Q1 2026 iRhythm Technologies Inc Earnings Call

April 30, 2026

Speaker #1: Hello everyone, thank you for joining us and welcome to iRhythm Holdings' Q1 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session.

Operator: Hello, everyone. Thank you for joining us, and welcome to iRhythm Holdings' Q1 2026 earnings conference call. After today's prepared remarks, we will host a question-and-answer session. I will now hand the call over to Lisa Pecora, Senior Vice President of Finance and Investor Relations, for opening remarks.

Operator: Hello, everyone. Thank you for joining us, and welcome to iRhythm Holdings' Q1 2026 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. I will now hand the call over to Lisa Pecora, Senior Vice President of Finance and Investor Relations, for opening remarks.

Speaker #1: If you would like to ask a question, please press star 1 on your telephone keypad. To withdraw your question, press star 1 again. I will now hand the call over to Lisa Pecora, Senior Vice President of Finance and Investor Relations, for opening remarks.

Speaker #2: Thank you, Operator, and thank you all for joining iRhythm's first quarter 2026 earnings call. With me today are Quentin Blackford, iRhythm's and Dan Wilson, our Chief Financial Officer.

Lisa Pecora: Thank you, operator, and thank you all for joining iRhythm's Q1 2026 earnings call. With me today are Quentin Blackford, iRhythm's President and Chief Executive Officer, and Daniel Wilson, our Chief Financial Officer. Before we begin, please note that management will make forward-looking statements within the meaning of federal securities laws under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our intentions, beliefs, and expectations about future events, strategy, competition, products, operating plans, and performance. Forward-looking statements on this call are based on current estimates and assumptions, involve risks and uncertainties, and actual results may differ materially. These statements are made as of today, 30 April 2026, and are time-sensitive. We undertake no obligation to update or revise them except as required by law.

Lisa Pecora: Thank you, operator, and thank you all for joining iRhythm's Q1 2026 earnings call. With me today are Quentin Blackford, iRhythm's President and Chief Executive Officer, and Dan Wilson, our Chief Financial Officer. Before we begin, please note that management will make forward-looking statements within the meaning of federal securities laws under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our intentions, beliefs, and expectations about future events, strategy, competition, products, operating plans, and performance. Forward-looking statements on this call are based on current estimates and assumptions, involve risks and uncertainties, and actual results may differ materially. These statements are made as of today, 30 April 2026, and are time-sensitive. We undertake no obligation to update or revise them except as required by law.

Speaker #2: Before we begin, please note that management will make forward-looking statements within the meaning of federal securities laws under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.

Speaker #2: These forward-looking statements include, but are not limited to, statements regarding our intentions, beliefs, and expectations about future events, strategy, competition, products, operating plans, and performance.

Speaker #2: Forward-looking statements on this call are based on current estimates and assumptions, involve risks and uncertainties, and actual results may differ materially. These statements are made as of today, April 30th, 2026, and are time-sensitive.

Speaker #2: We undertake no obligation to update or revise them, except as required by law. Accordingly, you should not place undue reliance on these statements. For discussion of risks and uncertainties, please refer to our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC.

Lisa Pecora: Accordingly, you should not place undue reliance on these statements. For a discussion of risks and uncertainties, please refer to our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP. Unless otherwise noted, all references to financial measures on this call are presented on a non-GAAP basis. These non-GAAP measures should not be considered in isolation or as a substitute for or superior to GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release and the slides accompanying today's call. With that, I'll turn the call over to Quentin.

Speaker #2: Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP. Unless otherwise noted, all references to financial measures on this call are presented on a non-GAAP basis.

Speaker #2: These non-GAAP measures should not be considered in isolation or as a substitute for, or superior to, GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release and the slides accompanying today's call.

Speaker #2: And with that, I'll turn the call over to Quentin.

Speaker #3: Good afternoon, everyone, and thank you for joining us. I'm pleased to be here to discuss our first quarter 2026 performance and outlook for the balance of the year.

Quentin Blackford: Good afternoon, everyone, and thank you for joining us. I'm pleased to be here to discuss our Q1 2026 performance and outlook for the balance of the year. I will begin with an overview of the quarter, our strategic progress, and our outlook for 2026 and beyond. Dan will talk about our financial performance and guidance in more detail. We delivered a strong Q1, exceeding expectations on both the top and bottom line. Revenue grew 26% year over year, driven by volume, we continued to execute on our profitability improvement commitments as we expanded margins. Importantly, our performance was broad-based across Zio monitor and Zio AT and across each of our key growth pillars, including cardiology, primary care, innovative channels, and international.

Speaker #3: I will begin with an overview of the quarter, our strategic progress, and our outlook for 2026 and beyond. Dan will then talk about our financial performance and guidance in more detail.

Speaker #3: We delivered a strong first quarter, exceeding expectations on both the top and bottom line. Revenue grew 26% year over year, driven by volume, and we continued to execute on our profitability improvement commitments as we expanded margins.

Speaker #3: Importantly, our performance was broad-based across zero-monitor and zero-AT and across each of our key growth pillars, including cardiology, primary care, innovative channels, and international.

Speaker #3: Our results reflect both strong execution in the core business and continued progress against the strategic priorities we believe will support durable growth over time.

Quentin Blackford: Our results reflect both strong execution in the core business and continued progress against the strategic priorities we believe will support durable growth over time. At the center of that strategy is our effort to expand the long-term continuous monitoring market by redefining how arrhythmias are diagnosed once patients enter the diagnostic pathway. A growing body of clinical evidence, now spanning more than 140 publications, consistently shows that nearly two-thirds of arrhythmias are often detected only after 48 hours of monitoring, reinforcing the limitations of short-duration monitoring. Yet nearly 2 million short-duration Holter and event monitors are still prescribed annually in the US, representing a significant opportunity to upgrade care. By continuing to shift clinical practice towards longer-duration monitoring, we believe iRhythm is not only gaining share but actively growing the market by increasing diagnostic yield and improving patient outcomes.

Speaker #3: At the center of that strategy is our effort to expand the long-term continuous monitoring market by redefining how arrhythmias are diagnosed once patients enter the diagnostic pathway.

Speaker #3: A growing body of clinical evidence now spanning more than 140 publications consistently shows that nearly two-thirds of arrhythmias are often detected only after 48 hours of monitoring.

Speaker #3: Reinforcing the limitations of short-duration monitoring, yet nearly 2 million short-duration Holter and event monitors are still prescribed annually in the US, representing a significant opportunity to upgrade care.

Speaker #3: By continuing to shift clinical practice towards longer-duration monitoring, we believe iRhythm is not only gaining share but actively growing the market by increasing diagnostic yield and improving patient outcomes.

Speaker #3: Zero-Monitor remains the foundation of our platform, supported by consistent prescribing trends, broad clinical adoption, and continued growth across new channels and international markets. Zero-AT also continued to advance this quarter, taking share with new account wins and expanding utilization within existing accounts.

Quentin Blackford: Zio monitor remains the foundation of our platform, supported by consistent prescribing trends, broad clinical adoption, and continued growth across new channels and international markets. Zio AT also continued to advance this quarter, taking share with new account wins and expanding utilization within existing accounts. That progress came despite a challenging prior year comparison and reinforces our view of the MCT category as a durable and increasingly important contributor to the platform. One of the most important drivers of our long-term opportunity is our continued move upstream in the patient pathway. We estimate that more than 27 million people in the US are at risk for arrhythmias, many of whom are first evaluated in primary care settings. As a result, primary care is becoming an increasingly important entry point for earlier detection and more proactive management.

Speaker #3: That progress came despite a challenging prior year comparison and reinforces our view of the MCT category as a durable and increasingly important contributor to the platform.

Speaker #3: One of the most important drivers of our long-term opportunity is our continued move upstream in the patient pathway. We estimate that more than 27 million people in the US are at risk for arrhythmias, many of whom are first evaluated in primary care settings.

Speaker #3: As a result, primary care is becoming an increasingly important entry point for earlier detection and more proactive management. We continue to expand our reach and engagement within primary care, helping clinicians rule arrhythmias in or out while enabling cardiology to focus more efficiently on the highest acuity patients.

Quentin Blackford: We continue to expand our reach and engagement within primary care, helping clinicians rule arrhythmias in or out while enabling cardiology to focus more efficiently on the highest acuity patients. This is not a shift away from cardiology. It expands the overall market and improves patient flow, diagnostic efficiency, and care coordination across settings. A key enabler of this strategy is workflow integration. Approximately 53% of our volume now flows through EHR-integrated accounts. More than three-quarters of our top 100 customers are now integrated. This level of integration is particularly valuable in primary care, where once embedded, we partner closely with our customers to help them develop best-in-class clinical pathways rather than just a transactional tool. We continue to see traction across innovative care channels with growth supported by a broad and expanding set of value-based primary care and population health partners.

Speaker #3: This is not a shift away from cardiology. Rather, it expands the overall market and improves patient flow, diagnostic efficiency, and care coordination across settings.

Speaker #3: A key enabler of this strategy is workflow integration. Approximately 53% of our volume now flows through EHR-integrated accounts. And more than three-quarters of our top 100 customers are now integrated.

Speaker #3: This level of integration is particularly valuable in primary care, where, once embedded, we partner closely with our customers to help them develop best-in-class clinical pathways rather than just a transactional tool.

Speaker #3: We continue to see traction across innovative care channels, with growth supported by a broad and expanding set of value-based primary care and population health partners.

Speaker #3: Activity remains consistent and repeatable, driven by both new account wins and expanding utilization within existing relationships. Importantly, as certain programs mature, we're seeing adoption broaden across both symptomatic and asymptomatic populations, reinforcing the relevance and durability of the Zero platform as care delivery continues to shift upstream and toward value-based models.

Quentin Blackford: Activity remains consistent and repeatable, driven by both new account wins and expanding utilization within existing relationships. Importantly, as certain programs mature, we're seeing adoption broaden across both symptomatic and asymptomatic populations, reinforcing the relevance and durability of the Zio platform as care delivery continues to shift upstream and toward value-based models. International remains another emerging source of opportunity. In the UK, we had our best quarter in company history, reflecting growing traction and validation of our model in a cost-constrained health system. In Japan, we recently received an update to the reimbursement framework that introduces a modest supplemental payment for longer duration monitoring. While the economics remain early and are not a meaningful contributor today, we view this as a positive signal that reflects growing recognition of the long-term continuous monitoring and reinforces the pathway to more favorable reimbursement as we generate local head-to-head clinical evidence.

Speaker #3: International remains another emerging source of opportunity. In the UK, we had our best quarter in company history, reflecting growing traction and validation of our model in a cost-constrained health system.

Speaker #3: In Japan, we recently received an update to the reimbursement framework that introduces a modest supplemental payment for longer-duration monitoring. While the economics remain early and are not a meaningful contributor today, we view this as a positive signal that reflects growing recognition of long-term continuous monitoring and reinforces the pathway to more favorable reimbursement as we generate local, head-to-head clinical evidence.

Speaker #3: We are also making progress in adjacent markets. In sleep, our pilots continue to produce encouraging early feedback and reinforce the meaningful opportunity ahead in a US market of nearly 40 million sleep apnea patients of which there is significant overlap with arrhythmia populations.

Quentin Blackford: We are also making progress in adjacent markets. In sleep, our pilots continue to produce encouraging early feedback and reinforce the meaningful opportunity ahead in a US market of nearly 40 million sleep apnea patients, of which there is significant overlap with arrhythmia populations. Sleep is another good example of why workflow integration matters. Sleep diagnostics today remain highly fragmented across primary care, cardiology, sleep specialists, sleep labs, home testing, interpretation, and follow-up, and often across disconnected systems. Our focus is not simply on introducing a new device or algorithm, but on building a streamlined end-to-end clinical workflow that simplifies how sleep diagnostics are ordered, interpreted, and acted upon. As we have done in cardiac monitoring, we believe workflow simplification can create meaningful value for both providers and the healthcare system, particularly as care continues to shift upstream.

Speaker #3: Sleep is another good example of why workflow integration matters. Sleep diagnostics today remain highly fragmented across primary care, cardiology, sleep specialists, sleep labs, home testing, interpretation, and follow-up, and often across disconnected systems.

Speaker #3: Our focus is not simply on introducing a new device or algorithm, but on building a streamlined end-to-end clinical workflow that simplifies how sleep diagnostics are ordered and interpreted and acted upon.

Speaker #3: As we have done in cardiac monitoring, we believe workflow simplification can create meaningful value for both providers and the healthcare system, particularly as care continues to shift upstream.

Speaker #3: From a clinical perspective, recent evidence continues to support our position and reinforces the significant opportunity ahead of us. At ACC, we shared new real-world evidence showing Zero's high diagnostic yield for clinically actionable arrhythmias across cardiometabolic risk populations including increased risk in chronic kidney disease, in rising atrial fibrillation detection with obesity.

Quentin Blackford: From a clinical perspective, recent evidence continues to support our position and reinforces the significant opportunity ahead of us. At ACC, we shared new real-world evidence showing Zio's high diagnostic yield for clinically actionable arrhythmias across cardiometabolic risk populations, including increased risk in chronic kidney disease and rising atrial fibrillation detection with obesity. We also launched iRhythm Academy, which scales high-quality on-demand education to help clinicians adopt best practices and new advances more efficiently. At HRS, we presented new data reinforcing the superiority of Zio after AF ablation and in pregnancy. In addition, we published two peer-reviewed studies highlighting the clinical and utilization advantages of long-term continuous monitoring using Zio. The data show that traditional short-term monitoring often misses actionable arrhythmias, and that Zio enables earlier diagnosis with fewer repeat tests across both Medicare and commercially insured patients. Taken together, these efforts reinforce three points.

Speaker #3: We also launched iRhythm Academy, which scales high-quality, on-demand education to help clinicians adopt best practices and new advances more efficiently. At HRS, we presented new data reinforcing the superiority of Zero after AF ablation and in pregnancy.

Speaker #3: In addition, we published two peer-reviewed studies highlighting the clinical and utilization advantages of long-term continuous monitoring using Zero. The data show that traditional short-term monitoring often misses actionable arrhythmias, and that Zero enables earlier diagnosis with fewer repeat tests across both Medicare and commercially insured patients.

Speaker #3: Taken together, these efforts reinforce three points. Zero long-term monitoring improves diagnostic yield. It expands relevance across broader patient populations and it can reduce inefficiency and downstream cost.

Quentin Blackford: Zio long-term monitoring improves diagnostic yield. It expands relevance across broader patient populations, and it can reduce inefficiency and downstream cost, all of which are critical as we continue to expand beyond traditional symptomatic populations and move further upstream into earlier detection with the potential to lower downstream costs for the healthcare system. Consistent with that clinical expansion, recent CMS policy developments continue to emphasize objective diagnosis, quality, and measurable outcomes over documentation-driven strategies. The final 2027 Medicare Advantage rate announcement reflects funding stability alongside continued tightening around risk adjustment and coding practices. This policy trajectory reinforces the importance of confirmatory diagnostics that drive accurate diagnosis and appropriate care and positions Zio well as healthcare continues to shift towards value-based models. With our vision to scale beyond traditional arrhythmia monitoring, our ability to execute is supported by an integrated AI-enabled platform.

Speaker #3: All of which are critical as we continue to expand beyond traditional symptomatic populations and move further upstream into earlier detection, with the potential to lower downstream costs for the healthcare system.

Speaker #3: Consistent with that clinical expansion, recent CMS policy developments continue to emphasize objective diagnosis, quality, and measurable outcomes over documentation-driven strategies. The final 2027 Medicare Advantage rate announcement reflects funding stability alongside continued tightening around risk adjustment and coding practices.

Speaker #3: This policy trajectory reinforces the importance of confirmatory diagnostics that drive accurate diagnosis and appropriate care, and positions Zero well as healthcare continues to shift towards value-based models.

Speaker #3: With our vision to scale beyond traditional arrhythmia monitoring, our ability to execute is supported by an integrated, AI-enabled platform. We now have more than 3 billion hours of curated ECG data and we continue to build on that foundation by combining internal and external data sets including claims and EHR data to improve detection, identify at-risk patients earlier, and enhance clinical workflows.

Quentin Blackford: We now have more than 3 billion hours of curated ECG data, and we continue to build on that foundation by combining internal and external data sets, including claims and EHR data, to improve detection, identify at-risk patients earlier, and enhance clinical workflows. As we continue to advance our AI predictive capabilities, we are now in our first health system deployment of predictive identification workflows integrated with iRhythm monitoring solutions, and we have an active pipeline for additional health systems to follow. Early pilots show more than 85% accuracy in pre-identifying patients with clinically relevant arrhythmias, reinforcing our conviction that iRhythm is positioned not just to detect disease, but also help predict risk earlier and ultimately prevent it. Our initial programs focus on high-risk populations, including patients with diabetes, CKD, CAD, COPD, sleep disorders, and heart failure, where arrhythmias are both common and costly.

Speaker #3: As we continue to advance our AI predictive capabilities, we are now in our first health system deployment of predictive identification workflows integrated with iRhythm Monitoring Solutions, and we have an active pipeline for additional health systems to follow.

Speaker #3: Early pilots show more than 85% accuracy in pre-identifying patients with clinically relevant arrhythmias reinforcing our conviction that iRhythm is positioned not just to detect disease but also help predict risk earlier and ultimately prevent it.

Speaker #3: Our initial programs focus on high-risk populations, including patients with diabetes, CKD, CAD, COPD, sleep disorders, and heart failure, where arrhythmias are both common and costly.

Speaker #3: These initiatives are designed to improve efficiency, quality, and reduce cost of care delivery, and we look forward to real-world data being published later this year.

Quentin Blackford: These initiatives are designed to improve efficiency, quality, and reduce cost of care delivery. We look forward to real-world data being published later this year. More broadly, iRhythm's durability in an AI-driven environment is grounded in the fact that healthcare value is not created by algorithms alone. It is created by operating an end-to-end AI-embedded, FDA-regulated, clinically integrated, and reimbursed service at scale. Our platform is deeply embedded across leading health systems and supported by deep workflow integration, broad reimbursement, extensive clinical evidence, and a proprietary ECG data set that continues to grow significantly. Coupled with the operational complexity of device programs, specialized clinical support, and high regulatory scrutiny, our platform will continue to compound in value over time, particularly as we expand beyond cardiovascular into a multi-specialty intelligence platform.

Speaker #3: More broadly, iRhythm's durability in an AI-driven environment is grounded in the fact that healthcare value is not created by algorithms alone. It is created by operating an end-to-end AI-embedded FDA-regulated clinically integrated and reimbursed service at scale.

Speaker #3: Our platform is deeply embedded across leading health systems and supported by deep workflow integration, broad reimbursement, extensive clinical evidence, and a proprietary ECG data set that continues to grow significantly.

Speaker #3: Coupled with the operational complexity of device programs, specialized clinical support, and high regulatory scrutiny, our platform will continue to compound in value over time, particularly as we expand beyond cardiovascular into a multi-specialty intelligence platform.

Speaker #3: I'm pleased to share that same foundation is helping drive progress as we expand our AI capabilities with our new next-generation AI algorithm. Leveraging our large proprietary multi-billion-hour data set, we believe this next-generation algorithm which will be used across our entire platform of Zero Monitor, Zero AT, and our future Zero MCT can reduce clinical technician review time by as much as half over time.

Quentin Blackford: I'm pleased to share that same foundation is helping drive progress as we expand our AI capabilities with our new next-generation AI algorithm. Leveraging our large proprietary multi-billion-hour data set, we believe this next-generation algorithm, which will be used across our entire platform of Zio Monitor, Zio AT, and our future Zio MCT, can reduce clinical technician review time by as much as half over time, which would improve efficiency, support future margin expansion, and further strengthen our competitive position as we increase the clinical value to our patients and physicians. We submitted the 510(k) for this next-generation AI algorithm to the FDA last year alongside, albeit separate from our Zio MCT 510(k) submission. I'd like to provide an update on our regulatory progress. As you know, we remain subject to an FDA warning letter.

Speaker #3: Which would improve efficiency, support future margin expansion, and further strengthen our competitive position as we increase the clinical value to our patients and physicians.

Speaker #3: We submitted the 510(k) for this next-generation AI algorithm to the FDA last year alongside albeit separate from our Zero MCT 510(k) submission. Next, I'd like to provide an update on a regulatory progress.

Speaker #3: As you know, we remain subject to an FDA warning letter. As part of our remediation efforts, we committed to address all of the agency's concerns.

Quentin Blackford: As part of our remediation efforts, we committed to address all of the agency's concerns. We also elected to go beyond the specific actions requested by the FDA, which included conducting a comprehensive review of our entire quality management system to identify and implement further improvements, which we have now completed. Consistent with our commitments to the agency, we also engaged an independent third party to conduct a comprehensive review of our quality management system. That review was completed in Q1 and did not identify any material observations. We believe this outcome reflects both the seriousness with which we have approached this work and the substantial progress we have made. While the timing of any action by the FDA remains with the agency, we believe the work completed to date positions us well as the agency continues its review.

Speaker #3: We also elected to go beyond the specific actions requested by the FDA which included conducting a comprehensive review of our entire quality management system to identify and implement further improvements, which we have now completed.

Speaker #3: Consistent with our commitments to the agency, we also engaged an independent third party to conduct a comprehensive review of our quality management system. That review was completed in the first quarter and did not identify any material observations.

Speaker #3: We believe this outcome reflects both the seriousness with which we have approached this work and the substantial progress we have made. While the timing of any action by the FDA remains with the agency, we believe the work completed to date positions us well as the agency continues its review.

Speaker #3: With respect to our next-generation MCT program, we've made a lot of progress over the past few months and are happy to reaffirm our first half 2027 release timeline.

Quentin Blackford: With respect to our next-generation MCT program, we've made a lot of progress over the past few months and are happy to reaffirm our H1 2027 release timeline. As we noted on our last earnings call, we identified a clear path to our next-generation MCT clearance, including the determination that it was in our best long-term interest to move to a new mobile gateway sooner, which would require some additional work and data to be submitted to the FDA. As we continue to work collaboratively with the FDA, they have clarified that rather than submit additional data on a rolling basis, the preferred path is to provide a complete package once all elements are finalized later this year. We had anticipated this might be one outcome for how we might update our submission, so it falls within our previously communicated clearance and launch timeframe.

Speaker #3: As we noted on our last earnings call, we identified a clear path to our next-generation MCT clearance, including the determination that it was in our best long-term interest to move to a new mobile gateway sooner, which would require some additional work and data to be submitted to the FDA.

Speaker #3: As we continue to work collaboratively with the FDA, they have clarified that rather than submit additional data on a rolling basis, the preferred path is to provide a complete package once all elements are finalized later this year.

Speaker #3: We had anticipated this might be one outcome for how we might update our submission, so it falls within our previously communicated clearance and launch timeframe.

Speaker #3: We believe this collaborative approach enabling us to stay on track with our approval and launch timelines while also advancing and enhanced next-generation AI algorithm for clearance at a potentially earlier time point is a clear sign that all of our hard work over the past few years to improve our relationship with the FDA has been paying off.

Quentin Blackford: We believe this collaborative approach enabling us to stay on track with our approval and launch timelines while also advancing an enhanced next-generation AI algorithm for clearance at a potentially earlier time point is a clear sign that all of our hard work over the past few years to improve our relationship with the FDA has been paying off. Looking ahead, our priorities remain clear: to drive durable volume-led growth across cardiology, primary care, and innovative channels, continue expanding margins through operating discipline, efficiency, and scale, advance our innovation roadmap, including next-generation MCT and predictive AI, build international and adjacent markets with discipline, and maintain high standards of operational excellence and compliance in a rapidly evolving healthcare environment. With that, I'll turn the call over to Dan.

Speaker #3: Looking ahead, our priorities remain clear. To drive durable, volume-led growth across cardiology, primary care, and innovative channels, continue expanding margins through operating discipline, efficiency, and scale, advance our innovation roadmap including next-generation MCT and predictive AI, build international and adjacent markets with discipline, and maintain high standards of operational excellence and compliance in a rapidly evolving healthcare environment.

Speaker #3: With that, I'll turn the call over to Dan.

Speaker #2: Thank you, Quentin. iRhythm delivered continued strong financial performance in the first quarter 2026, reflecting durable demand for iRhythm's ambulatory cardiac monitoring services and disciplined execution across the organization.

Daniel Wilson: Thank you, Quentin. iRhythm delivered continued strong financial performance in Q1 2026, reflecting durable demand for iRhythm's ambulatory cardiac monitoring services and disciplined execution across the organization. Our results demonstrate once again our focus on profitable growth as we recorded another Q of strong year-over-year revenue growth while driving 880 basis points of improvement to adjusted EBITDA margin. We are encouraged to see the continued growth in the business while driving strong operating leverage. We delivered revenue of $199.4 million, representing 25.7% year-over-year growth. Performance was driven primarily by sustained volume demand across our customer base, reflecting continued strength in our core business and contributions from newer growth channels.

Dan Wilson: Thank you, Quentin. iRhythm delivered continued strong financial performance in Q1 2026, reflecting durable demand for iRhythm's ambulatory cardiac monitoring services and disciplined execution across the organization. Our results demonstrate once again our focus on profitable growth as we recorded another Q of strong year-over-year revenue growth while driving 880 basis points of improvement to adjusted EBITDA margin. We are encouraged to see the continued growth in the business while driving strong operating leverage. We delivered revenue of $199.4 million, representing 25.7% year-over-year growth. Performance was driven primarily by sustained volume demand across our customer base, reflecting continued strength in our core business and contributions from newer growth channels.

Speaker #2: Our results demonstrate once again our focus on profitable growth as we recorded another quarter of strong year-over-year revenue growth while driving $880 basis points of improvement to adjusted EBITDA margin.

Speaker #2: We are encouraged to see the continued growth in the business, while driving strong operating leverage. We delivered revenue of $199.4 million, representing 25.7% year-over-year growth.

Speaker #2: Performance was driven primarily by sustained volume-demand across our customer base, reflecting continued strength in our core business and contributions from newer growth channels. Volume remained the primary driver of year-over-year revenue growth while we also benefited from improvements with our estimated collections reserves related to our market access, contracting, and collection efforts.

Daniel Wilson: Volume remained the primary driver of year-over-year revenue growth, while we also benefited from improvements with our estimated collections reserves related to our market access, contracting, and collection efforts. These results were supported by continued engagement across a broad and expanding prescriber base, reinforcing the durability of volume demand. New store growth, with new store defined as accounts that have been open for less than 12 months, accounted for approximately 64% of our year-over-year volume growth. Home enrollment for Zio services in the US remained consistent from prior quarters at approximately 23% of volume in Q1. Moving down the P&L, gross margin in Q1 was 70.9%, an increase of 210 basis points year over year. This sustainable improvement was driven by continued operational efficiencies, including manufacturing automation and workflow optimization, as well as scale benefits from higher volumes.

Dan Wilson: Volume remained the primary driver of year-over-year revenue growth, while we also benefited from improvements with our estimated collections reserves related to our market access, contracting, and collection efforts. These results were supported by continued engagement across a broad and expanding prescriber base, reinforcing the durability of volume demand. New store growth, with new store defined as accounts that have been open for less than 12 months, accounted for approximately 64% of our year-over-year volume growth. Home enrollment for Zio services in the US remained consistent from prior quarters at approximately 23% of volume in Q1. Moving down the P&L, gross margin in Q1 was 70.9%, an increase of 210 basis points year over year. This sustainable improvement was driven by continued operational efficiencies, including manufacturing automation and workflow optimization, as well as scale benefits from higher volumes.

Speaker #2: These results were supported by continued engagement across a broad and expanding prescriber base reinforcing the durability of volume demand. New store growth with new store defined as accounts that have been open for less than 12 months accounted for approximately 64% of our year-over-year volume growth.

Speaker #2: Home enrollment for Zio services in the US remained consistent from prior quarters at approximately 23% of volume in the first quarter. Moving down the P&L, gross margin in the first quarter was 70.9%, an increase of 210 basis points year-over-year.

Speaker #2: This sustainable improvement was driven by continued operational efficiencies including manufacturing automation and workflow optimization as well as scale benefits from higher volumes. First quarter 2026 adjusted operating expenses were $153.5 million compared to $140.4 million in the prior year period and increase of 9.3% year-over-year primarily driven by an increase in volume-related costs to serve litigation-related expenses and investments to drive future revenue growth.

Daniel Wilson: Q1 2026 adjusted operating expenses were $153.5 million compared to $140.4 million in the prior year period, an increase of 9.3% year over year, primarily driven by an increase in volume-related costs to serve, litigation-related expenses, and investments to drive future revenue growth. We invested purposefully in the business to fuel near, mid, and long-term growth while delivering strong operating leverage with revenue growing meaningfully faster than operating expenses. On the bottom line, GAAP net loss for Q1 was $13.9 million or net loss of $0.43 per diluted share, compared to a GAAP net loss of $30.7 million or net loss of $0.97 per diluted share in Q1 2025.

Dan Wilson: Q1 2026 adjusted operating expenses were $153.5 million compared to $140.4 million in the prior year period, an increase of 9.3% year over year, primarily driven by an increase in volume-related costs to serve, litigation-related expenses, and investments to drive future revenue growth. We invested purposefully in the business to fuel near, mid, and long-term growth while delivering strong operating leverage with revenue growing meaningfully faster than operating expenses. On the bottom line, GAAP net loss for Q1 was $13.9 million or net loss of $0.43 per diluted share, compared to a GAAP net loss of $30.7 million or net loss of $0.97 per diluted share in Q1 2025.

Speaker #2: We invested purposefully in the business to fuel near-, mid-, and long-term growth, while delivering strong operating leverage, with revenue growing meaningfully faster than operating expenses.

Speaker #2: On the bottom line, gap net loss for the first quarter was 13.9 million or net loss of $43 per diluted share compared to a gap net loss of $30.7 million or net loss of $97 per diluted share in the first quarter of 2025.

Speaker #2: Adjusted net loss for the first quarter was $11.3 million or a net loss of $35 per diluted share compared to an adjusted net loss of $30.3 million or a net loss of $95 per diluted share in the first quarter of 2025.

Daniel Wilson: Adjusted net loss for Q1 was $11.3 million or a net loss of $0.35 per diluted share, compared to an adjusted net loss of $30.3 million or a net loss of $0.95 per diluted share in Q1 2025. Adjusted EBITDA for Q1 was $14.1 million or 7.1% of revenue, representing an 880 basis point improvement year-over-year and a significant improvement in profitability, demonstrative of the operating leverage inherent in our business. Free cash flow during Q1 was -$33 million, in line with normal seasonality attributable to annual compensation payments and working capital seasonality.

Dan Wilson: Adjusted net loss for Q1 was $11.3 million or a net loss of $0.35 per diluted share, compared to an adjusted net loss of $30.3 million or a net loss of $0.95 per diluted share in Q1 2025. Adjusted EBITDA for Q1 was $14.1 million or 7.1% of revenue, representing an 880 basis point improvement year-over-year and a significant improvement in profitability, demonstrative of the operating leverage inherent in our business. Free cash flow during Q1 was -$33 million, in line with normal seasonality attributable to annual compensation payments and working capital seasonality.

Speaker #2: Adjusted EBITDA for the first quarter was 14.1 million or $7.1% of revenue representing an $880 basis point improvement year-over-year and a significant improvement in profitability demonstrative of the operating leverage inherent in our business.

Speaker #2: Free cash flow during the first quarter was -33 million in line with normal seasonality attributable to annual compensation payments and working capital seasonality. We ended the quarter with $549.6 million in cash, cash equivalents, and marketable securities a strong cash position that provides us with substantial flexibility to support future growth initiatives.

Daniel Wilson: We ended the quarter with $549.6 million in cash equivalents, and marketable securities, a strong cash position that provides us with substantial flexibility to support future growth initiatives. Looking ahead, we are raising full year 2026 revenue guidance to $875 million to $885 million, representing 17% to 18% year-over-year growth. This outlook reflects sustained demand across our core business while maintaining a disciplined approach to forecasting newer and emerging channels. On a full year basis, we continue to expect pricing to be approximately flat overall to 2025, with revenue growth driven by continued volume growth across core Zio monitor, Zio AT, innovative channels, and international.

Dan Wilson: We ended the quarter with $549.6 million in cash equivalents, and marketable securities, a strong cash position that provides us with substantial flexibility to support future growth initiatives. Looking ahead, we are raising full year 2026 revenue guidance to $875 million to $885 million, representing 17% to 18% year-over-year growth. This outlook reflects sustained demand across our core business while maintaining a disciplined approach to forecasting newer and emerging channels. On a full year basis, we continue to expect pricing to be approximately flat overall to 2025, with revenue growth driven by continued volume growth across core Zio monitor, Zio AT, innovative channels, and international.

Speaker #2: Looking ahead, we are raising full-year 2026 revenue guidance to $875 million to $885 million, representing 17% to 18% year-over-year growth. This outlook reflects sustained demand across our core business, while maintaining a disciplined approach to forecasting newer and emerging channels.

Speaker #2: On a full-year basis, we continue to expect pricing to be approximately flat overall to 2025 with revenue growth driven by continued volume growth across core Zero Monitor, Zero AT, innovative channels, and international.

Speaker #2: In the second quarter of 2026, we anticipate revenue to be in the range of $218 million to $220 million, consistent with typical revenue seasonality.

Daniel Wilson: In Q2 2026, we anticipate revenue to be in the range of $218 to 220 million, consistent with typical revenue seasonality. For gross margin, we expect the clinical operations and manufacturing efficiencies we've driven will continue to incrementally improve our gross margin profile for the full year 2026. We believe that these sustainable improvements will continue to lower our cost to serve as we leverage our fixed cost infrastructure over a higher volume of patients over time and introduce new artificial intelligence and workflow tools. Regarding the current geopolitical situation, we have cost containment initiatives in place and do not expect a material impact to gross margin.

Dan Wilson: In Q2 2026, we anticipate revenue to be in the range of $218 to 220 million, consistent with typical revenue seasonality. For gross margin, we expect the clinical operations and manufacturing efficiencies we've driven will continue to incrementally improve our gross margin profile for the full year 2026. We believe that these sustainable improvements will continue to lower our cost to serve as we leverage our fixed cost infrastructure over a higher volume of patients over time and introduce new artificial intelligence and workflow tools. Regarding the current geopolitical situation, we have cost containment initiatives in place and do not expect a material impact to gross margin.

Speaker #2: For gross margin, we expect the clinical operations and manufacturing efficiencies we've driven will continue to incrementally improve our gross margin profile for the full year 2026.

Speaker #2: We believe that these sustainable improvements will continue to lower our cost to serve as we leverage our fixed cost infrastructure over a higher volume of patients over time and introduce new artificial intelligence and workflow tools.

Speaker #2: Regarding the current geopolitical situation, we have cost containment initiatives in place and do not expect a material impact to gross margin. From a profitability standpoint, we are raising our full-year 2026 adjusted EBITDA margin guidance to 12% to 13%, reflecting increased operating leverage and a balanced approach to investing in our key priorities, including product innovation, commercial initiatives, international expansion, and platform capabilities.

Daniel Wilson: From a profitability standpoint, we are raising our full year 2026 adjusted EBITDA margin guidance to 12% to 13%, reflecting increased operating leverage and a balanced approach to investing in our key priorities, including product innovation, commercial initiatives, international expansion, and platform capabilities. For Q2 2026, we anticipate adjusted EBITDA margin to be between 11.5% and 12.5%. We continue to expect full year free cash flow in 2026 to grow versus 2025, with free cash flow more heavily weighted in H2 of the year due to normal operating seasonality. In summary, our Q1 results demonstrate the resilience of our business model and the progress we are making in scaling our platform with disciplined investment.

Dan Wilson: From a profitability standpoint, we are raising our full year 2026 adjusted EBITDA margin guidance to 12% to 13%, reflecting increased operating leverage and a balanced approach to investing in our key priorities, including product innovation, commercial initiatives, international expansion, and platform capabilities. For Q2 2026, we anticipate adjusted EBITDA margin to be between 11.5% and 12.5%. We continue to expect full year free cash flow in 2026 to grow versus 2025, with free cash flow more heavily weighted in H2 of the year due to normal operating seasonality. In summary, our Q1 results demonstrate the resilience of our business model and the progress we are making in scaling our platform with disciplined investment.

Speaker #2: For the second quarter 2026, we anticipate adjusted EBITDA margin to be between $11.5 and $12.5%. We continue to expect full-year free cash flow in 2026 to grow versus 2025 with free cash flow more heavily weighted in the second half of the year due to normal operating seasonality.

Speaker #2: In summary, our first quarter results demonstrate the resilience of our business model and the progress we are making in scaling our platform with disciplined investment.

Speaker #2: We are seeing increasing validation of the value our services deliver, particularly in their ability to help lower downstream healthcare utilization. This dynamic reinforces demand for our solutions, especially as healthcare systems remain focused on efficiency and cost-effective care delivery.

Daniel Wilson: We are seeing increasing validation of the value our services deliver, particularly in their ability to help lower downstream healthcare utilization. This dynamic reinforces demand for our solutions, especially as healthcare systems remain focused on efficiency and cost-effective care delivery. We similarly remain focused on growing the number of patients we serve while operating efficiently and investing in the opportunities we believe will drive sustainable growth in our business. I will now turn the call back to Quentin for closing remarks.

Dan Wilson: We are seeing increasing validation of the value our services deliver, particularly in their ability to help lower downstream healthcare utilization. This dynamic reinforces demand for our solutions, especially as healthcare systems remain focused on efficiency and cost-effective care delivery. We similarly remain focused on growing the number of patients we serve while operating efficiently and investing in the opportunities we believe will drive sustainable growth in our business. I will now turn the call back to Quentin for closing remarks.

Speaker #2: We similarly remain focused on growing the number of patients we serve while operating efficiently and investing in the opportunities we believe will drive sustainable growth in our business.

Speaker #2: I will now turn the call back to Quentin for closing remarks.

Speaker #1: In the first quarter, we were pleased with our start to the year with strong top-line growth, continued margin expansion, and ongoing investments in the capabilities that support durable long-term value creation.

Quentin Blackford: In Q1, we were pleased with our start to the year with strong top-line growth, continued margin expansion, and ongoing investments in the capabilities that support durable long-term value creation. As we enter iRhythm's twentieth year, our performance reflects the strength of our platform, the discipline of our execution, and the relevance of the problem we are solving. Arrhythmias remain a significant clinical and economic challenge. They are often episodic, asymptomatic, or misattributed to other conditions and are often missed by short-duration diagnostics. Delayed or misdiagnosis can lead to worse patient outcomes and avoidable cost across the healthcare system. iRhythm sits at the intersection of several powerful trends: an aging population, increasing prevalence of arrhythmias, growing cost pressure, cardiology capacity constraints, and the shift towards value-based proactive care.

Speaker #1: As we enter iRhythm's 20th year, our performance reflects the strength of our platform, the discipline of our execution, and the relevance of the problem we are solving arrhythmias remain a significant clinical and economic challenge.

Speaker #1: They are often episodic, asymptomatic, or misattributed to other conditions and are often missed by short-duration diagnostics. Delayed or misdiagnosis can lead to worse patient outcomes and avoidable cost across the healthcare system.

Speaker #1: iRhythm sits at the intersection of several powerful trends: an aging population increasing prevalence of arrhythmias, growing cost pressure, cardiology capacity constraints, and the shift towards value-based proactive care.

Speaker #1: We believe the market opportunity ahead is significantly larger than it has historically been recognized and that our platform positions us well to lead that expansion to create long-term value for patients, physicians, providers, payers, and shareholders.

Quentin Blackford: We believe the market opportunity ahead is significantly larger than it has historically been recognized and that our platform positions us well to lead that expansion to create long-term value for patients, physicians, providers, payers, and shareholders. Our focus remains on disciplined execution. We are driving volume-led growth by expanding access through primary care and integrated networks, advancing our platform through AI and workflow innovation, and investing selectively where we see clear clinical and economic return. Looking ahead, the opportunity is not only about expanding the market, it's about strengthening our platform advantage. Our growing clinical data set, AI capabilities, and deep body of clinical validation increasingly differentiate iRhythm. As healthcare increasingly prioritizes accuracy, evidence, and efficiency, we believe validated data-driven diagnostics will be increasingly important in improving outcomes and lowering system cost, attractively positioning iRhythm to create long-term value for all stakeholders.

Speaker #1: Our focus remains on disciplined execution. We are driving volume-led growth by expanding access through primary care and integrated networks, advancing our platform through AI and workflow innovation, and investing selectively where we see clear clinical and economic return.

Speaker #1: Looking ahead, the opportunity is not only about expanding the market; it's about strengthening our platform advantage. Our growing clinical dataset, AI capabilities, and deep body of clinical validation increasingly differentiate iRhythm.

Speaker #1: As healthcare increasingly prioritizes accuracy, evidence, and efficiency, we believe validated data-driven diagnostics will be increasingly important in improving outcomes and lowering system cost, attractively positioning iRhythm to create long-term value for all stakeholders.

Speaker #1: Before we move to Q&A, I want to briefly touch on a couple of items that are often top of mind. With respect to the DOJ, we have not received any requests for additional information since the CID issued in December and continue to cooperate fully.

Quentin Blackford: Before we move to Q&A, I want to briefly touch on a couple of items that are often top of mind. With respect to the DOJ, we have not received any request for additional information since the CID issued in December and continue to cooperate fully. Separately, regarding finalization of the local coverage determination, we have not yet heard back from the MACs. As expected, timing remains uncertain given the current official silent period. With that, we are now happy to take your questions.

Speaker #1: Separately, regarding finalization of the local coverage determination, we have not yet heard back from the MACs. As expected, timing remains uncertain given the current official silent period.

Speaker #1: With that, we're now happy to take your questions.

Speaker #3: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press *1 on your telephone keypad.

Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question is from Allen Gong with J.P. Morgan. Please go ahead.

Speaker #3: To withdraw your question, press *1 again. Please pick up your handset when asking a question. If you are a muted locally, please remember to unmute your device.

Speaker #3: Please stand by while we compile the Q&A roster. Your first question is from Alan Gon with GP Morgan. Please go ahead.

Speaker #4: Hi, thanks for the question. Just the first one is going to be on the guide. You're coming off a quarter where I think you came in about $5 million or so above consensus.

Allen Gong: Hi. Thanks for the question. Just the first one is going to be on the guide. You're coming off of a quarter where, you know, I think you came in $5 million or so above consensus. You raised the full year by that amount, but then the rest of the year implies, you know, a bit of a deceleration from there. Help me understand how much of that is conservatism, how much of that is informed by what you're seeing so far in April.

Speaker #4: You raised the full year by that amount, but then the rest of the year implies a bit of a deceleration. From there—so, help me understand how much of that is conservatism, and how much of that is informed by what you're seeing so far in April?

Speaker #5: Yeah, thanks, Alan, for the question. I guess maybe to start, as always, we don't like to get ahead of ourselves. It is early in the year.

Daniel Wilson: Yeah. Thanks, Alan, for the question. I guess maybe to start, you know, as always, we don't like to get ahead of ourselves. It is early in the year. We want to be thoughtful around how we set up the year. Certainly a great start to the year. In the quarter, we talked about momentum kind of across, you know, across the different business. Really encouraged about what we're seeing and the trends that we expect to see for the remainder of the year. I would point, you know, the back part of the year, in particular, starts to have some pretty difficult comps given the performance that we had in 2025. Again, feel really good about what we're seeing in the business.

Dan Wilson: Yeah. Thanks, Alan, for the question. I guess maybe to start, you know, as always, we don't like to get ahead of ourselves. It is early in the year. We want to be thoughtful around how we set up the year. Certainly a great start to the year. In the quarter, we talked about momentum kind of across, you know, across the different business. Really encouraged about what we're seeing and the trends that we expect to see for the remainder of the year. I would point, you know, the back part of the year, in particular, starts to have some pretty difficult comps given the performance that we had in 2025. Again, feel really good about what we're seeing in the business.

Speaker #5: We want to be thoughtful around how we set up the year. Certainly, a great start to the year, in the quarter, we talked about momentum, kind of across the different business.

Speaker #5: So, really encouraged about what we're seeing and the trends that we expect to see for the remainder of the year. I would point out the back part of the year in particular starts to have some pretty difficult comps, given the performance that we had in 2025.

Speaker #5: But again, feel really good about what we're seeing in the business. There's certainly potential upside that we're not going to bake into the guide given it's the early part of the year, and that's a similar approach that we've taken previously.

Daniel Wilson: There's certainly potential upside that we're not gonna bake into the guide given, you know, the early part of the year, and that's a similar approach that we've taken previously. If those play through, that's great, but there's a reason we, you know, leave them outside the guide to start. Like what we're seeing in the business, a lot of, you know, good contribution across the different growth drivers in the business.

Dan Wilson: There's certainly potential upside that we're not gonna bake into the guide given, you know, the early part of the year, and that's a similar approach that we've taken previously. If those play through, that's great, but there's a reason we, you know, leave them outside the guide to start. Like what we're seeing in the business, a lot of, you know, good contribution across the different growth drivers in the business.

Speaker #5: And if those play through, that's great. But there's a reason we leave them outside the guide to start. But like what we're seeing in the business, a lot of good contribution across the different growth drivers in the business.

Speaker #1: Alan, I'll just jump in. This is Quentin. In terms of what we're seeing in April, we're encouraged by what we're seeing there—good results.

Quentin Blackford: Allen, I'll just jump in. This is Quentin. In terms of what we're seeing in April, you know, we're encouraged by what we're seeing there. Good, good results. We feel good about that. Obviously, we can contemplate that in the reiteration of the guide and the increase in the guide as well. One last point I'd just make with respect to what Dan had commented on and your point on the slower growth rates in Q2, Q3, and Q4. When you look at things on a stacked growth comp basis, the momentum is very, very strong. Despite, you know, the tougher comps we're running into year-over-year in the next, you know, few quarters here, which we contemplate, the overall momentum in the business continues to be really strong.

Speaker #1: So we feel good about that. Obviously, we can contemplate that in the reiteration of the guide and the increase in the guide as well.

Speaker #1: One last point I just make with respect to what Dan had commented on and your point on the slower growth rates in Q2, 3, and 4.

Speaker #1: When you look at things on a stacked growth comp basis, the momentum is very, very strong. And so despite the tougher comps we're running into year over year in the next few quarters here, which we contemplate, the overall momentum in the business continues to be really strong.

Speaker #4: Got it. And then, just as a follow-up, I think one of the pressures on the broader medtech space recently has been a fear around AI, looking at your business.

Allen Gong: Got it. Just as a follow-up, I think one of the, you know, pressures on the broader MedTech space recently has been a fear around AI. You know, looking at your business, it does seem as though you might be a little bit more exposed that even more so than other MedTech companies. You know, you're talking about this new algorithm that you're planning to launch. When we think about potential competition from outside of the traditional MedTech sphere, how, you know, how concerned are you about that? How do you position yourself to better compete against those kinds of entrants?

Speaker #4: It does seem as though you might be a little bit more exposed than even more so than other medtech companies. You're talking about this new algorithm that you're planning to launch.

Speaker #4: But when we think about potential competition from outside of the traditional medtech sphere, how concerned are you about that? And how do you position yourself to better compete against those kinds of entrants?

Speaker #5: Yeah. It's a fair question. It's one that we get a lot. It's one that I feel very good about in terms of our defensibility and the moat that we've built in the business.

Quentin Blackford: It's a fair question. It's one that we get a lot. It's one that I feel very good about in terms of our defensibility and the moat that we've built in the business. I think, you know, you have to keep in mind, we're not simply just offering a software capability or an algorithm. It's much more than that. It's running an end-to-end program for these customers of ours around cardiac monitoring and ultimately arrhythmia diagnosis, which includes, for sure, AI capabilities that we've now got 20 years of experience behind us, a 3 billion hour data set that's curated ECG data that we can build off of.

Speaker #5: I think you have to keep in mind we're not simply just offering a software capability or an algorithm; it's much more than that. It's running an end-to-end program for these customers of ours around cardiac monitoring and ultimately arrhythmia diagnosis.

Speaker #5: Which includes, for sure, AI capabilities that we've now got 20 years of experience behind us, a $3 billion dataset that's curated ECG data that we can build off of.

Quentin Blackford: Frankly, that's been part of what's enabled us to move into spaces like predictive capabilities, and we're excited to be launching our first commercial predictive AI, you know, collaboration that I mentioned in prepared remarks. It's also what's enabled us to advance our next-gen algorithm that will reduce our technician review time by, you know, nearly half over the next several years, which is gonna be a meaningful financial contributor. It's the power of that data that allows us to move quickly in those spaces, but also the broader end-to-end program that we enable these customers to be able to run without worry, whether that's a hardware device on the front end, like our patch that has incredible patient compliance. You know, 98% of our folks will wear the patch up to 14 days.

Speaker #5: And frankly, that's been part of what's enabled us to move into spaces like predictive capabilities. And we're excited to be launching our first commercial predictive AI collaboration that I mentioned in Prepared Remarks.

Speaker #5: It's also what's enabled us to advance our next-gen algorithm that will reduce our technician review time by nearly half over the next several years, which is going to be a meaningful financial contributor but it's the power of that data that allows us to move quickly in those spaces but also the broader end-to-end program that we enable these customers to be able to run without worry, whether that's a hardware device on the front end like our patch that has incredible patient compliance, 98% of our folks will wear the patch up to 14 days.

Speaker #5: We know duration of monitoring is important. So getting a longer duration wear period is important, which is more than just an algorithm. That's a form factor and a hardware component.

Quentin Blackford: We know duration of monitoring is important, getting a longer duration, wear period is important, which is, you know, more than just an algorithm. That's a form factor and a hardware component. There's the intake process of receiving these things, downgrading the data or downloading the data, sorry, coupling it with the patient context that's provided with it. There's many times that you look at feedback and there might not be any arrhythmia in the ECG data, but the patient feedback in the diary or the electronic, digital, you know, facing app is meaningful. The physician wants to know that. You're not gonna capture all that in just an algorithm alone.

Speaker #5: There's the intake process of receiving these things, downgrading the data—or downloading the data, sorry—coupling it with the patient context that's provided with it.

Speaker #5: There's many times that you look at feedback, and there might not be any arrhythmia in the ECG data, but the patient feedback in the diary or the electronic digital-facing app is meaningful.

Speaker #5: The physician wants to know that. You're not going to capture all that in just an algorithm alone. And then on top of that, it's got to be clinically validated and upheld to the FDA scrutiny from a quality perspective or you could go on to reimbursement.

Quentin Blackford: On top of that, it's got to be clinically validated and upheld to the FDA scrutiny from a quality perspective, or you could go on to reimbursement. You know, there's a massive market access component to ensuring that your solution is reimbursed, and that takes tremendous effort. I think we're up to 93% of all lives in the US are now covered with respect to access to Zio. That takes time and effort with other solutions. There's a lot that goes into it. It's not just simply an AI capability. It's an end-to-end program that's being run that we have mastered over the years, and we have a market-leading position for a reason, and we will continue to defend that well.

Speaker #5: There's a massive market access component to ensuring that your solution is reimbursed and that takes tremendous effort. I think we're up to 93% of all lives in the US are now covered with respect to access to Xeo.

Speaker #5: That takes time and effort with other solutions. So there's a lot that goes into it. It's not just simply an AI capability. It's an end-to-end program that's being run.

Speaker #5: That we have mastered over the years, and we have a market-leading position for a reason, and we will continue to defend that well. But I think the platform we've built ultimately gives us the ability to drop incremental AI capabilities on and through the large integration platform that we have with the vast majority of our customers enable them to have access to some of these capabilities seamlessly on their side.

Quentin Blackford: I think the platform we've built ultimately gives us the ability to drop incremental AI capabilities on and through the large integration platform that we have with the vast majority of our customers, enable them to have access to some of these capabilities seamlessly on their side. They're not having to integrate multiple times over. They have a single point of integration with iRhythm. We can bring to them several of these solutions and give them very quick, easy access. I'm excited by the position we have. We'll continue to move quickly, and we're bullish on the position we have here.

Speaker #5: They're not having to integrate multiple times over. They have a single point of integration with iRhythm. We can bring to them several of these solutions and give them very quick, easy access.

Speaker #5: So I'm excited by the position we have. We'll continue to move quickly. And we're bullish on the position we have here.

Speaker #6: Your next question is from Stephanie Elghazi, with B of A. Please go ahead.

Operator: Your next question is from Stephanie Zhadkevich with BofA. Please go ahead.

Speaker #7: Hey, thanks for taking the question. I wanted to ask about the EBITDA margin— in the quarter, it was pretty strong at 7%, which was better than your guide of 3% to 4%.

Stephanie Zhadkevich: Hey, thanks for taking the question. Wanted to ask on the EBITDA margin in the quarter was pretty strong at 7% and better than your guide of 3% to 4%. Just curious what drove that outperformance. You raised the guide slightly to 12% to 13%. Just curious why not raise more. Maybe it's just early in the year, but curious your thinking on that.

Stephanie Elghazi: Hey, thanks for taking the question. Wanted to ask on the EBITDA margin in the quarter was pretty strong at 7% and better than your guide of 3% to 4%. Just curious what drove that outperformance. You raised the guide slightly to 12% to 13%. Just curious why not raise more. Maybe it's just early in the year, but curious your thinking on that.

Speaker #7: So just curious what drove that outperformance. And then you raised the guide slightly to 12 to 13%. I'm just curious why not raise more.

Speaker #7: Maybe it's just early in the year, but yeah, curious your thinking on that.

Speaker #5: Yeah. Thanks, Stephanie, for the question. Maybe the second part of your question first there. Yes, we are raising the guide essentially by the magnitude of the beat in the quarter again early in the year.

Daniel Wilson: Yeah. Thanks, Stephanie, for the question. Maybe the second part of your question first there. Yes, we are raising the guide essentially by the magnitude of the beat in the quarter. Again, early in the year, you know, don't wanna get ahead of ourselves, but certainly seeing the profitability flow through nicely in the business and saw a nice result there in the quarter. Would just comment, you know, really continued strong execution across our teams. We've seen gross margin continue to step up nicely. A lot of efficiencies being driven within our clinical operations team, our manufacturing teams and the automation that we've implemented.

Dan Wilson: Yeah. Thanks, Stephanie, for the question. Maybe the second part of your question first there. Yes, we are raising the guide essentially by the magnitude of the beat in the quarter. Again, early in the year, you know, don't wanna get ahead of ourselves, but certainly seeing the profitability flow through nicely in the business and saw a nice result there in the quarter. Would just comment, you know, really continued strong execution across our teams. We've seen gross margin continue to step up nicely. A lot of efficiencies being driven within our clinical operations team, our manufacturing teams and the automation that we've implemented.

Speaker #5: Don't want to get ahead of the profitability flow through nicely in the business and saw a nice result there in the quarter. Would just comment really continued strong execution across our teams.

Speaker #5: We've seen gross margin continue to step up nicely a lot of efficiencies being driven within our clinical operations team, our manufacturing teams, and the automation that we've implemented.

Speaker #5: Certainly continued opportunity there as we leverage our scale, leverage technology, our next-generation algorithm as we mentioned and have a nice roadmap there to continue to drive efficiencies and operating leverage.

Daniel Wilson: Certainly continued opportunity there as we leverage our scale, leverage technology, our next generation algorithm, as we mentioned, and have a nice roadmap there to continue to drive efficiencies and operating leverage. Below gross margin, I'd say similar, you know, efficiencies and automation. Maybe would just call out some of the maybe more underappreciated aspects of our business that can drive nice operating leverage. You know, we've talked about innovative channel, the one-to-many selling model that is present in that channel, that has, you know, real operating leverage that's playing through. You think about our land and expand model as we open an account and then expand into primary care and other prescriber bases, we can do that, you know, really, really efficiently. Related to that, EHR integration.

Dan Wilson: Certainly continued opportunity there as we leverage our scale, leverage technology, our next generation algorithm, as we mentioned, and have a nice roadmap there to continue to drive efficiencies and operating leverage. Below gross margin, I'd say similar, you know, efficiencies and automation. Maybe would just call out some of the maybe more underappreciated aspects of our business that can drive nice operating leverage. You know, we've talked about innovative channel, the one-to-many selling model that is present in that channel, that has, you know, real operating leverage that's playing through. You think about our land and expand model as we open an account and then expand into primary care and other prescriber bases, we can do that, you know, really, really efficiently. Related to that, EHR integration.

Speaker #5: Below gross margin, I'd say similar efficiencies and automation. And then maybe we'll just call out some of the maybe more underappreciated aspects of our business that can drive nice operating leverage.

Speaker #5: We've talked about innovative channel, the one-to-many selling model. That is present in that channel and that has real operating leverage that's playing through. You think about our land and expand model.

Speaker #5: As we open an account and then expand in a primary care and other prescriber bases, and we can do that really, really efficiently. Related to that EHR integration, integration drives operating leverage.

Daniel Wilson: You know, integration drives operating leverage on an account level basis and really allows us to expand prescribers in a really efficient way. Certainly within G&A, we've been hard at work there, very disciplined, and a lot of opportunities to continue to drive leverage there. Really excited about what we've driven to over the last couple of years, but see a lot of opportunity in front of us to continue to drive profitability expansion.

Dan Wilson: You know, integration drives operating leverage on an account level basis and really allows us to expand prescribers in a really efficient way. Certainly within G&A, we've been hard at work there, very disciplined, and a lot of opportunities to continue to drive leverage there. Really excited about what we've driven to over the last couple of years, but see a lot of opportunity in front of us to continue to drive profitability expansion.

Speaker #5: On an account-level basis and really allows us to expand prescribers in a really efficient way. And then certainly within GNA, we've been hard at work there very disciplined and a lot of opportunities to continue to drive leverage there.

Speaker #5: So really excited about what we've driven to over the last couple of years, but see a lot of opportunity in front of us to continue to drive profitability expansion.

Speaker #6: Thank you. And then just wanted to follow up on the next-gen algorithm. I think that was a new positive update. And you mentioned some of the efficiency benefits it can bring.

Stephanie Zhadkevich: Thank you. Just wanted to follow up on the next gen algorithm. I think that was a new positive update, and you mentioned some of the efficiency benefits it can bring. Was wondering if anything else you can share on the features of this next gen algo. Just to confirm, you said it is a separate filing from MCT, but submitted at a similar time. Could we be expecting FDA approval in the coming months? What is the plan for rolling that out once you get approval? Thank you.

Stephanie Elghazi: Thank you. Just wanted to follow up on the next gen algorithm. I think that was a new positive update, and you mentioned some of the efficiency benefits it can bring. Was wondering if anything else you can share on the features of this next gen algo. Just to confirm, you said it is a separate filing from MCT, but submitted at a similar time. Could we be expecting FDA approval in the coming months? What is the plan for rolling that out once you get approval? Thank you.

Speaker #6: So I was wondering if there’s anything else you can share on the features of this next-gen algo. And then, just to confirm, you said it's a separate filing from MCT, but submitted at a similar time.

Speaker #6: So could we be expecting FDA approval in the coming months? And then what's the plan for rolling that out once you get approval? Thank you.

Speaker #5: Yeah, Stephanie, this is Quentin. In terms of the financial lever there's probably not a larger financial lever that we have in the business, quite honestly, than this next-generation algorithm when it gets implemented.

Quentin Blackford: Yeah. Stephanie, this is Quentin. You know, in terms of the financial lever, there's probably not a larger financial lever that we have in the business, quite honestly, than this next generation algorithm when it gets implemented. We're excited by what that will bring. You know, our view is it has the opportunity to cut review time by nearly half, if not more over time, which is gonna allow us to scale very, very efficiently into the future. You know, as we do some of the math around it, over the next, you know, 5 years or so, it's well north of $100 million of value on a cumulative basis that we expect to be delivered from this.

Speaker #5: And we're excited by what that will bring. Our view is it has the opportunity to cut review time by nearly half, if not more over time, which is going to allow us to scale very, very efficiently into the future.

Speaker #5: And so as we do some of the math around it over the next five years or so, it's well north of $100 million of value on a cumulative basis that we expect to be delivered from this.

Speaker #5: So this is a meaningful lever for us that we're excited to get into the company and start to realize the benefit from it. To your point, we did submit it last year.

Quentin Blackford: This is a meaningful lever for us that we're excited to get into the company and start to realize the benefit from it. To your point, we did submit it last year alongside MCT. It continues to run, you know, independent and on its own timeline. We would expect approval later this year. We'll be sure to keep you updated when that approval comes. In terms of implementing it, we will implement it alongside MCT when MCT is approved and implemented in H1 2027. There's some work from the development teams to integrate that algorithm onto the production side. We will team that up with the MCT launch as well and keep those coupled. That's how we're thinking about it.

Speaker #5: Alongside MCT, it continues to run independent and on its own timeline. We would expect approval later this year. We'll be sure to keep you updated when that approval comes.

Speaker #5: In terms of implementing it, we will implement it alongside MCT when MCT is approved and implemented in the first half of '27. So there's some work from the development teams to integrate that algorithm onto the production side.

Speaker #5: We will team that up with the MCT launch as well and keep those coupled. So that's how we're thinking about it.

Speaker #6: Your next question is from Vijay Kumar with Evercore ISI. Please go ahead. We will move on to the next question. Your next question will be from Brandon Vasquez with William Blair.

Operator: Your next question is from Vijay Kumar with Evercore ISI. Please go ahead. We will move on to the next question. Your next question will be from Brandon Vazquez with William Blair. Please stand by while we look at this issue. Brandon Vazquez, your line is now open.

Speaker #6: Please stand by while we look at this issue. Brandon Vasquez, your line is now open.

Speaker #8: Hey, can you guys hear me?

[Analyst] (William Blair): Hey, can you guys hear me?

Speaker #5: Hey, we got you, Brandon.

Daniel Wilson: Hey, we got you, Brandon.

Dan Wilson: Hey, we got you, Brandon.

Speaker #4: Hey, Brandon.

Quentin Blackford: Hey, Brandon.

Speaker #8: Hey, hey guys, it's Max on for Brandon. You guys have a handful of innovative channel partners that have been with you for a few quarters now.

[Analyst] (William Blair): Hey. Hey, guys. It's Max on for Brandon. You know, you guys have a handful of innovative channel partners that have been with you for a few quarters now. Can you guys just touch on what you've learned from the more tenured relationships and how that's helping you guys as you approach some of the newer accounts?

Speaker #8: Can you guys just touch on what you've learned from the more tenured relationships and how that's helping you guys as you approach some of the newer accounts?

Speaker #5: Yeah. One of the things that's most encouraging with our innovative channel partners is that every single one of these partners who passed with us in 2025 is up and patching consistently in 2026.

Daniel Wilson: Yeah. You know, one of the things that's most encouraging with our innovative channel partners is that every single one of these partners who passed with us in 2025 is up and patching consistently in 2026. We're starting to see more consistency in that channel. Quite honestly, there continues to be lumpiness.

Quentin Blackford: Yeah. You know, one of the things that's most encouraging with our innovative channel partners is that every single one of these partners who passed with us in 2025 is up and patching consistently in 2026. We're starting to see more consistency in that channel. Quite honestly, there continues to be lumpiness. At that customer level, but overall, we're seeing more consistency in it. We're encouraged by that. We continue to sign up some new partners over the course of Q1. The pipeline's incredibly healthy as we head into Q2. Same with Q3. We're excited by what innovative channel partners will bring to us.

Speaker #5: So we're starting to see more consistency in that channel, quite honestly. There continues to be lumpiness at that customer in it. So we're encouraged by that.

Quentin Blackford: At that customer level, but overall, we're seeing more consistency in it. We're encouraged by that. We continue to sign up some new partners over the course of Q1. The pipeline's incredibly healthy as we head into Q2. Same with Q3. We're excited by what innovative channel partners will bring to us. We're starting to see a bit more consistency around it. We wanna see that continue to play out into the future before we start to get ahead of ourselves. We're starting to see what we anticipated we might in those areas. The other thing that's really encouraging with what we're seeing in that channel partner business is, you know, most of these customers start with us on the asymptomatic side or maybe better described as undiagnosed, unaware arrhythmia patients.

Speaker #5: We continue to sign up. So new partners over the course of Q1, the pipeline's incredibly healthy as we head into Q2. Same with Q3.

Speaker #5: So we’re excited by what innovative channel partners will bring to us. We’re starting to see a bit more consistency around it. We want to see that continue to play out into the future before we start to get ahead of ourselves.

Quentin Blackford: We're starting to see a bit more consistency around it. We wanna see that continue to play out into the future before we start to get ahead of ourselves. We're starting to see what we anticipated we might in those areas. The other thing that's really encouraging with what we're seeing in that channel partner business is, you know, most of these customers start with us on the asymptomatic side or maybe better described as undiagnosed, unaware arrhythmia patients.

Speaker #5: But we're starting to see what we anticipated we might in those areas. The other thing that's really encouraging with what we're seeing in that channel partner business is most of these customers start with us on the asymptomatic side or maybe better described as undiagnosed unaware arrhythmia patients.

Speaker #5: These are folks who generally have symptoms in their medical records. They're just not aware of them or they're being confused with other disease states like type 2 diabetes or COPD, CKD, sleep.

Quentin Blackford: These are folks who generally have symptoms in their medical records. They're just not aware of them or they're being confused with other disease states like type 2 diabetes or COPD, CKD, sleep. You go down the list. What's encouraging in what we're seeing with our innovative channel partners is that folks who started on the asymptomatic side are actually starting to use the device much more on the symptomatic side of their business as well. I think part of that comes back to the attributes of the Zio product itself. These folks are learning through their own real-world data that longer duration monitoring produces a higher diagnostic yield. It doesn't miss the arrhythmias.

Speaker #5: You go down the list. But what's encouraging and what we're seeing with our innovative channel partners is that folks who started on the asymptomatic side are actually starting to use the device much more on the symptomatic side of their business as well.

Speaker #5: I think part of that comes back to the attributes of the Zio product itself. And these folks are learning through their own real-world data that longer-duration monitoring produces a higher diagnostic yield.

Speaker #5: It doesn't miss the arrhythmias. And where in the past, maybe their symptomatic patients were using a traditional Holter short-duration sort of monitor, they're missing them.

Quentin Blackford: Where in the past maybe their symptomatic patients were using a traditional Holter short duration sort of monitor, they're missing them, and they're realizing that, and they're starting to patch with longer duration. A lot of really interesting, encouraging trends coming out of that part of the business. We're very bullish on what that means for the future and opening up the $27 million, you know, patient TAM that we think is out there. It's still early, but we've been encouraged by what we're seeing.

Speaker #5: And they're realizing that and they're starting to patch with longer duration. So a lot of really interesting, encouraging trends coming out of that part of the business.

Speaker #5: We're very bullish on what that means for the future and opening up the 27 million patient TAM that we think is out there. But it's still early.

Speaker #5: But we've been encouraged by what we're seeing.

Speaker #8: That's helpful. And then, Quentin, you previously talked about how MCT can eventually drive share closer toward that 40 to 50 percent range over time.

[Analyst] (William Blair): That's helpful. Quentin, you previously talked about how, you know, MCT can eventually drive share closer towards that 40% to 50% range over time. How should we think about that market share ramp once MCT launches in the H1 2027? I understand AT continues to take share. Should we see at that MCT launch as a continuation of that trend? How does the next gen algorithm with MCT play into that?

Speaker #8: How should we think about that market share ramp once MCT launches in the first half of '27? I understand AT continues to take share.

Speaker #8: So should we see that MCT launch as a continuation of that trend? And then how does the next-gen algorithm with MCT play into that?

Speaker #5: Yeah, look, I think the right way to think about it is a continuation of the trend. We know that the new MCT product closes a lot of the competitive gaps that our current ZAT product has.

Quentin Blackford: Yeah, look, I think the right way to think about it is a continuation of the trend. We know that the new MCT product closes a lot of the competitive gaps that our current Zio AT product has, I think we're gonna wanna see that product play in the market before we're gonna guide to something different. I think the right way to think about it right now is a continuation of the trend that we see with Zio AT with a lot of excitement that it has the potential to do even better than that. That's probably not how we're gonna set expectations out of the gate. I would say, you know, with Zio AT's performance, we continue to demonstrate the ability to take share with an inferior product.

Speaker #5: But I think we're going to want to see that product play in the market before we're going to guide to something different. So I think the right way to think about it right now is a continuation of the trend that we see with Zio AT, with a lot of excitement that it has the potential to do even better than that.

Speaker #5: That's probably not how we're going to set expectations though out of the gate. I would say with Zio AT's performance, we continue to demonstrate the ability to take share with an inferior product.

Speaker #5: So we're just all the more excited by the ability to get MCT into the product or sorry, into the market. With respect to getting the algorithm into the product, it's going to drive meaningful gross margin benefit.

Quentin Blackford: We're just all the more excited by the ability to get MCT into the product or sorry, into the market. With respect to getting the algorithm into the product, it's gonna drive meaningful gross margin benefit. You know, one of the nice things about Zio MCT is it's coming on the same form factor that our Zio monitor is already on, which is gonna enable us to leverage a lot of the automation from a manufacturing perspective that we already have. We were already gonna see a nice benefit, you know, from AT into MCT. Now that we are able to drop the next gen algorithm onto that platform as well, it's gonna really enhance the gross margin profile. We're excited by that.

Speaker #5: So one of the nice things about Zio MCT is it's coming on the same form factor that our Zio monitor is already on, which is going to enable us to leverage a lot of the automation from a manufacturing perspective that we already have.

Speaker #5: So we were already going to see a nice benefit from AT into MCT now that we are able to drop the next-gen algorithm onto that platform as well.

Speaker #5: It's going to really enhance the gross margin profile. So we're excited by that. I would note though, that next-gen algorithm while we'll bring it to market alongside Zio MCT, it will apply across our entire platform.

Quentin Blackford: I would note though, that next gen algorithm, you know, while we'll bring it to market alongside Zio MCT, it will apply across our entire platform. It's gonna be immediately applied against Zio monitor and the large presence that we have there. We'll continue to run on the Zio AT product as we work through those inventory levels and migrate towards Zio MCT, and we'll also be on the MCT product. It's a complete platform application of that new algorithm that we're excited by.

Speaker #5: It's going to be immediately applied against Zio monitor and the large presence that we have there. We'll continue to run on the Zio AT product as we work through those inventory levels and migrate towards Zio MCT.

Speaker #5: And we'll also be on the MCT product. So it's a complete platform application of that new algorithm that we're excited by.

Speaker #8: That's helpful. Thanks for taking the question, guys.

[Analyst] (William Blair): That's helpful. Thanks for taking the question, guys.

Speaker #9: Your next question is from Vijay Kumar with Evercore ISI. Please go ahead.

Operator: Your next question is from Vijay Kumar with Evercore ISI. Please go ahead.

Speaker #10: Hi. Can you hear me clearly?

[Analyst] (Evercore ISI): Hi. Can you hear me clearly?

Speaker #5: We got you. Sorry, we missed your earlier.

Quentin Blackford: We got you. Sorry we missed you earlier.

Speaker #10: Great. No worries. This is Kevin on for Vijay. Just the one on the DOJ CID request. I know you mentioned there has not been any requests for additional information but can you just update us on what exactly they asked for so far and looking forward, do you have maybe a preliminary view on what the range of outcomes might be here from this request?

[Analyst] (Evercore ISI): Great. No worries. This is Kevin on for Vijay. Just the one on the DOJ CID request. I know you mentioned there has not been any request for additional information, but can you just update us on what exactly they asked for so far? Looking forward, do you have maybe a preliminary view on what the range of outcomes might be here from this request? Thanks.

Speaker #10: Thanks.

Speaker #5: Yeah, no, the request for information in that CID was very consistent with the original subpoena that dates back to 2023. Seems very clear that they're focused in and around the AT product line and really specific to dates back in the '17 to '21, '22 timeframe.

Quentin Blackford: The request for information in that CID was very consistent with the original subpoena that dates back to 2023. It seems very clear that they're focused in and around the AT product line, really specific to dates back in the 2017 to 2021, 2022 timeframe. That's what we can infer from the line of questions and the information request. To go beyond that would be hard for us to do. There's not much more clarity we can give. It just seems like for the breadth of their review and investigation, it's been focused in that area, tied into those timeframes. As we have more clarity, be happy to share it with you.

Speaker #5: That's what we can infer from the line of questions and the information request. So the go beyond that, it would be hard for us to do.

Speaker #5: There's not much more clarity we can give. It just seems like for the breadth of their review and investigation, it's been focused in that area.

Speaker #5: And tied into those timeframes. So as we have more clarity, I'd be happy to share it with you. Obviously, Zio AT was not a big part of our portfolio back in those early days.

Quentin Blackford: Obviously, Zio AT was not a big part of our portfolio back in those early days. It was, you know, newly launched and was growing over time. It's hard to size up any anything along those lines, though, and that's not something we would speculate on.

Speaker #5: It was newly launched and was growing over time. It's hard to size up anything along those lines though, and that's not something we would speculate on.

Speaker #9: A reminder to all analysts to please limit yourself to one question. Our next question will be from Nathan Traybeck with Wells Fargo. Please go ahead.

Operator: A reminder to all analysts to please limit yourself to one question. Our next question will be from Nathan Treybeck with Wells Fargo. Please go ahead.

Speaker #10: Great.

Quentin Blackford: Great.

Speaker #8: Hey, good afternoon. Are you beginning to see any benefit of flow-through from reconfirmations for charge-derived diagnoses? And are you anticipating any benefit in your guidance?

Nathan Treybeck: Hey, good afternoon. Are you beginning to see any benefit of flow-through from reconfirmations for chart-derived diagnoses? Are you anticipating any benefit in your guidance?

Speaker #5: We haven't contemplated anything in the guide Nathan in particular. We continue to believe that we're in a very good position relative to the focus around the charge-derived mentioned that has been made out there and the increased scrutiny around it.

Quentin Blackford: We haven't contemplated anything in the guide, Nathan, in particular. We continue to believe that we're in a very good position relative to the focus around the chart-derived mention that has been made out there and the increased scrutiny around it. From our perspective, you know, our partners consistently use Zio to get to a confirmed diagnosis, which is exactly what, you know, CMS is trying to get to, ensure that there's a real confirmed diagnosis versus just speculation off of chart-derived notes. We like the position. We haven't seen a change in behavior necessarily, but to be honest with you, most all of our channel partners are using the product to get to that confirmatory diagnosis, and that's what they've been using from the beginning of the relationship.

Speaker #5: From our perspective, our partners consistently use Zio to get to a confirmed diagnosis, which is exactly what CMS is trying to get to: ensuring that there's a real confirmed diagnosis versus just speculation off of chart review notes.

Speaker #5: And so we like the position. We haven't seen a change in behavior necessarily, but to be honest with you, most all of our channel partners are using the product to get to that confirmatory diagnosis.

Speaker #5: And that's what they've been using from the beginning of the relationship. So we'll continue to monitor it and watch it. We think this is a nice tailwind in the business.

Quentin Blackford: We'll continue to monitor it and watch it. We think this is a nice tailwind in the business and, you know, expect that's how it will play out. We haven't adjusted anything in guidance at this point for it.

Speaker #5: And expect that's how it will play out. But we haven't adjusted anything in guidance at this point for it.

Speaker #9: Your next question is from David Rescott with RW Baird. Please go ahead.

Operator: Your next question is from David Rescott with RW Baird. Please go ahead.

Speaker #8: Great. Thanks. And congrats on a good start to the year here. I wanted to ask about the sleep market. It sounds like there's some pilots that are ongoing.

David Rescott: Great. Thanks, and congrats on a good start to the year here. I wanted to ask about the sleep market. It sounds like there's some pilots that are ongoing. Would be curious to hear, maybe from our perspective, when we should expect to maybe hear something more on sleep, when we should be thinking about this potentially becoming some type of opportunity that you're more meaningfully moving into. When you think about the, you know, competitive offerings that are out there, you know, what value do you think iRhythm can bring to that market with not only a hardware component, but also just the broader service offering longer term? Thank you.

Speaker #8: But would be curious to hear maybe from our perspective, when we should expect to maybe hear something more on sleep, when we should be thinking about this potentially becoming some type of opportunity that you're more meaningfully moving into.

Speaker #8: And then when you think about the competitive offerings that are out there, what value do you think iRhythm can bring to that market with not only a hardware component, but also just the broader service offering longer term?

Speaker #8: Thank you.

Speaker #5: Yeah, look, I think you're going to hear us continue to talk about sleep over the course of the year, David. It's an important strategic opportunity for us and one that our pilots are validating to us as real.

Quentin Blackford: Yeah. Look, I think you're gonna hear us continue to talk about sleep over the course of the year, David. It's an important strategic, you know, opportunity for us and one that our pilots are validating to us as real. You know, in terms of meaningful contribution, we'll talk about that, you know, as we get out into 2027. I don't see it as being something that's gonna move the needle in a significant way just yet. As we get more confidence in it and lean into it, we'll keep you apprised of that, and we'll speak to it when that time comes. I do think that we have a real opportunity to disrupt this space.

Speaker #5: In terms of meaningful contribution, we'll talk about that as we get out into '27. I don't see it as being something that's going to move the needle in a significant way just yet.

Speaker #5: But as we get more confidence in it and lean into it, we'll keep you apprised of that. And we'll speak to it when that time comes.

Speaker #5: I do think that we have a real opportunity to disrupt this space. It's more than about simply a home sleep device, and it's more about an algorithm that can identify and detect sleep disease.

Quentin Blackford: It's more than about simply a home sleep device, and it's more about an algorithm that can identify and detect sleep disease. This is very similar to what we did with cardiac arrhythmias. We disrupted an entire marketplace by providing an easier end-to-end solution to identify, monitor, and diagnose these patients. Right now, sleep patients are being lost in their journey, whether it's, you know, getting referred from primary care onto cardiology, onto a sleep practice, to a sleep lab, to a home sleep test that, you know, they never receive or don't send back. The entire system is just very fractured and one that we believe we can bring a lot of organization to and make it as simple as when that physician wants to order a sleep test, it's as easy as hitting a button in our digital tool, Zio Suite.

Speaker #5: This is very similar to what we did with cardiac arrhythmias. We disrupted entire marketplace by providing an easier end-to-end solution to identify and monitor and diagnose these patients.

Speaker #5: And right now, sleep patients are being lost in their journey—whether it's getting referred from primary care onto cardiology, onto sleep practice, to a sleep lab, to a home sleep test that they never receive or don't send back.

Speaker #5: The entire system is just very fractured in one that we believe we can bring a lot of organization to and make it as simple as when that physician wants to order a sleep test, it's as easy as hitting a button in our digital tool, Zio Suite, we get a device to that patient, could either be in the clinician's office, it could be through home enrollment just like we do today with cardiac arrhythmias, they wear the device, we get the information back, we can provide a report right through an IDTF capability and provide that report right back through the digital tool to that physician where it ends up being incredibly seamless.

Quentin Blackford: We get a device to that patient. Could either be in the clinician's office, it could be through home enrollment, just like we do today with cardiac arrhythmias. They wear the device, we get the information back. We can provide a report right through an IDTF capability and provide that report right back through the digital tool to that physician, where it ends up being incredibly seamless and all that back-end effort is invisible to the physician. We think that is a real opportunity to disrupt in this space. We know from our market channel checks that our customers are prescribing home sleep tests already, or would be more than willing to prescribe home sleep tests.

Speaker #5: And all that backend effort is invisible to the physician. We think that is a real opportunity to disrupt in this space. We know from our market channel checks that our customers are prescribing home sleep tests already, or would be more than willing to prescribe home sleep tests.

Speaker #5: I think that as we continue to move further up the care pathway, as you see the proliferation of even GLP-1s into the marketplace to treat sleep disease, you're going to see more prescribing in primary care.

Quentin Blackford: I think that as we continue to move further up the care pathway, as you see the proliferation of even GLP-1s, you know, into the marketplace to treat sleep disease, you're gonna see more prescribing in primary care. We can make this very seamless and very easy for the physician. We're excited by that. I think it's much more than just a home sleep test itself. It's about the workflow efficiencies that we can create. I don't think there is a single competitor out there who's able to disrupt and provide an offering in the market like we can. There's nobody else who brings that end-to-end solution like we do today.

Speaker #5: We can make this very seamless and very easy for the physician. So we're excited by that. I think it's much more than just a home sleep test itself.

Speaker #5: It's about the workflow efficiencies that we can create and I don't think there is a single competitor out there who's able to disrupt and provide an offering in the market like we can.

Speaker #5: There's nobody else who brings that end-to-end solution like we do today. There's a lot of mom-and-pop one-off sleep practices or sleep IDTFs but nobody's integrated seamlessly in a workflow like we can be particularly through the large presence of system integrations that we already have I think there's a real opportunity to disrupt this.

Quentin Blackford: There's a lot of, you know, mom-and-pop, one-off sleep practices or sleep IDTFs. Nobody's integrated seamlessly in a workflow like we can be, particularly through the large presence of system integrations that we already have. I think there's a real opportunity to disrupt this.

Speaker #9: Your next question is from Marie Thibault with BPIG. Please go ahead.

Operator: Your next question is from Marie Thibault with BTIG. Please go ahead.

Speaker #10: Hi, this is Alex on for Marie. Congrats on the nice quarter. I just wanted to ask some questions on the international business. So you guys mentioned in a prepared remarks that you recently got an update to the reimbursement framework with a supplemental payment.

[Analyst] (BTIG): Hi, this is Alex on for Marie. Congrats on a nice quarter. I just wanted to ask some questions on the international business. You guys mentioned in the prepared remarks that you recently got an update to the reimbursement framework with a supplemental payment. I was just curious on if you could provide any more detail on that, and is there any more ongoing work to try to continue getting, like, the reimbursement rate further up there?

Speaker #10: I was just curious on if you could provide any more detail on that and is there any more ongoing work to try to continue getting the reimbursement rate further up there?

Speaker #5: Yeah, thanks, Alex, for the question. We did see in that specifically in Japan we did see a small increase in the reimbursement rate there.

Quentin Blackford: Yeah. Thanks, Alex, for the question. We did see in that specifically in Japan, we did see a small increase in the reimbursement rate there. It is still below what we think is ultimately the value that we are bringing to the market. We are still running the head-to-head study and collecting that data to ultimately secure more favorable reimbursement in that market. We will continue to work towards that. That's likely a, you know, 2027 event. We're, you know, looking to collect that data and ultimately get to more favorable reimbursement. Encouraging that we saw, you know, a bit of a step-up here recently. Again, don't believe that reflects the value that we're bringing into that market. We're gonna continue to pursue that premium reimbursement.

Speaker #5: It is still below what we think is ultimately the value that we are bringing to the market. And we are still running the head-to-head study and collecting that data to ultimately secure more favorable reimbursement in that market.

Speaker #5: We will continue to work towards that. That's likely a 2027 event but we're looking to collect that data and ultimately get to more favorable reimbursement.

Speaker #5: Encouraging that we saw a bit of a step up here recently but again, don't believe that reflects the value that we're bringing into that market and we're going to continue to pursue that premium reimbursement.

Speaker #9: Your next question is from Richard Neuwitter with Trust Securities. Please go ahead.

Operator: Your next question is from Richard Newitter with Truist Securities. Please go ahead.

Speaker #11: Hi, this is Felipe on for Rich. Just on the proposed LCD for ACM, if you could just help us understand if that was finalized today in its current state, what are your expectations for just potential impact or implications?

[Analyst] (Truist Securities): Hi, this is Philippe on for Rich. Just on the proposed LCD for ACM, if you could just help us understand if that was finalized today in its current state, what are your expectations for just potential impact or implications? Just second question up front, just on the electrophysiology opportunity, I guess can you help us understand like what inning of penetration you are in there, and maybe how does the MCT approval unlock patients you're maybe not getting to? Thanks for taking the questions.

Speaker #11: And just second question up front, just on the electrophysiology opportunity I guess, can you help us understand what anything of penetration you are in there and maybe how does the MCT approval unlock patients who are maybe not getting to?

Speaker #11: Thanks for taking the questions.

Speaker #5: I'll address the first one on the LCD. I'm not sure exactly follow the second question there. But I'll give it a shot. With respect to the LCD, to your, I guess, specific question of if implemented as written today, what would that impact be or what we would see?

Quentin Blackford: I'll address the first one on the LCD. I'm not sure I exactly follow the second question there, but I'll give it a shot. With respect to the LCD, to your, I guess, specific question of if implemented as written today, what, you know, would that impact be or what we would see? Well, the reality is that as it's written today, it would move just about everything into an MCT category, 'cause it's requiring continuous monitoring with, you know, 24-hour monitoring, I think is exactly what the language is in the LCD as currently worded. If that were the case, you're gonna be moving a significant amount of LTCM monitoring business into the MCT category, which would have a significant uplift from a revenue perspective on the company.

Speaker #5: Well, the reality is as it's written today, it would move just about everything into an MCT category. Because it's requiring continuous monitoring with 24-hour monitoring.

Speaker #5: I think it's exactly what the language is in the LCD as currently worded. If that were the case, you're going to be moving a significant amount of LTCM monitoring business into the MCT category, which would have a significant uplift from a revenue perspective on the company.

Quentin Blackford: Which I don't believe is probably the intention of what the three MACs who are putting that proposed language forward. We have engaged directly with the MACs. Nearly all of industry has engaged with the MACs. I think we're all pretty consistent in our recommendation with respect on how to clarify that language. We expect that we'll see that, you know, get revised in some sort in the final language that they put into that LCD. I think, you know, you look at the LCD as it's currently written, it would start to really confuse or even contradict some of what's in the national coverage decision that is out there, which that is not the intent of the LCDs.

Speaker #5: Which I don't believe is probably the intention of what the three MACs who are putting that proposed language forward. Now, we have engaged directly with the MACs, nearly all of industry has engaged with the MACs.

Quentin Blackford: We have engaged directly with the MACs. Nearly all of industry has engaged with the MACs. I think we're all pretty consistent in our recommendation with respect on how to clarify that language. We expect that we'll see that, you know, get revised in some sort in the final language that they put into that LCD. I think, you know, you look at the LCD as it's currently written, it would start to really confuse or even contradict some of what's in the national coverage decision that is out there, which that is not the intent of the LCDs.

Speaker #5: I think we're all pretty consistent in our recommendation with respect on how to clarify that language. And we expect that we'll see that get revised in some sort in the final language that they put into that LCD.

Speaker #5: I think you look at the LCD as it's currently written it would start to really confuse or even contradict some of what's in the national coverage decision that is out there.

Speaker #5: Which that is not the intent of the LCDs. And so I think they're trying to provide more clarity around what they want to see within the MCT category.

Quentin Blackford: I think they're trying to provide more clarity around what they want to see within the MCT category, but as currently written, it starts to restrict the ability to provide it the other modalities of monitoring, and I just don't believe that that's what they're after. We'll continue to engage with them on the opportunities where they present themselves. They're in a quiet period as we speak, we're waiting to see what comes out of that. I think, you know, there are other LCDs that are out there who have that have been written to sort of clarify around ambulatory cardiac monitoring. Novitas is one of those. I think they did a pretty nice job of providing that clarity. You might end up seeing, you know, the three MACs here end up with something closer to that.

Speaker #5: But as currently written, it starts to restrict the ability to provide the other modalities of monitoring. And I just don't believe that that's what they're after.

Speaker #5: So we'll continue to engage with them on the opportunities where they present themselves. They're in a quiet period as we speak. And so we're waiting to see what comes out of that.

Speaker #5: I think there are other LCDs that are out there who have that have been written to sort of clarify around ambulatory cardiac monitoring. Novatas is one of those and I think they did a pretty nice job of providing that clarity.

Speaker #5: You might end up seeing the three MACs here end up with something closer to that. That's speculation. I don't know exactly. But as currently written, it would move the majority of the market into an MCT-style monitor.

Quentin Blackford: That's speculation. I don't know exactly. As currently written, it would move the majority of the market into an MCT style monitor, and that cannot be what the intent is as the cost of monitoring for the overall healthcare system would be increased dramatically.

Speaker #5: And that cannot be what the intent is as the cost of monitoring for the overall healthcare system would be increased dramatically.

Speaker #9: Your next question.

Operator: Your next question.

Quentin Blackford: With respect to the EP benefit. No, go ahead.

Speaker #5: No, go ahead.

Speaker #9: Your next question is from Suraj Kalia with Oppenheimer. Please go ahead.

Operator: Your next question is from Suraj Kalia with Oppenheimer. Please go ahead.

Speaker #5: I'd point to Dan. Congrats on a nice start to the year. Can you hear me all right?

Suraj Kalia: Hi, Quentin and Dan, congrats on a nice start to the year. Can you hear me all right?

Speaker #4: Yeah. Thanks, Rush.

Quentin Blackford: Yeah. Thanks, Suraj.

[Analyst] (Truist Securities): Yeah, I can.

Dan Wilson: Yeah, I can.

Speaker #5: So Quentin, number of calls going on. Forgive me if you've already talked about this. And two-part question I'll pose it right up front, Quentin.

Suraj Kalia: Quentin, number of calls going on, forgive me if you've already talked about this. Two-part question, I'll pose it right up front, Quentin. Where do you think the current monitoring market stands? I know there are numbers of $5 million, $6 million that historically we have used, but you guys continue on this solid growth trajectory, which means the overall pie is shifting. Can you quantify just in terms of where currently the long-term monitoring is versus the MCT, at least in terms of the US patient? That would be great. Quentin, the second part of my question, if I could pose. There has been a lot of chatter about EP slowdown. I know this is derivative, but are you all also picking it up in Zio scripts in post-ablation hospital monitoring?

Speaker #5: Where do you think the current monitoring market stands? I know there are numbers of 5 million, 6 million that historically we have used. But you guys continue on this solid growth trajectory which means the overall pie is shifting.

Speaker #5: Can you quantify just in terms of where currently the long-term monitoring is versus the MCT, at least in terms of the US patient? That would be great.

Speaker #5: And Quentin, the second part of my question if I could pose, there has been a lot of chatter about EP slowdown. I know this is derivative but are you all also picking it up in Zero Scripts in post-ablation hospital monitoring?

Speaker #5: Thank you for taking my questions.

Suraj Kalia: Thank you for taking my questions.

Speaker #4: Yeah. So good question. With respect to the monitoring market, our view is that monitoring market is somewhere around 6 and a half to 7 million tests a day in the US.

Quentin Blackford: Yeah. Good question. With respect to the monitoring market, you know, our view is that monitoring market is somewhere around 6.5 to 7 million tests today in the US, of which probably 3.5 million of those tests are long-term cardiac monitoring or patch-based, you know, longer duration monitors, of which we have probably 72% of that market is sort of what our market share estimate is, based upon the last data points that we had. There's also about 1 million MCT tests that are being performed in the US market. That's a rough estimate, but that's what our data's telling us. Just in terms of framing up the market, that's how we think about those two modalities. I do think that we are expanding the market, though.

Speaker #4: Of which probably 3 and a half of those 3 and a half million of those tests are long-term cardiac monitoring or patch-based longer-duration monitors.

Speaker #4: Of which we have probably 702% of that market is sort of what our market share estimate is. Based upon the last data points that we had.

Speaker #4: There's also about 1 million MCT tests that are being performed in the US market. That's a rough estimate but that's what our data is telling us.

Speaker #4: So just in terms of framing up the market, that's how we think about those two modalities. I do think that we are expanding the market though.

Speaker #4: We're very excited by the fact that we think the market is much larger than anywhere close to the 6 and a half million tests being performed today.

Quentin Blackford: We're very excited by the fact that we think the market is much larger than anywhere close to the 6.5 million tests being performed today. There's 27 million folks, at least in the US, who most likely have arrhythmias, just have been undiagnosed, and unfortunately are confusing the symptoms of those arrhythmias with other comorbid disease states. It's our intent to go open the market and find those folks, and that's a big part of why the predictive algorithm capabilities that we've built and are now implementing in our first commercial relationship are so important to us. We know we can find these patients. Important we find them and get them monitored because when you diagnose early, the downstream reduction in cost is proving to be very clear and very significant, and we know we can bend that cost curve.

Speaker #4: There's 27 million folks at least in the US who most likely have arrhythmias, just have been undiagnosed. And unfortunately, are confusing the symptoms of those arrhythmias with other comorbid disease states.

Speaker #4: It's our intent to go open the market and find those folks. And that's a big part of why the predictive algorithm capabilities that we've built and are now implementing in our first commercial relationship are so important to us.

Speaker #4: We know we can find these patients important. We find them and get them monitored because when you diagnose early, the downstream reduction in cost is proving to be very clear and very significant.

Speaker #4: And we know we can bend that cost curve. In terms of your point on the EP slowdown, I would say there's nothing in our data that would give us that indication at this point.

Quentin Blackford: In terms of your point on the EP slowdown, I would say, you know, there's nothing in our data that would give us that indication at this point. We'll pay close attention to it. It's a little bit of an interesting dynamic. You know, the data continues to sort of coalesce around the fact that longer duration monitoring, even post-ablation, is quite important. You know, the current guidelines today I believe for post-monitoring of a PFA procedure is somewhere around, you know, 2 to 3 months out. You're generally monitoring with a short duration monitor, and then you're monitoring on an annual basis as well with a short duration monitor.

Speaker #4: We'll pay close attention to it. It's a little bit of an interesting dynamic. The data continues to sort of coalesce around the fact that longer-duration monitoring, even post-ablation, is quite important.

Speaker #4: The current guidelines today I believe for post-monitoring of a PFA procedure is somewhere around two to three months out, you're generally monitoring with a short-duration monitor.

Speaker #4: And then you're monitoring on an annual basis as well with a short-duration monitor. The data would tell us that I think we're missing 25 to 30 percent of arrhythmias that are present as a result of not using longer-duration monitoring in those particular procedures.

Quentin Blackford: The data would tell us that I think we're missing 25% to 30% of arrhythmias that are present, as a result of not using longer duration monitoring in those particular procedures. That becomes quite important, even dangerous, 'cause if you're starting to change anticoagulation, prescribing off of a short duration monitoring and you're missing these arrhythmias, you may be stopping too soon on this, which puts the patient at risk. That data continues to build. We had some interesting data that was put out at HRS. What I suspect you could see, and we might be seeing, I don't know, Suraj, is, you know, if there is a slowdown, we might maybe we end up seeing an offsetting mix, you know, switch towards longer duration monitoring that masks that.

Speaker #4: And that becomes quite important, even dangerous, because if you're starting to change anticoagulation prescribing off of a short-duration monitoring and you're missing these arrhythmias, you may be stopping too soon on this, which puts the patient at risk.

Speaker #4: And so that data continues to build. We had some interesting data that was put out at HRS and so what I suspect you could see and we might be seeing, I don't know Suraj's if there is a slowdown, we might maybe we end up seeing an offsetting mix switch towards longer-duration monitoring that mask that.

Speaker #4: But I don't have anything to indicate a slowdown at this point in time. Our data wouldn't tell us that either. But I do think we're in a nice position here to increase the amount of monitoring post-PFA procedures.

Quentin Blackford: I don't have anything to indicate a slowdown at this point in time. Our data wouldn't tell us that either. I do think we're in a nice position here to increase the amount of monitoring post, you know, or post-PFA procedures.

Speaker #9: Your next question is from Jean Manheimer with Freedom Capital Markets. Please go ahead.

Operator: Your next question is from Gene Mannheimer with Freedom Capital Markets. Please go ahead.

Gene Mannheimer: Thanks, congrats on a good quarter and outlook. You know, along some of the lines that were discussed, you know, kind of running ahead of guidance and raising it, have you contemplated any change to your long-term financial targets? Follow-up would be, could you just remind us the percent of registrations coming from primary care lately? Thank you.

Speaker #4: Thanks. And congrats on the good quarter and outlook. Along some of the lines that were discussed, kind of running ahead of guidance and raising it, have you contemplated any change to your long-term financial targets and follow-up would be could you just remind us the percent of registrations coming from primary care lately?

Speaker #4: Thank you.

Speaker #5: Yeah. Hi, Jean. Thanks for the questions. Yeah. We have not updated the our long-term guidance that's out there for 2027 revenue, gross margin, and adjusted EBITDA margin.

Daniel Wilson: Yeah. Hi, Gene. Thanks for the questions. We have not updated the our long-term guidance that's out there for 2027 revenue gross margin and adjusted EBITDA margin. Certainly, the guidance that we have for 2026 puts us on pace to deliver those targets. As we get a bit closer, you know, we'll think about potentially updating those. You know, continue to feel really good about ultimately delivering on that long range guidance that we set back in 2022. On the second part of your question, we continue to see primary care, you know, increase as a percent of volume. That is a big, you know, part of the growth that we're driving and moving upstream into primary care.

Dan Wilson: Yeah. Hi, Gene. Thanks for the questions. We have not updated the our long-term guidance that's out there for 2027 revenue gross margin and adjusted EBITDA margin. Certainly, the guidance that we have for 2026 puts us on pace to deliver those targets. As we get a bit closer, you know, we'll think about potentially updating those. You know, continue to feel really good about ultimately delivering on that long range guidance that we set back in 2022. On the second part of your question, we continue to see primary care, you know, increase as a percent of volume. That is a big, you know, part of the growth that we're driving and moving upstream into primary care.

Speaker #5: Certainly, the guidance that we have for 2026 puts us on pace to deliver those targets. As we get a bit closer, we'll think about potentially updating those.

Speaker #5: But continue to feel really good about ultimately delivering on that long-range guidance that we set back in 2022. On the second part of your question, we continue to see primary care increase as a percent of volume.

Speaker #5: That is a big part of the growth that we're driving and moving upstream into primary care. Last quarter, we mentioned over 40,000 primary care prescribers we see that number continue to increase.

Daniel Wilson: Last quarter, we mentioned over 40,000 primary care prescribers. We see that number continue to increase. We gave a metric at one point, call it roughly a third or a little bit over 30% of our volume coming from primary care, and that has been steadily upticking as well. That will remain a growth driver for the business, and we're excited about what that means.

Dan Wilson: Last quarter, we mentioned over 40,000 primary care prescribers. We see that number continue to increase. We gave a metric at one point, call it roughly a third or a little bit over 30% of our volume coming from primary care, and that has been steadily upticking as well. That will remain a growth driver for the business, and we're excited about what that means.

Speaker #5: And we gave a metric at one point, call it roughly a third, or a little bit over 30%, of our volume coming from primary care.

Speaker #5: And that has been steadily upticking as well. So that will remain a growth driver for the business. And we're excited about what that means.

Speaker #4: Thank you.

Gene Mannheimer: Thank you.

Speaker #5: Thanks, Jean.

Daniel Wilson: Thanks, Gene.

Dan Wilson: Thanks, Gene.

Speaker #9: Your next question is from Bill Plavanic with Canaccord Genuity. Please go ahead.

Operator: Your next question is from Bill Plovanic with Canaccord Genuity. Please go ahead.

Speaker #10: Hey, guys. It's Zachary on for Bill. Thank you for taking the question. So to what you were just speaking about with longer-term monitoring showing that arrhythmias can be missed even after ablation because of shorter-term monitoring, I understand that you're generating data around it.

[Analyst] (Canaccord Genuity): Hey, guys. It's Zachary on for Bill. Thank you for taking the question. To what you were just speaking about with, you know, longer term monitoring showing that arrhythmias can be missed even after ablation because of shorter term monitoring, I understand that you're generating data around it, but is there any interaction with societies about switching the protocols for, you know, these studies? You know, I think someone asked before about interaction with EPs, but, you know, in those post-ablation patients, is there any, you know, any penetration you guys can pick up from there?

Speaker #10: But is there any interaction with societies about switching the protocols for these studies? Or I think someone asked before about interaction with EPs. But in those post-ablation patients, is there any penetration you guys can pick up from there?

Speaker #5: I think it's certainly an approach. And one that we would be very interested in pursuing and certainly be moving down that pathway. But clearly, you need data.

Quentin Blackford: I think it's certainly an approach, and one that we would be very interested in pursuing and certainly be moving down that pathway. Clearly you need data, and you need real data. I think that data is just coming together. This was the first study that was published here recently, and we'll continue to add to that and accrue, you know, the data behind it to make it even more powerful. Ultimately, you would love to see those guidelines change. I mean, the guidelines today just frankly leads to a situation where, you know, you may be putting patients at greater risk than what you could be if you were using a better modality of monitoring. We know that monitoring is there. We know that Zio is it.

Speaker #5: And you need real data. And I think that data is just coming together. This was the first study that was published here recently. And we'll continue to add to that and accrue the data behind it to make it even more powerful.

Speaker #5: But ultimately, you would love to see those guidelines change. I mean, the guidelines today, just frankly, leads to a situation where you may be putting patients at greater risk than what you could be if you were using a better modality of monitoring.

Speaker #5: And we know that that monitoring is there. We know that Zio is it. And if we can change guidelines, we will certainly lean into trying to do that.

Quentin Blackford: If we can change guidelines, we will certainly lean in to try to do that.

Speaker #9: Your next question is from David Roman with Goldman Sachs. Please go ahead.

Operator: Your next question is from David Roman with Goldman Sachs. Please go ahead.

[Managing Director] (Goldman Sachs): Thank you. This is David on for David, all by myself this afternoon. I wanted just to ask about the profitability here, maybe. As I look at the $5 million raise in revenue for the year, you're also putting through roughly a $5 million raise on EBITDA. The incremental gross margin continues to go up, I think now approaching something like 80% if you look at Q1. Maybe you could help us just think through some of the factors contributing to the improved P&L here, the drop-through rate you're seeing. As you reflect on the margin upside, where are some of the biggest opportunities for incremental investment here?

Speaker #11: Thank you. This is David on for David. All by myself this afternoon. I wanted just to ask about the profitability here, maybe as I look at the $5 million raise in revenue for the year, you're also putting through roughly a $5 million raise.

[Analyst] (Goldman Sachs): Thank you. This is David on for David, all by myself this afternoon. I wanted just to ask about the profitability here, maybe. As I look at the $5 million raise in revenue for the year, you're also putting through roughly a $5 million raise on EBITDA. The incremental gross margin continues to go up, I think now approaching something like 80% if you look at Q1. Maybe you could help us just think through some of the factors contributing to the improved P&L here, the drop-through rate you're seeing. As you reflect on the margin upside, where are some of the biggest opportunities for incremental investment here?

Speaker #11: On EBITDA, the incremental gross margin continues to go up—I think now approaching something like 80% if you look at Q1. So maybe you could help us just think through some of the factors contributing to the improved P&L here: the drop-through rate you're seeing, and then, as you reflect on the margin upside, where are some of the biggest opportunities for incremental investment here?

Speaker #5: Yeah. Thanks, David. And appreciate the question. And we are really excited about what we're seeing in the business in terms of profitability. It does start with gross margin.

Daniel Wilson: Yeah. Thanks, David. Appreciate the question. We are really excited about what we're seeing, you know, in the business, in terms of profitability. It does start with gross margin. We've seen nice leverage there and continued, you know, gross margin expansion and see a good kind of roadmap to continue to drive that. We've talked about, you know, manufacturing automation and subsequent phases there continuing to drive efficiencies on call it the device side of our cost of service. Within the clinical operations, you know, opportunities there to continue to drive efficiencies with our next generation algorithm and clinical kind of workflow tools. We're making those investments now, have been making those investments. We'll look to implement those that continue to drive, you know, gross margin leverage.

Dan Wilson: Yeah. Thanks, David. Appreciate the question. We are really excited about what we're seeing, you know, in the business, in terms of profitability. It does start with gross margin. We've seen nice leverage there and continued, you know, gross margin expansion and see a good kind of roadmap to continue to drive that. We've talked about, you know, manufacturing automation and subsequent phases there continuing to drive efficiencies on call it the device side of our cost of service. Within the clinical operations, you know, opportunities there to continue to drive efficiencies with our next generation algorithm and clinical kind of workflow tools. We're making those investments now, have been making those investments. We'll look to implement those that continue to drive, you know, gross margin leverage.

Speaker #5: And we've seen nice leverage there and continued gross margin expansion. And see a good kind of roadmap to continue to drive that. We've talked about manufacturing automation and subsequent phases there continuing to drive efficiencies on, call it, the device side of our cost of service.

Speaker #5: Within the clinical operations, opportunities are there to continue to drive efficiencies. With our next-generation algorithm and clinical kind of workflow tools, and we're making those investments now, have been making those investments.

Speaker #5: And we'll look to implement those to continue to drive gross margin leverage. And then on the rest of the P&L from an OPEX standpoint, we do feel really good that we have a balanced approach here where as we drive upside and revenue and grow revenue year over year, we are letting some of that play through and land at the bottom line while reinvesting back into the business.

Daniel Wilson: Then, you know, on the rest of the P&L from an OpEx standpoint, you know, we do feel really good that we have a balanced approach here, where, as we drive upside and revenue and grow revenue year-over-year, we are letting some of that play through and land at the bottom line while reinvesting, you know, back into the business. There isn't a shortage of things that get us excited about in terms of investing into the business. Zio MCT, certainly the next generation algorithm, as I mentioned. Clinical evidence has always been something we want to invest in, we'll continue to invest in. We have a nice roadmap there, as we look at the back part of this year.

Dan Wilson: Then, you know, on the rest of the P&L from an OpEx standpoint, you know, we do feel really good that we have a balanced approach here, where, as we drive upside and revenue and grow revenue year-over-year, we are letting some of that play through and land at the bottom line while reinvesting, you know, back into the business. There isn't a shortage of things that get us excited about in terms of investing into the business. Zio MCT, certainly the next generation algorithm, as I mentioned. Clinical evidence has always been something we want to invest in, we'll continue to invest in. We have a nice roadmap there, as we look at the back part of this year.

Speaker #5: And there isn't a shortage of things that get us excited about in terms of investing into the business. Zio MCP certainly, the next-generation algorithm, as I mentioned, clinical evidence has always been something we want to invest in.

Speaker #5: We'll continue to invest in. We have a nice roadmap there. As we look at the back part of this year, there's a lot we can do from a marketing standpoint.

Daniel Wilson: There's a lot we can do from a marketing standpoint, so opportunities there to invest into programs there. International is an opportunity we're investing in to open up, as is, you know, innovative channel, as is sleep. A lot of opportunities for. I don't think I named them all. A lot of opportunities to make investments in the business and, you know, that's what gets us excited and drives us to be as disciplined and as efficient as we can in the spend that we control. You know, we afford ourselves the opportunity to invest in those items that I mentioned.

Dan Wilson: There's a lot we can do from a marketing standpoint, so opportunities there to invest into programs there. International is an opportunity we're investing in to open up, as is, you know, innovative channel, as is sleep. A lot of opportunities for. I don't think I named them all. A lot of opportunities to make investments in the business and, you know, that's what gets us excited and drives us to be as disciplined and as efficient as we can in the spend that we control. You know, we afford ourselves the opportunity to invest in those items that I mentioned.

Speaker #5: So opportunities there to invest into programs there. International is an opportunity we're investing in to open up as is innovative channel, as is sleep.

Speaker #5: So, a lot of opportunities for — and I don't think I named them all — a lot of opportunities to make investments in the business. And that's what gets us excited.

Speaker #5: And drives us to be as disciplined and as efficient as we can in the spend that we control. So, we have afforded ourselves the opportunity to invest in those items that I mentioned.

Speaker #9: There are no further questions at this time. I will now turn the call back over to Quentin Blackford, President and CEO for Closing Remarks.

Operator: There are no further questions at this time. I will now turn the call back over to Quentin Blackford, President and CEO, for closing remarks.

Speaker #5: Well, thank you. And as we close another strong quarter, I want to once again thank our iRhythm employees around the world. Their execution has been very good.

Quentin Blackford: Well, thank you. You know, and as we close another strong quarter, I want to once again thank our iRhythm employees around the world. Their execution has been very good, and our results are a direct reflection of their hard work. Our future has never been brighter, and our market continues to expand around us with many meaningful drivers. As we enter our 20th year, I couldn't be more proud of the team, and I couldn't be more confident in the future that we will achieve together. Thanks for your time. I'll see you guys all soon. Take care.

Speaker #5: And our results are a direct reflection of their hard work. Our future has never been brighter. And our market continues to expand around us with many meaningful drivers.

Speaker #5: As we enter our 20th year, I couldn't be more proud of the team. And I couldn't be more confident in the future that we will achieve together.

Speaker #5: Thanks for your time. I'll see you guys all soon. Take care.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

Q1 2026 iRhythm Technologies Inc Earnings Call

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