iRhythm Holdings, Inc. Q1 FY2025 earnings call

• Strong Q1 2025 revenue of $158.7 million, a 20.3% year-over-year increase, driven by demand for Zio Monitor and Zio AT.
• Surpassed 10 million cumulative patient reports, underscoring commitment to patient care.
• Upstream expansion into primary care via land-and-expand strategy, with nearly one third of long-term continuous monitoring volumes originating from primary care.
• Progress with Epic Aura partnership, with dozens of health systems in integration or planning phase.
• Global expansion: Europe saw record volume, Japan launched Zio with 14-day AI, and clinical studies demonstrated Zio's superiority over short-term monitors.
• Commitment to FDA remediation, with progress on compliance activities.

iRhythm Technologies reported Q1 2025 revenue of $158.7 million, representing a 20.3% year-over-year growth. The growth was driven by robust volume across both Zio Monitor and Zio AT product lines. Zio AT showed strong momentum, with its proportion of revenue volume reaching a new high. Long-term continuous monitoring saw growth from primary care channels, with nearly one third of volumes originating from primary care. Internationally, Europe achieved record volume, Japan launched Zio as the first ambulatory cardiac monitoring solution with 14-day PMDA-cleared AI, though initial Japan reimbursement is not ideal. Revenue contribution from Zio AT was significant, and new account onboarding, including in primary care and international markets, contributed to the growth.

• Raised full-year 2025 revenue guidance to $690 million to $700 million, reflecting Q1 outperformance and durable volume growth.
• Second quarter 2025 revenue expected to be consistent with historical averages, with approximately 25% of full-year revenue generated in Q2.
• Adjusted EBITDA margin guidance raised to between 7.5% and 8.5% of full-year revenues, inclusive of assumed acquired IP R&D charges and tariff impact.
• Anticipates slight free cash flow negative in 2025, turning positive in 2026 due to inventory buildup and investment in next-generation technology platforms.

• FDA remediation efforts, including ongoing compliance activities and potential facility inspections.
• Tariffs on global imports, expected to impact gross margin, with mitigation strategies in place but uncertainty remains.
• Uncertainty in new business segments like undiagnosed monitoring, with different selling cycles and prescribing patterns.

Q: Allen Gong asked about the Q1 outlook and Japan reimbursement.

A: Dan Wilson stated Q1 outperformance was due to Zio AT momentum, and Japan's initial reimbursement is below expectations but they are working on clinical evidence. Quentin Blackford added they are committed to improving Japan reimbursement through studies.

Q: Kallum Titchmarsh asked about Zio AT momentum and MCT launch.

A: Quentin Blackford said Zio AT is successful because of its features and being available in existing accounts, and they are excited about the new MCT product but will wait for its launch to discuss expectations.

Q: Macauley Kilbane asked about Epic integration impact.

A: Quentin Blackford said Epic integration has shown workflow efficiencies, with early accounts seeing 20%-40% increase in prescribing, but it's early to bake into guidance.

Q: David Saxon asked about Zio AT strength and competitor dynamics.

A: Quentin Blackford said Zio AT strength is from new accounts and word of mouth, with patients wearing it longer than competitors' products.

Q: Nathan Treybeck asked about Zio MCT filing and FDA facility reinspection.

A: Quentin Blackford said they are confident in filing Zio MCT in Q3, and while there's no indication of facility reinspection for approval, they are on track with FDA remediation.