iRhythm Technologies Announces First Quarter 2025 Financial Results

/EIN News/ -- SAN FRANCISCO, May 01, 2025 (GLOBE NEWSWIRE) -- iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital health care company focused on creating trusted solutions that detect, predict, and prevent disease, today reported financial results for the three months ended March 31, 2025.

First Quarter 2025 Financial Highlights

• Revenue of $158.7 million, a 20.3% increase compared to first quarter 2024
• Gross margin of 68.8%, a 250-basis point increase compared to first quarter 2024
• Unrestricted cash, cash equivalents, and marketable securities of $520.6 million as of March 31, 2025
• Increased fiscal year 2025 guidance for revenue and adjusted EBITDA margin

Recent Operational Highlights

• Strong quarterly revenue unit volume driven by momentum from innovative value-based care accounts as well as demand from Zio AT in the United States and record demand in the United Kingdom
• Expanded global reach with commercial launch of Zio monitor in Japan, highlighting our continued commitment to bringing our innovative digital healthcare solutions to millions of people worldwide
• As presented at ACC.25, two large real-world studies in over one million patients revealed that short-term, Holter-duration monitoring frequently misses actionable arrhythmias - 64% of daily-symptom patients with actionable arrhythmias went undetected in the first 48 hours - and that patient-reported symptoms are an unreliable predictor of arrhythmic events^1,2
• AVALON study recently presented at Heart Rhythm Society found that the Zio^® long-term continuous monitor (LTCM) associated with higher adjusted odds of arrhythmia detection, fewer repeat tests, and reduced likelihood of cardiovascular events compared to other modalities and LTCM brands in the follow-up year³

"The first quarter of 2025 demonstrated continued commercial momentum, with revenue growth exceeding 20% year-over-year, driven by upstream expansion in the patient care pathway and strength in our Zio AT business," said Quentin Blackford, President and Chief Executive Officer of iRhythm. "We've seen increasing demand from recently opened accounts while also driving penetration within innovative, value-based care and risk-bearing entities. With our recent commercial launch in Japan, we are now actively driving physician and health system awareness of Zio in six markets outside the U.S., contributing to our milestone of 10 million patient reports posted since iRhythm's inception. With strong execution across multiple growth levers and additional catalysts on the horizon, we are more excited than ever as we continue to enable the earlier diagnosis of cardiac arrhythmias, opening the potential to reduce costs and deliver meaningful value for patients, our customers, healthcare systems, and shareholders."

First Quarter Financial Results
Revenue for the first quarter of 2025 was $158.7 million, up 20.3% from $131.9 million during the same period in 2024. The increase was driven by growth in demand for Zio services.

Gross profit for the first quarter of 2025 was $109.2 million, up 24.8% from $87.5 million during the same period in 2024, while gross margin was 68.8%, up from 66.3% during the same period in 2024. The increase in gross profit was primarily due to increased volume of Zio services provided due to higher demand. The increase in gross margin was primarily due to volume leverage as well as operational efficiencies, partially offset by an increased blended cost per unit from a higher Zio AT product mix.

Operating expenses for the first quarter of 2025 were $141.8 million, compared to $125.7 million for the same period in 2024. Adjusted operating expenses for the first quarter of 2025 were $140.4 million, compared to $125.7 million during the same period in 2024. The increase in adjusted operating expenses was primarily driven by funding of innovation and incremental costs to serve a growing volume of patients globally.

Net loss for the first quarter of 2025 was $30.7 million, or a diluted loss of $0.97 per share, compared with net loss of $45.7 million, or a diluted loss of $1.47 per share, for the same period in 2024. Adjusted net loss for the first quarter of 2025 was $30.3 million, or a diluted loss of $0.95 per share, compared with an adjusted net loss of $38.1 million, or a diluted loss of $1.23 per share, for the same period in 2024. The decrease in net loss was primarily driven by our revenue growth and operating leverage achieved through implementation of efficiency initiatives.

Unrestricted cash, cash equivalents, and marketable securities were $520.6 million as of March 31, 2025.

2025 Annual Guidance
iRhythm projects revenue for the full year 2025 between $690 million to $700 million. Adjusted EBITDA margin for the full year 2025 is expected to range from approximately 7.5% to 8.5% of revenues.

Webcast and Conference Call Information
iRhythm’s management team will host a conference call today beginning at 1:30 p.m. PT/4:30 p.m. ET. Interested parties may access a live and archived webcast of the presentation on the “Events & Presentations” section of the company’s investor website at investors.irhythmtech.com.

About iRhythm Technologies, Inc.
iRhythm is a leading digital health care company that creates trusted solutions that detect, predict, and prevent disease. Combining wearable biosensors and cloud-based data analytics with powerful proprietary algorithms, iRhythm distills data from millions of heartbeats into clinically actionable information. Through a relentless focus on patient care, iRhythm’s vision is to deliver better data, better insights, and better health for all.

Reclassifications
Certain prior period amounts have been reclassified to conform to the current year presentation. These reclassifications have no impact on previously reported results of operations or financial position.

Use of Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including adjusted EBITDA, adjusted net loss, adjusted net loss per share and adjusted operating expenses. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. See the schedules attached to this press release for additional information and reconciliations of such non-GAAP financial measures. We have not reconciled our adjusted operating expenses and adjusted EBITDA margin estimates for full year 2025 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort.

Adjusted EBITDA excludes non-cash operating charges for stock-based compensation expense, changes in fair value of strategic investments, impairment and restructuring charges, business transformation costs, certain intellectual property litigation expenses and settlements, and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources.

Beginning in the first quarter of 2025, we have excluded third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc. Factors we considered in arriving at this determination to exclude these patent litigation costs from our non-GAAP financial measures include frequency and complexity of the patent litigation, the counterparty involved, and the expected magnitude of patent litigation costs for this matter.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. An investor can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future actions or operating or financial performance. In particular, these statements include statements regarding financial guidance, market opportunity, ability to penetrate the market, international market expansion, anticipated productivity and quality improvements, and expectations for growth. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled “Risk Factors” and elsewhere in our filings made with the Securities and Exchange Commission, including those on the Form 10-Q expected to be filed on or about May 1, 2025. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. iRhythm disclaims any obligation to update these forward-looking statements.

Investor Contact
Stephanie Zhadkevich
investors@irhythmtech.com

Media Contact
Kassandra Perry
irhythm@highwirepr.com

1. Battisti, T, Pinkerton, R, Fokin, V. et al. "Arrhythmias in patietns with daily vs non-daily symptoms undergoing long-term continuous patch ECG monitoring." JACC. 2025 Apr, 85 (12_Supplement) 221.
2. Battisti, T, Pinkerton, R, Fokin, V. et al.“Symptom-Rhythm Correlation Patterns in Patients Undergoing Ambulatory ECG Monitoring: Analysis of Over 1 Million Patients." JACC. 2025 Apr, 85 (12_Supplement) 37.
3. Russo, Pierantonio et al. "Assessment of Variation in AmbuLatory Cardiac MONitoring: Real-World Evidence of Commercially Insured Beneficiaries.” Heart Rhythm, Volume 22, Issue 4, S547.
   

IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (In thousands, except par value) (unaudited)
	March 31, 2025				December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	375,278			$	419,597
Marketable securities		145,311				115,956
Accounts receivable, net		80,639				79,941
Inventory		14,336				14,039
Prepaid expenses and other current assets		20,449				16,286
Total current assets		636,013				645,819
Property and equipment, net		130,850				125,092
Operating lease right-of-use assets		46,171				47,564
Restricted cash		8,358				8,358
Goodwill		862				862
Long-term strategic investments		62,745				61,902
Other assets		41,099				41,852
Total assets	$	926,098			$	931,449
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	11,946			$	7,221
Accrued liabilities		79,976				84,900
Deferred revenue		3,282				2,932
Operating lease liabilities, current portion		16,140				15,867
Total current liabilities		111,344				110,920
Long-term senior convertible notes		647,237				646,443
Other noncurrent liabilities		8,727				8,579
Operating lease liabilities, noncurrent portion		72,125				74,599
Total liabilities		839,433				840,541
Stockholders’ equity:
Preferred stock, $0.001 par value – 5,000 shares authorized; none issued and outstanding at March 31, 2025 and December 31, 2024		—				—
Common stock, $0.001 par value – 100,000 shares authorized; 32,144 shares issued and 31,915 shares outstanding at March 31, 2025, respectively; 31,621 shares issued and 31,392 shares outstanding at December 31, 2024, respectively		32				31
Additional paid-in capital		901,085				874,607
Accumulated other comprehensive loss		143				165
Accumulated deficit		(789,595	)			(758,895	)
Treasury stock, at cost; 229 shares at March 31, 2025 and December 31, 2024		(25,000	)			(25,000	)
Total stockholders’ equity		86,665				90,908
Total liabilities and stockholders’ equity	$	926,098			$	931,449

IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Statements of Operations (In thousands, except per share data) (unaudited)
		Three Months Ended March 31,
			2025				2024
Revenue, net		$	158,677			$	131,929
Cost of revenue			49,461				44,413
Gross profit			109,216				87,516
Operating expenses:
Research and development			21,519				16,994
Acquired in-process research and development			296				—
Selling, general and administrative			119,957				108,660
Total operating expenses			141,772				125,654
Loss from operations			(32,556	)			(38,138	)
Interest and other income (expense), net:
Interest income			4,919				3,057
Interest expense			(3,273	)			(2,860	)
Loss on extinguishment of debt			—				(7,589	)
Other income (expense), net			875				(105	)
Total interest and other income (expense), net			2,521				(7,497	)
Loss before income taxes			(30,035	)			(45,635	)
Income tax provision			665				32
Net loss		$	(30,700	)		$	(45,667	)
Net loss per common share, basic and diluted		$	(0.97	)		$	(1.47	)
Weighted-average shares, basic and diluted			31,590				31,033

IRHYTHM TECHNOLOGIES, INC. Reconciliation of GAAP to Non-GAAP Financial Information (in thousands, except per share data) (unaudited)
		Three Months Ended March 31,
			2025				2024
Adjusted EBITDA reconciliation*
Net loss, as reported1		$	(30,700	)		$	(45,667	)
Interest expense			3,273				2,860
Interest income			(4,919	)			(3,057	)
Changes in fair value of strategic investments			(843	)			—
Income tax provision			665				32
Depreciation and amortization			5,210				5,131
Stock-based compensation			23,344				20,991
Business transformation costs			503				—
Intellectual property litigation costs2			832				—
Loss on extinguishment of debt			—				7,589
Adjusted EBITDA		$	(2,635	)		$	(12,121	)
Adjusted net loss reconciliation*
Net loss, as reported1		$	(30,700	)		$	(45,667	)
Business transformation costs			503				—
Intellectual property litigation costs2			832				—
Changes in fair value of strategic investments			(843	)			—
Loss on extinguishment of debt			—				7,589
Tax effect of adjustments3			(91	)			—
Adjusted net loss		$	(30,299	)		$	(38,078	)
Adjusted net loss per share reconciliation*
Net loss per share, as reported1		$	(0.97	)		$	(1.47	)
Business transformation costs per share			0.02				—
Intellectual property litigation costs per share2			0.03				—
Changes in fair value of strategic investments per share			(0.03	)			—
Loss on extinguishment of debt per share			—				0.24
Tax effect of adjustments per share3			—				—
Adjusted net loss per share		$	(0.95	)		$	(1.23	)
Weighted-average shares, basic and diluted			31,590				31,033
Adjusted operating expense reconciliation*
Operating expense, as reported		$	141,772			$	125,654
Business transformation costs			(503	)			—
Intellectual property litigation costs2			(832	)			—
Adjusted operating expense		$	140,437			$	125,654

*Certain numbers expressed may not sum due to rounding.
¹ Net loss for the three months ended March 31, 2025 includes $0.3 million of acquired in-process research and development expense.
² Excludes third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc.
³ Income tax impact of Non-GAAP adjustments listed.