iRhythm Technologies Announces First Quarter 2025 Financial Results

About this update from Irhythm Holdings, Inc.

SAN FRANCISCO , May 01, 2025 (GLOBE NEWSWIRE) -- iRhythm Technologies, 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 March 31, 2025 . First Quarter 2025 Financial Highlights Revenue of $158.7 million , a 20.3% increase compared to first quarter 2024 Gross margin of 68.8%, a 250-basis point increase compared to first quarter 2024 Unrestricted cash, cash equivalents, and marketable securities of $520.6 million as of March 31, 2025 Increased fiscal year 2025 guidance for revenue and adjusted EBITDA margin Recent Operational Highlights Strong quarterly revenue unit volume driven by momentum from innovative value-based care accounts as well as demand from Zio AT in the United States and record demand in the United Kingdom Expanded global reach with commercial launch of Zio monitor in Japan , highlighting our continued commitment to bringing our innovative digital healthcare solutions to millions of people worldwide As presented at ACC.25, two large real-world studies in over one million patients revealed that short-term, Holter-duration monitoring frequently misses actionable arrhythmias - 64% of daily-symptom patients with actionable arrhythmias went undetected in the first 48 hours - and that patient-reported symptoms are an unreliable predictor of arrhythmic events1,2 AVALON study recently presented at Heart Rhythm Society found that the Zio® long-term continuous monitor (LTCM) associated with higher adjusted odds of arrhythmia detection, fewer repeat tests, and reduced likelihood of cardiovascular events compared to other modalities and LTCM brands in the follow-up year3 "The first quarter of 2025 demonstrated continued commercial momentum, with revenue growth exceeding 20% year-over-year, driven by upstream expansion in the patient care pathway and strength in our Zio AT business," said Quentin Blackford , President and Chief Executive Officer of iRhythm. "We've seen increasing demand from recently opened accounts while also driving penetration within innovative, value-based care and risk-bearing entities. With our recent commercial launch in Japan , we are now actively driving physician and health system awareness of Zio in six markets outside the U.S. , contributing to our milestone of 10 million patient reports posted since iRhythm's inception. With strong execution across multiple growth levers and additional catalysts on the horizon, we are more excited than ever as we continue to enable the earlier diagnosis of cardiac arrhythmias, opening the potential to reduce costs and deliver meaningful value for patients, our customers, healthcare systems, and shareholders." First Quarter Financial Results Revenue for the first quarter of 2025 was $158.7 million , up 20.3% from $131.9 million during the same period in 2024. The increase was driven by growth in demand for Zio services. Gross profit for the first quarter of 2025 was $109.2 million , up 24.8% from $87.5 million during the same period in 2024, while gross margin was 68.8%, up from 66.3% during the same period in 2024. The increase in gross profit was primarily due to increased volume of Zio services provided due to higher demand. The increase in gross margin was primarily due to volume leverage as well as operational efficiencies, partially offset by an increased blended cost per unit from a higher Zio AT product mix. Operating expenses for the first quarter of 2025 were $141.8 million , compared to $125.7 million for the same period in 2024. Adjusted operating expenses for the first quarter of 2025 were $140.4 million , compared to $125.7 million during the same period in 2024. The increase in adjusted operating expenses was primarily driven by funding of innovation and incremental costs to serve a growing volume of patients globally. Net loss for the first quarter of 2025 was $30.7 million , or a diluted loss of $0.97 per share, compared with net loss of $45.7 million , or a diluted loss of $1.47 per share, for the same period in 2024. Adjusted net loss for the first quarter of 2025 was $30.3 million , or a diluted loss of $0.95 per share, compared with an adjusted net loss of $38.1 million , or a diluted loss of $1.23 per share, for the same period in 2024. The decrease in net loss was primarily driven by our revenue growth and operating leverage achieved through implementation of efficiency initiatives. Unrestricted cash, cash equivalents, and marketable securities were $520.6 million as of March 31, 2025 . 2025 Annual Guidance iRhythm projects revenue for the full year 2025 between $690 million to $700 million . Adjusted EBITDA margin for the full year 2025 is expected to range from approximately 7.5% to 8.5% of revenues. 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 Technologies, 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. Reclassifications Certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on previously reported results of operations or financial position. 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 net loss, adjusted net loss per share and adjusted operating expenses. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. 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 operating expenses and adjusted EBITDA margin estimates for full year 2025 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort. Adjusted EBITDA excludes non-cash operating charges for stock-based compensation expense, changes in fair value of strategic investments, impairment and restructuring charges, business transformation costs, certain intellectual property litigation expenses and settlements, 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. Beginning in the first quarter of 2025, we have excluded 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. Factors we considered in arriving at this determination to exclude these patent litigation costs from our non-GAAP financial measures include frequency and complexity of the patent litigation, the counterparty involved, and the expected magnitude of patent litigation costs for this matter. 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, international market expansion, anticipated productivity and quality improvements, and expectations for growth. 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 those on the Form 10-Q expected to be filed on or about May 1, 2025 . 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 Stephanie Zhadkevich [email protected] Media Contact Kassandra Perry [email protected] Battisti, T, Pinkerton, R, Fokin, V. et al. "Arrhythmias in patietns with daily vs non-daily symptoms undergoing long-term continuous patch ECG monitoring." JACC . 2025 Apr, 85 (12_Supplement) 221. Battisti, T, Pinkerton, R, Fokin, V. et al.“Symptom-Rhythm Correlation Patterns in Patients Undergoing Ambulatory ECG Monitoring: Analysis of Over 1 Million Patients." JACC . 2025 Apr, 85 (12_Supplement) 37. Russo, Pierantonio et al. "Assessment of Variation in AmbuLatory Cardiac MONitoring: Real-World Evidence of Commercially Insured Beneficiaries.” Heart Rhythm , Volume 22, Issue 4, S547. IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (In thousands, except par value) (unaudited) March 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 375,278 $ 419,597 Marketable securities 145,311 115,956 Accounts receivable, net 80,639 79,941 Inventory 14,336 14,039 Prepaid expenses and other current assets 20,449 16,286 Total current assets 636,013 645,819 Property and equipment, net 130,850 125,092 Operating lease right-of-use assets 46,171 47,564 Restricted cash 8,358 8,358 Goodwill 862 862 Long-term strategic investments 62,745 61,902 Other assets 41,099 41,852 Total assets $ 926,098 $ 931,449 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 11,946 $ 7,221 Accrued liabilities 79,976 84,900 Deferred revenue 3,282 2,932 Operating lease liabilities, current portion 16,140 15,867 Total current liabilities 111,344 110,920 Long-term senior convertible notes 647,237 646,443 Other noncurrent liabilities 8,727 8,579 Operating lease liabilities, noncurrent portion 72,125 74,599 Total liabilities 839,433 840,541 Stockholders’ equity: Preferred stock, $0.001 par value – 5,000 shares authorized; none issued and outstanding at March 31, 2025 and December 31, 2024 — — Common stock, $0.001 par value – 100,000 shares authorized; 32,144 shares issued and 31,915 shares outstanding at March 31, 2025 , respectively; 31,621 shares issued and 31,392 shares outstanding at December 31, 2024 , respectively 32 31 Additional paid-in capital 901,085 874,607 Accumulated other comprehensive loss 143 165 Accumulated deficit (789,595 ) (758,895 ) Treasury stock, at cost; 229 shares at March 31, 2025 and December 31, 2024 (25,000 ) (25,000 ) Total stockholders’ equity 86,665 90,908 Total liabilities and stockholders’ equity $ 926,098 $ 931,449 IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Statements of Operations (In thousands, except per share data) (unaudited) Three Months Ended March 31 , 2025 2024 Revenue, net $ 158,677 $ 131,929 Cost of revenue 49,461 44,413 Gross profit 109,216 87,516 Operating expenses: Research and development 21,519 16,994 Acquired in-process research and development 296 — Selling, general and administrative 119,957 108,660 Total operating expenses 141,772 125,654 Loss from operations (32,556 ) (38,138 ) Interest and other income (expense), net: Interest income 4,919 3,057 Interest expense (3,273 ) (2,860 ) Loss on extinguishment of debt — (7,589 ) Other income (expense), net 875 (105 ) Total interest and other income (expense), net 2,521 (7,497 ) Loss before income taxes (30,035 ) (45,635 ) Income tax provision 665 32 Net loss $ (30,700 ) $ (45,667 ) Net loss per common share, basic and diluted $ (0.97 ) $ (1.47 ) Weighted-average shares, basic and diluted 31,590 31,033 IRHYTHM TECHNOLOGIES, INC. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share data) (unaudited) Three Months Ended March 31 , 2025 2024 Adjusted EBITDA reconciliation* Net loss, as reported1 $ (30,700 ) $ (45,667 ) Interest expense 3,273 2,860 Interest income (4,919 ) (3,057 ) Changes in fair value of strategic investments (843 ) — Income tax provision 665 32 Depreciation and amortization 5,210 5,131 Stock-based compensation 23,344 20,991 Business transformation costs 503 — Intellectual property litigation costs2 832 — Loss on extinguishment of debt — 7,589 Adjusted EBITDA $ (2,635 ) $ (12,121 ) Adjusted net loss reconciliation* Net loss, as reported1 $ (30,700 ) $ (45,667 ) Business transformation costs 503 — Intellectual property litigation costs2 832 — Changes in fair value of strategic investments (843 ) — Loss on extinguishment of debt — 7,589 Tax effect of adjustments3 (91 ) — Adjusted net loss $ (30,299 ) $ (38,078 ) Adjusted net loss per share reconciliation* Net loss per share, as reported1 $ (0.97 ) $ (1.47 ) Business transformation costs per share 0.02 — Intellectual property litigation costs per share2 0.03 — Changes in fair value of strategic investments per share (0.03 ) — Loss on extinguishment of debt per share — 0.24 Tax effect of adjustments per share3 — — Adjusted net loss per share $ (0.95 ) $ (1.23 ) Weighted-average shares, basic and diluted 31,590 31,033 Adjusted operating expense reconciliation* Operating expense, as reported $ 141,772 $ 125,654 Business transformation costs (503 ) — Intellectual property litigation costs2 (832 ) — Adjusted operating expense $ 140,437 $ 125,654 *Certain numbers expressed may not sum due to rounding.1 Net loss for the three months ended March 31, 2025 includes $0.3 million of acquired in-process research and development expense.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 Income tax impact of Non-GAAP adjustments listed. Source: iRhythm

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