iRhythm(IRTC) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights iRhythm Technologies reported a record second quarter for 2025, with revenue growth exceeding 26% to $186.7 million, driven by its diversified growth strategy. Key operational achievements include a strategic AI partnership with Lucem Health to enhance early arrhythmia detection and the presentation of positive clinical study results at ADA 2025, reinforcing the value of early cardiac monitoring in at-risk populations | Metric | Q2 2025 | Change vs Q2 2024 | | :--- | :--- | :--- | | Revenue | $186.7 million | +26.1% | | Gross Margin | 71.2% | +130 bps | - The company's growth momentum is attributed to three main areas: accelerating its core monitoring business, increasing the adoption of Zio AT, and expanding with value-based care partners[4] - A strategic partnership was executed with Lucem Health to use AI for earlier identification of undiagnosed arrhythmias in patients with comorbid conditions[9] - Results from two large-scale studies presented at ADA 2025 highlighted the opportunity for early cardiac detection in at-risk cardiometabolic populations, showing arrhythmias often precede major adverse cardiovascular events (MACE)[9] Detailed Financial Performance In Q2 2025, revenue grew 26.1% year-over-year to $186.7 million, fueled by strong demand for Zio services. Gross margin improved to 71.2% from 69.9% due to volume leverage and operational efficiencies. Despite a rise in operating expenses to $151.6 million to support growth, the company successfully narrowed its GAAP net loss to $14.2 million from $20.1 million in the prior-year period, demonstrating improved operating leverage | Financial Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | $186.7M | $148.0M | +26.1% | | Gross Profit | $132.9M | $103.5M | +28.4% | | Gross Margin | 71.2% | 69.9% | +1.3 ppt | | Operating Expenses | $151.6M | $126.5M | +19.8% | | Net Loss | ($14.2M) | ($20.1M) | +29.4% (Improvement) | | Diluted Loss Per Share | ($0.44) | ($0.65) | +32.3% (Improvement) | - The increase in gross margin was primarily driven by volume leverage and operational efficiencies, which was partially offset by a higher product mix of Zio AT[6] - Adjusted operating expenses increased to $145.2 million, mainly due to funding for development activities and costs associated with serving a growing global patient volume[7] Financial Position As of June 30, 2025, iRhythm maintained a strong liquidity position with $545.5 million in unrestricted cash, cash equivalents, and marketable securities. The company's total assets grew to $964.0 million from $931.4 million at the end of 2024, while total liabilities also increased slightly - The company held $545.5 million in unrestricted cash, cash equivalents, and marketable securities as of June 30, 2025[10] | Balance Sheet Item (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $663,917 | $645,819 | | Total assets | $964,030 | $931,449 | | Total current liabilities | $132,211 | $110,920 | | Total liabilities | $860,370 | $840,541 | | Total stockholders' equity | $103,660 | $90,908 | 2025 Annual Guidance Following strong first-half performance, iRhythm has increased its full-year 2025 guidance. The company now projects revenue to be in the range of $720 million to $730 million and expects the adjusted EBITDA margin to be between 8.0% and 8.5% of revenues | 2025 Full Year Guidance | Projected Range | | :--- | :--- | | Revenue | $720 million to $730 million | | Adjusted EBITDA Margin | 8.0% to 8.5% of revenues | Consolidated Financial Statements Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2025, shows total assets of $964.0 million, an increase from $931.4 million at year-end 2024. This was driven by increases in marketable securities and property and equipment. Total liabilities rose to $860.4 million, primarily due to higher accrued liabilities, while stockholders' equity improved to $103.7 million | Selected Balance Sheet Items (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $309,105 | $419,597 | | Marketable securities | $236,435 | $115,956 | | Total assets | $964,030 | $931,449 | | Long-term senior convertible notes | $648,007 | $646,443 | | Total liabilities | $860,370 | $840,541 | | Total stockholders' equity | $103,660 | $90,908 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, iRhythm reported revenue of $186.7 million and a net loss of $14.2 million, or ($0.44) per share. This represents a significant improvement from the same period in 2024, which saw revenue of $148.0 million and a net loss of $20.1 million, or ($0.65) per share. For the six-month period, revenue grew to $345.4 million and net loss narrowed to $44.9 million Three Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Revenue, net | $186,687 | $148,047 | | Gross profit | $132,857 | $103,471 | | Loss from operations | ($18,708) | ($22,981) | | Net loss | ($14,218) | ($20,107) | | Net loss per share | ($0.44) | ($0.65) | Six Months Ended June 30 (in thousands) | Account | 2025 | 2024 | | :--- | :--- | :--- | | Revenue, net | $345,364 | $279,976 | | Gross profit | $242,073 | $190,987 | | Loss from operations | ($51,264) | ($61,119) | | Net loss | ($44,918) | ($65,774) | | Net loss per share | ($1.41) | ($2.12) | Reconciliation of GAAP to Non-GAAP Financial Information The company provides non-GAAP financial measures, including adjusted EBITDA, adjusted net loss, and adjusted operating expenses, to offer a clearer view of its core operational performance. These measures exclude items such as stock-based compensation, impairment charges, business transformation costs, and certain litigation expenses. For Q2 2025, these adjustments reveal a significant improvement in underlying profitability compared to the prior year - Non-GAAP measures are used for internal decision-making and period-to-period comparisons, excluding items like stock-based compensation, impairment charges, business transformation costs, and certain litigation expenses[15][16] Adjusted EBITDA and Net Loss Reconciliation For Q2 2025, iRhythm's adjusted EBITDA was $15.7 million, a substantial turnaround from $5.0 million in Q2 2024. The improvement was driven by higher revenue and operating leverage. Adjusted net loss also narrowed significantly to $10.2 million, or ($0.32) per share, compared to an adjusted net loss of $18.8 million, or ($0.61) per share, in the prior-year quarter. Key adjustments included stock-based compensation ($22.8 million) and intellectual property litigation costs ($3.0 million) Q2 Non-GAAP Reconciliation (in thousands) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net Loss (GAAP) | ($14,218) | ($20,107) | | Stock-based compensation | $22,827 | $21,821 | | Adjusted EBITDA | $15,696 | $4,991 | | Adjusted Net Loss | ($10,224) | ($18,811) | | Adjusted Net Loss per Share | ($0.32) | ($0.61) | Adjusted Operating Expenses Reconciliation Adjusted operating expenses for Q2 2025 were $145.2 million, compared to $125.2 million in Q2 2024. The non-GAAP figure is derived by excluding $2.5 million in impairment charges, $0.9 million in business transformation costs, and $3.0 million in intellectual property litigation costs from the GAAP operating expenses of $151.6 million Operating Expenses Reconciliation (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating Expenses (GAAP) | $151,565 | $126,452 | | Less: Impairment charges | ($2,479) | — | | Less: Business transformation costs | ($925) | ($1,296) | | Less: IP litigation costs | ($2,956) | — | | Adjusted Operating Expenses | $145,205 | $125,156 |