iRhythm Holdings, Inc. Q4 FY2024 earnings call

Business Performance in 2024 - Full year 2024 revenue grew over 20%, with record new account openings in long-term continuous monitoring and mobile cardiac telemetry. - 1 million patients registered for Zio Monitor, and 2 million registrations through EHR-integrated accounts were crossed in 2024. ### Primary Care and EHR Integration - North of 50% of large independent delivery networks have primary care physicians prescribing Zios. - Partnership with Epic Aura's diagnostic suite for EMR integration has been well-received, with early accounts seeing workflow efficiency gains. ### National Value-Based Care Accounts - Opened large national value-based care accounts, validating product-market fit for risk factor-guided monitoring. Over 80% of patients monitored with Zio had arrhythmias identified. ### International Expansion - Made progress in OUS markets, with UK driving record billable registrations, and launch in Austria, Netherlands, Switzerland, Spain in Q3 2024. Received PMDA approval for Zio monitor in Japan, working on market access and reimbursement. ### Operational Transformations - Launched Zio Monitor as next-gen hardware platform, with manufacturing automation plans. Reduced management layers for efficiency, globalized workforce with Global Business Services Center. Gross margin improved from 66% to 70% by Q4 2024, and adjusted EBITDA margin improved.

In 2024, iRhythm achieved over 20% year-over-year revenue growth. The Zio Monitor segment saw 1 million patients registered in 2024, and Zio AT performed well, especially in the fourth quarter with competitor disruption. Revenue contribution was driven by sustained volume demand across all customer channels. Zio Monitor had 1 million patient registrations, and Zio AT contributed to growth, with north of 50% of large independent delivery networks having primary care physicians prescribing Zios.

2025 Revenue - Reiterated full year revenue guidance of $675 million to $685 million, driven by sustained volume growth in core U.S. markets and international contributing ~1 point growth (including ~$2 million from Japan). ### Gross Margin - Anticipates modest improvements offset by proposed tariffs (50-75 basis points negative impact). ### Adjusted EBITDA Margin - Expected to range between 7% and 8% of revenue, including tariff impact. ### Free Cash Flow - Anticipated slightly free cash flow negative in 2025, becoming positive in 2026.

• Regulatory and Quality Matters: FDA remediation and compliance efforts remain top priority, with incremental remediation expenses expected to be ~$15 million in 2025. Need to complete compliance efforts by year-end 2025. - Tariffs: Proposed tariffs on Mexico, Canada, and China imports could impact gross margin by 50-75 basis points.

Q: About guidance and catalysts driving growth A: Dan Wilson mentioned potential levers like balanced growth, but noted low single-digit pricing pressure in 2025 and need to see certain trends (like Zio AT disruption) continue before baking into guidance.

Q: On 483 observations remediation A: Quentin Blackford said progress is good, teams making great strides, targeting mid-2025 for remediation specific activities, with third-party review starting in Q2 2025.

Q: Zio MCT timeline A: Quentin Blackford said still on track for Q3 2025 submission, no need for full remediation before submission.

Q: Epic integration impact A: Quentin Blackford said Epic integration is going well, early accounts showing workflow efficiency gains, but need to see volume trends play out before baking into expectations.

Q: Sleep apnea contribution A: Quentin Blackford said no formal guidance yet, but expect progress in pursuing sleep apnea opportunity.