Q1 2024 iRhythm Technologies Inc Earnings Call

May 2, 2024

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Operator: Hello and welcome to the Irhythm Technologies Inc. Q1 2024 Earnings Conference Call. My name is Terri, and I will be the conference operator today. All lines have been placed on mute to prevent any background noise.

Hello, and welcome to the eye Rhythm Technologies, Inc. Q1, 'twenty 'twenty four earnings conference call My.

My name is Terry and I'll be the conference operator today.

All lines have been placed on mute to prevent any background noise.

Operator: You will have an opportunity to ask questions today, and you can do this by pressing the star followed by one on your telephone keypad. I would now like to hand over to Stephanie Zhadkevich, Director of Investor Relations, to begin. Please go ahead.

Operator: You will have an opportunity to ask questions today and you can do this by pressing star followed by one on the telephone keypad.

Stephanie Zhadkevich: I would now like to hand over to Stephanie saw Kovich director of Investor Relations to begin. Please go ahead. Thank.

Stephanie Zhadkevich: Thank you all for participating in today's call. Earlier today, Irhythm released financial results for the first quarter ended March 31st, 2024.

Stephanie Zhadkevich: Thank you all for participating in today's call earlier today I rhythm released financial results for the first quarter ended March 31 2024.

Stephanie Zhadkevich: Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking statements within the meaning of federal security laws pursuant to the safe harbor provisions of the Private Security Litigation Reform Act of 1995. Therefore, any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. These are based upon our current estimates and various assumptions and reflect management's intentions, beliefs, and expectations about future events, strategies, competition, products, and operating plans and performance. These statements involve risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements.

Stephanie Zhadkevich: To begin I'd like to remind you that management will make statements. During this call that include forward looking statements within the meaning of federal Securities law pursuant to the Safe Harbor provisions of the private Securities Litigation Reform Act of 1995.

Stephanie Zhadkevich: Any statements contained in this call that are not statements of historical fact should be deemed to be forward looking statements.

Stephanie Zhadkevich: Based upon our current estimates and various assumptions and reflect management's intentions beliefs and expectations about future events strategies competition products operating plans and performance.

Stephanie Zhadkevich: These statements involve risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements.

Stephanie Zhadkevich: Accordingly, you should not place undue reliance on these statements.

Stephanie Zhadkevich: For a list and description of the risks and uncertainties associated with a business, please refer to the risk factor section of the most recent annual and quarterly reports on Form 10-K and Form 10-Q, respectively, filed with the Securities and Exchange Commission. Also, during the call, we will discuss certain financial measures that have not been prepared in accordance with U.S. GAAP with respect to our non-GAAP and cash-based results, including adjusted EBITDA, adjusted operating expenses, and adjusted net loss.

Stephanie Zhadkevich: For a list and description of the risks and uncertainties associated with our business. Please refer to the risk factors section of our most recent annual and quarterly reports on Form 10-K, and Form 10-Q, respectively filed with the Securities and Exchange Commission.

Stephanie Zhadkevich: Also during the call we will discuss certain financial measures that have not been prepared in accordance with U S. GAAP with respect to our non-GAAP and cash based results, including adjusted EBITDA adjusted operating expenses adjusted net loss.

Stephanie Zhadkevich: Unless otherwise noted, all references to financial metrics are presented on a non-GAAP basis. The presentation of additional information should not be considered in isolation of, as a substitute for, or superior to, results prepared in accordance with GAAP. Please refer to the tables in our earnings release in 10Q for reconciliation of these measures to the most directly comparable gap financial measures. Unless otherwise noted, all references to financial measures in this call, other than revenue, refer to non-GAAP results.

Stephanie Zhadkevich: Unless otherwise noted all references to financial metrics are presented on a non-GAAP basis.

Stephanie Zhadkevich: The presentation of additional information should not be considered in isolation of our subsidiary as a substitute for or superior to results prepared in accordance with GAAP.

Stephanie Zhadkevich: Please refer to the tables in our earnings release and 10-Q for a reconciliation of these measures to their most directly comparable GAAP financial measures.

Stephanie Zhadkevich: Unless otherwise noted all references to financial measures in this call other than revenue referred to non-GAAP results.

Stephanie Zhadkevich: This conference call contains time-sensitive information and is accurate only as of the live broadcast today, May 2, 2024. Irhythm disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. And with that, I'll turn the call over to Quentin Blackford, Irhythm's President and CEO.

Stephanie Zhadkevich: This conference call contains time sensitive information and is accurate only as of the live broadcast today May <unk> 2024.

Stephanie Zhadkevich: I rhythm disclaims any intention or obligation, except as required by law to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise and with that I'll turn the call over to Quentin Blackford, I remember president and CEO.

Quentin S. Blackford: Thank you, Stephanie. Good afternoon, and thank you all for joining us. Brice Bobzien, our Chief Financial Officer, and Dan Wilson, our EVP of Corporate Development and Investor Relations, will join me on today's call. My prepared remarks today cover business updates for the first quarter of 2024, as well as our annual outlook. I'll then turn the call over to Brice to provide a detailed review of our first quarter financial results and updated 2024 guidance.

Quentin S. Blackford: Thank you Stephanie good afternoon, and thank you all for joining us bright spots in our Chief Financial Officer, and Dan Wilson, Our EVP of corporate development and Investor Relations. Joining me on today's call. My prepared remarks today cover business updates during the first quarter of 2024 as well as our annual outlook. I'll, then turn the call over to Bryce to provide a detailed review of our <unk>.

Stephanie Zhadkevich: First quarter financial results and updated 2020 for guidance.

Quentin S. Blackford: During the first quarter of 2024, we achieved revenue of $131.9 million, representing 18.4% growth compared to the first quarter of 2023. Over half a million registrations in Q1 contributed to another quarter of record revenue volume while our average selling prices remained steady with the prior year.

Stephanie Zhadkevich: During the first quarter of 2024, we achieved revenue of $131 $9 million, representing 18, 4% growth compared to the first quarter of 2023.

Quentin S. Blackford: Over half a million registrations in Q1 contributed to another quarter of record revenue volume, while our average selling prices remained steady with the prior year.

Quentin S. Blackford: Drivers of growth continue to come from the focus of our land and expand strategy by going deeper and broader with an existing account, as well as a meaningful contribution from new account openings. The first quarter was again a strong quarter of new account onboarding as we matched our highest ever quarter for new account openings for Xeo long-term continuous monitoring, reflective of our team's ability to capitalize on our pipeline opportunities and providing confidence in our 2024 outlook.

Stephanie Zhadkevich: Drivers of growth continued to come from the focus of our land and expand strategy by going deeper and broader within existing accounts.

Quentin S. Blackford: As well as a meaningful contribution from new account openings.

Quentin S. Blackford: The first quarter was again, a strong quarter of new account on boarding as we matched our highest ever quarter for new account openings for <unk> long term continuous monitoring.

Stephanie Zhadkevich: Reflective of our team's ability to capitalize on our pipeline opportunities and providing confidence in our 2020 for outlook.

Quentin S. Blackford: Our teams drove solid momentum during the first quarter, as we have seen strong market demand for our Xeo products and services thus far in Q2. These factors have resulted in our updating of annual revenue guidance, reflecting our ongoing confidence in the underlying fundamentals of the core business and optimism for continued market capture in 2024.

Quentin S. Blackford: Our teams drove solid momentum during the first quarter as we have seen strong market demand for our <unk> products and services, thus far in Q2 as well.

Stephanie Zhadkevich: These factors have resulted in our updating of annual revenue guidance, reflecting our ongoing confidence in the underlying fundamentals of the core business and optimism for continued market capture in 2024.

Quentin S. Blackford: Our excitement for the primary care channel continues to grow as our two-pronged approach to opening that opportunity gains traction. As a reminder, we are approaching this opportunity by working from the ground up within large health networks that our current cardiologists and electrophysiologists are a part of today, while also targeting large national innovative primary care providers. During the quarter, we were pleased to have entered into additional partnerships with several innovative national primary care networks, further demonstrating these groups' growing appreciation for Zio's ease of use, high patient compliance, and ability to deliver clinical accuracy while reducing the cost of care.

Quentin S. Blackford: Our excitement for the primary care channel continues to grow as our two pronged approach to opening that opportunity gains traction.

Quentin S. Blackford: As a reminder, we are approaching this opportunity by working from the ground up within large health networks that are current cardiologist and Electrophysiologist are a part of today, while also targeting the large national innovative primary care providers.

Quentin S. Blackford: During the quarter, we were pleased to have entered into additional partnerships with several innovative national primary care networks further demonstrating these groups growing appreciation for ease of use high patient compliance and ability to deliver clinical accuracy, while reducing the cost of care.

Quentin S. Blackford: Importantly, we have seen a continued uptick in utilization from these early national primary care adopters over the course of the quarter and are excited about their potential throughout the year and into 2025. Important to our growth, we have seen continued traction from within large integrated multidisciplinary care networks where Xeo's value proposition as a workflow efficiency tool is clearly resonating as these networks push prescribing further up the care pathway into the primary care channel.

Quentin S. Blackford: Importantly, we have seen a continued uptick in utilization from these early national primary care doctors over the course of the quarter.

Quentin S. Blackford: We are excited about their potential throughout the year and into 2025.

Quentin S. Blackford: Important to our growth we have seen continued traction from within large integrated multi disciplinary care networks, where <unk> value proposition as a workflow efficiency tool. It's clearly resonating as these networks pushed prescribing further up the care pathway into the primary care channel out of all accounts ordering <unk> services in 2023.

Quentin S. Blackford: Out of all accounts ordering Xeo services in 2023, almost half had at least one primary care prescriber in their care network. But perhaps more importantly, volume growth in 2023 from cardiologists was higher in those accounts that were part of multidisciplinary care networks and that had at least one primary care prescriber compared to accounts that did not have a primary care prescriber in their network.

Quentin S. Blackford: Almost half had at least one primary care prescribers and their care network.

Quentin S. Blackford: But perhaps more importantly volume growth in 2023 from cardiologist was higher in those accounts that were part of multi disciplinary care networks and that had at least one primary care prescriber compared to accounts did not have a primary care prescriber and their network.

Quentin S. Blackford: This diversification into different specialties is not only a driving factor for further penetration within these networks, but it is also validation that primary care is an important partner to alleviate backlogs associated with capacity-constrained workflows. This has already played out at several representative IDNs where we have seen primary care participation, and we believe that we are only getting started to expand patient access to Xeo and many more of these opportunities. To continue driving this workflow efficiency for our customers and enable even more streamlined access to Xeo for our patients in the future, we were very excited to have recently announced a collaboration with Epic Aura, becoming the first medical device manufacturer to join the Epic community to use Aura.

Quentin S. Blackford: This diversification into different specialties is not only a driving factor in further penetration within these networks, but it is also a validation that primary care as an important partner to alleviate backlogs associated with capacity constraints workflows. This has already played out at several representative <unk>, where we have seen primary care participation and we believe that we are only getting.

Quentin S. Blackford: Started to expand patient access to <unk> and many more of these opportunities to continue driving this workflow efficiency for our customers and enable even more streamlined access to zero for our patients in the future. We were very excited to have recently announced a collaboration with epic aura, becoming the first medical device manufacturer to join the epic community to use aura.

Quentin S. Blackford: This collaboration will expand access to ZEO services across the continuum of patient care within health care systems, from cardiology to primary care to hospital to home and beyond, and should help systems simplify operations while optimizing clinician workflows. Through this partnership, Irhythm and EPIC will enable health systems to implement ZEO services more efficiently, and we estimate that institutions can save up to 75% of the time it typically takes to integrate ZEO services into local instances of EPIC.

Quentin S. Blackford: This collaboration will expand access to our <unk> services across the continuum of patient care within health care systems from cardiology to primary care to hospital to home and beyond it.

Quentin S. Blackford: And should help system simplify operations, while optimizing clinician workflows.

Quentin S. Blackford: Through this partnership I rhythm and epic will enable health systems to implement zelle services more efficiently and we estimate that institutions can save up to 75% of the time. It typically takes to integrate geo services into local synthesis of epic the.

Quentin S. Blackford: The initial inbound interest from accounts wanting to leverage the Irhythm-EPIC partnership has been terrific, and we have already started to partner with early adopters to integrate Xeo services into the Aura network across their health system. As we advance this effort, we expect to begin offering this solution to both existing and new Xeo customers starting in early 2025.

Quentin S. Blackford: The initial inbound interest from accounts wanting to leverage that I rhythm epic partnership has been terrific and we have already started to partner with early adopters to integrate Geo services into the aura network across their health systems.

Quentin S. Blackford: As we advance this effort, we expect to begin offering this solution to both existing and new zero customers. Starting in early 2025 further contributing to our record success has been traction in large innovative care networks, where <unk> has become the ambulatory cardiac monitor of choice for monitoring programs within asymptomatic patient populations.

Quentin S. Blackford: Further contributing to our record success has been traction in large innovative care networks where Zio has become the ambulatory cardiac monitor of choice for monitoring programs within asymptomatic patient populations. With MSTOP's economic analysis published showing the benefits of identifying patients who are at risk for undiagnosed arrhythmias before their symptoms become severe, proactive screening programs using ZEO services are gaining traction within innovative primary care groups, home health groups, and accountable care These accounts are highly focused on preventative care and value-added patient wellness programs for their members.

Quentin S. Blackford: Within stops economic analysis published showing the benefits of identifying patients who are at risk for undiagnosed arrhythmias before their symptoms become severe.

Quentin S. Blackford: <unk> screening programs using <unk> services are gaining traction with an innovative primary care groups home health groups and accountable care organizations. These.

Quentin S. Blackford: These accounts are highly focused on preventative care and value added patient wellness programs for their members and they have been very receptive to our strong clinical evidence demonstrating that monitoring for up to 14 days with zero long term continuous monitoring service maximizes diagnostic yield compared to monitoring with holter for 24 to 48 hours.

Quentin S. Blackford: And they have been very receptive to our strong clinical evidence demonstrating that monitoring for up to 14 days with Zio's Long-Term Continuous Monitoring Service maximizes diagnostic yield compared to monitoring with Halter for 24 to 48 hours. This means that XeoMonitor services have the potential to provide the right answer the first time for those patients and better inform the care pathways for those individuals, potentially reducing downstream clinical events and the future cost of care associated with those clinical events and possibly addressing the growing capacity challenges within the health networks we serve.

Quentin S. Blackford: This means that zeal monitor services have the potential to provide the right answer the first time for those patients and better informed the care pathways for those individuals potentially reducing downstream clinical events and the future cost of care associated with those clinical events and possibly addressing the growing capacity challenges within the health networks, we serve.

Quentin S. Blackford: As a fantastic example of this, recall that we began to pilot our Know Your Rhythm program with our partner Physician Care Centers (PCC), for clinicians to proactively screen patients to identify those that meet the NSTOPS inclusion criteria and are believed to be at risk of undiagnosed arrhythmias to determine if they would benefit from XeoMonitor services. This program was primarily designed to identify patients that may be at risk for experiencing asymptomatic AFib by implementing proactive screening guidelines according to the MSTOPS inclusion criteria.

Quentin S. Blackford: Is a fantastic example of this recall that we began to pilot our new year rhythm program with our partner physicians care centers or PCC for clinicians to proactively screen patients to identify those that meet the and stops inclusion criteria and are believed to be at the risk of undiagnosed arrhythmia to determine if they would benefit from zero monitor services. This.

Quentin S. Blackford: Graham was primarily designed to identify patients that may be at risk for experiencing asymptomatic afib by implementing proactive screening guidelines. According to the <unk> stops inclusion criteria.

Quentin S. Blackford: Of the initial asymptomatic patients that were ordered the XeoMonitor services in this pilot, 80% of these patients had at least one arrhythmia identified. Since there is a three times greater risk of developing heart failure and a five times greater risk of stroke if AFib is a comorbidity, we believe that early identification of AFib is crucial to develop clinical intervention strategies and reduce downstream adverse events. We are excited that this initial pilot is now transitioning into commercial launch, and we look forward to providing additional updates around this movement into the asymptomatic population as we move throughout the year.

Quentin S. Blackford: The initial asymptomatic patients that were ordered the zeal monitor services in this pilot 80% of these patients had at least one arrhythmia identified.

Quentin S. Blackford: Since there is a three times greater risk of developing heart failure, and a five times greater risk of stroke. If afib is a comorbidity. We believe that early identification of Afib is crucial to develop clinical intervention strategies and reduce downstream adverse events.

Quentin S. Blackford: We are excited that this initial pilot is now transitioning into commercial launch and we look forward to providing additional updates around this movement into the asymptomatic population as we move throughout the year.

Quentin S. Blackford: In our international business, we continue to move forward with our expansion efforts into multiple European countries, as well as Japan. During the first quarter, our teams drove strong registration growth in the UK, with volumes above forecast through expansion within private sector hospitals.

Quentin S. Blackford: In our international business, we continue to move forward with our expansion efforts into multiple European countries as well as Japan. During the first quarter. Our teams drove strong registration growth in the U K with volumes above forecast through expansion within the private sector hospitals. These sites have recognized the value of the <unk> services is having a positive impact on patient waiting.

Quentin S. Blackford: These sites have recognized the value of Xeo services as having a positive impact on patient waiting times, hospital resource utilization, clinical diagnostic yield, and pathway cost savings. In parallel, we continue to advance efforts to argue for an enhanced long-term reimbursement rate in the UK. Additionally, now that we have received CE marking under the EU MDR for XeoMonitor in our ZOOS system, we kicked off a market evaluation in two Spanish hospitals in March and continue to anticipate the commercial launch of XeoMonitor services in the Netherlands, Spain, Switzerland, and Austria in the back half of 2024.

Quentin S. Blackford: Times Hospital resource utilization clinical diagnostic yield and pathway cost savings in.

Quentin S. Blackford: In parallel we continue to advance efforts to argue for an enhanced long term reimbursement rate in the U K.

Quentin S. Blackford: Additionally, now that we have received CE, marking under EU MTR freezing monitor and our <unk> system, we kicked off a market evaluation and two Spanish hospitals in March and continue to anticipate the commercial launch of the Xeon monitor services in the Netherlands, Spain, Switzerland, and Austria in the back half of 2024.

Quentin S. Blackford: In Europe, as well as in Japan, we believe there remains a significant unmet clinical need for improved arrhythmia detection as the prevalence of arrhythmias and stroke continues to rise, with the predominant monitoring technology still being ultramonitor. In our ZOAT business, recall that we submitted two 510K files in January.

Quentin S. Blackford: In Europe as well as Japan, we believe there remains significant unmet clinical need for improved arrhythmia detection as the prevalence of arrhythmias and stroke continues to rise with the predominant monitoring technology still being holter monitors.

Quentin S. Blackford: One is a catch-up for changes previously made to the ZOAT system as a letter to file, and a second 510K for design features and labeling updates to further address areas of focus noted in the FDA warning letter. Since these submissions early in the quarter in support of ZOAT, we have been in dialogue with the FDA and continue to believe that we could receive a clearance decision from the FDA on our submissions in the second half of 2024.

Quentin S. Blackford: And our <unk> business recall that we submitted two 500 10-K filed on January one as a catch up for changes previously made to the system as a letter to file in a second 500 10-K for design features and labeling updates to further address areas of focus noted in the FDA warning letter.

Quentin S. Blackford: Since these submissions early in the quarter and support of <unk>.

Quentin S. Blackford: We have been in dialogue with the FDA and continue to believe that we could receive a clearance decision from the FDA on our submissions in the second half of 2024.

Quentin S. Blackford: In parallel, our teams continue to work diligently to prepare for the subsequent filing for our next generation MCT product, Xeo MCT, and we believe that the 510K submission for that product will be submitted late in the second half of 2024.

Quentin S. Blackford: In parallel our teams continue to work diligently to prepare for the subsequent filing for our next generation MCT product zeal MCT and we believe that five 10-K submission for that product will be submitted late in the second half of 2024.

Quentin S. Blackford: As these near and midterm opportunities are being further fostered within traditional cardiac monitoring, we have also begun to explore possibilities beyond pure arrhythmia monitoring and into natural adjacent markets. As mentioned, this past February, we launched a sleep pilot program with approximately 5 to 10 existing Irhythm customers intended to validate the value of streamlining the current journey of getting to a sleep diagnosis for both physicians and patients. We intend to utilize our call point and establish customer relationships with a combination of cardiologists and primary care physicians to validate the potential commercial opportunity and physician desire to streamline the prescription of home sleep tests and diagnose sleep disorders with a focus on obstructive sleep apnea.

Quentin S. Blackford: As these near and mid term opportunities are being further fostered within traditional cardiac monitoring we have also begun to explore possibilities beyond pure arrhythmia monitoring and into natural adjacent markets.

Quentin S. Blackford: As mentioned this past February we have launched a sleep pilot program with approximately five to 10 existing I rhythm customers intended to validate the value of streamlining the current journey of getting to a sleep diagnosis for both physicians and patients.

Quentin S. Blackford: We intend to utilize our call point and established customer relationships with a combination of cardiologists and primary care physicians to validate the potential commercial opportunity and physician desire to streamline the prescription of home sleep test and diagnose sleep disorders with a focus on obstructive sleep apnea.

Quentin S. Blackford: The goal of this pilot is to determine if cardiologists and PCPs will prescribe a home sleep study, collect metrics such as which patients these physicians may prescribe a home sleep study, and determine how Irhythm can best be positioned to contribute to improved care for patients with obstructive sleep apnea, including through the delivery of this service through an integrated digital platform that will provide us with a differentiated ability to address what we believe have been We have been encouraged by the interest thus far in this initiative, especially with the rapid onboarding of customer accounts for this pilot just beginning to launch.

Quentin S. Blackford: We'll have this pilot is to determine if cardiologist and Pcp's will prescribe a home sleep test collect metrics such as to which patients. These physicians may prescribe a home sleep test and determine how I rhythm can best be positioned to contribute to improved care for patients with obstructive sleep apnea, including through the delivery of this service through an integrated digital platform that will provide us.

Quentin S. Blackford: <unk> differentiated ability to address what we believe have been long term challenges in this space.

Quentin S. Blackford: We have been encouraged by the interest thus far on this initiative, especially with the rapid onboarding of customer accounts for this pilot just beginning to launch.

Quentin S. Blackford: The early forays into adjacent markets are being further supported by scientific evidence our teams and academic partners are generating in support of EKG as a critical vital sign for predictive clinical insight. As a recent example from ACC last month, study findings from our collaboration with Duke Health concluded that incorporating EKG data from long-term continuous monitoring with components of the CHAD-VAS score has greater discrimination than the existing clinical scoring system alone for the risk of heart failure hospitalization and new onset heart failure.

Quentin S. Blackford: As a recent example from ACC last month study findings from our collaboration with Duke Health concluded that incorporating EKG data from long term continuous monitoring with components of the Chad Vas score has greater discrimination then the existing clinical scoring system alone for the risk of heart failure hospitalization and new onset heart failure further.

Quentin S. Blackford: Furthermore, authors concluded that the risk scores developed via this new model were able to more accurately predict Medicare costs in both treated and untreated patients. These conclusions are the starting point to develop risk models that include long-term EKG data, such as that provided by Xeo Products and Services, to inform diagnosis and management of high-risk patients, while also being used by health systems and payers to develop interventions to reduce health care utilization and cost.

Quentin S. Blackford: More authors concluded that the risk scores developed via this new model, we are able to more accurately predict Medicare cost in both treated and untreated patients.

Quentin S. Blackford: These conclusions are the starting point to develop risk models that include long term EKG data such as that provided by zero products and services to inform diagnosis and management of high risk patients. While also being used by health systems and payers to develop interventions to reduce healthcare utilization and cost.

Quentin S. Blackford: As multiple vital signs and digital data assets are increasingly combined to generate these types of clinical insights, we are uniquely positioned for success far into the future. With that, I'll now turn the call over to Brice to discuss our recent financial performance.

Quentin S. Blackford: As multiple vital signs and digital data assets are increasingly combine to generate these type of clinical insights. We are uniquely positioned for success far into the future with that I'll now turn the call over to Brian to discuss our recent financial performance.

Brice Bobzien: Thanks, Quentin. As a reminder, unless otherwise noted, the financial metrics that I discussed today will be presented on a non-GAAP basis. Reconciliations to GAAP can be found in today's earnings release and on our IR website. First quarter 2024 results demonstrated positive momentum in our core markets as we achieved revenue of $131.9 million, representing 18.4% year-over-year growth. As Quentin mentioned, this was driven by strong revenue volume growth as well as a slight improvement to our average selling price of approximately 100 basis points year-over-year.

Brice: Thanks Clinton as a reminder, unless otherwise noted the financial metrics that I discussed today will be presented on a non-GAAP basis reconciliations to GAAP can be found in today's earnings release and on our IR website.

Brice Bobzien: First quarter 2024 results demonstrated positive momentum in our core markets as we achieved revenue of $131 9 million, representing 18, 4% year over year growth as Quintin mentioned this was driven by strong revenue volume growth as well as a slight improvement to our average selling price of approximately 100 basis points year over year, new store growth with new store to <unk>.

Brice Bobzien: New store growth, with new store defined as accounts that have been open for less than 12 months, accounted for approximately 46% of our year-over-year volume growth. Consistent with recent trends, home enrollment for zero services was approximately 21% of volume in the first quarter.

Brice Bobzien: As accounts that have been opened for less than 12 months accounted for approximately 46% of our year over year volume growth.

Brice Bobzien: <unk> with recent trends home enrollment for zero services was approximately 21% of volume in the first quarter.

Brice Bobzien: Gross margin for the first quarter was 66.3%, in line with expectations and with the guidance provided in February. As previously discussed, we have continued to see positive marketplace reaction to XeoMonitor, and we are focused on managing the incremental costs associated with ramping capacity. We remain on track to realize the benefits of automation and scale for XeoMonitor production in the second half of 2024.

Brice Bobzien: Gross margin for the first quarter was 66, 3% inline with expectations and with the guidance provided in February as previously discussed we have continued to see positive marketplace reaction to video monitor and we are focused on managing the incremental costs associated with ramping capacity, we remain on track to realize the benefits of automation and scale for zero monitor production.

Brice Bobzien: <unk> in the second half of 2024.

Brice Bobzien: Additionally, since completing the last phase of our San Francisco IDTF investment in the fourth quarter, we are ramping utilization from newly hired clinical cardiac technicians, as planned, and we expect to see continued improvements in efficiency as they come up to speed. First quarter adjusted operating expenses were $125.7 million, up 10% sequentially, and up 15% year over year, in line with our expectations. Compared to the first quarter of 2023, this increase in adjusted operating expenses was primarily due to incremental resources to support volume growth in our operations. Additionally, expenses were elevated due to seasonal items, such as our global sales and leadership meetings, as well as annual compensation-related items.

Brice Bobzien: Additionally, since completing the last phase of our San Francisco at ETF investment in the fourth quarter, we are ramping utilization from a newly hired clinical cardiac technicians as planned and we expect to see continued improvements in efficiency as they come up to speed first quarter. Adjusted operating expenses were $125 7 million up 10% sequentially and up 15%.

Brice Bobzien: Year over year in line with our expectations compared to the first quarter of 2023. This increase in adjusted operating expenses was primarily due to incremental resources to support volume growth in our operations sequentially expenses were elevated due to the seasonal items, such as our global sales and leadership meetings as well as annual compensation related items, we continue to incur incremental league.

Brice Bobzien: We continue to incur incremental legal and consulting fees, as well as other company expenses related to the FDA warning letter and DOJ subpoena, and these are in line with the guidance previously provided. However, revenue growth outpaced increases in operating expenses, showing our ability to drive sustainable operating leverage throughout the P&L. Adjusted net loss in the first quarter was approximately $38.1 million, or a loss of $1.23 per share, compared to an adjusted net loss of $33.4 million, or an adjusted net loss of $1.10 per share, in the first quarter of 2023.

Brice Bobzien: And consulting fees as well as other company expenses related to the FDA warning letter and Doj subpoena and these are in line with the guidance previously provided.

Brice Bobzien: Revenue growth outpaced increases in operating expenses, showing our ability to drive sustainable operating leverage throughout the P&L adjusted net loss in the first quarter was approximately $38 1 million or a loss of $1 23 per share compared to an adjusted net loss of $33 4 million or an adjusted net loss of $1 10 per share in the first quarter of 2023.

Brice Bobzien: Adjusted EBITDA in the first quarter of 2024 was minus $12.1 million, reflecting minus 9.2% of revenue, compared to minus 10.8% in the first quarter of 2023. We continue to make progress in our adjusted EBITDA margin profile, driving a 160 basis point improvement in adjusted EBITDA as a percentage of revenue year-over-year in the face of the temporary pressure on gross margin associated with the ZioMonitor launch and Turning to guidance, we are updating our 2024 outlook as presented earlier this year and now anticipate full-year revenue of approximately $578 to $588 million. We believe that the year will be driven by sustained volume growth in our core U.S. market as we continue to drive penetration in both existing and new customer accounts.

Brice Bobzien: Adjusted EBIT in the first quarter 2024 was minus $12 $1 million, reflecting minus nine 2% of revenue compared to minus 10, 8% in the fourth quarter of 2023, we continue to make progress in our adjusted EBITDA margin profile driving a 160 basis point improvement in adjusted EBITDA as a percentage of revenue year over year in the face of the 10th.

Brice Bobzien: Pressure on gross margin associated with the zeal monitor launch and the San Francisco ETF investment turning to guidance. We are updating our 2024 outlook as presented earlier this year and now anticipate full year revenue of approximately $578 million to $588 million. We believe that the year will be driven by sustained volume growth in our core U S market as we.

Brice Bobzien: Continue to drive penetration in both existing and new customer accounts with strong momentum exiting the first quarter. We believe that our second quarter 2020 for revenue will be in line with historical seasonality up approximately 25% of full year revenues.

Brice Bobzien: With strong momentum exiting the first quarter, we believe that our second quarter 2024 revenue will be in line with historical seasonality of approximately 25% of four-year revenue. Turning to gross margin, we are reiterating our full year 2024 gross margin guidance in a range of 68 to 69 percent, an improvement of approximately 120 basis points at midpoint compared to the full year 2023. Our outlook on phasing throughout the year remains unchanged, with material improvement manifesting in the back half of the year.

Brice Bobzien: Turning to gross margin, we are reiterating our full year 2024 gross margin guidance in a range of 68% to 69% an improvement of approximately 120 basis points at midpoint compared to the full year of 2023.

Brice Bobzien: Our outlook on phasing throughout the year remains unchanged with material improvement manifesting in the back half of the year.

Brice Bobzien: We expect efficiencies to be driven by the majority of our business being transitioned to the new XeoMonitor platform, the ramp of automation lines to produce XeoMonitor, and our clinical operations team in San Francisco operating at full capacity. For 2024, we are also reiterating our adjusted EBITDA margin guidance to range between 3 to 4% of revenues, which would represent a 400 to 500 basis point improvement compared to 2023, in line with our stated path to adjusted EBITDA margin targets in 2027 and driven by our focus on sustainable operating leverage improvements throughout the P&L.

Brice Bobzien: We expect efficiencies to be driven by the majority of our business being transitioned to the new zero monitor platform the ramp of automation lines to produce new monitor and our clinical operations team in San Francisco operating at full capacity.

Brice Bobzien: For 2024, we are also reiterating our adjusted EBITDA margin guidance to range between 3% to 4% of revenues, which would represent a 400 to 500 basis point improvement compared to 2023 in line with our stated path to adjusted EBITDA margin targets in 2027, and driven by our focus on sustainable operating leverage improvements throughout the P&L.

Brice Bobzien: Adjusted EBITDA excludes impairment and restructuring costs, business transformation costs, stock-based compensation expenses, and the loss incurred in the first quarter associated with the early extinguishment of our debt with Silicon Valley Bank and Braid Bank. Looking at the cadence of margin expansion throughout 2024, we expect to see second quarter adjusted EBITDA margins to be around break even with progressive margin expansion in the back half of the year. Along with anticipated progress in gross margin efficiency, operating expenses are historically more elevated in the first half of the year relative to revenue.

Brice Bobzien: Adjusted EBITDA excludes impairment and restructuring cost business transformation cost stock based compensation expenses and the loss incurred in the first quarter associated with the early extinguishment of our debt with Silicon Valley Bank and <unk>.

Brice Bobzien: Looking at the cadence of margin expansion throughout 2024, we expect to see second quarter adjusted EBIT margin to be around breakeven with progressive margin expansion in the back half of the year.

Brice Bobzien: Along with anticipated progress in gross margin efficiency operating expenses are historically more elevated in the first half of the year relative to revenue.

Brice Bobzien: As mentioned last quarter, we continue to believe that there will be approximately 8 to 10 million in costs predominantly incurred in the first half of 2024 associated with the FDA warning letter and responses to the DOJ subpoena. As we navigate these two issues, the majority of these costs will come out of P&O in the future. Finally, we ended the first quarter in a strong financial position with approximately $569 million in unrestricted cash and short-term investments, inclusive of financing activities and uses of cash for operations and capital investments.

Brice Bobzien: As mentioned last quarter, we continue to believe that there will be approximately $8 million to $10 million of cost predominantly incurred in the first half of 2024 associated with the FDA warning letter and responsive to the Doj subpoena as.

Brice Bobzien: As we navigate these two issues. The majority of these costs will come out of the P&L in the future. Finally, we ended the first quarter in a strong financial position with approximately $569 1 million in unrestricted cash and short term investments inclusive of financing activities and uses of cash for operations and capital investments as disclosed in March we <unk>.

Brice Bobzien: As disclosed in March, we further bolstered our balance sheet with cost-efficient capital through the closing of $661.25 million of convertible senior notes at a 1.5% coupon interest rate. As we have demonstrated, we will continuously evaluate our capital structure to ensure financial flexibility in alignment with shareholder interests. With that, I'd like to turn it back to Quentin before we open it up to questions.

Brice Bobzien: They're bolstered our balance sheet with cost efficient capital through the closing of 661 5 million of convertible senior notes at a one 5% coupon interest rate as we have demonstrated we will continuously evaluate our capital structure to ensure financial flexibility and alignment with shareholder interest with that I'd like to turn it back to Quintin.

Quentin: Before we open it up to questions.

Quentin S. Blackford: Thanks Brice, we are incredibly pleased with the start of the year and couldn't be more excited about the future in front of us. Irhythm is building a digital health care portfolio for the future. We are uniquely positioned for success as we continue to build our technology platform and leverage our commercial reach, established market position, patient-centric technology focus, expansive EKG data repository, and robust evidence generation strategy, which puts us in a position to be a market leader in defining how patient monitoring could look in the future as we address the quintuple aim of health care in the years to come. With that, Brice, Dan, and I would like to now Operator?

Quentin: Thanks, Bryce we're incredibly pleased with the start of the year and Couldnt be more excited about the future in front of us.

Brice Bobzien: Our rhythm is building a digital health care portfolio of the future. We are uniquely positioned for success as we continue to build our technology platform and leverage our commercial reach established market position patient centric technology focus expensive EKG data repository and robust evidence generation strategy, which puts us in.

Quentin S. Blackford: Positioned to be a market leader in defining a patient monitoring to look in the future as we address the quintuple name of health care in the years to come.

Speaker Change: With that price, Dan and I would like to now open the call for questions operator.

Operator: Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad now. If you wish to withdraw yourself from the queue, please press star followed by two. We do, please ask, all participants to limit themselves to one question. The first question on the line comes from Allen Gong of J.P. Morgan. Your line is now open.

Speaker Change: Thank you.

Quentin S. Blackford: Like to ask a question. Please press star followed by one of your telephone keypad now if you wish to withdraw yourself from the queue. Please press star followed by Jay.

Speaker Change: Please ask all participants to limit themselves to one question.

Operator: The first question on the line comes from Allen Gong of Jpmorgan. Your line is now open.

Allen Gong: Thanks. Congratulations on a good quarter. You know, I just had one quick one to start. You know, in the first quarter, you called out how you had a little bit of a challenge in January with some weather-related impacts, but a strong February, and it looks like that momentum kind of continued into March. So just kind of curious to hear if, you know, you're still seeing that strong momentum from, say, Xeomonitor and ET so far into the second quarter. Hey Allen.

Allen Gong: Thanks, Congratulations on the good quarter I guess.

Allen Gong: I had one quick one to start.

Allen Gong: In the first quarter, you called out how you add a little bit of a challenge in January with some weather related impacts strong February and it looks like that momentum kind of continuing into March. So it just kind of curious to hear if youre still seeing that strong momentum from <unk> zero monetary netease apart into the second quarter.

Quentin S. Blackford: Hey, Allen, it's Quentin here. We have continued to see that momentum continue into the second quarter so far. And to your point, you really saw that momentum begin to pick up in the back part of Q1. And I would say it's been unchanged, relatively speaking, here in the first part of the second quarter through the month of April. So it has continued, and we've seen it continue on both the monitor product line as well as the AT product.

Allen Gong: Hey, Alan it's quitting here, we have continued to see that momentum continue into the second quarter to date and to your point really saw that momentum begin to pick up in the back part of Q1.

Quentin S. Blackford: And I would say it's been unchanged relatively speaking here in the first part of the second quarter through the month of April so.

Quentin S. Blackford: It has continued and we've seen it continue on both the monitor product line as well as the <unk> product line.

Margaret Caxall: The next question on the line comes from Margaret Caxall of William Blair. Your line is now open.

Quentin S. Blackford: The next question on the line comes from Michael <unk> of William Blair. Your line is now open.

Margaret Caxall: Hey, good afternoon, guys. Thanks for taking the time to answer the question. I guess I'd like to spend a little time on some of the data and time savings that you guys referenced around Epic Aura. You know, 75% sounds pretty meaningful. So I'm just curious, how meaningful is that to the user, if you can conceptualize it? And kind of a follow-up to that is, I imagine those time savings are kind of step one. But ultimately, that should lead to share taking or market expansion. So I guess when should we start to get a better sense of those sorts of metrics? And would you even agree with that?

Allen Gong: Hey, good afternoon, guys. Thanks for taking the question.

Quentin S. Blackford: Like to spend a little time around some of the data and time savings that you guys referenced Ronald.

Margaret Caxall: 75% sounds pretty meaningful.

Margaret Caxall: I'm just curious how meaningful is that to either if you can contextualize it.

Margaret Caxall: And kind of a follow up to that is.

Margaret Caxall: Imagine those time savings or step one, but ultimately that should lead to share taking or market expansion.

Margaret Caxall: When should we start to get a better sense around those sorts of metrics.

Speaker Change: Thank you.

Quentin S. Blackford: Thank you. Hey Margaret.

Quentin S. Blackford: Hey Margaret, we certainly would agree with you on that. It's one of the reasons we get super excited about the whole relationship with EPIC. And they've been just outstanding partners out of the gate here. So our excitement and enthusiasm, frankly, just continue to grow as we get closer to them. In terms of the work savings and the time savings, these integrations that we currently go through today, and as you know, integration is a big part of our focus.

Speaker Change: Hey, Margaret we certainly would agree with you on it it's one of the reasons, we get Super excited about the whole relationship with epic and they've been just outstanding partners.

Margaret Caxall: Out of the gate here, so our excitement and enthusiasm frankly, just continues to grow as we get closer to them.

Quentin S. Blackford: Our goal is to get more than 50% of our accounts fully integrated with the EHR systems. That is a matter of many months of work that it takes, both from our team and also the teams on the account side. And that's a big lift, both in time resources as well as financial resources.

Quentin S. Blackford: In terms of the work savings and the time savings. These integrations that we currently go through today and as you know integration is a big part of our focus our goal is to get more than 50% of our accounts fully integrated with the EHR systems that is a matter of many months of work that it takes both from our team but also the teams on the <unk>.

Quentin S. Blackford: Syed and Thats, a big lift both time and resources as well as financial resources with Ora, we expect that can start to be counted in a matter of weeks.

Quentin S. Blackford: With Aura, we expect that to start to happen in a matter of weeks for those accounts that are not Aura accounts. Now, for folks that ultimately are Epic accounts and adopt Aura, even if they're not a customer of ours today, we're going to end up right in their order set as a solution or as an offering without any incremental integration really required. And that really excites us because when you think about that, not only are we calling on the accounts and coming in through the front door, as I like to think about it as we build those relationships, but for these accounts that we haven't yet gotten to, and they're already Epic Aura users, they're ultimately going to have access to our product as well.

Quentin S. Blackford: For those accounts that are not or accounts now for folks that ultimately our epic accounts and adopt or even if they're not a customer of ours today, we're going to end up right in their order set as a solution or as an offering without any incremental integration really required and that really excites us because when you think about that.

Quentin S. Blackford: Not only are we calling on the accounts and coming in through the front door as I like to think about it as we build those relationships, but for these accounts that we haven't yet gotten to and theyre already epic or a users. They're also looking to have access to our product as well and so I think it only increases our odds of success and chances to win which is why I do.

Quentin S. Blackford: And so I think it only increases our odds of success and chances to win, which is why I do think it will be a needle mover for us and ultimately allow us to capture even more shares as we go into the future. Now, over the course of 24, our work will continue with Epic as we design out sort of what that interface looks like and what that order set looks like within their system and on their platform.

Quentin S. Blackford: Do think it will be a needle mover for us and ultimately allow us to capture even more share as we go into the future now over the course of 'twenty for our work will continue with epic as we design out sort of what that interface looks like and what that order set looks like within their system and their platform will pilot that with with the selected accounts that I've already mentioned in my prepared remark.

Quentin S. Blackford: We'll pilot that with the selected accounts that I've already mentioned in my prepared remarks here in the back part of the year, and then we'll really turn that on in early 2025 to begin to really expand the offering out across the broader universe. But I don't expect a significant contribution in 24. I think 25 could be a really exciting year when it comes to Epic and the Aura integration that we're working on.

Quentin S. Blackford: Here in the back part of the year and then we'll really turned that on in early 2025 to begin to really expand the offering out across the broader the broader universe, but I don't expect a significant contribution in 'twenty four I think 25 could be a really exciting year when it comes to epic and the integration that we're working on.

Operator: Thank you. The next question comes from Richard Newitter from Truist. Your line is now open, please go ahead.

Quentin S. Blackford: Thank you. The next question comes from Richard Davis from Trust. Your line is now open. Please go ahead.

Richard Samuel Newitter: Hi, thanks for taking the questions. Maybe just the first one on the training and the onboarding that's going on in the San Francisco IDTF hires.

Speaker Change: Hi, Thanks for taking the question.

Quentin S. Blackford: Maybe just.

Richard Samuel Newitter: First one on the training and the.

Richard Samuel Newitter: Onboarding, that's going on in the San Francisco Art ETF.

Richard Samuel Newitter: I'm just curious where are you in terms of the throughput shifts to do that.

Richard Samuel Newitter: Where are you in terms of the throughput shift to that IDTF?

Richard Samuel Newitter: EQT ETF excuse me.

Richard Samuel Newitter: And, you know how much...

Richard Samuel Newitter: <unk>.

Richard Samuel Newitter: How much.

Richard Samuel Newitter: What youre seeing in terms of their productivity improvements as we're moving through the quarter how much did that.

Richard Samuel Newitter: Increase where you think you'll be exiting the year in terms of what we can put through that region and then if you could also just talk to any implications for gross margin from that transition. Thank you.

Brice Bobzien: What you're seeing in terms of their productivity improvements as we're moving through the quarter, how much of that increase do you think you'll be exiting the year in terms of what we can put through that region? And then, if you could also just talk about any implications for gross margin from that transition. Hey Rich, thanks for the question. I'll take that one. This is Brice.

Speaker Change: Hey, rich thanks for the question.

Richard Samuel Newitter: That's the ones that one this is bryce.

Richard Samuel Newitter: I would say, we're progressing nicely honestly, we talked about last quarter as we had that large investment in the fourth quarter. It takes about six to nine months for these individuals to get fully up to speed and start to optimize efficiently.

Brice Bobzien: So I would say we're progressing nicely. Honestly, we talked about last quarter as we had that large investment in the fourth quarter. It takes about six to nine months for these individuals to get fully up to speed and start to optimize efficiently.

Brice Bobzien: And so I think, you know, we're sort of midway through. However, we're going to start to see some progress in Q2 and definitely more so in Q3, and Q4. So it's progressing nicely. As far as the volumes going through the IDTF go, we talked about being slightly north of 60% and exiting 2023. We're continuing to make progress on that, and we feel good about the transition there. And frankly, having those resources allows us to do that.

Brice Bobzien: And so I think we are.

Brice Bobzien: Sort of midway through however, we're going to start to see some progress in Q2, and that's definitely more so in Q3 Q4, so its progressing nicely as far as the volumes going through the <unk>, we talked about being slightly north of 60%.

Brice Bobzien: <unk> 2023, we're.

Brice Bobzien: We're continuing to make progress on that and we feel good about the transition there and frankly, having those resources allows us to do that.

Brice Bobzien: And, you know, it's a center of excellence for us now, and we want to make sure we're serving that patient population as effectively and efficiently as we possibly can. As you move into the back half of the year, the way I really think about the gross margin step up from the 66% we're seeing now up to that 70% or so range in the back half, I think about clinical technician efficiency in San Francisco contributing about 200 basis points.

Brice Bobzien: The center of excellence for US now and we want to make sure we're servicing that patient population as effectively and efficiently as we possibly can as you move into the back half of the year. The way I really think about the gross margin step up from the 66%, we're seeing now up to that 70% or so range in the back half I think about that clinical technician.

Brice Bobzien: Efficiency in San Francisco, contributing about 200 basis points I think about the automation component.

Brice Bobzien: Monitor platform contributing about 100 basis points, and then I think about the scale as we continue to push monitor further into our in clinic business and then ultimately followed by home enrollment contributing about 100 basis points. We felt like all three are making progress in line with our expectations and feel good about the guidance we put out there.

Brice Bobzien: I think about the automation component of the ZioMonitor platform contributing about 100 basis points. And then I think about scale as we continue to push ZioMonitor further into our in-clinic business, and then ultimately followed by home enrollment, contributing about 100 basis points. We feel like all 3 are making progress in line with our expectations, and we feel good about the guidance we put out there. Thank you. The next question comes from Marie Thibault of BTIG. Please go ahead; your line is open.

Brice Bobzien: Thank you. The next question comes from Larry <unk> of Pp BPI. Please go ahead. Your line is open.

Marie Yoko Thibault: Good afternoon. Thanks for taking the question.

Marie Yoko Thibault: Good afternoon, thanks for taking the questions and congrats on a very nice Q1.

Marie Yoko Thibault: I wanted to ask a little bit more on guidance. I mean, you had a very nice quarter and I know that was against the face of.

Marie Yoko Thibault: Dealing with some weather disruption early in the quarter. So can you help us think about how you set that guide was there a little prudent stake then how should we consider this new revenue range.

Brice Bobzien: Yeah, hey Marie, this is Brice again. Thanks for the question. I think what it was important for us to do was to pass through the beat from the first quarter. We did talk about a little bit of disruption early on. However, we saw an incredible recovery in the back half and continued momentum into Q2. And so, the way we feel about guidance moving forward, we certainly have tailwinds at our backs. We've talked a lot about them in Quentin's prepared remarks, as well as just the opportunity we have in front of us, and we feel good about it.

Marie Yoko Thibault: Yeah, Hey, Marie this is Brian again, thanks for the question I think what was important for us to do was to pass through the beat from the from the first quarter. We did talk about a little bit of disruption early on however, we saw incredible recovery in the back half and continued momentum into Q2, and so the way we feel about guidance moving forward, we certainly <unk>.

Brice Bobzien: Ill wind at our back we've talked a lot about them and print quittance prepared remarks, as well as just the opportunity we have in front of us and we feel good about it but I will tell you when you look at the guidance setup.

Brice Bobzien: But I'll tell you, when you look at the guidance setup, you're gonna see growth rates that are relatively consistent at midpoint, and under the top end of the range, it does have growth accelerating. We absolutely believe that it's achievable, and we feel great about it. However, it does take some execution, right? We're in the midst of a launch of the ZioMonitor product, right? We're navigating the conversations with the FDA. It requires a commercial launch internationally.

Brice Bobzien: Youre going to see growth rates that are relatively consistent at midpoint and under the top end of the range. It does have growth accelerating we absolutely believe thats achievable achievable and we feel great about it. However, it does take some execution right. We're in the midst of a launch of the monitor product right. We're navigating that conversations with the FDA.

Brice Bobzien: It requires commercial launch internationally there are some things we have to execute on and we truly believe we are going to be able to execute on all those however, until we see that execution play through we're going to be thoughtful in the guidance for the last three quarters of the year.

Brice Bobzien: There are some things we have to execute on, and we truly believe we're gonna be able to execute on all those. However, until we see that execution play out, we're gonna be thoughtful on the guidance for the last three quarters. Your next question comes from Joanne Wuensch from Citibank.

Brice Bobzien: Okay.

Joanne Karen Wuensch: Your next question comes from Joanne Wuensch from Citibank. Your line is now open. Good afternoon. Thank you.

Brice Bobzien: Thank you. Your next question comes from Joanne Wuensch from Citibank. Your line is now open.

Joanne Karen Wuensch: Good afternoon, and thank you for taking the questions.

Joanne Karen Wuensch: Just a few catch up here.

Joanne Karen Wuensch: Where are you on FDA warning letter resolution anything nano the department of Justice and what is the current thinking of timing for them.

Joanne Karen Wuensch: Monitor for <unk>. Thank you.

Quentin S. Blackford: Hey, Joanne. Thanks for the question. Look, from the FDA perspective, I would tell you we continue to be really encouraged by the work that's going on with the FDA. I think the collaboration is as high as it's ever been, and I applaud our own teams, but I also applaud the FDA just for the approach here that the two sides have taken. And again, I couldn't feel better about it.

Joanne Karen Wuensch: Hey, Joanne Thanks for the question.

Joanne Karen Wuensch: Look from the FDA perspective, I would tell you we continue to be really encouraged with the work that's going on with the FDA I think the collaboration is as high as it's ever been.

Quentin S. Blackford: I applaud our own teams, but I also applaud the FDA just with the approach here.

Quentin S. Blackford: The two sides are taken and again I couldnt feel better about it I feel like we're making great progress with it. We originally had anticipated that we would see an approval sometime around the mid part of the year. It's probably a couple maybe a few months later behind that as we worked through this and just go back and forth.

Quentin S. Blackford: My confidence level has never been higher that we're going to ultimately see an approval here. It's just a matter of the back and forth with the agency and making sure we're answering all those questions.

Quentin S. Blackford: In a way that that addresses the questions. They have so feel good about the momentum there.

Quentin S. Blackford: And the progress that's being made there again I think given the new MCT category code created would be in the first product put into that category code. Just continues to validate the progress thats being made and appreciate the relationship again with the agency.

Quentin S. Blackford: I feel like we're making great progress with it. With respect to MCT, I continue to believe we'll get on file in the back half of this year with the agency. It's probably a little bit skewed towards the latter part of the back half of the year, but we still expect to have MCT filed in the second half of 2024, which means we're bringing that product into the market in 2025. So MCT is an important one, and we're very excited about the enhanced features that are going to come in that MCT product once we get it through.

Quentin S. Blackford: With respect to MCT I continue to believe we will get on file in the back half of this year with the agency, it's probably a little bit.

Quentin S. Blackford: Skewed towards the latter part of the back half of the year, but still expect to have MCT filed in the second half of 2024, which means we're bringing that product into the market. In 2025. So excited with MCT I'll remind you when you think about growth levers in the future. We only have about 7% of that MCT marketplace. Despite the fact that.

Quentin S. Blackford: We have about 70% of the long term cardiac monitoring place in every 10 points of growth that we can capture in that MCT spaces.

Quentin S. Blackford: Pushing up on nearly $100 million of incremental revenue to us. So MCT is an important one and we're very excited about the enhanced features that are going to come in that MCT product. Once we get it through and then on the Doj not anything to update on at this point in time.

Quentin S. Blackford: And then on the DOJ, not anything to update on at this point in time. We continue to answer questions when they come and provide information when the questions come, but there really hasn't been a lot of dialogue or back and forth here, and there's not much to update on at this point in time.

Quentin S. Blackford: We continue to answer questions when they come and provide information when the questions come but.

Quentin S. Blackford: There really hasnt been a lot of dialogue back and forth here and theres not much to update on at this point in time, certainly if that changes and there is something to update on we'll be certain to do it.

Quentin S. Blackford: But theres just not a lot to update here.

Kallum L Titchmarsh: Thank you. The next question on the line comes from Kallum Titchmarsh of Morgan Stanley. Please go ahead; your line is open.

Quentin S. Blackford: Thank you. The next question on the line comes from Calum touched thoughts of Morgan Stanley. Please go ahead. Your line is open.

Kallum L Titchmarsh: Hey guys, thanks for taking the question. I'm going to stick to MCT here, if that's okay. You alluded to about 7% of this market for AT today. So realistically, I think, you know, after those first couple of years of the launch of MCT, where do you think your share could move to in this market? Because it seems as though there are a couple of pretty small, lightweight, high-tech MCT devices coming through the market today from competitors, so I'm just curious what it is about your product that's encouraging you about a potential uptake here. Thanks a lot.

Speaker Change: Hey, guys. Thanks for taking the question.

Quentin S. Blackford: I'm going to stick to MCT.

Kallum L Titchmarsh: Okay, you alluded to about 7% share.

Kallum L Titchmarsh: This market for Aes each day.

Kallum L Titchmarsh: So realistically I think after.

Kallum L Titchmarsh: After those first couple of years of launch of MCT, where do you think youll share could move to in this market because it seems as though there are a couple of pretty small lightweight high tech MCT devices coming through to market today from competitors. So I'm just curious what it is about your product thats encouraging you about a potential uptake here. Thanks a lot.

Quentin S. Blackford: Yeah, look how far we can get Kallum. You know, I think we're going to wait and see with the success that we have in the market. I think what's really fascinating and one of the reasons that we believe we have a high degree of opportunity to win here is that the exact same customer call point that is prescribing long-term cardiac monitoring today in the way of Zio is also writing scripts for competitive MCT products because our product just isn't quite what they're looking for. And I think we know very well why that is.

Kallum L Titchmarsh: Yes.

Speaker Change: Far we can can get Callum.

Kallum L Titchmarsh: We're going to wait and see what the success that we have in the market I think what's really fascinating and one of the reasons that we believe we have a high degree of opportunity to win here is the exact same customer call point that is prescribing long term cardiac monitoring today in the way of zero.

Quentin S. Blackford: Also writing scripts for competitive MCT products, because our product just isn't quite what theyre looking for and I think we know very well why that is one is the duration of wear while the data is incredibly compelling with respect to why 14 days of monitoring is sufficient and I can tell you that data only continues to build.

Quentin S. Blackford: One is the duration of where while the data is incredibly compelling with respect to why 14 days of monitoring is sufficient. And I can tell you that the data only continues to build. The customers want to see up to 30 days of monitoring, or up to 30 days. And so we need to continue to work towards closing that gap and, frankly, just continue to impress them with data as well. But we need to meet the customer where the customer wants to be met, and that's one of the things that we're doing in this enhanced MCT product.

Quentin S. Blackford: The customers want to see up to 30 days of monitoring or up to 30 days and so we need to continue to work towards closing that gap and frankly, just continue to compel them with data as well, but we need to meet the customer where the customer wants to be met and that's one of the things that we're doing in this enhanced MCT product the other thing that.

Quentin S. Blackford: The other thing that a lot of our competitors will offer is a downgradable capability. When insurance is not able to be found for the actual MCT device, can they step down into something like an event monitor? Those are capabilities that we're building into our product set as well, and they begin to eliminate the argument from a physician's perspective on why Xeo MCT is not the right product for them. So whether we can get all the way to 70% of the MCT market like we have in the long-term cardiac monitoring market, certainly we're not setting our expectations that way, but there's a lot of room to run in there to capture market share and have success.

Quentin S. Blackford: Lot of our competitors will offer is a downgraded capability when.

Quentin S. Blackford: When insurance is not able to be found for the actual MCT device can they stepped down into something like an event monitor those are capabilities that we're building into our product set as well and begin to eliminate the argument from a physician's perspective on why <unk> is not the right product for them. So what.

Quentin S. Blackford: We can get to all the way to 70% of the MCT market like we have in long term cardiac monitoring market certainly were not setting our expectations that way, but there is a lot of room to run in there to capture market share and have success. So could you get half of that.

Quentin S. Blackford: So could you get half of that? It's hard to say, but if we're just picking up 10 points, that's an incremental $100 million of revenue for our company. I like our opportunities to get in there and compete for that and ultimately have success with it.

Quentin S. Blackford: It's hard to say, but if were just picking up 10 points, that's an incremental $100 million of revenue to our company.

Quentin S. Blackford: Like our opportunities to get in there and compete for that and ultimately have success with it.

Nathan Treybeck: Thank you. The next question on the line comes from Nathan Treybeck of Wells Fargo. Your line is now open.

Quentin S. Blackford: Thank you. The next question on the line comes from Nathan <unk> of Wells Fargo. Your line is now open.

Nathan Treybeck: Hi.

Speaker Change: Hi, congrats on a great quarter.

Quentin S. Blackford: I think I heard you specifically call out your partnership with signify health in your opening remarks can you provide an update on where you stand currently and are you still in pilot and when do you expect a full rollout and also signified just announced CEO transition does this impact your outlook from this partnership.

Quentin S. Blackford: Hey, Nathan, I don't think it changes anything in terms of how we look at the partnership here. You know, I made a comment in the prepared remarks that Q1 was very encouraging. We've actually signed up, you know, several new innovative primary care partners in this space. We're excited about the collaboration with Signify. It is still in the pilot phase, and we're still working through that, but we fully expect to turn that into a broader commercial launch in the back half of this year.

Nathan Treybeck: Hey, David I don't think it changes anything in terms of how we look at the partnership here I made a comment in the prepared remarks Q1 was very encouraging we actually.

Nathan Treybeck: Signed up several new innovative primary care partners in this space and we're excited about the collaboration with signify it is still in pilot phase and we're still working through that but fully expect to turn that into a broader commercial launch in the back half of this year. So a little bit early to speak to the results at this point in time I can tell.

Quentin S. Blackford: So a little bit early to speak to the results at this point in time, but I can tell you if we see results like we saw with some of the other innovative primary care players, I point back to PCC. You know, we saw nearly 80% of the patients that were applied patches to that were asymptomatic, ultimately, you know, were found to have an arrhythmia. That is very informative and I think allows these innovative channels to really address care the way that they need to.

Quentin S. Blackford: If we see results like we saw with some of the other innovative primary care players I point back to PCC.

Quentin S. Blackford: We saw nearly 80% of the patients that were applied patches to that were asymptomatic ultimately were found to have an arrhythmia.

Quentin S. Blackford: That is very informative I think allows these these innovative channels to really address care the way that they need to so we're excited by the prospects of the signify relationship. We're excited by the prospects of some of the other innovative primary care players that are coming into this I think it validates our thesis that primary care is absolutely the place that this device is ultima.

Quentin S. Blackford: So we're excited by the prospects of the Signify relationship, and we're excited by the prospect of some of the other innovative primary care players that are coming into this. I think it validates our thesis that primary care is absolutely the place that this device is ultimately going to be applied in the future, just with its ease of use, its high diagnostic yield, its incredible accuracy, the ability to create tremendous workflow efficiencies, and ultimately, all of that comes back into play with respect to delivering incremental value and this whole focus on value-based care.

Quentin S. Blackford: We're going to get applied into the future just with its ease of use it's high diagnostic yield it's incredible accuracy the ability to create tremendous workflow efficiencies and ultimately all of that comes back into play with respect to delivering incremental value and this whole focus on value based care.

Quentin S. Blackford: I just really like the way that Zio is positioned to address this into the future. So we couldn't be more excited, but we're going to let that play out in the back half of the year, and hopefully, we'll be talking a whole lot more about it.

Quentin S. Blackford: Really like the way that <unk> is positioned to address this into the future. So we couldnt be more excited but we're going to let that play out in the back half of the year and hopefully we're talking a whole lot more about it.

Quentin S. Blackford: Okay.

David Kenneth Rescott: Thank you. The next question comes from David Rescott of Baird. Your line is now open.

Quentin S. Blackford: Thank you. The next question comes from David <unk> of Baird. Your line is now open.

David Kenneth Rescott: Oh, great. Thanks and congrats on the strong start to the year here. Brice, I just wanted to say

Speaker Change: Great. Thanks, and congrats on the strong start to the year here Bryce I just wanted to clarify one comment you made that I had a question for not signify up did you say that the percentage of volumes that came through San Francisco exiting 2023 or above 50% or above 60%.

David Kenneth Rescott: You're here, Brice. I just wanted to clarify one comment you made that I had a question for Quentin on Signify. Did you say that the percentage of volumes that came through San Francisco exiting 2023 were above 50% or above 60%? And then, on Signify for Quentin, I appreciate the comments you just provided there, but I'm wondering if you could frame up, maybe, the size of the opportunity there.

David Kenneth Rescott: <unk> and <unk>.

David Kenneth Rescott: Then on signify.

David Kenneth Rescott: And I appreciate the comments you just provided there, but I'm wondering if you could frame up maybe the size of the opportunity. There I think the last that that company called out was about $3 million annual at in home evaluations wondering if you have a sense for how many of those are in the eligible offer diagnostic preventive services and maybe therefore at rest for AF and then long.

Quentin S. Blackford: I think the last that that company pulled out was about 3 million annual in-home evaluations. Wondering if you have a sense for how many of those are kind of eligible for diagnostic preventive services and maybe therefore at risk for AF and then longer term in the back half of the year and into 2025. Beyond this initial rollout, I'm just trying to get a sense for how this rolls into patients.

Quentin S. Blackford: Our term in the back half of the year and into 2025.

Quentin S. Blackford: This initial rollout I'm, just trying to get a sense for how this rolls into.

Quentin S. Blackford: Is it getting rolled out more widely across these eligible patients, or is it more offered to the patients, and therefore it's up to the patient to decide whether or not they want to participate in some type of program like this?

Quentin S. Blackford: In the patients that more.

Quentin S. Blackford: Getting rolled out across these eligible patients or is it more offer to the patients and therefore, it's up to the patient to decide whether or not they want to participate in some type of a program like that thank you.

Quentin S. Blackford: Hey Dave, maybe I'll kick it off. Yeah, just clarification: just north of 60% exiting 2023 with continued progress in Q1 and expected progress throughout the rest of the year. Yeah, and I think Dave, you know, it

Speaker Change: Hey, Dave maybe I'll kick it off yes, just.

Quentin S. Blackford: Vacation in just north of 60% exiting 2023 with.

Quentin S. Blackford: With continued progress in Q1 than expected progress throughout the rest of the year.

Quentin S. Blackford: Yeah, and I think David, you know, it's early right now. I can tell you we've had a lot of discussions with Signify around, you know, what the potential opportunity could look like. I think we're still nailing that down. Probably the best way to describe it is you go back, you look at the NSTOPS criteria, and you look at some of the data that's out there around identifying arrhythmias in these comorbid conditions where other disease states are present. Maybe it's diabetes, maybe it's COPD, or maybe it's obesity.

Speaker Change: Yes, I think David it's early right now I can tell you we've had a lot of discussions with signify around what the potential opportunity could look like I think we're still narrowing that down probably the best way to describe it as you go back you look at the yen stops criteria you look at some of the data that's out there around identifying.

Quentin S. Blackford: Arrhythmia is in these co morbid conditions, where other disease states or present, maybe its diabetes, maybe it's COPD maybe it's.

Quentin S. Blackford: It's at least 25% or so of the population, and so if those rates apply to Signify, I think, you know, you can see that it's a pretty significant opportunity. The question is, you know, is there more? We know that that population tends to be one that, you know, needs care in the home, can't get out to see a physician, so does that mean that it's a little bit of a different population where those rates are even higher? We'll see as we go.

Quentin S. Blackford: Obesity.

Quentin S. Blackford: It's at least 25% or so of the population and so if those.

Quentin S. Blackford: If those rates apply to signify I think you can see that it's a pretty significant opportunity.

Quentin S. Blackford: The question is is there is there more there we know that that population tends to be one that.

Quentin S. Blackford: Needs care in the home can't get out to see a physician. So does that mean that it's a little bit of a different population where those rates are even higher we'll see as we go.

Quentin S. Blackford: Okay.

Operator: Thank you. The next question comes from the line of Bill Plozanek from Canaccord. Please go ahead, your line is open.

Quentin S. Blackford: Thank you. The next question comes from the line of Bill <unk> from Canaccord. Please go ahead. Your line is open.

William John Plovanic: Great, thanks. Good evening and thanks for taking my question. Just wanted to take a step back on the launch of Xeo Monitor. You know, you're seeing good uptake in new accounts. Are all new accounts getting Xeo Monitor, and are you still transitioning just the existing accounts?

Speaker Change: Great. Thanks, Good evening and thanks for taking my question.

William John Plovanic: Just wanted to take a step back just on the launch of zero monitor just one.

William John Plovanic: Youre seeing good uptake in new accounts.

William John Plovanic: Our all new accounts getting zero monitor and Youre still transitioning just see existing accounts or where are you with that and then in terms of.

William John Plovanic: Or, you know, where are you with that? And then, in terms of... The compliance rate. I think one of the things you saw early on was a higher compliance rate in returning the device, and I'm wondering if that is still carrying through. Thanks. Yeah. Hey, Bill.

William John Plovanic: The compliance rate I think one of the things you saw early on was a higher compliance rate and returning the device and I'm wondering if that is still carrying through.

William John Plovanic: <unk>.

Brice Bobzien: Hey, Bill, it's Brice. So yeah, on the rollout, that is absolutely the case. All new accounts coming on are starting with XeoMonitor, and we're approaching, call it that 80% or so level of existing accounts also being converted. So the progress on XeoMonitor has gone incredibly well. But you are right about thinking all new accounts are on it, and then existing accounts will slowly come up to speed here. As far as the compliance rate is concerned, you're absolutely right. There is a benefit to XeoMonitor, much of which is related to the form factor, but also, just the high diagnostic yield of the device and those coming back with data.

William John Plovanic: Yeah, Hey, Bill it's Brian.

Speaker Change: So yeah on the rollout that is absolutely the case, all new accounts coming on are starting with <unk> monitor.

Speaker Change: And we're approaching call it that 80% or so.

Brice Bobzien: Level of existing accounts also being converted so the progress on the monitor has gone incredibly well, but you have it right. We're thinking all new accounts are on it and then existing accounts will slowly come up to speed here as far as the compliance rate Youre absolutely right. There is a benefit to zero monitor much of which is related to the form factor but.

Brice Bobzien: And so we are seeing an improvement there. I will tell you, there are a few dynamics at play here; home enrollment, picking up a little bit, compliance tends to be a little bit lower there. And as PCP and some other of these sort of alternative channels come into place, there's a little bit different return dynamic for those. However, once everyone's on monitor, we feel really good about that return device rate improving nicely over the time horizon.

Brice Bobzien: Frankly also just the high diagnostic yield as the device and that was coming back with data and so we are seeing an improvement there I will tell you.

Brice Bobzien: There's a few dynamics at play here home enrollment picking up a little bit compliance tends to be a little bit lower there.

Brice Bobzien: And as PCP and some other.

Brice Bobzien: Alternative channels come into place, there's a little bit different return dynamic for those however, once every everyone gone monitor we feel really good about that return device rate improving nicely over the over the time horizon.

Brice Bobzien: Okay.

Operator: Thank you. The final question today comes from Suraj Kalia from Oppenheimer. Please go ahead. Your line is open.

Brice Bobzien: The final question today comes from Suraj Kalia from Oppenheimer. Please go ahead. Your line is open.

Suraj Kalia: Quentin, can you hear me all right? Yeah, we got you. Perfect. Hey, so I guess I'll just quickly throw one for you, Quentin, one for Brice. So, Quentin, in terms of sleep, I guess I'm curious why sleep, just given OSA is so predictable, and the relative complexity of algorithms is, if I can loosely use it, de minimis compared to AF, which is complex

Brice Bobzien: Quintin kindergarten outright.

Suraj Kalia: Yeah, We got you.

Operator: Perfect.

Suraj Kalia: So I guess I'll just quickly throw one for you Quintin one shop rise sequentially in terms of sleep I guess I'm curious why sleep, just given OSA, so predictable and the relative complexity of algorithms is if.

Suraj Kalia: I can loosely use it de minimis compared to F, which is complex rate. So I'm trying to understand what value proposition you see out there and Bryce quickly if I could.

Suraj Kalia: So I'm trying to understand what value proposition you see out there. And Brice, quickly, if I could, the SFO IDTF. Has a decision been made? I mean, if you guys are at 60% and going higher, there is obviously a trade-off between OPEX and Topline, right? So I'm curious what the read-throughs per report currently are in terms of technicians. Thank you for taking my questions.

Suraj Kalia: It's a full ITT F.

Suraj Kalia: Hum decision being made I mean, if you guys are at 60% and going higher.

Suraj Kalia: Theres, obviously, a trade off between Opex and topline right. So I'm curious what the read throughs per report currently are in terms of technicians. Thank you for taking my questions.

Quentin S. Blackford: Thanks, Suraj. So I'll hit that first one while I'm sleeping. Look, I think the prevalence of OSA is incredibly high, and the reality is these patients need a diagnosis. And the further reality is that so many of them start with the cardiologist, the EP, or even the primary care physician. Ultimately, they get referred on to a sleep specialist, or they get a diagnosis performed right there by that cardiologist, EP, or primary care physician.

Suraj Kalia: The.

Brice Bobzien: Thanks, Raj So I'll hit that first of all don't sweep look I think the.

Suraj Kalia: The prevalence of OSA is incredibly high.

Suraj Kalia: It is these patients need a diagnosis and to further reality is there's so many of them start with cardiologists, the EP or even the primary care physician ultimately they get referred onto a sleep specialist or they get a diagnosis.

Quentin S. Blackford: Formed REIT, thereby that cardiologist EEP or primary care physician.

Quentin S. Blackford: We have access to these very same customers, and as we sit down in our advisory groups with these customers and ask for ways to streamline their practice or ways that we could add incremental value consistently, the very top of the list, if not the absolute top of the list, is helping us figure out how to deal with this cumbersome, challenging process that we have with our sleep patients. So many times we'll refer them on to a sleep specialist. They can't be seen for five, six, or seven months. They get lost in the fray.

Quentin S. Blackford: We have access to these very same customers and as we sit down and our advisory groups with these customers and we asked for ways to streamline their practice or ways that we could add incremental value consistently at the very top of the list if not the absolute top of the list is help us figure out how to deal with this cumbersome challenging.

Quentin S. Blackford: Process that we have with our sleep patients. So many times will refer them onto a sleep specialists. They can't be seen for 567 months. They get lost in the Fray They never get a diagnosis there back in my office trying to figure out what is going on with.

Quentin S. Blackford: They never get a diagnosis, and they're back in my office trying to figure out what is going on. With our call point, with our digital platform, ZioSuite, being integrated right into their accounts and our IDTF capabilities, we think it's a natural synergy and a very easy opportunity for these physicians to be able to prescribe a home sleep test. We send that device to the home, just like we do in our home enrollment program, and we leverage IDTF capabilities to perform the analysis and ultimately put a diagnosis back into the hands of the physician.

Quentin S. Blackford: With our call point with our digital platform <unk> suite being integrated right into their accounts and our <unk> capabilities. We think it's a natural synergy and a very easy opportunity to enable these physicians to be able to prescribe a home sleep test we send that device to the home just like we do in our home enrollment program and we love.

Quentin S. Blackford: I'd ETF capabilities to perform the analysis and ultimately put a diagnosis back into the hands of the physician.

Quentin S. Blackford: You think about it, serving north of two million patients a year now, 60 to 70 percent of all patients who have AFib will have OSA as well. There's a natural synergy here between what we do, what our customers, or what our call point is looking for, and what we're able to offer. So we're incredibly excited by it. I think it could be a tremendous opportunity for us and our product into the

Quentin S. Blackford: Think about it serving north of 2 million patients a year now 60% to 70% of all patients have afib will have OSA as well.

Quentin S. Blackford: There is a natural synergy here between what we do what our customers are what our call point is looking for and what we're able to offer. So we're incredibly excited by it I think it could be a tremendous opportunity for us our product into the future. We believe will have the opportunity to diagnose sleep disease right off of the patch as.

Quentin S. Blackford: We believe we'll have the opportunity to diagnose sleep disease right off of the patch as we continue to enhance its feature set. And so, again, it's natural to step into this and take advantage of what we've built to date and the service offering that we've become known for, which is easy to use and highly predictable and highly accurate. Brice, yep, Ace Ross, yeah.

Quentin S. Blackford: As we continue to enhance its feature set and so again, it's natural to step into this and take advantage of of what we've built to date and the service offering that we've become known for which is easy to use and highly predictable highly accurate.

Brice Bobzien: So, question on the CCTs in the San Francisco Center of Excellence. So, remember, the CCT costs themselves run through gross margin, not through OPEX. The administrative component, there's a piece of it that resides down in OPEX, but the vast majority of that rolls through gross margin. And so I would say the read-throughs, as they stand now, there's a little bit of inefficiency, which is causing the pressure on gross margin, as it stands now. And that's the natural progression we expect in the back half of the year.

Brice Bobzien: Yeah, Hey, Suraj, Yeah. So question on the <unk> and that the San Francisco.

Quentin S. Blackford: Center of excellence, so remember the CCT costs themselves run through gross margin not through Opex.

Brice Bobzien: The administrative component there is a piece of it that resides down in opex, but the vast majority of that rolls through gross margin and so I would say the read throughs as they stand now there is a little bit of inefficiency, which is causing the pressure on gross margin as it stands now and thats that natural progression, we expect in the back half of the year again to the tune of about 200 basis points.

Brice Bobzien: Again, to the tune of about 200 basis points. There's no reason to believe the efficiency level will be any different in the Center of Excellence than what we would see in either one of the other two IDTFs over time. And so, frankly, we hired a tremendously talented group where you could see potential efficiency gains over time. So, again, we feel great about the gross margin playthrough over time. It's just going to take a little bit of time for them to get up to the efficiency levels that we see with the other IDTFs.

Brice Bobzien: No reason to believe the efficiency level will be any different in the centre of excellence than what we would see in either one of the other two etfs overtime and so frankly, we hired a tremendously talented group, where you could see potential efficiency gains are there overtime.

Operator: Thank you. We have no further questions on the line, so I'll hand you over to the management team for any closing remarks.

Quentin S. Blackford: Well, thank you for joining us today. We're extremely pleased about the start of 2024 and couldn't be more excited about the growing momentum in our business as we begin to explore opening new adjacencies like sleep and continue to expand into the primary care channel. The back half of the year is set up to demonstrate significant financial leverage as we continue to progress in our efforts to become more operationally excellent as we grow.

Quentin S. Blackford: Excellent as we grow.

Quentin S. Blackford: In addition, we have many catalysts of growth that remain in front of us, which are yet to contribute to our success, including a new innovative Xeo MCT solution, entry into the second largest ACM market in the world, Japan, expand further into primary care, and step into adjacent sleep markets. Irhythm's future has truly never been brighter than it is today, and I'm grateful to each of our employees around the world as they're doing a great job in progressing our efforts forward. We'll see you over the course of the next couple of months. Goodbye.

Operator: This concludes today's conference call. Thank you all for joining us. You may now disconnect your lines.

Quentin S. Blackford: We look forward to progressing our efforts forward.

Q1 2024 iRhythm Technologies Inc Earnings Call

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