iRhythm Technologies, Inc. (NASDAQ: IRTC) Q2 2025 Earnings | 08/01/2025

Summary of iRhythm Technologies Q2 2025 Earnings Call

Key Highlights:

• Strong Revenue Growth:

  • Q2 revenue of $186.7M (+26.1% YoY), driven by core long-term monitoring (Zio Monitor), Zio AT adoption, and innovative channel partnerships.

  • Raised full-year 2025 revenue guidance to $720–730M (from prior $690–700M).

  • Adjusted EBITDA margin expanded to 8.4% (vs. 3.4% YoY), reflecting operational efficiency gains.

• Business Momentum:

  • Record new account openings in long-term monitoring, supported by EHR integrations (Epic Aura) and health system expansions.

  • Zio AT growth accelerating, with low double-digit market share (vs. ~70% in core monitoring).

  • 12 innovative channel partners (e.g., Signify Health, CenterWell) now under contract, covering ~2M potential patients.

  • AI partnership with Lucem Health to enhance early arrhythmia detection in high-risk populations (e.g., diabetes, CKD).

• Product Innovation & Pipeline:

  • Next-gen Zio MCT (mobile cardiac telemetry) 510(k) submission expected in Q3 2025—features 21-day wear time, improved form factor, and advanced analytics.

  • International expansion progressing, with Japan commercialization underway and steady uptake in Europe.

• Regulatory & Financial Discipline:

  • FDA remediation efforts on track; responses to warning letter submitted, with third-party audit planned for H2 2025.

  • Strong balance sheet: $545.5M in cash, expect free cash flow positive by 2026.

Financial Details:

• Gross margin: 71.2% (up YoY), benefiting from volume leverage and operational efficiencies.

• Adjusted EBITDA: $15.7M (8.4% margin), up 500 bps YoY.

• Q3 2025 Outlook: Revenue expected to dip ~1% QoQ (seasonality), with adjusted EBITDA margin of 9–9.5%.

Growth Drivers:

1. Core Long-Term Monitoring:

   • 70%+ market share, with new Epic integrations driving 20–40% prescribing increases post-implementation.

2. Zio AT Expansion:

   • Record quarterly revenue; dual adoption with Zio Monitor in health systems.

3. Innovative Channels:

   • Early success in value-based care partnerships (e.g., 80–90% arrhythmia detection rates in AI-identified high-risk patients).

4. International Markets:

   • Japan launch progressing, with 8 new accounts; Europe showing steady demand.

Key Takeaways:

• Accelerating growth across all segments (core, AT, innovative channels, international).

• Zio MCT launch expected to bolster competitive positioning in underpenetrated MCOT market.

• Margin expansion demonstrates scalable profitability, with long-term EBITDA target of 15% by 2027.

• FDA remediation nearing completion, reinforcing quality leadership.

Investor Takeaway: iRhythm is executing on multiple growth vectors (technology, partnerships, global expansion) while driving operational leverage. The upward guidance revision and strong Q2 beat reflect sustained momentum, with AI-driven early detection and Zio MCT launch poised to unlock further upside.