IRhythm Holdings Announces Second Quarter 2026 Financial Results

About this update from Irhythm Holdings, Inc.

SAN FRANCISCO, Aug. 06, 2026 (GLOBE NEWSWIRE) -- iRhythm Holdings, Inc. (NASDAQ: IRTC), a leading digital health care company focused on creating trusted solutions that detect, predict, and prevent disease, today reported financial results for the three months ended June 30, 2026. Second Quarter 2026 Financial Highlights Revenue of $224.2 million, a 20.1% increase compared to second quarter 2025 Gross margin of 72.8%, a 160-basis point increase compared to second quarter 2025 Net loss of $0.4 million, a $13.8 million improvement compared to second quarter 2025 Adjusted EBITDA and adjusted EBITDA margin of $43.3 million and 19.3%, respectively, a $27.6 million and 1,090-basis point improvement, respectively, compared to second quarter 2025 Unrestricted cash, cash equivalents, and marketable securities of $591.3 million as of June 30, 2026 Increased fiscal year 2026 revenue guidance to $880 million to $890 million and adjusted EBITDA margin guidance to 13.0% to 14.0% Recent Operational Highlights Delivered another strong quarter, demonstrated by robust volume led revenue growth and expanded margins, with continued momentum across cardiology, primary care, innovative channels, and international markets Entered into a definitive agreement to acquire Vital Connect, Inc. ("VitalConnect"), a privately held company that offers complementary ambulatory cardiac monitoring technology, for total consideration of approximately $287.5 million. Upon closing, the transaction is expected to immediately expand iRhythm's addressable market and advance its evolution into a broader cardiac monitoring and intelligence platform Achieved FDA clearance of our third-generation algorithm, which is expected to reduce clinician review time by approximately 50% over time and drive approximately $100 million of cumulative cost savings over the next five years Continued to scale our Predictive Arrhythmia Solutions™ footprint with Desert Oasis Health Care, an affiliate of Heritage Provider Network, supporting earlier identification of patients who may benefit from cardiac evaluation and monitoring through AI-driven predictive analytics Recognized by Newsweek in 2026 as one of America’s Greatest Workplaces for Leadership and among the World’s Greenest Companies, reflecting iRhythm’s continued commitment to strong leadership, workplace culture, and sustainability “Our second quarter results reflect strong execution across the business, with broad-based growth, meaningful margin expansion, and continued progress against our strategic priorities,” said Quentin Blackford, President and Chief Executive Officer of iRhythm. “We are driving adoption across an increasingly diverse set of care settings and channels, including primary care, while continuing to invest in the capabilities that we believe will shape the future of healthcare. We are also thrilled to have entered into a definitive agreement to acquire VitalConnect, a transaction we believe will allow us to serve more patients, while also creating long-term value for clinicians and stockholders.” Second Quarter 2026 Financial Results Revenue for the second quarter of 2026 was $224.2 million, up 20.1% from $186.7 million during the same period in 2025. The increase was driven primarily by sustained volume demand across our customer base, reflecting continued strength in our core business and contributions from newer growth channels. Gross profit for the second quarter of 2026 was $163.2 million, up 22.8% from $132.9 million during the same period in 2025, while gross margin was 72.8%, a 160-basis point improvement compared to second quarter 2025. The increase in gross profit was primarily due to increased volume of Zio services. The increase in gross margin was primarily driven by continued operational efficiencies, product mix, and scale benefits from higher volumes. Operating expenses for the second quarter of 2026 were $165.7 million, compared to $151.6 million for the same period in 2025. Adjusted operating expenses for the second quarter of 2026 were $145.0 million, compared to $145.2 million during the same period in 2025. The decrease in adjusted operating expenses, period over period, reflects a disciplined approach to investment, as we funded key growth initiatives while thoughtfully managing costs across the broader organization. GAAP net loss for the second quarter of 2026 was $0.4 million, or net loss per diluted share of $0.01, compared with GAAP net loss of $14.2 million, or net loss per diluted share of $0.44, for the same period in 2025. Adjusted net income for the second quarter of 2026 was $19.3 million, or net income per diluted share of $0.58, compared with an adjusted net loss of $10.2 million, or net loss per diluted share of $0.32, for the same period in 2025. The improvement was primarily driven by our revenue growth and operating leverage achieved through implementation of efficiency initiatives. Unrestricted cash, cash equivalents, and marketable securities were $591.3 million as of June 30, 2026. 2026 Annual Guidance For the full year 2026, iRhythm expects revenue between $880 million and $890 million and adjusted EBITDA margin between 13.0% and 14.0%, reflecting continued volume-led growth, gross margin expansion, and operating leverage while maintaining disciplined investment in innovation and market expansion. Webcast and Conference Call Information iRhythm’s management team will host a conference call today beginning at 1:30 p.m. PT/4:30 p.m. ET. Interested parties may access a live and archived webcast of the presentation on the “Events & Presentations” section of the company’s investor website at investors.irhythmtech.com. About iRhythm Holdings, Inc. iRhythm is a leading digital health care company that creates trusted solutions that detect, predict, and prevent disease. Combining wearable biosensors and cloud-based data analytics with powerful proprietary algorithms, iRhythm distills data from millions of heartbeats into clinically actionable information. Through a relentless focus on patient care, iRhythm’s vision is to deliver better data, better insights, and better health for all. Use of Non-GAAP Financial Measures We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted operating expenses and free cash flow. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures may be helpful to investors. However, non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of non-GAAP financial measures as a tool for comparison. See the schedules attached to this press release for additional information and reconciliations of such non-GAAP financial measures. We have not reconciled our adjusted EBITDA margin estimates for full year 2026 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of adjusted EBITDA estimates is not available without unreasonable effort. Adjusted EBITDA is defined as net income (loss) before income tax provision, depreciation and amortization, interest expense, and interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment charges, business transformation costs, certain intellectual property litigation expenses, certain corporate litigation settlements (net of expected insurance recoveries), costs related to the cybersecurity incident (net of expected insurance recoveries), and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. An investor can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future actions or operating or financial performance. In particular, these statements include statements regarding financial guidance, market opportunity, ability to penetrate the market, expansion into new health programs, international market expansion, anticipated productivity and quality improvements, anticipated demand for our products and expectations for growth, and statements regarding the expected timing and completion of the VitalConnect transaction; the anticipated strategic, commercial, operational and financial benefits of the transaction; the ability to expand into new markets, care settings, customer categories and commercial partnerships; the potential to take advantage of and accelerate VitalConnect's growth, deepen customer relationships and realize cross-selling opportunities; the anticipated effect on long-term value for clinicians and stockholders; our expectation of the transaction’s effect on our ability to serve more patients, future product development, regulatory approvals and commercialization; the success of integration and the retention of key employees; the anticipated growth of the mobile cardiac telemetry category; and the expected impact on revenue growth, adjusted EBITDA and adjusted EBITDA margin. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled “Risk Factors” and elsewhere in our filings made with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q expected to be filed on or about August 6, 2026. Additional important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others: the possibility that the acquisition of VitalConnect may not be completed on the anticipated terms or timing; the failure to obtain required regulatory approvals or satisfy other closing conditions; challenges in integrating VitalConnect and realizing anticipated benefits and synergies on the expected timeline or at all; business disruption or diversion of management’s attention; changes in market demand, reimbursement, competition or regulation; product development or regulatory delays; the loss of key VitalConnect employees, customers or partners; and unforeseen liabilities and future expenditures associated with the transaction. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. iRhythm disclaims any obligation to update these forward-looking statements. Investor Contact [email protected] Media Contact Kassandra Perry [email protected] IRHYTHM HOLDINGS, INC. Condensed Consolidated Balance Sheets (in thousands, except par value) (unaudited)     June 30, 2026   December 31, 2025 Assets       Current assets:       Cash and cash equivalents $ 246,679     $ 236,012   Marketable securities   344,595       347,751   Accounts receivable, net   84,274       75,706   Inventory   22,513       21,634   Prepaid expenses and other current assets   57,893       21,662   Total current assets   755,954       702,765   Property and equipment, net   165,308       151,599   Operating lease right-of-use assets   38,794       41,827   Restricted cash   8,358       8,358   Goodwill   862       862   Long-term strategic investments   73,682       69,913   Other assets   50,468       44,718   Total assets $ 1,093,426     $ 1,020,042   Liabilities and Stockholders’ Equity       Current liabilities:       Accounts payable $ 17,411     $ 2,256   Accrued liabilities   157,570       128,747   Deferred revenue   4,205       4,201   Operating lease liabilities, current portion   16,912       16,686   Total current liabilities   196,098       151,890   Long-term senior convertible notes   651,096       649,504   Other noncurrent liabilities   908       908   Operating lease liabilities, noncurrent portion   59,341       64,994   Total liabilities   907,443       867,296   Stockholders’ equity:       Preferred stock, $0.001 par value – 5,000 shares authorized; none issued and outstanding at June 30, 2026 and December 31, 2025   —       —   Common stock, $0.001 par value – 100,000 shares authorized; 33,173 shares issued and 32,944 shares outstanding at June 30, 2026, and 32,526 shares issued and 32,297 shares outstanding at December 31, 2025   33       32   Additional paid-in capital   1,028,898       980,757   Accumulated other comprehensive (loss) income   (188 )     403   Accumulated deficit   (817,760 )     (803,446 ) Treasury stock, at cost; 229 shares at June 30, 2026 and December 31, 2025   (25,000 )     (25,000 ) Total stockholders’ equity   185,983       152,746   Total liabilities and stockholders’ equity $ 1,093,426     $ 1,020,042     IRHYTHM HOLDINGS, INC. Condensed Consolidated Statements of Operations (in thousands, except per share data) (unaudited)       Three Months Ended June 30,   Six Months Ended June 30,       2026       2025       2026       2025   Revenue, net   $ 224,172     $ 186,687     $ 423,562     $ 345,364   Cost of revenue     60,967       53,830       119,004       103,291   Gross profit     163,205       132,857       304,558       242,073   Operating expenses:                 Research and development     19,843       21,012       41,201       42,531   Acquired in-process research and development     299       1,698       595       1,994   Selling, general and administrative     131,655       126,376       267,539       246,333   Litigation settlements     13,950       —       13,950       —   Impairment charges     —       2,479       —       2,479   Total operating expenses     165,747       151,565       323,285       293,337   Loss from operations     (2,542 )     (18,708 )     (18,727 )     (51,264 ) Interest and other income, net:                 Interest income     4,776       5,321       9,655       10,240   Interest expense     (3,294 )     (3,278 )     (6,584 )     (6,551 ) Other income, net     679       2,264       1,842       3,139   Total interest and other income, net     2,161       4,307       4,913       6,828   Loss before income taxes     (381 )     (14,401 )     (13,814 )     (44,436 ) Income tax provision (benefit)     —       (183 )     500       482   Net loss   $ (381 )   $ (14,218 )   $ (14,314 )   $ (44,918 ) Net loss per common share, basic and diluted   $ (0.01 )   $ (0.44 )   $ (0.44 )   $ (1.41 ) Weighted-average shares, basic and diluted     32,895       31,990       32,702       31,791     IRHYTHM HOLDINGS, INC. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share data) (unaudited)       Three Months Ended June 30,   Six Months Ended June 30,       2026       2025       2026       2025   Adjusted EBITDA reconciliation*                 Net loss, as reported 1   $ (381 )   $ (14,218 )   $ (14,314 )   $ (44,918 ) Interest expense     3,294       3,278       6,584       6,551   Interest income     (4,776 )     (5,321 )     (9,655 )     (10,240 ) Changes in fair value of strategic investments     (822 )     (2,152 )     (2,269 )     (2,995 ) Income tax provision (benefit)     —       (183 )     500       482   Depreciation and amortization     5,222       5,105       10,264       10,315   Stock-based compensation     20,039       22,827       41,530       46,171   Impairment charges     —       2,479       —       2,479   Business transformation costs     1,158       925       1,504       1,428   Intellectual property litigation expenses 2     4,928       2,956       8,617       3,788   Litigation settlements 3     13,950       —       13,950       —   Cybersecurity incident 4     686       —       686       —   Adjusted EBITDA   $ 43,298     $ 15,696     $ 57,397     $ 13,061                     Adjusted net income (loss) reconciliation*                 Net loss, as reported 1   $ (381 )   $ (14,218 )   $ (14,314 )   $ (44,918 ) Impairment charges     —       2,479       —       2,479   Business transformation costs     1,158       925       1,504       1,428   Intellectual property litigation expenses 2     4,928       2,956       8,617       3,788   Changes in fair value of strategic investments     (822 )     (2,152 )     (2,269 )     (2,995 ) Litigation settlements 3     13,950       —       13,950       —   Cybersecurity incident 4     686       —       686       —   Tax effect of adjustments 5     (197 )     (214 )     (197 )     (305 ) Adjusted net income (loss)   $ 19,322     $ (10,224 )   $ 7,977     $ (40,523 )   IRHYTHM HOLDINGS, INC. Reconciliation of GAAP to Non-GAAP Financial Information (continued) (in thousands, except per share data) (unaudited)       Three Months Ended June 30,   Six Months Ended June 30,       2026       2025       2026       2025   Adjusted diluted net income (loss) per share reconciliation*                 Net loss, as reported 1   $ (0.01 )   $ (0.44 )   $ (0.44 )   $ (1.41 ) Impairment charges     —       0.08       —       0.08   Business transformation costs     0.03       0.03       0.05       0.04   Intellectual property litigation expenses 2     0.15       0.09       0.26       0.12   Changes in fair value of strategic investments     (0.02 )     (0.07 )     (0.07 )     (0.09 ) Litigation settlements 3     0.42       —       0.42       —   Cybersecurity incident 4     0.02       —       0.02       —   Tax effect of adjustments 5     (0.01 )     (0.01 )     (0.01 )     (0.01 ) Adjusted diluted net income (loss) per share   $ 0.58     $ (0.32 )   $ 0.23     $ (1.27 )                   Weighted-average shares, basic     32,895       31,990       32,702       31,791   Weighted-average shares, diluted     33,286       31,990       33,370       31,791                     Adjusted operating expenses reconciliation*                 Operating expenses, as reported   $ 165,747     $ 151,565     $ 323,285     $ 293,337   Impairment charges     —       (2,479 )     —       (2,479 ) Business transformation costs     (1,158 )     (925 )     (1,504 )     (1,428 ) Intellectual property litigation expenses 2     (4,928 )     (2,956 )     (8,617 )     (3,788 ) Litigation settlements 3     (13,950 )     —       (13,950 )     —   Cybersecurity incident 4     (686 )     —       (686 )     —   Adjusted operating expenses   $ 145,025     $ 145,205     $ 298,528     $ 285,642                     Free cash flow reconciliation*                 Net cash provided by operating activities   $ 51,080     $ 27,659     $ 24,907     $ 19,768   Less: Purchases of property and equipment     (13,565 )     (10,369 )     (20,470 )     (19,788 ) Free cash flow   $ 37,515     $ 17,290     $ 4,437     $ (20 )   *Certain numbers expressed may not sum due to rounding. 1 Net loss for the three and six months ended June 30, 2026 includes $0.3 million and $0.6 million of acquired in-process research and development expense, and $1.7 million and $2.0 million for the three and six months ended June 30, 2025, respectively. 2 Excludes third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc. 3 Excludes charges for securities class action litigation settlement, net of expected insurance recoveries. 4 Represents expenses directly related to the Cybersecurity Incident, net of expected insurance recoveries, including investigation and remediation, customer notifications, and professional and consultancy expenses. 5 Income tax impact of Non-GAAP adjustments listed.

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