Title

Presentation

iRhythm Technologies, Inc. beats earnings expectations. Reported EPS is $-0.43, expectations were $-0.56.

Operator: Hello everyone. Thank you for joining us and welcome to iRhythm Technologies, Inc. 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 1 on your telephone keypad. To withdraw your question, press 1 again. I will now hand the call over to Lisa Pricora, senior vice president of finance and investor relations, for opening remarks.

Lisa Pricora: Thank you, operator, and thank you all for joining iRhythm Technologies, Inc.’s first quarter 2026 earnings call. With me today are Quentin Blackford, iRhythm Technologies, Inc.’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, 04/30/2026, and are time sensitive. 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 a discussion of risks and uncertainties, please refer to our most recent annual report on Form 10-Ks, 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.

I will now turn the call over to Quentin.

Quentin Blackford: Good afternoon, everyone, and thank you for joining us. I am pleased to discuss our first quarter 2026 performance and outlook for the balance of the year. I will begin with an overview of the quarter, strategic progress, and our outlook for 2026 and beyond. Daniel will then talk about our financial performance and guidance in more detail. 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. Importantly, our performance was broad-based across ZioMonitor and Zio AT and in each of our key growth pillars, including cardiology, primary care, innovative channels, and international.

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 U.S., representing a significant opportunity to upgrade care.

By continuing to shift clinical practice towards longer-duration monitoring, we believe iRhythm Technologies, Inc. is not only gaining share but actively growing the market by increasing diagnostic yield and improving patient outcomes. ZioMonitor 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 U.S. 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. 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. Rather, 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, and 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. Activity remains consistent and repeatable, driven by both new account wins and expanding utilization within existing relationships. Importantly, as certain programs mature, we are 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 U.K., 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 long-term continuous monitoring and reinforces the pathway to more favorable reimbursement as we generate local head-to-head clinical evidence. 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 U.S. 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 can create meaningful value for both providers and the health care system, particularly as care continues to shift upstream. 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 actual 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: 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 health care 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 and coding practices.

This policy trajectory reinforces the importance of confirmatory diagnostics that drive accurate diagnosis and appropriate care, and positions Zio well as health care 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. 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 datasets, 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 Technologies, Inc.

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 Technologies, Inc. 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. These initiatives aim to improve efficiency and quality and reduce cost of care delivery, and we look forward to real-world data being published later this year. More broadly, iRhythm Technologies, Inc.’s durability in an AI-driven environment is grounded in the fact that health care 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 dataset 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 multispecialty intelligence platform. I am pleased to share that the same foundation is helping drive progress as we expand our AI capabilities with our new next-generation AI algorithm.

Leveraging our large proprietary multibillion-hour dataset, we believe this next-generation algorithm that will be used across our entire platform of ZioMonitor, 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. Next, I would like to provide an update on our regulatory progress. 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.

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 the first quarter 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.

With respect to our next-generation MCT program, we have made a lot of progress over the past few months and are happy to reaffirm our first-half 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 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.

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 road map, 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 health care environment.

With that, I will turn the call over to Daniel.

Daniel Wilson: Thank you, Quentin. iRhythm Technologies, Inc. delivered continued strong financial performance in 2026, reflecting durable demand for iRhythm Technologies, Inc.’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 quarter 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.

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 U.S. 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.

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, 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, delivering strong operating leverage with revenue growing meaningfully faster than operating expenses. On the bottom line, GAAP net loss for the first quarter was $13.9 million, or a net loss of $0.43 per diluted share, compared to a GAAP net loss of $30.7 million, or a net loss of $0.97 per diluted share, in 2025.

Adjusted net loss for the first quarter 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 2025. 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. Free cash flow during the first quarter was negative $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.

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 flat overall to 2025, with revenue growth driven by continued volume growth across core Zio Monitor, Zio AT, innovative channels, and international. 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. For gross margin, we expect the clinical operations and manufacturing efficiencies we have driven will continue to incrementally improve our gross margin profile for 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. 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 the second quarter of 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. 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. We are seeing increasing validation of the value our services deliver, particularly in their ability to help lower downstream health care utilization. This dynamic reinforces demand for our solutions, especially as health care 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.

Quentin Blackford: 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. As we enter iRhythm Technologies, Inc.’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 health care system. iRhythm Technologies, Inc.

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. 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 is about strengthening our platform advantage. Our growing clinical dataset, AI capabilities, and deep body of clinical validation increasingly differentiate iRhythm Technologies, Inc. As health care 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 Technologies, Inc. to create long-term value for all stakeholders. 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, now happy to take your questions.

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Operator: We will now open the call for questions. 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. To withdraw your question, please press 1 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 JPMorgan. Please go ahead.

Analyst: Just the first one is going to be on the guide. You are coming off of a quarter where 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 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 are seeing so far in April?

Daniel Wilson: Yeah, thanks for the question. I guess maybe to start, as always, we do not 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 across the business. We are really encouraged about what we are seeing in the trends that we expect to see for the remainder of the year. I would point to the back part of the year, in particular, starting to have some pretty difficult comps given the performance that we had in 2025. But again, we feel really good about what we are seeing in the business. There is certainly potential upside that we are not going to bake into the guide given the early part of the year, and that is a similar approach that we have taken previously.

If those play through, that is great, but there is a reason we leave them outside the guide to start. We like what we are seeing in the business and see a lot of good contribution across the different growth drivers.

Quentin Blackford: In terms of what we are seeing in April, we are encouraged. Good results, so we feel good about that. Obviously, we contemplated that in the reiteration and the increase in the guide as well. One last point with respect to your point on slower growth rates in Q2, Q3, and Q4: when you look at things on a stacked growth comp basis, the momentum is very strong. Despite the tougher year-over-year comps over the next few quarters, which we contemplate, overall momentum in the business continues to be really strong.

Analyst: Got it. And then just as a follow-up, one of the pressures on the broader medtech space recently has been a fear around AI. Looking at your business, it does seem as though you might be a little bit more exposed than other medtech companies. You are talking about this new algorithm that you are planning to launch. 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?

Quentin Blackford: It is a fair question, and one that we get a lot. I feel very good about our defensibility and the moat that we have built. You have to keep in mind, we are not simply offering a software capability or an algorithm. It is much more than that. It is running an end-to-end program for our customers around cardiac monitoring and ultimately arrhythmia diagnosis, which includes AI capabilities that we now have 20 years of experience behind and 3 billion hours of curated ECG data that we can build off of. Frankly, that has enabled us to move into spaces like predictive capabilities, and we are excited to be launching our first commercial predictive AI collaboration that I mentioned in prepared remarks. It has also 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 is the power of that data that allows us to move quickly in those spaces, and also the broader end-to-end program that we enable customers to run without worry—whether that is a hardware device on the front end like our patch that has incredible patient compliance. Ninety-eight percent of our patients will wear the patch up to 14 days. We know duration of monitoring is important, so getting a longer duration wear period is important, which is more than just an algorithm. That is a form factor and a hardware component. There is the intake process, downloading the data, coupling it with the patient context. Many times you look at feedback and there might not be any arrhythmia in the ECG data, but the patient feedback in the diary or the app is meaningful.

The physician wants to know that. You are not going to capture all that in an algorithm alone. Then on top of that, it has to be clinically validated and upheld to FDA scrutiny from a quality perspective, and then reimbursed. There is a massive market access component to ensuring that your solution is reimbursed, and that takes tremendous effort. We are up to 93% of all lives in the U.S. now covered with respect to access to Zio. That takes time and effort. There is a lot that goes into it. It is not just an AI capability. It is an end-to-end program 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. The platform we 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.

They are not having to integrate multiple times over. They have a single point of integration with iRhythm Technologies, Inc., and we can bring several of these solutions to them and give very quick, easy access. We are excited by the position we have, we will continue to move quickly, and we are bullish on our position.

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

Analyst: I wanted to ask on the EBITDA margin in the quarter. It was pretty strong at 7% and better than your guide of 3% to 4%. What drove that outperformance? And then you raised the guide slightly to 12% to 13%. Why not raise more—is it just early in the year?

Quentin Blackford: Thanks for the question. Maybe the second part first—yes, we are raising the guide essentially by the magnitude of the beat in the quarter.

Daniel Wilson: Again, early in the year, we do not want to get ahead of ourselves, but we are certainly seeing the profitability flow through nicely and saw a nice result in the quarter. I would comment on continued strong execution across our teams. We have seen gross margin continue to step up nicely—lots of efficiencies being driven within our clinical operations and manufacturing teams and the automation that we have implemented. There is continued opportunity as we leverage our scale, technology, and our next-generation algorithm, and we have a nice roadmap to continue to drive efficiencies and operating leverage. Below gross margin, I would say similar efficiencies and automation. I will also call out some of the more underappreciated aspects of our business that can drive operating leverage—the innovative channel with a one-to-many selling model; our land-and-expand model as we open an account and then expand in primary care and other prescriber bases, which we can do very efficiently; EHR integration that drives operating leverage on an account level and allows us to expand prescribers efficiently; and disciplined SG&A with a lot of opportunities to continue to drive leverage.

We are excited about what we have driven over the last couple of years and see a lot of opportunity in front of us to continue to drive profitability expansion.

Analyst: Thank you. And then on the next-gen algorithm—you mentioned efficiency benefits. Anything else you can share on features? You said it is a separate filing from MCT but submitted at a similar time. Should we expect FDA approval in the coming months? And what is the plan for rolling it out once you get approval?

Quentin Blackford: In terms of the financial lever, there is probably not a larger one that we have than the next-generation algorithm when it gets implemented, and we are 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 will allow us to scale very efficiently. As we do the math, over the next five years or so, it is well north of $100 million of cumulative value we expect to be delivered. We submitted it last year alongside MCT. It continues to run independent and on its own timeline. We would expect approval later this year and will keep you updated. In terms of implementing it, we will implement it alongside MCT when MCT is approved and implemented in 2027. There is some work from the development teams to integrate that algorithm onto the production side. We will team that up with the MCT launch and keep those coupled.

Operator: Your next question is from William Blair. Please go ahead.

Max Kruszeski: You have a handful of innovative channel partners that have been with you for a few quarters now. Can you touch on what you have learned from the more tenured relationships and how that is helping as you approach some of the newer accounts? And then, Quentin, you previously talked about how 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 2027? I understand AT continues to take share. Should we see the MCT launch as a continuation of that trend? And how does the next-gen algorithm with MCT play into that?

Quentin Blackford: One of the most encouraging things with our innovative channel partners is that every single one of these partners who piloted with us in 2025 is up and patching consistently in 2026. We are starting to see more consistency in that channel. There continues to be lumpiness at the customer level, but overall we are seeing more consistency, so we are encouraged. We continued to sign up new partners over the course of Q1. The pipeline is incredibly healthy as we head into Q2 and Q3, so we are excited by what innovative channel partners will bring. We are also seeing most of these customers—who start with us on the asymptomatic side or undiagnosed/unaware arrhythmia patients—begin to use the device much more on the symptomatic side as well.

Part of that comes back to Zio’s attributes and these partners learning through their own real-world data that longer-duration monitoring produces a higher diagnostic yield. Where in the past their symptomatic patients were using a traditional Holter, they were missing arrhythmias. They are realizing that and starting to patch with longer duration. On MCT share, think of it as a continuation of the trend. We know the new MCT product closes a lot of the competitive gaps that our current Zio AT product has, but we will want to see it play in the market before guiding to something different. With Zio AT’s performance, we continue to demonstrate the ability to take share with an inferior product, so we are excited to get MCT into the market.

With respect to getting the algorithm into the product, it is going to drive meaningful gross margin benefit. Zio MCT is coming on the same form factor that our ZioMonitor is already on, enabling us to leverage a lot of the manufacturing automation we already have. We were already going to see a nice benefit moving from AT to MCT; now adding the next-gen algorithm onto that platform will really enhance the gross margin profile. Note that the next-gen algorithm, while we will bring it to market alongside Zio MCT, will apply across our entire platform. It will be immediately applied against ZioMonitor and the large presence we have there. It will continue to run on Zio AT as we work through those inventory levels and migrate towards Zio MCT, and it will also be on the MCT product.

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

Analyst: This is Kevin on for Vijay. On the DOJ CID request—you mentioned there has not been any request for additional information. Can you update us on what exactly was asked for so far? And looking forward, do you have a preliminary view on the range of outcomes from this request?

Quentin Blackford: The request for information in that CID was very consistent with the original that dates back to 2023. It seems very clear that they are focused in and around the AT product line and really specific to dates back in the 2021–2022 timeframe. That is what we can infer from the line of questions and the information request. Beyond that, it would be hard for us to provide more clarity. For the breadth of their review and investigation, it has been focused in that area and tied into those timeframes. As we have more clarity, we will share it. Zio AT was not a big part of our portfolio back in those early days; it was newly launched and was growing. It is hard to size up anything along those lines, and we will not speculate.

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

Nathan Treybeck: Are you beginning to see any benefit flow through from reconfirmations for chart-derived diagnoses, and are you anticipating any benefit in your guidance?

Quentin Blackford: We have not contemplated anything in the guide. We continue to believe that we are in a very good position relative to the focus around chart-derived mentions and the increased scrutiny. Our partners consistently use Zio to get to a confirmed diagnosis, which is exactly what CMS is trying to ensure—there is a real confirmed diagnosis versus speculation off of chart notes. We like the position. We have not seen a change in behavior necessarily, but most of our channel partners are using the product to get to that confirmatory diagnosis, and that is what they have been doing from the beginning of the relationships. We will continue to monitor it. We think this is a nice tailwind, but we have not adjusted guidance at this point for it.

Operator: Your next question is from R.W. Baird. Please go ahead.

David Rescott: I wanted to ask about the sleep market. It sounds like there are some pilots ongoing. When should we expect to hear something more on sleep and when might this become something you are more meaningfully moving into? And given the competitive offerings, what value do you think iRhythm Technologies, Inc. can bring to that market longer term with not only a hardware component but also the broader service offering?

Quentin Blackford: You will continue to hear about sleep over the course of the year. It is an important strategic opportunity and our pilots are validating it as real. In terms of meaningful contribution, we will talk about that as we get into 2027. I do not see it moving the needle in a significant way just yet, but as we get more confidence and lean into it, we will keep you apprised. We think we have a real opportunity to disrupt this space. It is more than a home sleep device or an algorithm. Similar to cardiac arrhythmias, we disrupted the market by providing an easier end-to-end solution to identify, monitor, and diagnose patients. Today, sleep patients are being lost in their journey across fragmented steps. We can make it as simple as ordering a sleep test via our Zio Suite, getting a device to the patient via office or home enrollment, returning data, and providing a report through an IDTF capability right back through the digital tool to the physician.

It becomes seamless and all the back-end effort is invisible to the physician. Our customers are already prescribing home sleep tests or are willing to. As care moves upstream and with the proliferation of GLP-1s to treat sleep disease, you will see more prescribing in primary care. We can make this seamless and easy. We do not think there is a single competitor able to provide an offering like we can—nobody else brings that end-to-end solution, particularly through the large presence of system integrations that we already have. There is a real opportunity to disrupt.

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

Analyst: Hi, this is Alex on for Marie. Congrats on a nice quarter. On the international business—you mentioned in prepared remarks a recent update to the reimbursement framework with a supplemental payment. Any more detail on that? And is there ongoing work to continue getting the reimbursement rate further up there?

Daniel Wilson: Thanks for the question. In Japan, we did see a small increase in the reimbursement rate. It is still below what we think reflects the value we are bringing to the market, and we are still running the head-to-head study and collecting data to ultimately secure more favorable reimbursement in that market. We will continue to work towards that. That is likely a 2027 event, but we are collecting the data to ultimately support more favorable reimbursement. It is encouraging that we saw a bit of a step up, but again, we do not believe it reflects the value we are bringing, and we will continue to pursue premium reimbursement.

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

Analyst: On the proposed LCD for ACM, if it were finalized today in its current state, what are your expectations for the potential impact or implications? And second, on the electrophysiology opportunity, what inning of penetration are you in there, and how does MCT approval unlock patients you are maybe not getting to?

Quentin Blackford: With respect to the LCD, as written today, it would move just about everything into an MCT category because it is requiring continuous monitoring with 24-hour monitoring. If that were the case, you would be moving a significant amount of LTCM monitoring business into the MCT category, which would have a significant uplift from a revenue perspective for the company. I do not believe that is the intention of the three MACs who put that proposed language forward. We have engaged directly with the MACs, as has nearly all of industry. We are consistent in our recommendation on how to clarify the language, and we expect to see that revised in some form in the final language. As currently written, it would start to confuse or even contradict aspects of the national coverage decision.

I think they are trying to provide more clarity around what they want to see within MCT, but as currently written, it starts to restrict the ability to provide the other modalities of monitoring, which I do not believe is what they are after. We will continue to engage where opportunities present themselves. They are in a quiet period, and we are waiting to see what comes out. Other LCDs, like Novitas, have provided clarity around ambulatory cardiac monitoring; you might see the three MACs end up closer to that. As currently written, it would move the majority of the market into an MCT-style monitor, and that cannot be the intent given cost implications.

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

Suraj Kalia: Quentin, two-part question. Where do you think the current monitoring market stands? Historically we have used numbers of 5 million to 6 million, but you continue solid growth, which means the overall pie is shifting. Can you quantify where long-term monitoring is versus MCT in terms of U.S. patients? And secondly, there has been chatter about EP slowdown. Are you picking it up in Zio scripts, in post-ablation hospital monitoring?

Quentin Blackford: Our view is the monitoring market is around 6.5 million to 7 million tests today in the U.S., of which probably 3.5 million to 4 million are long-term cardiac monitoring or patch-based longer-duration monitors, where we have roughly 72% share based upon the last data points we had. There are also about 1 million MCT tests performed in the U.S. market—that is a rough estimate based on our data. We do think we are expanding the market. We believe the market is much larger than 6.5 million tests performed today. There are at least 27 million folks in the U.S. who most likely have arrhythmias but have been undiagnosed and are confusing symptoms with other comorbidities. It is our intent to open the market and find those folks.

That is a big part of why the predictive algorithm capabilities we built and are implementing in our first commercial relationship are so important. We know we can find these patients. It is important we find and monitor them because when you diagnose early, the downstream reduction in cost is proving to be significant. On an EP slowdown, there is nothing in our data that indicates that at this point, but we will watch closely. Data continues to show that longer-duration monitoring, even post-ablation, is important. Current guidelines for post-monitoring of a PFA procedure generally call for short-duration monitoring at two to three months and then annually. The data would tell us we are missing 25% to 30% of arrhythmias by not using longer-duration monitoring in those procedures, which can be dangerous if you are changing anticoagulation prescribing off of short-duration monitoring.

That data continues to build—we had interesting data at HRS. If there is a slowdown, we might see an offsetting mix shift towards longer-duration monitoring that masks it. We do not have anything indicating a slowdown at this time, and our data would not tell us that either. We are in a nice position to increase the amount of monitoring post-PFA.

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

Gene Mannheimer: Congrats on a good quarter and outlook. Running ahead of guidance and raising it—have you contemplated any change to your long-term financial targets? And as a follow-up, could you remind us the percent of registrations coming from primary care lately?

Daniel Wilson: We have not updated our long-term guidance for 2027—revenue, gross margin, and adjusted EBITDA margin. The guidance we have for 2026 puts us on pace to deliver those targets. As we get a bit closer, we will think about potentially updating those, but we continue to feel really good about delivering on that long-range guidance set back in 2022. On primary care, we continue to see it increase as a percent of volume. That is a big part of the growth we are driving as we move upstream. Last quarter, we mentioned over 40 thousand primary care prescribers, and we see that number continuing to increase. We previously said roughly a third or a little bit over of our volume coming from primary care, and that has been steadily upticking as well. That will remain a growth driver.

Quentin Blackford: Thank you.

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

Analyst: 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—beyond generating data, is there interaction with societies about switching protocols for these studies? In post-ablation patients, is there penetration you can pick up from there?

Quentin Blackford: It is certainly an approach we are interested in pursuing and are moving down that pathway. You need data, and the data is coming together. This was the first study published recently, and we will continue to add to it to make it more powerful. Ultimately, you would love to see guidelines change. The guidelines today may put patients at greater risk than necessary if using a suboptimal modality. We know longer-duration monitoring is there—we know Zio is it—and we will lean into trying to change guidelines.

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

Analyst: On profitability—the $5 million raise in revenue for the year and roughly a $5 million raise on EBITDA. The incremental gross margin continues to go up, now approaching something like 80% if you look at Q1. Can you help us think through the factors contributing to the improved P&L, the drop-through rate you are seeing, and where the biggest opportunities for incremental margin and investment are?

Daniel Wilson: We are really excited about what we are seeing in the business in terms of profitability. It starts with gross margin, and we have seen nice leverage there and continued expansion. We see a good roadmap to continue to drive that. Manufacturing automation and subsequent phases will continue to drive efficiencies on the device side of our cost of service. Within clinical operations, there are opportunities to continue to drive efficiencies with our next-generation algorithm and clinical workflow tools. We are making those investments now and will implement them to continue to drive gross margin leverage. On OpEx, we feel good that we have a balanced approach—driving upside in revenue year over year, letting some of that play through to the bottom line, while reinvesting back into the business.

There is no shortage of things that get us excited: Zio MCT, the next-generation algorithm, clinical evidence, marketing programs, international, innovative channel, and sleep. There are many opportunities to invest, and that drives us to be disciplined and efficient in the spend we control so we can afford to invest in those items.

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

Quentin Blackford: Thank you. As we close another strong quarter, I want to thank our iRhythm Technologies, Inc. employees around the world. Their execution has been very good, and our results are a direct reflection of their hard work. The future has never been brighter, and our market continues to expand around us with many meaningful drivers. As we enter our twentieth year, I could not be more proud of the team, and I could not be more confident in the future that we will achieve together. Thank you for your time. I will see you all soon. Take care.

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

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