iRhythm(US:IRTC)2025-10-30 21:30Financial 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]