IRTC - Earnings call transcript Q3 2024 | iRhythm Technologies, Inc.

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Operator

Hello, everyone, and welcome to iRhythm's Third Quarter 2024 Earnings Call. My name is Lydia, and I'll be your operator today. After the prepared remarks, you have the opportunity to participate in the Q&A with the management team. [Operator Instructions] I'll now hand you over to Stephanie Zhadkevich, Director of Investor Relations at iRhythm to begin. Please go ahead, Stephanie.

Stephanie Zhadkevich

participating call. for all you in today's Thank Earlier quarter ended released financial the third results for September today, iRhythm XX, XXXX.

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

of release as CEO. as to to our intention considered only revenue, should operating are information measures. cash-based be for iRhythm otherwise I'll have measures Factors forward-looking on Unless of For statements, we of obligation, and in on loss. in required and October non-GAAP financial by except of reconciliation annual the including results. This XX-Q, the today, superior discuss prepared adjusted Unless GAAP and substitute to or description to Risk uncertainties been because most Please most U.S. call adjusted will time-sensitive call, the XX, call tables Commission. Also and these references in events over revise with or and projections indicated, and XX-Q The to contains their to the than not our respectively, not isolation with information non-GAAP that President business, respect Form accurate basis. measures to financial GAAP. certain presented XXXX. earnings a references noted, Securities results report non-GAAP accordance accordance live XX-K list GAAP with with with expenses that, metrics please all information, and disclaims of, to and presentation a the filed the otherwise other to refer risks financial is quarterly in any results, call, Quentin our our all broadcast recent new refer refer the financial prepared Exchange during a a associated of or additional for section comparable otherwise. And with Form adjusted Blackford, conference this measures EBITDA, to or in and and of law, future update or any financial whether turn as iRhythm's directly net

Quentin Blackford

during updates you, today's business Officer, Stephanie. for Wilson, prepared you me and on joining Financial Dan Good Chief our My call of and results today as quarter Dan XXXX quarter turn then well provide third updated to annual as guidance. detailed third financial of the over the remarks all us. is call. Thank XXXX, I'll our outlook. thank afternoon, joining review our cover a to

our FDA from the the regarding XXXX top to headwinds of the on specifics investors' share diving especially warning quarter, price, status like of remediation iRhythm's in minds response I'd regarding the know recent address third XXX and observations. Before more letter I what to into the efforts of a is

multiple transformation, single company large a our beyond global platform maturing into many a multi-sensing growth of As iRhythm with the in product, business of single scalable a is midst you company addressing company market know, profitable, end U.S.-focused markets. a

are multiple long-range months we of our XX to stated Our changes reflective made towards excellence foster have to ongoing of and strides our the transformational a significant these past organization commitment within accomplishments goals my a provide later for of and to specific to remarks. the recent benefit create patient some in of bit value continue examples on for stakeholders accomplishments foster outcomes. I'll innovation

made have significant legacy we for significant we acknowledge While organization. ongoing our progress, issues regulatory addressing remain that and quality a and challenge

iRhythm's and have and of priority the regulatory from a top the level to Board and been foremost, to and First executive quality and and into from down every remediation iRhythm will of matters organization. of quality is culture committed these sustainability continue top be layer our corporate

warning from beyond the year. XXX of the addressing observations and year July Our focus from the this letter current extend last efforts the remediation of

of are our part been including our system touching intent management intend inspections recent not areas that and expectations best-in-class. accelerate quality of aspect entire above seek of system, of the iRhythm have broader culture making and it, going organization quality with FDA every to our of we the committed the We company. rebuilding exceed FDA's to quality beyond truly maturation with is to rapidly efforts the our quality of within and as the the the

quality significant one from X to more XXX brings letter ago our people we led companies regulatory who today. investments As and new past within years the efforts. hired into experience remediation have XXX which a Further, having directly than significant leader is made function, our XX myself, reporting have resource in roughly we of example, month, warning through individuals organizations of and quality now

quality in remediation place, industry-recognized beyond at and FDA system, warning highly as known which engaged go progress audits the beyond entire our be planned have will conduct our of the navigating is audit consulting reputable commented periodic for They what leader in XXX a the conclusion regulatory already against we observations. management compliance efforts. last also around matters in to recent the of a a consultants will the expert that year's scope efforts most internal firm full Additionally, on performing letter

we quality a from regulatory and quality to remedied matters satisfaction. taking are very to necessary seriously we will clear, these ensure is best-in-class and we perspective abundantly FDA's and the observations that allocate As complete hope are that the their are resources

in concerns FDA of we clearance XXX(k)s AT progress expressed Zio clear system. recently addressing a X first letter, in our FDA the As the related received for to indication the warning of have

clearance AT the letter is system as for a first to The made file. Zio a previously catch-up to changes

Regarding the before our design XXX(k), system. second to second the agency be perform contains of review obtained that they our which requested specifically first AT modifications clearance Zio XXX(k) final XXX(k) submission, the

from any further of the questions letter submitted FDA second as clearance We time, agency our the regarding the the agency to time. at XXX(k) this soon At to response submission. are awaiting are look XXX(k) forward community have from of clearance unaware recently and received we accelerate will this this technical our We investment the updating substantial the a efforts while the support telemetry for Zio be next the quality remediation transformation delaying of of the intended engage undertaking the milestone company's the the generation and voluntarily system, redefining efforts FDA, we our organization cardiac mobile the which is reached. Considering regulatory with we to the to product. MCT standards were submissions which as

to our of the system encompasses regarding the the XXX(k) third of the on FDA of the of approach and our technicians product following the recent time most position our future. and by of that receipt XXXX. We're concerns taking that ahead file with questions documentation acceptance the voluntary plan of in in FDA's company's to the the the the necessary and and efforts to the with take demonstrate questions in in our proactive XXX we part including testing observations the next-generation activities quarter this technicians commitment additional of company's system, certain agency be approach to performed rigor of result This inclusion to anticipation as may as perform submissions of demonstrate recent impacts all the expect and will ask July agency continue to the filing we to will MCT of time FDA addressing the ensure the to voluntary which part the Following our inspection. approach

iRhythm's representing new this of by best the record driven required were third to $XXX.X ensure we is with come. Shifting achieved in the existing pleased that quarter the up innovation application as agency quarter disappointing, execution to the we years from what account FDA and in XX.X% may XXX(k) to to field this understand in core We that set growth of be revenue, approach iRhythm we year-over-year. with to way combined continue was we completeness business of record and our performance. for demand a believe is ensure This million results to to accounts, thoroughness lead quarter While solid another openings.

growth third now in Our mentioned within quarter commercial top deeper expand integrated early drive quarters. our channels, in pilot also care care Both into accounts cost-efficient line substantial to quarters phase primary to beyond that networks are during national value-based large beginning teams should launch. drive within prior into the expanding and large continued delivery traction programs future penetrating pilot

growth Importantly, momentum Zio came business, accelerated Zio only AT has from months. where our our overall volume business, recent XT but in from not also

third fourth registrations efforts, of our are largest a every in U.S. Exemplary in a also and account of quarter it openings, a record going AT better support number tap XXX of milestones Overall, Zio our Zio Zio customers serve had extremely fueled that of celebrated AT The new better the is number ever, seconds. third quarter we to of there during represented on XX a a and again of XXXX Zio quarter. year, and out is exciting the the that this every will by the wear to number once quarter on these patient X a of patients. exciting something people we developments pace

our patient newest compared superior longer patient and Zio long-term fewer wear at longer duration, Zio we First, monitor has XT demonstrated device. HRX performance. demonstrates generation Monitor data Zio analyzable Zio fewer Monitor's time legacy believe we complaints and which early terminations, X XXXX, for celebrated our wear Monitor, our to real-world continuous unveiled registered millionth

improve longer CAMELOT demonstrated which analyzable leads further this XT's generally to wear as greater devices may ACM diagnostic among duration, superior time building yield, upon by yield findings. Zio Additionally,

the time Epic platform. through EHR streamlining And to celebrated integration, also cardiology devote access more we local have on first XX% providers our their across believe time and allow and the By care registrations to operational we their to it health can to which launched milestone to typically crossed results health collaboration of care systems system the to we community. to up have we health iRhythm our company into serve delivery Aura integrate our believe that accounts exchange save can of patient improve on can this Additionally, with services and collaboration Epic's what beyond. Zio efficiency, care services X Zio orders join the organizations integrated estimate Aura, takes from that network million expand first emergency of to services teams via of through community medical primary matters that care. Furthermore, is EHR to reduce integrated continuum Epic, their within Epic. most, the access cost across to to instance networks Zio and can care clinicians and departments patient device

begin to customers solution this We more early are in to offering excited broadly XXXX. new starting and Zio very existing

features This requested for the from MyZio field during has years a the used our than and more for third the team. feature quarter, relative This highly the platform few having software released Lastly, milestone development X of product iteration legacy Suite team also commercial patient to an our customers. of celebrated past system. experience Zio enhanced the the app digital our latest latest million patients user been

ingenuity For improve am latest our important lead workflow collaboration iRhythm incredibly are our of enhancements update continues user and teams we the as and to Zio of through navigation management proud customers, includes developments of milestones. These and and to some the milestones experience. achieve examples these how and the updates latest internal I innovation of suite

progress Turning sustainable levers long-term against our for growth. to

to log MyZio our compared and impact strides paper more one usage patients for and as and the in ever clear. meaningful very clinical our content Patients also allowing expansion at symptom a our arrhythmia international the were of In around efforts record the MyZio teams this a the on Xx using We enabled single time XX,XXX symptoms than The garnered more is to using during significance likely patients, an least as initiatives. well also U.K. product access made first MyZio quarter to symptom Kingdom, to past introduction log booklet. app innovation our the United we them digitally. educational in quarter rhythm overall app registrations correlation

commercial milestone solutions with worldwide. critical thrilled Spain, commitment this quarter Netherlands, launch company bring excited our in been have in to market during digital Switzerland Zio our and innovative of a to reached our in millions bring expansion We more health to Europe, Austria, care we patients and third to U.K. with the there. Also highlighting continued are the people

and were We approval are these practices. In Japanese to to Japanese PMDA can ramp early their in academic opinion utilizing engaging continue the cardiac clinical a monitoring trial. received regulatory its we in hospitals, have monitoring Monitor in in leading clinical markets the September. XX-day efforts, receive Zio started regulatory receive and an have for to service without the key for to to extremely device arrhythmia Zio evidence only at the Japan excited orders improved product also the with value is to stages and that commercial services deliver approval we'll physician first artificial intelligence as Zio drive appreciate very centers generating help contracting local our physicians services in and leaders Japan, category

Our a questions from regarding our following we MHLW Japanese submitted regulatory was already few dossier application. approval and reimbursement the fielded have

negotiations, As work these to them for we our planned in we with navigate to launch. continue Japan get ready distributor

We largest continue monitoring ambulatory representing launch cardiac XXXX, to second the in world. anticipate our the market foray commercial into in

licensing not we platform of products, years. a could more significantly expand to entered the connected, medical-grade, multi-sensor BioIntelliSense product technology to the capabilities into capabilities incorporate the excited with be ACM to several over agreement innovation On our front, us next our positioning have

market, platform health, channels to to BioIntelliSense's that Zio also While our iRhythm's iterations progressively monitoring services heart broader vitals ambulatory more capabilities our over be efficiencies capabilities this apnea deliver of a enable within workflow obstructive ECG additional develop sensing rate market long-term accelerometry-based clinical for clinical optimize that our where pulse other I'm and oximetry, patient believe partnering and also utilizing adjacent next systems view are several positioning is future patients serve play, and holistic ACM a these technology rate capabilities and product important hospital to indications of accelerate we best-in-class pressure necessary indications in as of exceptional multiparametric maintain noninvasive potentially in and fund time. Patch-based such and may more incorporation technology the the we capabilities patient expanded factors to to premium core years insights. These then states believe could type may ensure as and natural risk these this respiratory multiparameter and broaden care. the enter we sleep over with and to ACM into into blood further but But an development cardiac will vitals capabilities complements not long-term data By very collaborate disease strategic team only next for to overloaded enable the believe positioning diagnosis. provide platform of iRhythm connected represent platform of balance proprietary us sheet chapter uncover have BioIntelliSense, excited to as and additional physicians. naturally

than named recently, usage, so being innovative iRhythm and and top the different as U.S. recognizes and more from on disclosure based Greenest emissions, the and parties are externally every companies sustainability engagement. waste that which companies World's the commitments. gas Finally, a a countries XXX technologies teams Companies are performance on by America's data list for It's third that greenhouse parameters thrilled Companies, recognized health iRhythm online and the Health ranks based to scores XX sustainability for Best I'm financial of accomplishments also May, was company's XX In our on water that More and XXXX. Digital our list list in recognized Newsweek's Newsweek improvements over inaugural that companies variety XXX of evaluates environmental generation population impact, one day. on our of top committed recent

health one Additionally, engagement highly health and Sciences we of patient This announce a management population major is Awards X achievement to December. we announced top XXXX very winners of with happy finalists in to solutions Fierce in field the that named Life digital competitive and be for are been the the in Innovation a have solutions. categories

committed demonstrate, call of significant financial our in driving accolades is to performance. all recent benefit iRhythm that, sustainable now for stakeholders. With turn growth over Dan to profitable a these of responsible, the the recent discuss to way our and I'll As

Daniel Wilson

Thanks, Quentin.

As presented the otherwise be to a website. will on found metrics today discuss on in noted, I reminder, non-GAAP financial unless today's basis. release Reconciliations can earnings be that IR a GAAP our and

revenue momentum we demonstrated million, XX.X% continued third XXXX as representing Our achieved markets $XXX.X core year-over-year results quarter our growth. of in

openings. combined account As from were driven demand another new by Quentin of with mentioned, record accounts, these quarter record existing results

third one-time during improvement some operations and benefited was commercial year, inventory as sustainable items XX.X%, for efficiencies enrollment quarter defined efficiency to accounted our noted continue excess quarter. Gross Compared approximately opened of reduced quarter favorable approximately our the the New the for decrease driven for XXXX, the volume associated gross volume the store for margin gross clinical XX% third XX was prior growth. costs than manufacturing Zio Zio of prior XXXX. with with the absence year-over-year to margin new the Compared store well was quarter. to in margin, quarter the months, operational that quarter second been with expectations. in XX% third the of Services while third XT related advancement automation Zio as accounts growth by to benefit U.S. us in have as less driven line of Home was launch by stated the and in in that Monitor in slight the our

in third with from the approximately a quarter Normalizing or SEC $XX.X primarily for our million adjusted non-GAAP was adjusted acquired our XX.X% quarter. related expense operating guidance for results. research continued operating expense, as Compared toward to within operating have of million, acquired in-process charge not P&L. sequentially iRhythm IPR&D XXXX, this been up demonstrating $XXX.X and acquired its that were during up license expenses $XXX.X the around million during third the approximately leverage development non-GAAP XX.X% exclude recognized measures quarter, financial realizing quarter alignment by year-over-year, expense was increase IPR&D technology to expenses expenses does this X.X% would In expense Third progress adjusted year-over-year. up driven and operating

expect FDA other increased well to noted company prior consulting quarters, third additional subpoena related are noted in to quarter, to approximately the XXXX run expenses we incremental through $XX incremental $XX activities. these fees company As be rate XXXX. Once million DOJ continue activities continuing incur and forward The with bringing and majority million support, to in Quentin related now efforts its we million remediation these efforts, remediation activities legal per year as as to going $XX expect consulting expenses the and we expenses as of into expenses on a previously. our these in to We subside. remediation

priorities million XXXX quarter third or million was of per X.X% the third X.X% compared quarter incremental future. Adjusted in of sustainable of net approximately an of quarter share while $XX.X actions in profitability of XXXX. and to remediation the to to revenue adjusted scale net negative deliver loss into revenue corporate XXXX. near of expenses $XX.X of per or quarter align XXXX the negative $X.XX compared Adjusted iRhythm FDA resources negative quarter the of a positioning will efficiently share XX.X% $XX.X million an in recent better loss loss the headcount second of help intended loss the EBITDA term the to Importantly, our $X.XX third offset was in and or third in corporate net XXXX adjusted in to

quarter previously of million contemplated during X.X%. have not EBITDA guidance, been the our would which $XX.X was third XXXX acquired the adjusted issued Excluding IPR&D, in

guidance. Turning to

as are this between $XXX.X presented anticipate year to full our $XXX.X We revenue narrowing XXXX revenue earlier million. and now year outlook range million to

we continue business driven both fourth year drive and We have core our by strongest of quarter. trends market continue in solid is and to penetration seen the in accounts. to new year The quarter customer to historically believe our existing be as that growth of the the will U.S. start volume the we the year in sustained

reiterating range to to midpoint gross to basis approximately XX%, compared points full XXX full XXXX. are year our XX.X% We guidance margin year improvement at XXXX a of an of

negative with believe full margin We range of made EBITDA serve clinical expect now continue margin, manufacturing negative and respect improvements X% year for operations XXXX revenues. lower and X.X% that to progress we have these significant will EBITDA time. With adjusted year to adjusted efficiencies over our the to to approximately year-to-date to full sustainable cost from

not As charge noted non-GAAP excluded our the will for from IPR&D earlier, be results. acquired

acquired the charge year. be of We million $XX.X the full IPR&D to for for $XX.X range million expect in to the

million expenses and and the into earlier, $XX consulting will the to to that we fees align for be remediation efforts million FDA headcount activities to related full offset noted resources now to will were future. As legal corporate the to anticipate matters be by and efficient executed DOJ approximately year. $XX These ensure scaling better priorities corporate

guidance. our been absent guidance with to together, unchanged would adjusted margin Taken prior transaction our EBITDA BioIntelliSense, have

we a Finally, and unrestricted quarter approximately in investments. with short-term the $XXX position strong ended third financial cash in million

During levels we recovery and momentum improvements the quarter, first delayed further quarter associated to normalized in quarter working with incident demonstrate from XXXX. To and we the and Change financial DSO billings in anticipate operational in improvements our of the as close, began exit continued teams. solid third collections to third in business the iRhythm cash execution Healthcare by of the we resulting cybersecurity the commercial capital see the accomplishments

profitability of into in implementing now we to remediation call efficiencies like would for allocated future. With and capital open expansion long-term growth that, are business. and appropriately priorities our teams Operator? focused the are on strong the And are We while FDA drive to for the financial investing position resources a questions. sustainable continued ensuring are to the

Operator

first today Gong Our JPMorgan. Allen [Operator comes Dan. you, question with from Thank Instructions]

K. Gong

or is just MCT, want So, start So, being off the Zio approval pushed I AT hear disappointing with that to right? back. to

much of your how decision that that in the approval informed And own much was conversations how decision the FDA? fashion? was with curious, to of of get of when about your we by kind to that do timely to ensure bolster submission this, kind you Just think a

Quentin Blackford

This Allen, is here. the thanks question. Quentin for

FDA Before to get I we but answer starting call that I our that XXX(k) have design the this AT a with as for audience. jump our submission our from wanted cleared forward did they warning question, with that learn is share enhancements remediation Zio bit had second This letter that we unusual, in notice put product to and of afternoon, the we part efforts. our subsequent that

So, I think come another pleased the to certainly good sign that with we that continue XXX(k) FDA remediation to the and see of second make through. good down progress path approval

share wanted XXX on decision. position. the information and as get observations our there. Allen, that I us help part a So, our out out we as It is proactive position leadership the incremental question it's to the this of think here engaged part. decision MCT, new your through with on I of with brought technicians important completely on to in understand very certainly to that product this qualified important outside think group and us respect as also is we a the I think the July navigate to are with FDA's board experts Coming accept that's voluntary to

off we again, progress the to qualified think is it efforts very to the are technicians of and come fact, position going that that that it's part product, there we to the aligned as incremental clear of that can understanding that being quick the with there we FDA questions also the in certain when FDA's would of to head but from it, some knowing very in make technician I become that submission some that remediation see spirit work product. bolster part any that to against, do just are, need making for are the MCT part qualified expect the sure that now are demonstrate we of they we that

robust our So, think out, We understand much choice be submission. this the submission pushing we is a it will we're on part. more but a it's that disappointing proactive date

it all falls sends with our it of sure the we think going in the line signals acknowledge to agree make and I accept well. and right their that as filing to view. FDA with we're it We that point

K. Gong

follow-up really on a quick guide. just then the And

Sorry the quarter. a for million at of the your of sneaking this gives despite usual being being implying third pretty bit into little you're softer strong cadence? maybe than look reiterate What a guide in. the you $XX guide, really the quarter kind But midpoint step-up the raised confidence I of to when kind fourth

Daniel Wilson

Thanks, Allen, Dan. This is Yes. for the question.

So, I lot We prepared new good the from seeing business, the think there. heard in QX. really onboarding remarks, our talked accounts strength you momentum about of a in

means about what AT. growth I and So, feel and XT really good really that for balanced future and that both across nice is

setup fourth that. guidance So, and I quarter feel reflects for good like our there's a the

Operator

Our with today from Macauley next question comes Kilbane William Blair.

Macauley Kilbane

here I'd new is are up you there. allow the you mentioned, and about we the talk XXXX. they're board, accounts these you see. profile on This record it just then for few but on like average is maybe as coming assume with accelerate that a look which quarter, in set volume great XX% coming the Could should on obviously, the Macauley number whether level of follow the that. And that's growth as to towards record adds account on Margaret quarters of tonight. switches. just to feels just Dan, of accumulation of in maybe to competitive us AT, to And both to Monitor north last

expectations Just year. into look and we beyond wondering next QX as

Daniel Wilson

Quentin start it, to can this and so. Dan. could Macauley, I add is

their one is large are in the with past future with new I that exception and a takes is out launching full a accounts and accounts side of are or longer, maybe to accounts bit a for good converting time. accounts, of are integration indicator with EHR to honest, you integration. on adds those number the which consistent timing where be EHR full The pipeline. that expect of pretty to of ramp a point number won naturally we're They're really on growth. account in right that launch You're winning in into the takes IT record of these terms think, recently often The those how being them in bigger. It there execute profile terms resources they of would as

seeing the cycle similar. little Otherwise, extended a is relates bit selling it are as we the pretty So, those profile to accounts.

You more more care, really turning care for and more know naturally primary and growth. primary accounts. means feel on the more what about do good future expanding into But we're that so

As it again, XXXX, kind in us of well that to sets forward, I up XXXX. for relates going think

pushed We our out hear did the there into kind commercial being MCT thought $XX launch XXXX. Zio of incremental comments in XXXX. that a million-plus You of on opportunity revenue the ultimately, as submission and

And of Difficulty]. need see for. will So, a countries started be about launched Those will in ramp. the it, have international, the we a think does just We'll little getting X with then, European that which of take then third XXXX. And XXXX we're start bit you launching, in of to course, to quarter. to accounted Japan bit contribute that call midyear time [Technical year, to contribution next that

Quentin Blackford

growth unit fourth from will just quarter accelerated step quarter, Each point guidance, quarter. prior the it quarter unit And volume our up I volume growth every Macauley, year. has once would again. out, our this our up stepped in

business. good the in feel So, the we to continue about momentum

advisory that seeing being rates is to years X.X being the commented on fourth quarter starting even think online see AT there really issued prior the encouraging what as And than warning field the ago these fact they back we're accounts I at that out notice I see. put or adding letter and come well. in Zio were to almost to faster the

accounts, handful our begin in a team. Aura fourth to as from We're So, Epic and on XXXX to that moved perspective. we're excited be but we to quarter get entire here with very bullish of commercial launched then see into turned the implemented

excites point, us. that So Dan's is to we're been we make But and going sure be the to AT MCT delayed to about that. that has But thoughtful business strong. want

Operator

Kallum Stanley. comes question with next Morgan Our from Titchmarsh

Kallum Titchmarsh

of their competitor into I I signs this remote licensing for opportunity in space yours in Maybe more When the to the multiparameter touch And on has vital a from that today. we about could inpatient see you the out with deal. color agreement could aspirations these features patch. the wanted beyond a commercial market? there and product monitoring around BioIntelliSense capabilities us push provide know Zio's talked

to that's to at into too? some checking would somewhere like if you So, push see point,

Quentin Blackford

partnership bring Yes, BioIntelliSense we've to Kallum. been together. able we're about the excited really Look, that

this idea think to us that very we've multi-sensing much these PPG unique, differentiated, And platform the think of to on heartbeat, respiratory a some I brings all the that with it's chest, interesting accelerometry investment think chest. oximetry that that advanced bit a I made that single protect a the strategic setting, pulse longer-term rate is heart gets beyond ACM continue offering opportunities rate, go going to in -- capability the off ultimately sign is things I inpatient their accelerometry, help the that analysis, bringing the space, improve us. but are overall to off us of capabilities us monitoring. The will multi-vital

that home we the in And setting. I that think I than the to to better into think opportunity, anybody do real ambulatory is know how setting quite else. frankly, an the hospital disrupt

monitor us I capability very it, think well. we to allows IDTF very remotely to a which bring large

will focus we think it's but a first, out. but our have that's product one I be in that a a on That very real about. space opportunity we're so its product years become to bag that way makes to And us gets that that going the disrupt few excited behind into MCT going to time,

the well. benefit it historically of chest home that into I think our gives we've how get ultimately to sleep also talked we activities line a off will us as that about a direct sleep test

So, implications to do forward I partner. going what to be terrific together. able of look a to there, we're in lot a strategic

Operator

Thibault question comes BTIG. Marie from The with next

Marie Thibault

on opportunities you'd And on here? with delay to you that it? there have more maybe the to bringing noise. the a on plan processes on take assurance to folks need quality R&D part ask further that little bit to MCT, the improvements technicians Wanted detail background fold. other the the that the and few make side the efforts as you a remediation or the to the into do that now follow-up, bit little extra product kind cardiac talk happen for any a a IDTF time second Apologies into wear about quarters Can of are

Quentin Blackford

question. Good Yes.

how be quality physicians to analysis, system, in the risk how IDTF But analysis and the internal from about an management workflow think we documenting and about is that tell impact or think of it. it statistical product the complaints, terms going our apply quality fold they to to the how product. they of I experience you we think I patients management system, bringing them and reporting, we any our experience perspective into will how not the there's

future those It service product of as go for we bit the any All it the result to technician why to part and FDA things technician is be into submission a becomes going is impacted into when which offering. as now the that MCT are bringing approvals, to of implications of product. means all work the that new also a the we with the here and has involving any product the bring delayed submissions

just impact So, up experiences physician or how requirements get industry some in see patient also internal experiences broader do and some I don't and it, of Marie, have work to completed. this. the impacted to take to that but be by shows through the how how expect starting we're it that documentation I it the process begin to time the believe, and it marketplace it does

partners strong and product. identified now well the case-by-case in other worked a think on their to play out MCT with as players has basis. and And the qualified of the around there's view space who in technicians are I industry how inclusion the their that iRhythm starting through that beginning deal to our see space see we're FDA in point

wear that's next do our receive specific. With on from now time. Zio or time making talk to industry, will most our of from I more think very part market, the this of design AT and duration the to wear just longer the MCT So, the critical get-go. Zio is what customers When with aspect something MCT, become been not Zio wear feedback of generation the That the it. broader respect been will we AT we our a iRhythm has competitive is the have

continue we needs to and market time address that extend so in with submission those will wear this next And product. that

Operator

David Sachs. Goldman Our with from comes next Roman question

David Roman

to the in the maybe a bit little expansion wanted about talk U.K., international. I U.K. the and

approval Japan. in got You also

ramp During with we referenced some think should incremental contributor partner. and help But up maybe you Dan $XX about represents million the the that us help the think the your delay offset about of talked and extent quarter, MCT in about how can ramping you to international OUS? that an perhaps which

Quentin Blackford

certainly we're about been the Well, period We've international a market very of U.K. Yes. business. excited in the now. for time

good making work to from a continue with private in of on perspective the the But very We systems. sort reimbursement public progress parallel. health side we're

us do in started by the already getting see So, from us. expect would most perspective product more Spain, don't probably we about that's that through the We're meetings and But half clear particular the market into momentum for opportunities. is ahead X we're new around then KOLs learn build very as think going revenue. the medical closer And excited market experience. But before be and the after part from an impact some to pushing the focus I of when going the incremental to We're see high primary starting quickly have How in of nice is, awareness of awareness start markets this contributor. this the first we're up EU international that of success commercially monitor. to a to these working some country, in with that launching the market them something in it within to the exciting want different the just the But brand to there. that ahead it. we up overall you of in go trade with designation. about there get sets get those international for those out that certainly us see there. on. the European Austria with success guide We something the so. to when those reimbursement that the we're we're first to in it, that's and of product be 'XX come now. expect, fact out get the orders the in exciting you to call is being for markets, first to 'XX, ourselves market ourselves to be X% will really going that's you Zio going gate. Japan there. We and And and the play of is opening shows on we It product of International, of our Zio going Switzerland, XXXX needs Netherlands, international year think ramps X%, as we'll and we growing excitement have couldn't incremental I to the But David, early ways. that be that and it's just in out

grow X next of I years going the that revenue. to over X, X% to think X, X%, see you're

Operator

question from comes Baird. David next Our with Rescott

David Rescott

ask delay around remarks I prepared and as I of QX the XXX(k) then MCT XXXX -- have a just the my the the questions heard that for comments, I'll clarification clearance question. recent heard of that of some couple kind around you're year it you submission It MCT sounds on ]. in or and clearance been [ making more had XXX(k) incorporations XXX we the the we from heard the of like the expecting. that second updates on based sounds the MCT And earlier is the in

or sense that the the incremental for delay, off the the first the called longer-term that you again, then for question is of maybe second of. the I'm baseline I around is know to just get XX% been guide now QX there impact this just update Is clearance? And on $XX the million So the is, submission what trying update again based no no the line. from XXX(k) to change would XXXX the correct? have on, of a top out,

XX% to doing this year. XX% You're

half is XX%, XX% for the a where take out XX% of impact maybe baseline you of next next and that's the $XX the of way year? about So, million maybe this out good outlook for the growth or think off year, to maybe year shake

Quentin Blackford

guide XXXX David, yet. going not We're just Yes. to to specifically,

product about to to concerns the with. FDA designed that in the address AT that as of MCT perspective enhancements product received the the features how that Zio even MCT What's way think very those to for about from product already the the can the no when impact that To in there are about be get max market is reduce we've anything in way the strong think That designed as service, that been way I working and with just technician into of clear, XXX(k) very approvals when quite has a design we that about technicians XXXX, AT accelerate MCT were had a is itself has the that changes of questions next defined to of about for. you I but now, think with report. performing to you product happy and you not year. the the that it product, we a result the design point were FDA we the this right very not accelerate how there able really is begin Think it's asked described think that AT limit submission the that think trigger We're view AT. this begin when product. Obviously, profile. you're already a the MCT that profile. FDA it be some very, think just But the has thinking software with are of quite final that further, product for and with a of adjusting the and the the it's to the workflow that to the is you the or also have just clear right right perspective how growth right by in and that the way but interact described right that are going do bringing lot into ultimately have I Zio delay. There

to as submission testing now it's and that to AT how perform likely well going these clear been that ahead to again, a way. demonstrates our of exactly Zio most to take on and works. to the commitment need sure of ask will they're do making addressing and expectations and factor it, are we So, FDA Zio that that the to and there's provide we MCT prepare FDA's that the asking that submissions time show and go and do ahead ahead satisfactory complete, these in thing which in but human bit they've the go is questions right that time interaction that it's to with But we submit a to

Operator

Our next Truist. question Richard Newitter comes from with

Richard Newitter

stake the level us to having the start to confident time you required. a just has this right spending need of for to that spend for need the able guess couple a is identified remediate. the or being required a put can you you the get MCT lines need information and the been in are what delays? all me. guess I incremental that challenge a and what and the lines FDA is Quentin, make with for versus ongoing spend This bit kind how tell is you ground XQ One and of you that you've for you 'XX progress much you guys, think you is these of I kind to time and have right

Quentin Blackford

I a it's Yes. fair Rich, think question.

as the well respect the going the in recent of spend, this important the are remediation, it's point $XX what observations. remediation the efforts identified I with think letter at to million I our XXX beyond to has note, think warning FDA as

navigating perform were it, We to another subsequent audits or audit the made. And they to entire management through their expectation. management experience entire through want that as building And back quality of being for XXXX. these is and of remedying at process the FDA have to It's quality a in system even looking back warning ensure this progress if outside will the may has them to sure works who where in management we engaged and entire anticipate we've ultimately, the we're the end here systems, quality of we the expert they inspections. in periodic taken go every at come step system, And make QMS, that to companies. having system aspect look management letters trying process quality would big why we're and up a is part look

that from very beginning to aspect confident be want can to and end, and happy to look particular it level that come FDA their to all need. more that every up can to meet it ensure we than that it's if area, of the with would in we at Looking were feel we a in

on than they've will offset rate want a quality other approach Dan addressing throughout about look why focus the actions at identified, $XX year. noted. I million just the the entire has that thing taken concerns continue That's after and out, is XXXX do the to perspective. that system the at corporate So here that let's been from FDA's our entire management go holistic that to rather spend will $XX point next million we've

we goes of try away, QX, So, time to wanted really XXXX, line from through MCT bottom a continue it the respect ultimately, when I again company important it's the nice the improvements to, could the perspective, the through work see address profitability those think part that as to before go do this. will line. submission and to address in know submit product. We're time With to the is there's while you're we to of of to term. that be they're the to spend profile needs going then if questions ahead in going profit reality we work upfront we drop asked questions remediating to done necessary And note, the that very technicians be involving are aspect that to the to near to including The there to of work are and asked. take in that the going and be the going and

the frames we've So, time our to the way seen expectations the internally, think QX time But than to pieces considering in we'll aggressive and best more time look we the driving to is frame. past frame that the do that estimate I at QX right ourselves when moving be that's it. something set

Operator

Plovanic next comes William question from Genuity. Our Canaccord with

William Plovanic

to move Quentin, really kind with just help hoping of us I as just forward. you cadence was measure against you milestones could

in become But Can filing. we you on letter? XXX see that the expect the quarter is for letter? third see forward Are could point time on a go the with of path that us giving that any need there as MCT to Kind should your a to we anticipate? Do the the anything expect remediation you way mileposts warning You're that? to guideposts are to filing? file what or or milestones there

Quentin Blackford

at perform can't I that where from as doing the as And directly theirselves in ground we're can and Yes. know FDA. their go the very parties going entire third even the to the speculate would And No, may to familiar we're FDA much thing also here beyond level system work they're against remedying we're hold the management looking help or audit committed all we to that, progress on with they rebuilding or of demonstrate entire audits we're that across that the look, and brought concerns. Obviously, their they this. the subject to making. ourselves the that to to we've and we've shared our clearly go they up. that we that the to that But with to quality themselves scrutiny very them -- with

entire to to know don't clearly respect that making. anything to a very there be trying made we or company. time that's to that respect is it FDA respect that course, every is very visible to response there's important those I We this commitments And and them the report is that's situation publicly to on to that progress the aspect we're in the to way, stay So, demonstrate very that's the with with the that single against important I from to cost FDA out along going -- very with with we us to the going really our no we're think XXX the it prohibit and And progress priority observations. top note. With remedying of month improvements.

see track along information are to progress But there's to and think up commitments how public remediation you the that's extent we going you're to against we going. be willing we or in as and the do. which with you something we showing we're efforts track are on way on made that probably is not I updates us remediation it the would we've to to updates that's we efforts get on respect the to to market that's with and the willing respect of the giving share can the provide

Operator

And Kalia Suraj our next with question comes Oppenheimer. from

Suraj Kalia

me hear right? you can Quentin, all

Quentin Blackford

Yes, we got you.

Suraj Kalia

I'll questions. upfront. X Quentin, Perfect. pose them of both

this correctly. the event So, trigger factor. I this want form sure Will be make essentially yes, built go of FDA one the right the level that understand on is MCT, thresholds to just say, given Zio That's the still amount, would just I some system into with there question. this

that right, into there understand The whether Help broad Quentin, specialized with right? that a Quentin, being and sensing, is dysfunction, choice talked I question, AI specialized and sort pretty more ventricular complementarities the about you is multiparameter second otherwise, your understand More novel going is versus you're analysis. commoditized multiparameter While, some are of sensing the is ECG of more it. appreciate dysfunction, think valvular lot I about there are sensing portfolio. get ECG What AI, the IP of that talked can from domain death-based so, us other about, trying cardiac to talking about I'm it's inpatient, areas. it's companies areas. multiparameter

Quentin Blackford

AT continues comfortable the in have right? it, continue But the but With with the the to Thanks, gotten significantly there the down that in just limit limit dialed to algorithm a approval will tell capabilities met we With the of all, has both also of be AI being that product. on prevalence first is being product the power better respect potential trigger design it. that Yes. and management. FDA Zio catch-up feature in we final to received Suraj. can utilization have, the I you trigger MCT, through a enhancements Zio of And MCT, the very

levels that our it is multiparameter the So, monitoring to in to will oxygen still to that center, want limit that approvals. With treat it the the has going to with into the we're very again, we've not was the with FDA becomes of think be give far to and I'll patient. treat find that in have far, they potential a for going research even is customers importantly, arrhythmia, seen rhythm the something known But that met see but can have needed lot care that expectation existing depleting up way If a wear us less. would still I and their to the respect only. there's seen patient that their does the an more primary a they physician we've thing arrhythmia there of our arrhythmia. data this trigger very is good comfortable patients But sees They're of opens in get enriching that example when monitoring fingertips, an today clearly space they sensing, valuable own identify to at cardiac able it, cardiologists, during things demonstrated one you to that particularly they're for that but with patient, even or EPs, them. were their of a they different being us. with moving dealing market it very own the a but is different never the to

So, another physician from is that patients becomes I a think or provide one know of the ultimately sleep becomes important. Sleep to interesting the EP. an enriching that data majority that can originate We we cardiologist us. analysis that very very to

disease, is these or multiparameter very more can interesting does the with can excited. enrich they for patients. am monitoring their it becomes ability not these can right we becomes that ways excited disease, for patient at. to out very that remotely, large interesting is more for sort is front of And RPM I identify arrhythmias, in of arrhythmia doesn't a some information we then think existing us cardiac through space. find I as get what of we diagnose a and funnel high or of some reduce to the important to that That networks see which that and becomes there to and don't move where not interesting is care our codes value there's what's can lot to that end, company chest, us. features me the But lot become that that But sleep therapy, monitor customer I treat to diagnose care think reimbursement is to hospitals us. into primary real of going some the a a for provide in to and RPM. wearing other these natural originating monitoring partnering identify of even risk if remote I than care say would and already they're base cost get it patient a hospital the that we're the them common capability off interested office. be sleep forward do avoidance on if not make care, therapeutic is disease sleep want vital think is We're patient me patch the the talk off And valuable the that a sensing for that care around on physician's cost more out of home cardiac just with future us. I very, we like but that can the of to the necessarily. we I the enabler do company of we a move too just hear We at and signs think

Operator

We have in queue. no further questions the

back closing call the turn remarks. I'll any to over management So, for the

Quentin Blackford

business, we're Thank with strong through operational forward the we're improvements made and finish say, to and through seeing the meaningful exciting, we're we the I months we've see play you, the profitability are on operational first would very looking a There to lot pleased that X momentum it's operator. in XXXX that beginning look, a growing year. of the to the particularly side. of progress that

you and us, collaboratively is into focus talk and we further future. With their later. work we'll working primary and Goodbye. thank immediate the forward address our them completing joining concerns to again, with that, updates FDA to and remediation for the However, providing look

Operator

Thank today. for call our concludes joining. you This

now disconnected. Your be will line

iRhythm (IRTC) 30 Oct 242024 Q3 Earnings call transcript