iRhythm Technologies (NasdaqGS:IRTC) Q4 2025 Earnings call February 19, 2026 04:30 PM ET Company ParticipantsAllen Gong - VPDan Wilson - CFODavid Roman - Managing DirectorDavid Saxon - Managing DirectorJoanne Wuensch - Managing DirectorNathan Treybeck - Equity Research Vice PresidentQuentin Blackford - President and CEORichard Newitter - Managing DirectorStephanie Piazzola - VP of Equity Research Medical TechnologyStephanie Zhadkevich - Senior Director of Investor RelationsSuraj Kalia - Managing DirectorVij ...

iRhythm Holdings Fourth Quarter 2025 Results February 19, 2026 © 2026 iRhythm Holdings, Inc. 1 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 Holdings, 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 m ...

Core Insights - iRhythm Technologies Inc. anticipates full-year 2025 revenue to exceed $740 million, driven by record revenue unit volume in Q4 2025, surpassing analysts' consensus of $737.95 million [1] - For fiscal year 2026, iRhythm expects revenue between $870 million and $880 million, reflecting a year-over-year growth of approximately 17% to 18%, compared to the consensus of $862.68 million [2] - The company projects an adjusted EBITDA margin of approximately 11.5% to 12.5% for 2026 [2] Growth Catalysts - iRhythm is positioned to accelerate growth through multiple catalysts, including deeper penetration in primary care and population health via AI-powered risk stratification partnerships, momentum in mobile cardiac telemetry, expansion into adjacent markets like obstructive sleep apnea, and continued international execution [3] Market Reaction - Following the update, iRhythm's stock fell around 20%, attributed to the delay of the Zio MCT launch to 2027 and formal 2026 guidance that did not meet market expectations [4] - Analyst Brandon Vazquez believes the stock weakness is overblown and recommends buying shares, adding iRhythm to the William Blair Analyst Conviction List due to favorable growth prospects and valuation reset [5] Management Insights - Management had previously hinted at a delay for Zio MCT, and the recent conference made this explicit, leading to adjustments in buy-side models regarding MCT contributions in 2026 [6] - William Blair does not foresee any FDA issues that iRhythm cannot address in a reasonable timeframe, and the expected 2027 launch allows for flexibility in case of additional agency requests [6] Stock Performance - iRhythm shares were trading at $155.44, up 1.23% at the time of publication, indicating some recovery amidst the recent stock volatility [7]

Financial Performance & Market Position - Anticipated full year 2025 revenue is over $740 million[30], reflecting strong commercial adoption and market expansion[83] - The company expects $870 million to $880 million in global net revenue for 2026[86] - The company anticipates an adjusted EBITDA margin of 825% to 875% for 2025[83], and projects 115% to 125% for 2026[87] - The company holds a 72% market share in Long-Term Continuous Monitoring (LTCM) within the US[39] Market Opportunity & Expansion - There are over 27 million potential patients in the United States who could benefit from ambulatory cardiac monitoring[32] - The company sees a $500 million revenue opportunity in converting 19 million legacy technology tests still performed in the US[39] - The company has a 15% market share in Mobile Cardiac Telemetry (MCT), with each 10 points of share representing $80 million to $100 million[39] - The company is targeting 32 million ambulatory cardiac monitoring tests across prioritized EU and APAC countries[32] Clinical & Technological Advancements - The company has generated over 12 million patient reports since its inception through December 31, 2025[34] - The company has accumulated approximately 3 billion hours of curated ECG data since its inception through 2025[36] - Approximately 85% of patients in representative customer programs had at least one arrhythmia identified[53]

Summary of iRhythm Technologies FY Conference Call (December 04, 2025) Company Overview - **Company**: iRhythm Technologies (NasdaqGS: IRTC) - **Industry**: Life Science Diagnostics and Medical Devices - **Key Products**: - **Zio Monitor**: Long-term continuous cardiac monitoring device, capable of monitoring for 14 days and collecting an average of 1.5 million heartbeats [3][4] - **Zio AT**: Mobile cardiac telemetry product launched in 2019, providing near real-time monitoring [5] Market Insights - **Market Size**: 6.7 million ambulatory cardiac monitoring tests in the U.S. annually, with long-term continuous monitoring being the largest and fastest-growing segment [6] - **Market Growth**: Long-term continuous monitoring is growing at a high teens percentage year-over-year [6] - **Market Share**: iRhythm holds over 70% market share in long-term continuous monitoring and approximately 15% in mobile cardiac telemetry [5][30] Competitive Landscape - **Key Competitors**: Traditional Holter monitors and event monitors, which still account for 2 million tests annually [6] - **Differentiation**: iRhythm emphasizes clinical and operational superiority, with a focus on AI tools for data analysis and high physician agreement rates (99%) on reports generated [8][9] Regulatory Environment - **NCD and LCD**: iRhythm has a National Coverage Determination (NCD) that is 20 years old, with recent concerns regarding proposed Local Coverage Determinations (LCDs) that may affect service level requirements [10][11] - **Industry Support**: The Heart Rhythm Society and other industry partners have provided feedback supporting iRhythm's position on the differentiation between long-term continuous monitoring and mobile cardiac telemetry [14] Financial Performance - **Revenue Growth**: Fiscal 2025 saw a revenue acceleration of 500 basis points over fiscal 2024, with growth attributed to the success of Zio AT, innovative channels, and EHR integration [18][19] - **Future Guidance**: Preliminary outlook for fiscal 2026 is 16%-18% growth, reflecting a step down from the previous year's performance due to difficult comparisons [65][66] Product Development - **Next-Gen MCT**: A new mobile cardiac telemetry product is in development, expected to extend monitoring to 21 days, which is anticipated to enhance market share [30][32] - **FDA Submission**: A traditional 510(k) submission was made for the new product, with ongoing discussions with the FDA regarding cybersecurity [32][34] Innovative Channels - **Strategy**: Focus on proactive monitoring for patients at risk of undiagnosed arrhythmias, with a target market of 27 million patients [46] - **Partnerships**: Currently working with 18 partners, with plans to expand to 40, emphasizing the importance of data-driven decision-making in identifying at-risk patients [45][51] EHR Integration - **Volume Uplift**: Accounts with EHR integration have seen a 25% increase in volume, with over 50% of orders now processed through EHR systems [58][61] - **Integration Benefits**: Streamlined workflows for clinicians, allowing for more efficient patient monitoring and report generation [58][60] Margin and Profitability - **Gross Margin Targets**: Long-term gross margin target of 72%-73% by 2027, with expectations for initial neutrality in margins from the new MCT product [40][41] - **EBITDA Expansion**: Aiming for 300-400 basis points of EBITDA expansion annually, with a target of 15% adjusted EBITDA by 2027 [68] Conclusion - **Overall Outlook**: iRhythm Technologies is positioned for continued growth in the cardiac monitoring market, with strong product offerings, a focus on innovation, and strategic partnerships aimed at capturing a larger share of the market while maintaining profitability [19][68]

Financial Data and Key Metrics Changes - The company reported over 30% growth in the most recent quarter, indicating strong performance and momentum in the business [66] - Preliminary revenue guidance for 2026 is projected in the high teens, reflecting a thoughtful approach to setting expectations [65][66] Business Line Data and Key Metrics Changes - The long-term continuous monitoring segment, which the company pioneered, is growing at high teens percent year-over-year, outpacing the overall market growth [9][10] - The company has gained one to two points of market share in the long-term continuous monitoring segment, now holding a low 70% share of that market [19][20] Market Data and Key Metrics Changes - The overall ambulatory cardiac monitoring market in the U.S. is estimated at 6.7 million tests, growing at mid-single digits, while the long-term continuous monitoring segment is experiencing faster growth [8][9] - The aging population is a significant tailwind for the market, increasing the risk of cardiac arrhythmias and the need for monitoring [10] Company Strategy and Development Direction - The company is focusing on expanding its presence in the primary care market, with a goal to increase the percentage of XT patches used by primary care physicians from 30% to potentially over 40% [12][14] - The company is investing in innovative channel partnerships that allow for proactive monitoring of patients, which is expected to enhance market penetration [22][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to capitalize on market opportunities, particularly with the increasing awareness of cardiac arrhythmias and advancements in therapies [10][11] - The company is committed to maintaining profitable growth while investing in innovation, aiming for a 400 basis points expansion in adjusted EBITDA year-over-year [64] Other Important Information - The company is actively working on international expansion, having launched into five new markets, including Japan, which presents a significant opportunity for growth [54][55] - The company is addressing FDA comments regarding cybersecurity as part of the review process for Zio MCT, with no expected contribution to 2026 revenue [41][42] Q&A Session Summary Question: What is driving the accelerated growth in the ambulatory cardiac monitoring market? - Management highlighted several factors, including the shift to primary care, increased consumer awareness, and the aging population as key drivers of growth [10][11] Question: How is the company leveraging its channel partners? - The company has seen success with 18 active channel partners, with all pilot programs transitioning to full commercial programs, indicating strong value propositions [34][35] Question: What is the status of the FDA submission for Zio MCT? - The company received comments from the FDA and is working through the review process, with no expected revenue contribution from Zio MCT in 2026 [41][42] Question: Can you provide an update on the international business? - The company is making progress in international markets, particularly in Japan, and expects to see meaningful contributions starting in 2027 [54][55] Question: What are the reimbursement updates for the monitoring services? - Medicare rates for long-term continuous monitoring are expected to increase by approximately 8% next year, while rates for MCT may see a slight decrease [76]

Financial Data and Key Metrics Changes - The company reported over 30% growth in the most recent quarter, indicating strong performance and momentum in the business [66][67] - Preliminary revenue guidance for 2026 is projected in the high teens percentage range, reflecting a thoughtful approach to setting expectations [65][66] Business Line Data and Key Metrics Changes - The long-term continuous monitoring segment, which the company pioneered, is growing at high teens percentage year over year, outpacing the overall market growth [8][19] - The company has gained one to two points of market share in the long-term continuous monitoring segment, now holding approximately 70% of that market [19][20] Market Data and Key Metrics Changes - The overall ambulatory cardiac monitoring market in the U.S. is estimated at 6.7 million tests annually, growing at mid-single digits, while the long-term continuous monitoring segment is experiencing faster growth [8][10] - The aging population is a significant tailwind for the market, with more individuals entering Medicare and increasing the risk of cardiac arrhythmias [10] Company Strategy and Development Direction - The company is focusing on expanding its presence in the primary care market, with a goal to increase the percentage of XT patches used by primary care physicians from 30% to potentially over 40% [12][14] - The company is investing in innovative channel partnerships that allow for proactive monitoring of patients, which is expected to enhance market penetration [22][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capitalize on market opportunities, particularly in the context of improving therapies and increasing consumer awareness [10][11] - The company is optimistic about its international expansion efforts, having launched into five new markets, including Japan, and expects meaningful contributions from these markets in the future [55][56] Other Important Information - The company is currently working through the FDA review process for Zio MCT, with no expected contributions to revenue in 2026 [40][41] - Recent updates indicate that Medicare reimbursement rates for long-term continuous monitoring will increase by approximately 8% next year, which is a positive outcome for the company [76] Q&A Session Summary Question: What is the current state of the ambulatory cardiac monitoring market? - The market is healthy, with the long-term continuous monitoring segment growing at high teens percentage year over year, driven by factors such as improved therapies and increased consumer awareness [8][10] Question: How is the company addressing the primary care market? - The company has seen an increase in the percentage of XT patches used by primary care physicians and believes this trend will continue to expand [12][14] Question: What is the status of the FDA submission for Zio MCT? - The company submitted Zio MCT to the FDA in September and is currently addressing comments received, with no expected revenue contribution in 2026 [40][41] Question: How is the international business progressing? - The company has launched into five new markets and is optimistic about future contributions, particularly from Japan, which is a significant market for ambulatory cardiac monitoring [55][56] Question: What is the company's approach to setting revenue guidance? - The company aims to provide thoughtful guidance based on high confidence in certain areas while leaving out less predictable factors [66][67]

Summary of iRhythm Technologies Conference Call Company Overview - **Company**: iRhythm Technologies (NasdaqGS: IRTC) - **Industry**: Medical Devices, specifically focused on ambulatory cardiac monitoring Key Points and Arguments Industry Concerns - Recent concerns regarding Medicare Administrative Contractors (MACs) and their draft Local Coverage Decisions (LCDs) for ambulatory cardiac monitoring were addressed. The company reassured stakeholders that a national coverage decision supersedes local decisions, and they are confident in the process of public comments and industry feedback to ensure favorable outcomes [4][5][6][11]. Financial Performance - iRhythm's 2025 revenue guidance is projected to be 8% higher than the original midpoint, driven by strong performance across multiple channels, including XT monitors and AT products [13][14]. - The company has seen significant growth in the AT segment, with a notable competitive disruption benefiting their market position [14][24]. Market Dynamics - The rise of technologies such as pulse field ablation (PFA) and increased consumer awareness of atrial fibrillation (AFib) are contributing positively to iRhythm's performance. The company is well-positioned to capitalize on these market tailwinds [16][20]. - iRhythm holds over 70% market share in long-term continuous monitoring and approximately 15% in mobile cardiac telemetry (MCT), indicating substantial growth opportunities in the MCT segment [30][31]. Innovative Channel Partners (ICPs) - The company is focusing on innovative channel partners, which are value-based care entities that manage patient risk and have direct patient contact. This strategy is expected to enhance patient monitoring and diagnosis [32][33]. - The economic argument for proactive monitoring is strong, with potential cost savings of $15,000-$17,000 for hospital events compared to $250-$300 for home monitoring [35]. Future Outlook - iRhythm anticipates continued growth in 2026, with core business performance expected to remain strong. The company has not provided formal guidance but is comfortable with current market expectations [30][31]. - The next-generation MCT device is in the pipeline, with a 510(k) submission made in September. The company is cautious about timelines due to potential delays from the FDA [52][53]. International Market Challenges - International revenue is currently low, with challenges primarily related to securing premium reimbursement in markets like Japan. The company is conducting studies to support their reimbursement applications [67]. Operational Efficiency - The company has successfully executed its FDA remediation plan and is undergoing an independent audit of its quality management system, which is a priority for the organization [65][66]. Additional Important Insights - The company is seeing a demographic shift with over 4 million patients aging into Medicare annually, which could increase the demand for their monitoring services [45]. - iRhythm is developing algorithms to identify patients who may benefit from monitoring based on risk factors, enhancing their proactive monitoring capabilities [46]. This summary encapsulates the key discussions and insights from the iRhythm Technologies conference call, highlighting the company's strategic positioning, market dynamics, and future growth potential.

Core Insights - iRhythm Technologies Inc. reported a third-quarter loss of 6 cents per share, significantly better than the analysts' expectation of a 31-cent loss [1] - The company achieved sales of $192.88 million, representing a 30.7% year-over-year increase, surpassing the consensus estimate of $184.74 million [1] Financial Performance - The third quarter of 2025 saw record quarterly revenue driven by strong performance in the core long-term continuous monitoring business, sustained demand for Zio AT, and contributions from international markets [2] - Gross profit reached $137.1 million, up 35.1%, with a gross margin of 71.1%, reflecting a 230-basis point improvement [2] Demand and Operational Efficiency - The increase in gross profit was primarily due to higher demand for Zio services, leading to greater volume [3] - The improvement in gross margin was attributed to volume leverage and operational efficiencies, although partially offset by higher blended costs per unit from a greater Zio AT product mix [3] Guidance and Future Outlook - iRhythm raised its fiscal 2025 sales guidance from a range of $720 million-$730 million to $735 million-$740 million, compared to the consensus of $726.42 million [4] - The adjusted EBITDA margin for the full year 2025 is expected to be approximately 8.25% to 8.75% of revenues [4] Analyst Sentiment - William Blair noted that the company is demonstrating strong growth and has a durable growth outlook, with positive expectations for future integrations and product launches [5] - BTIG and Needham analysts maintained a Buy rating on iRhythm, with price forecasts raised to $215 and $244, respectively [6] - Following these developments, IRTC stock increased by 3.19% to $190 [6]

Financial Data and Key Metrics Changes - For Q3 2025, revenue was $192.9 million, reflecting a year-over-year growth of 31% [5][19] - Adjusted EBITDA margin was 11.2%, compared to a negative 13.5% in Q3 2024 [22][24] - Adjusted net loss decreased to $2 million, or $0.06 per share, from an adjusted net loss of $39.2 million, or $1.26 per share in Q3 2024 [22][24] - Gross margin improved to 71.1%, an increase of 230 basis points year-over-year [20][24] Business Line Data and Key Metrics Changes - Record performance was noted in both Zio Monitor and Zio AT, contributing to overall revenue growth [5][13] - New store growth accounted for approximately 60% of year-over-year volume growth, with home enrollment for Zio services steady at around 23% [19][20] - The Zio AT business saw year-over-year unit growth more than double the corporate average [13] Market Data and Key Metrics Changes - The U.S. market continues to show strong adoption in both hospital and ambulatory settings, with 76 of the top 100 customers now EHR integrated [6][7] - In Japan, 13 systems are live, with positive feedback from physicians regarding Zio's capabilities [16] - The UK private market is experiencing strong growth, supported by clinical evidence and key opinion leader engagement [17] Company Strategy and Development Direction - The company is focusing on expanding into primary care and innovative health channels, leveraging EHR integrations to enhance clinician efficiency [6][8] - A partnership with Lusum Health aims to enhance clinical AI capabilities for identifying undiagnosed patients at risk of cardiac arrhythmias [12] - The company is transitioning from a device-enabled service to a comprehensive digital health platform powered by data and AI [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to generate positive free cash flow for the first time in its history, expecting to be free cash flow positive for the full year 2025 [24][25] - The outlook for full-year 2025 revenue has been raised to $735 to $740 million, indicating continued strong volume growth [23][24] - Management highlighted the importance of proactive monitoring and AI-driven risk stratification in reducing healthcare costs and improving patient outcomes [10][11] Other Important Information - The company is advancing development in sleep diagnostics, recognizing the overlap between cardiac arrhythmias and sleep apnea [15][49] - The FDA has requested to pause remediation efforts until after the government shutdown, which management views as a positive sign [38][40] Q&A Session Summary Question: What is driving the new account openings and volume growth? - Management noted that the ability to scale and absorb entire networks of new customers from day one has been a significant factor in growth [28] Question: What is driving the outperformance expected in Q4? - The outperformance is primarily attributed to the core monitor business, with healthy contributions from AT and innovative channels [31] Question: How should growth cadence for MCT be considered? - Management indicated that while they are optimistic about the AT business, they are cautious about forecasting MCT contributions until FDA approval is secured [33] Question: What is the sales cycle for innovative channel partners? - The sales cycle varies significantly by customer, with some partners scaling quickly while others take longer [36] Question: Any updates on FDA remediation efforts? - There has been limited communication from the FDA, but management is optimistic about resuming discussions post-shutdown [38][40] Question: What is the incremental patient pool in the innovative channel? - The focus is on monitoring asymptomatic, undiagnosed populations, with a significant opportunity identified among patients with comorbid conditions [41][43]