Summary of iRhythm Holdings Q1 2026 Earnings Call

1Key Financial Results and Metrics

Revenue: $199.4 million, up 25.7% year-over-year, exceeding expectations.

Adjusted EBITDA: $14.1 million (7.1% of revenue), an improvement of 880 basis points year-over-year.

Gross Margin: 70.9%, an increase of 210 basis points year-over-year.

Net Loss: GAAP net loss of $13.9 million ($0.43 per diluted share), improved from a loss of $30.7 million in Q1 2025.

Free Cash Flow: Negative $33 million, typical seasonal pattern.

Cash Position: $549.6 million in cash, cash equivalents, and marketable securities.

2Strategic Updates and Business Highlights

Growth Drivers: Strong performance across Zio Monitor and Zio AT, with significant contributions from cardiology, primary care, innovative channels, and international markets.

Market Expansion: iRhythm is focusing on expanding the long-term continuous monitoring market, emphasizing the limitations of short-duration monitoring.

EHR Integration: 53% of volume now flows through EHR-integrated accounts, enhancing workflow efficiency.

International Success: Best quarter in the U.K. and positive reimbursement updates in Japan.

AI Initiatives: Progress in AI capabilities, including a next-generation algorithm expected to reduce clinical technician review time significantly.

3Forward Guidance and Outlook

Revenue Guidance: Raised full-year 2026 revenue guidance to $875 million - $885 million, reflecting 17% to 18% year-over-year growth.

Adjusted EBITDA Margin Guidance: Increased to 12% - 13% for the full year.

Q2 Revenue Expectation: Anticipated revenue of $218 million - $220 million.

Long-Term Goals: Continued focus on expanding market share, particularly in primary care and innovative channels.

4Bad News, Challenges, or Points of Concern

Regulatory Issues: Ongoing FDA warning letter and the need for continued compliance and remediation efforts.

DOJ Investigation: Active investigation related to the AT product line, with no new requests for information but uncertainty remains.

Market Competition: Concerns about potential competition from AI-driven solutions outside traditional medtech, although management feels confident in their comprehensive service offering.

Economic Pressures: Mention of geopolitical factors and their potential impact on gross margins, though currently not expected to be material.

5Notable Q&A Insights

Guidance Adjustments: Management indicated the revenue guidance reflects a conservative approach, considering potential future upside but acknowledging tougher year-over-year comparisons.

AI Competition: Management emphasized the defensibility of their business model, highlighting their end-to-end service and extensive clinical data as competitive advantages.

Sleep Market Potential: Management expressed optimism about the sleep market, indicating ongoing pilots and a strategic approach to streamline sleep diagnostics.

Regulatory Developments: Discussion around the proposed local coverage determination (LCD) and its implications for monitoring categories, with management actively engaging with MACs for clarification.

Electrophysiology (EP) Market: Management noted no current signs of slowdown in EP, emphasizing the importance of long-duration monitoring post-ablation. Overall, iRhythm reported strong financial results and positive strategic developments while navigating regulatory challenges and competitive pressures. The company remains focused on leveraging its platform for sustained growth and market expansion.