125&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[622](index=622&type=chunk) [Controls and Procedures](index=125&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective as of December 31, 2020, due to a material weakness in the control environment, though prior weaknesses were remediated - Management concluded that disclosure controls and procedures were ineffective as of December 31, 2020, due to a material weakness in internal control over financial reporting[624](index=624&type=chunk) - The material weakness identified is an ineffective control environment, resulting from insufficient accounting and internal control expertise amidst rapid company growth[627](index=627&type=chunk) - Remediation efforts include hiring additional experienced finance staff and two Internal Audit Directors to enhance the control environment[630](index=630&type=chunk) - Previously disclosed material weaknesses in the 2019 10-K, concerning financial statement close and revenue accounting, were remediated by December 31, 2020[632](index=632&type=chunk)[634](index=634&type=chunk) [Other Information](index=127&type=section&id=Item%209B.%20Other%20Information) The company reports no other information to disclose for this item - None[637](index=637&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees and Services](index=128&type=section&id=Item%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) Information for Items 10-14, covering governance, compensation, and ownership, is incorporated by reference from the 2021 Proxy Statement - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the definitive Proxy Statement, to be filed within **120 days** after December 31, 2020[640](index=640&type=chunk)[641](index=641&type=chunk)[642](index=642&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=129&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists exhibits for the 10-K, with financial statement schedules omitted, and includes an index of material agreements and corporate governance documents - All required financial statements are included; financial statement schedules are omitted as not applicable or already present in the statements and notes[648](index=648&type=chunk) - An index of exhibits, as required by Item 601 of Regulation S-K, provides a list of material agreements and corporate governance documents[649](index=649&type=chunk)[650](index=650&type=chunk)

iRhythm Technologies, Inc. (NASDAQ:IRTC) Q3 2020 Earnings Conference Call November 5, 2020 4:30 PM ET Company Participants Leigh Salvo - Investor Relations Kevin King - Chief Executive Officer Doug Devine - Chief Financial Officer Dan Wilson - Executive Vice President, Strategy, Corporate Development and Investor Relations Conference Call Participants David Lewis - Morgan Stanley Robbie Marcus - JPMorgan Margaret Kaczor - William Blair Kaila Krum - Truist Securities Suraj Kalia - Oppenheimer Operator Ladies ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents iRhythm Technologies' unaudited condensed consolidated financial statements as of September 30, 2020, including balance sheets, statements of operations, comprehensive loss, cash flows, and stockholders' equity [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets significantly increased to **$497.2 million** by September 30, 2020, from **$306.2 million** at year-end 2019, driven by cash and investments, while stockholders' equity grew to **$334.5 million** due to capital raised Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $95,336 | $20,462 | | Short-term investments | $231,901 | $120,089 | | Total current assets | $365,939 | $172,792 | | Total assets | $497,201 | $306,212 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $55,866 | $52,066 | | Total liabilities | $162,655 | $170,803 | | Total stockholders' equity | $334,546 | $135,409 | | Total liabilities and stockholders' equity | $497,201 | $306,212 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q3 2020 revenue grew **32%** to **$71.9 million**, with net loss narrowing to **$4.7 million**, while nine-month revenue increased **20%** to **$186.4 million**, and net loss improved to **$34.2 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $71,944 | $54,673 | $186,357 | $155,448 | | Gross profit | $53,712 | $40,888 | $136,578 | $116,878 | | Loss from operations | $(4,757) | $(18,260) | $(34,092) | $(37,029) | | Net loss | $(4,677) | $(18,293) | $(34,179) | $(37,268) | | Net loss per share | $(0.17) | $(0.72) | $(1.25) | $(1.50) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities was **$21.6 million** for the nine months ended September 30, 2020, with **$211.4 million** provided by financing activities, leading to a **$74.9 million** net increase in cash and cash equivalents Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2020 | 2019 | | :--- | :--- | :--- | | Net cash used in operating activities | $(21,577) | $(17,003) | | Net cash used in investing activities | $(114,906) | $(76,766) | | Net cash provided by financing activities | $211,357 | $108,380 | | **Net increase in cash and cash equivalents** | **$74,874** | **$14,611** | - The company raised **$206.4 million** (net) from a follow-on public offering in the first nine months of 2020, significantly bolstering its cash position[22](index=22&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section details significant accounting policies, the impact of COVID-19, revenue recognition by payor, balance sheet components, commitments including the Verily development agreement, debt, and stock-based compensation - The company's business was significantly disrupted by the COVID-19 pandemic, leading to cost-reduction measures in Q2 2020, including furloughs, layoffs, and temporary pay reductions[35](index=35&type=chunk)[38](index=38&type=chunk) However, by August 2020, most of these measures were reversed as business conditions improved[38](index=38&type=chunk) Revenue by Payor Type (in thousands) | Payor Type | Q3 2020 | Q3 2019 | Nine Months 2020 | Nine Months 2019 | | :--- | :--- | :--- | :--- | :--- | | Contracted third-party payors | $36,317 | $25,961 | $94,571 | $73,006 | | Non-contracted third-party payors | $4,607 | $2,686 | $10,851 | $8,050 | | Centers for Medicare & Medicaid | $19,978 | $15,379 | $51,012 | $42,573 | | Healthcare Institutions | $11,042 | $10,647 | $29,923 | $31,819 | | **Total** | **$71,944** | **$54,673** | **$186,357** | **$155,448** | - The company has a development collaboration agreement with Verily Life Sciences to create next-generation atrial fibrillation (AF) screening products[91](index=91&type=chunk) The company paid a **$5.0 million** upfront fee in 2019 and an additional **$3.0 million** milestone payment in June 2020[92](index=92&type=chunk)[93](index=93&type=chunk) - Due to the impact of COVID-19, the company determined that performance targets for its 2019 Performance-based RSUs (PRSUs) were not probable[116](index=116&type=chunk) The terms were modified in June 2020 to vest based on the company's average stock price, resulting in an incremental compensation cost of **$13.6 million** to be recognized through March 2021[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, noting a **32%** Q3 2020 revenue increase driven by Zio service volume, COVID-19 impact and recovery, and strengthened liquidity from a **$206.8 million** public offering - The company's Zio service revenue is primarily from third-party payors[127](index=127&type=chunk) For the nine months ended September 30, 2020, contracted third-party payors accounted for **51%** of revenue, CMS for **27%**, healthcare institutions for **16%**, and non-contracted payors for **6%**[127](index=127&type=chunk) - The COVID-19 pandemic led to decreased patient registrations in mid-March 2020[131](index=131&type=chunk) However, during Q3 2020, patient registrations for the Zio service recovered to pre-COVID levels seen in Q1 2020[131](index=131&type=chunk) - In response to the pandemic, the company significantly increased the utilization of its "Home Enrollment" service, which allows patients to receive and use the Zio monitor without visiting a healthcare facility[133](index=133&type=chunk) Comparison of Results for the Three Months Ended September 30 (in thousands) | Metric | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $71,944 | $54,673 | $17,271 | 32% | | Gross Profit | $53,712 | $40,888 | $12,824 | 31% | | Gross Margin | 75% | 75% | - | - | | Loss from Operations | $(4,757) | $(18,260) | $13,503 | (74)% | | Net Loss | $(4,677) | $(18,293) | $13,616 | (74)% | Comparison of Results for the Nine Months Ended September 30 (in thousands) | Metric | 2020 | 2019 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $186,357 | $155,448 | $30,909 | 20% | | Gross Profit | $136,578 | $116,878 | $19,700 | 17% | | Gross Margin | 73% | 75% | - | - | | Loss from Operations | $(34,092) | $(37,029) | $2,937 | (8)% | | Net Loss | $(34,179) | $(37,268) | $3,089 | (8)% | [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company faces market risks from interest rate sensitivities on cash, investments, and variable-rate debt, and foreign currency exchange rates, though these are not considered material - The company's primary market risks are interest rate sensitivity and foreign currency exchange rate sensitivity[187](index=187&type=chunk) - As of September 30, 2020, the company had **$327.2 million** in cash, cash equivalents, and investments, and **$34.9 million** in outstanding debt with a variable interest rate[188](index=188&type=chunk)[190](index=190&type=chunk) Management concluded that a hypothetical **10%** change in interest rates would not materially impact the financial statements[190](index=190&type=chunk) - Foreign exchange risk from transactions denominated in currencies other than U.S. dollars, particularly the British Pound Sterling, is not considered material as of September 30, 2020[191](index=191&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2020, due to material weaknesses in the control environment, financial statement close process, and revenue accounting, with a remediation plan underway - As of September 30, 2020, management concluded that disclosure controls and procedures were not effective due to ongoing material weaknesses[192](index=192&type=chunk) - The identified material weaknesses relate to: 1) an ineffective control environment due to insufficient experienced accounting personnel, 2) an ineffective financial statement close process, and 3) ineffective controls over accounting for revenue and related receivables and reserves[193](index=193&type=chunk)[196](index=196&type=chunk) - The company is executing a remediation plan that includes hiring additional finance and internal audit personnel and modifying the design of key controls related to journal entries, business performance reviews, and revenue accounting[197](index=197&type=chunk)[198](index=198&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=42&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material legal proceedings, though it may encounter legal matters in the ordinary course of business - As of the report date, iRhythm is not a party to any material legal proceedings[201](index=201&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Key risks include the ongoing material adverse impact of COVID-19, a history of net losses, reliance on Zio service adoption and reimbursement, intense competition, potential CMS policy changes, supply chain dependence, and internal control weaknesses - The COVID-19 pandemic is expected to continue to materially and adversely impact the business through reduced patient volumes, limited access for sales staff to hospitals, and potential supply chain disruptions[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk) - The company has a history of net losses, with an accumulated deficit of **$295.0 million** as of September 30, 2020, and expects to continue incurring losses as it invests in growth[211](index=211&type=chunk) - A significant portion of revenue (approximately **27%** for the nine months ended Sep 30, 2020) comes from CMS, making the business highly sensitive to changes in Medicare regulations and reimbursement rates[217](index=217&type=chunk) - The company faces intense competition from large, established medical device companies and smaller service providers, some of whom have greater financial resources and broader product offerings[250](index=250&type=chunk)[251](index=251&type=chunk)[252](index=252&type=chunk) - The company has identified and is remediating material weaknesses in its internal control over financial reporting, which could result in material misstatements if not corrected[293](index=293&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable for the current reporting period - Not applicable[352](index=352&type=chunk) [Other Information](index=72&type=section&id=Item%205.%20Other%20Information) A new Severance and Change in Control Policy was approved, standardizing severance payments and benefits for executives for qualifying terminations - A new Severance and Change in Control Policy was approved, standardizing benefits for executives[354](index=354&type=chunk) - In a change of control scenario, qualifying terminated officers are entitled to benefits including lump sum salary payments (**24 months** for the CEO, **15** for other officers), bonus payments (**150%** of target for CEO, **100%** for others), COBRA premium payments, and **100%** accelerated vesting of unvested equity awards[356](index=356&type=chunk) - For terminations outside of a change of control period, benefits include continued salary payments (**18 months** for the CEO, **12** for others) and COBRA premium payments for the same duration[357](index=357&type=chunk) [Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed as part of the Quarterly Report on Form 10-Q, including officer certifications and XBRL data files

iRhythm Technologies, Inc. (NASDAQ:IRTC) Q2 2020 Earnings Conference Call August 6, 2020 4:30 PM ET Company Participants Leigh Salvo - IR Kevin King - President, CEO & Director Douglas Devine - CFO & Secretary Daniel Wilson - EVP, Strategy, Corporate Development & IR Conference Call Participants Lilia-Celine Breton Lozada - JPMorgan Chase & Co. Calvin Chu - Morgan Stanley Brandon Vazquez - William Blair & Company Kaila Krum - Truist Securities Cecilia Furlong - Canaccord Genuity Suraj Kalia - Oppenheimer Ma ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________________________________________________________ Form 10-Q _______________________________________________________________________ (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-37918 ____________ ...

iRhythm Technologies, Inc. (NASDAQ:IRTC) Q1 2020 Earnings Conference Call May 7, 2020 4:30 PM ET Company Participants Leigh Salvo - Investor Relations Kevin King - President and Chief Executive Officer Matthew Garrett - Chief Financial Officer Daniel Wilson - Executive Vice President of Strategy, Corporate Development and Investor Relations Conference Call Participants David Lewis - Morgan Stanley Brandon Vazquez - William Blair & Company, L.L.C. Cecilia Furlong - Canaccord Genuity Group Inc. Suraj Kalia - ...