Abstract

Irhythm Technologies Inc. will announce its quarterly results on February 19, 2026 after market close (Post Market), and investors are looking for confirmation of accelerating top-line growth, improving profitability metrics, and clear updates following recent guidance and analyst commentary.

Market Forecast

Consensus indicates Irhythm Technologies Inc. is set to deliver revenue of 201.59 million in the current quarter, up 27.64% year over year, with EPS estimated at 0.034, a 113.35% year-over-year increase, and EBIT near breakeven at -0.02 million, implying a 99.81% year-over-year improvement; gross margin and net margin forecasts were not provided. The company’s main business continues to be driven by a favorable payor mix shift and scaling Zio services, with contracted third-party payors remaining the largest revenue contributor and offering visibility into reimbursement and volumes. The most promising segment is contracted third-party payors, contributing 99.01 million last quarter, and is positioned to benefit from stable utilization trends alongside the company’s expected 27.64% year-over-year expansion in total revenue this quarter.

Last Quarter Review

Irhythm Technologies Inc. reported last quarter revenue of 192.88 million, gross profit margin of 71.09%, GAAP net profit attributable to the parent company of -5.21 million, net profit margin of -2.70%, and adjusted EPS of -0.06, improving 95.24% year over year. A key highlight was operating performance improvement, with EBIT turning positive to 4.13 million, up 109.75% year over year, and revenue beating estimates by 4.41%. Main business strength came through payor-mix driven growth: contracted third-party payors contributed 99.01 million, Centers for Medicare & Medicaid Services contributed 47.56 million, healthcare institutions added 32.79 million, and non-contracted third-party payors contributed 13.52 million, with total revenue expanding 30.74% year over year.

Current Quarter Outlook

Main Business Momentum

Irhythm Technologies Inc.’s core revenue engine is tracking toward another sequential step-up, with the current-quarter revenue forecast of 201.59 million representing a solid 27.64% year-over-year rise. The payor composition seen last quarter, where contracted third-party payors comprised the majority of revenue, typically supports a smoother billing cycle and more predictable collections, which can aid receivables turnover and cash conversion. While gross margin guidance has not been explicitly provided for this quarter, last quarter’s 71.09% gross margin establishes a constructive baseline; the combination of scale efficiencies, operational throughput, and continued algorithm and workflow refinements should help defend margin even as volume increases.

The earnings profile is equally important in the near term. The EPS estimate of 0.034 implies meaningful year-over-year progress toward profitability, and the near-breakeven EBIT of -0.02 million suggests operating leverage is starting to materialize in reported results. Net profit was negative last quarter, but the quarter-on-quarter change in net profit was 63.34%, signaling a clear directional improvement. As revenue expands and costs stay disciplined, the company’s sensitivity to volume should yield a more favorable blend for EPS and EBIT, and that sensitivity is likely to be heightened by ongoing process optimization.

Most Promising Segment

Contracted third-party payors remain the largest and most dependable revenue segment, at 99.01 million last quarter, and the linchpin of quarter-to-quarter growth potential. This segment’s scale supports visibility on future volumes and reimbursement consistency, which directly impacts the predictability of quarterly cash flow and reported earnings. As top-line growth is projected at 27.64% year over year for the current quarter, the contracted payor base is positioned to participate in and amplify that expansion, especially if utilization rates hold and recently observed payor mix improvements persist.

Alongside the contracted payor base, Centers for Medicare & Medicaid Services contributed 47.56 million last quarter and remains a strategically important revenue pool for broad access. While the company did not provide segment-specific year-over-year growth metrics, the overall revenue growth of 30.74% year over year last quarter underscores broad-based demand. Sustained momentum in these segments is vital because they underwrite the cost structure efficiencies that help push EPS and EBIT closer to sustainably positive levels.

Stock Price Drivers This Quarter

Two elements are likely to be the primary stock drivers around the upcoming report: the quality of the revenue beat or miss versus the 201.59 million forecast and the trajectory of profitability versus the EPS estimate of 0.034. A beat on revenue, combined with clear operating leverage that narrows losses or flips the quarter to marginal profitability, would be viewed favorably in the context of the company’s recent trend toward positive EBIT. Conversely, a top-line shortfall without sufficient cost control would raise questions about the near-term pace to consistent profitability and could temper the current bullish sentiment.

Investors will also be parsing management commentary relative to the January guidance indicating expected 2026 revenue of 870.00 million to 880.00 million, which was above the surveyed consensus at the time. Reinforcement of that full-year view, coupled with concrete steps on execution milestones and operational cadence, can anchor sentiment and frame how quarterly variability should be interpreted against the annual trajectory. Another important dimension is product execution cadence: recent discussion around a Zio MCT timing shift created share price pressure in January, and clarity on rollout or timeline updates will play into how investors model second-half seasonality and blended revenue mixes.

Revenue Quality and Margin Path

The revenue estimate implies continued volume growth and utilization, but the quality of that revenue—mix between contracted and non-contracted payors, the proportion attributable to CMS, and the flow through to margin—will be scrutinized. Last quarter’s 71.09% gross margin offers a high base from which incremental improvements could accrue; any signal that gross margin remains stable or trends higher as volumes climb would strengthen the case for near-term EPS expansion. Margin durability depends on a balanced mix of reimbursement rates, operational throughput, and cost efficiency in core processing, and incremental improvements in EBIT, even from a near-breakeven level, would reinforce that each dollar of revenue is translating more effectively into operating income.

Net margin last quarter was -2.70%, and the quarter-on-quarter change in net profit was 63.34%, which points to measurable progress even though the company is not yet consistently profitable. If EPS prints near the 0.034 estimate and EBIT is near breakeven, investors may adjust expectations for the timing of sustained profitability and rethink how many quarters are required to reach a durable positive net margin. A credible path to positive net margin within the year, supported by the January full-year revenue outlook of 870.00 million to 880.00 million, could be enough to keep valuation anchored for growth while managing downside risks from execution variability.

Cash Flow Dynamics and Operational Leverage

The payor composition described last quarter—anchored by 99.01 million from contracted third-party payors—lends itself to stronger receivables predictability, which is essential for cash flow planning in growth phases. The near-breakeven EBIT outlook this quarter emphasizes how incremental volume can disproportionately impact earnings when fixed and semi-fixed costs are relatively stable; that is typical in data-driven service models where scaling throughput can improve margins more quickly than nominal cost increases. As management delivers commentary on processing capacity, throughput gains, and billing cycle efficiency, investors will assess how those operational levers could compress the timeline to break-even net income and consistent positive free cash flow.

Linking those operating levers back to guidance, the 2026 revenue range of 870.00 million to 880.00 million implies continuous volume and utilization gains through the year. The route from last quarter’s 192.88 million revenue to the current-quarter 201.59 million forecast speaks to sequential progress; confirmation of this trend during the call would help triangulate full-year quarterly pacing and frame expectations for the second half. The combination of incremental margin improvements, disciplined cost control, and robust revenue mix should allow the company to convert its revenue trajectory into more durable EPS and cash flow.

Analyst Opinions

Based on views collected between January 1, 2026 and February 12, 2026, the ratio of bullish to bearish opinions is 3:0, and the majority view is bullish. Needham lifted its price target to 254.00 and reiterated a Buy rating on January 30, 2026, citing confidence in execution and growth visibility that aligns with the company’s elevated 2026 revenue outlook. William Blair maintained an Outperform stance in mid-January after shares fell on the Zio MCT timing update, characterizing the selloff as overdone and highlighting ongoing growth drivers and attractive fundamentals relative to valuation.

Consensus context supports these calls: an average rating of Buy and a mean price target of 221.27 reported in late January underscores broad constructive sentiment ahead of the February 19, 2026 release. This constructive view is rooted in the combination of a 201.59 million revenue forecast for the quarter, expected EPS inflection to 0.034, and EBIT near breakeven, which indicate improving operating leverage. Analysts also point to the company’s January guidance of 870.00 million to 880.00 million in 2026 revenue, above surveyed expectations at the time, framing how near-term quarterly results tie into a stronger full-year trajectory.

The bullish camp expects quarterly upside to be validated by stable utilization and a payor mix that continues to favor contracted third-party payors, which contributed 99.01 million last quarter and underpin revenue predictability. The recent quarter’s 71.09% gross margin provides a favorable base for incremental operating leverage, and the quarter-on-quarter improvement in net profit of 63.34% suggests momentum toward earnings normalization. From a modeling standpoint, a clean print that meets or beats the 201.59 million revenue estimate while showing EPS at or above 0.034 would support current price targets and maintain positive revisions bias for full-year estimates.

Bullish analyses further emphasize that clarity on product execution milestones and timeline updates should mitigate January’s volatility related to Zio MCT timing, with the view that the underlying demand trends are intact. In their majority narrative, analysts see limited change to the long-run demand profile and a path to profitability driven by scale, improving margin conversion, and payor stability. The emphasis is on how the quarter’s reported numbers and management’s commentary confirm sequential progress, reinforce confidence in the 2026 revenue range of 870.00 million to 880.00 million, and provide visibility into earnings and cash flow inflection points through the year.