iRhythm(IRTC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported revenue of $158.7 million for Q1 2025, representing a 20.3% year-over-year growth compared to Q1 2024 [8][24] - Adjusted net loss for Q1 2025 was $30.3 million, or $0.95 per share, an improvement from an adjusted net loss of $38.1 million, or $1.23 per share, in Q1 2024 [26] - Adjusted EBITDA margin improved to negative 1.7% in Q1 2025 from negative 9.2% in Q1 2024, reflecting a 750 basis points improvement [26] Business Line Data and Key Metrics Changes - The Zio AT product line showed strong demand, contributing significantly to revenue growth, with Zio AT volume reaching its highest level to date [13][14] - New store growth accounted for approximately 65% of year-over-year volume growth, with home enrollment for Zio Services in the U.S. at about 23% of volume in Q1 [24] - The mobile cardiac telemetry service achieved its strongest quarter in history, indicating robust demand for long-term continuous monitoring [13] Market Data and Key Metrics Changes - The company noted a significant opportunity in the undiagnosed arrhythmia market, estimating around 27 million patients in the U.S. who may have undiagnosed arrhythmias [10] - Internationally, the company reported record volume in the UK and continued progress in Switzerland, Austria, the Netherlands, and Spain [14][15] - The launch of Zio in Japan is expected to enhance patient care, despite initial reimbursement challenges [16][17] Company Strategy and Development Direction - The company is focused on expanding its presence in upstream care pathways and primary care channels, aiming to drive earlier monitoring and diagnosis [11][12] - The partnership with Epic Aura is expected to improve operational efficiencies and increase volume growth in integrated accounts [12][56] - The company is committed to addressing FDA compliance and quality standards, with ongoing remediation efforts as a top priority [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth strategy despite economic uncertainties, highlighting the compelling value proposition of its products [22][32] - The company raised its full-year 2025 revenue guidance to $690 million to $700 million, reflecting strong momentum and durable volume growth [27][28] - Management acknowledged the potential impact of tariffs on gross margin but remains focused on mitigating supply chain concerns [29] Other Important Information - The company surpassed 10 million cumulative patient reports, marking a significant milestone in its history [10] - The company is actively exploring opportunities for inventory buildup to ensure supply chain stability amid growing demand [30] - Recent studies presented at conferences demonstrated the clinical superiority of Zio's long-term continuous monitoring compared to traditional methods [18] Q&A Session Summary Question: Outlook and Confidence in Guidance - Management noted strong momentum in the business, particularly with Zio AT, contributing to the raised guidance for the year [38][40] Question: Japan Reimbursement Challenges - The company expects lower contributions from Japan due to reimbursement rates but is committed to generating clinical evidence for future applications [44][46] Question: Zio AT Market Strength - Management indicated that Zio AT's success is driven by customer satisfaction and word-of-mouth, with a strong pipeline of new accounts [50][81] Question: Epic Integration Impact - Early signs from Epic integration show a high 20% increase in prescribing patterns in integrated accounts, though no incremental benefit is baked into guidance yet [57][58] Question: Volume from Innovative Channels - Volume from innovative channels is still in low single digits but is growing, with significant potential for future expansion [60][62] Question: Multi-Parameter Sensor Opportunities - The company is focused on developing a multi-parameter sensing platform and is open to M&A opportunities that align strategically [66] Question: FDA Submission Timeline - Management expressed confidence in submitting the Zio MCT to the FDA in Q3 2025, with ongoing remediation efforts on track [69][71]