iRhythm(IRTC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - iRhythm reported Q1 2025 revenue of $158.7 million, representing a 20.3% year-over-year growth compared to Q1 2024 [10][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 for Q1 2025 was negative $2.6 million, improving from negative $14.6 million in Q1 2024, reflecting a 750 basis point improvement in adjusted EBITDA margin [26][23] 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 [14] - New store growth, defined as accounts opened in the last twelve months, accounted for approximately 65% of year-over-year volume growth [24] - The mobile cardiac telemetry service achieved its strongest quarter in history, indicating robust demand for Zio AT [14] Market Data and Key Metrics Changes - iRhythm's international business showed strong demand, particularly in the UK, with record volume achieved [15] - The company launched its services in Japan, marking its entry into the second-largest ambulatory cardiac monitoring market globally [16] - Approximately 27 million patients in the U.S. are at high risk for cardiac arrhythmias but remain undiagnosed, representing a significant market opportunity [12] Company Strategy and Development Direction - iRhythm is focused on expanding its presence in upstream care pathways and primary care channels, aiming to drive earlier monitoring and diagnosis [12][14] - The company is leveraging partnerships with innovative health channel partners to enhance its market penetration and improve patient outcomes [13] - iRhythm's strategy includes a commitment to quality and operational excellence, with ongoing remediation activities to address regulatory compliance [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory despite macroeconomic uncertainties, highlighting strong demand for Zio services [22][31] - The company raised its full-year 2025 revenue guidance to $690 million to $700 million, reflecting strong Q1 performance and durable volume growth [28] - Management emphasized the importance of upstream intervention in healthcare, aligning with current trends towards cost-effective solutions [22] Other Important Information - iRhythm surpassed 10 million cumulative patient reports, underscoring its commitment to superior patient care [11] - The company is actively working on FDA submissions for new products, including the Zio MCT, expected to be filed in Q3 2025 [30][74] - iRhythm is addressing potential supply chain concerns and cost implications due to tariffs, implementing strategies to mitigate these impacts [21][29] 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 [39][41] Question: Japan Market and Reimbursement - Management acknowledged disappointment with the reimbursement rate in Japan but emphasized the strategic importance of the market and plans to generate clinical evidence for higher reimbursement [45][48] Question: Zio AT Momentum - Management attributed Zio AT's success to strong word-of-mouth and the product's superior features compared to competitors [52][56] Question: Epic Integration Impact - Early results from Epic integration showed a high 20% increase in prescribing patterns in integrated accounts, indicating positive early signs [60][61] Question: Volume from Innovative Channels - Management indicated that volume from innovative channels is in the low single digits but is growing, with significant potential for future expansion [64][67] Question: Multi-parameter Sensor Opportunities - Management expressed interest in multi-parameter sensing capabilities and potential M&A opportunities, while emphasizing internal innovation [69][70] Question: FDA Conversations and Facility Inspection - Management expressed confidence in submitting Zio MCT to the FDA in Q3 2025 and ongoing progress with remediation efforts [73][76]