Release Date: May 01, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• iRhythm Technologies Inc (NASDAQ:IRTC) reported a strong start to 2025 with a revenue of $158.7 million, representing over 20% growth compared to the first quarter of 2024.
• The company achieved significant market penetration in the US and international markets, with strong demand for its XO monitor and GOAT products.
• iRhythm surpassed 10 million cumulative patient reports, highlighting its commitment to superior patient care.
• The company is expanding into primary care channels, with nearly one-third of long-term continuous monitoring volumes now originating from primary care physicians.
• iRhythm is making progress in international markets, including a commercial launch in Japan, and is working on improving reimbursement rates through clinical evidence.

Negative Points

• The company is facing challenges with reimbursement rates in Japan, which are currently set at the Holter monitoring rate, impacting expected revenue contributions.
• iRhythm continues to incur significant legal and consulting fees related to FDA remediation efforts and DOJ subpoena activities.
• The company is experiencing pricing headwinds in the US market, which could impact revenue growth.
• There are ongoing concerns about tariffs and their potential impact on supply chain and costs.
• Despite strong revenue growth, iRhythm reported an adjusted net loss of $30.3 million for the first quarter of 2025.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Sign with IRTC.

Q: What factors contributed to iRhythm Technologies' decision to raise their full-year revenue guidance despite the uncertain macroeconomic environment? A: Dan Wilson, CFO, explained that the decision to raise guidance was based on the strong momentum seen in the business, particularly with the ZOAT product, which has shown consistent growth. The company remains cautious and balanced in its approach to guidance, considering both upside drivers and emerging business areas like undiagnosed monitoring, which are still developing.

Q: How does iRhythm Technologies plan to address the reimbursement challenges in Japan, and what impact does this have on their financial outlook? A: Dan Wilson, CFO, noted that the initial reimbursement rate in Japan was lower than expected, which will slightly impact the previously anticipated $2 million contribution for the year. Quentin Blackford, CEO, added that the company is committed to generating local clinical evidence to support future reimbursement applications that better reflect the value of their product.

Q: What is the impact of the Epic integration on iRhythm Technologies' operations, and how does it affect their growth strategy? A: Quentin Blackford, CEO, highlighted that the Epic integration has led to significant workflow and IT efficiencies. Early results from integrated accounts show a notable increase in prescribing patterns, with some accounts experiencing up to a 40% increase. The company is optimistic about the potential for further growth as more accounts integrate with Epic.

Q: How is iRhythm Technologies leveraging its existing customer base to drive growth in the MCT market, and what are the expectations for the upcoming ZOMCT product launch? A: Quentin Blackford, CEO, stated that the company is capitalizing on its existing relationships with long-term continuous monitoring accounts to introduce the ZOAT product. The success of ZOAT has built confidence for the upcoming ZOMCT launch, which is expected to further strengthen their position in the MCT market.

Q: What are iRhythm Technologies' strategies for mitigating the impact of tariffs, and is there potential for passing costs to customers? A: Dan Wilson, CFO, mentioned that the company is exploring supply chain strategies to offset tariff impacts rather than immediately passing costs to customers. The focus remains on maintaining volume growth and market share, with pricing adjustments being a secondary consideration.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.