iRhythm’s first quarter results were well received by the market, driven by strong growth in its Zio product lines and expanding adoption among both traditional cardiology and new primary care channels. Management highlighted robust demand for Zio AT and Zio Monitor, with significant volume stemming from new account onboarding and deepening relationships with value-based care partners. CEO Quentin Blackford credited these trends, noting, “Demand within our Zio Monitor product line originated from cardiologists, electrophysiologists and primary care physicians,” and emphasized the clinical value of earlier arrhythmia detection. The company also celebrated surpassing 10 million cumulative patient reports, marking a milestone in its mission to broaden cardiac monitoring access.
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iRhythm (IRTC) Q1 CY2025 Highlights:
- Revenue: $158.7 million vs analyst estimates of $153.6 million (20.3% year-on-year growth, 3.3% beat)
- Adjusted EPS: -$0.96 vs analyst expectations of -$0.94 (2.5% miss)
- Adjusted EBITDA: -$2.64 million vs analyst estimates of -$5.03 million (-1.7% margin, 47.6% beat)
- The company lifted its revenue guidance for the full year to $695 million at the midpoint from $680 million, a 2.2% increase
- Operating Margin: -20.5%, up from -28.9% in the same quarter last year
- Market Capitalization: $4.30 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions iRhythm’s Q1 Earnings Call
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Allen Gong (JPMorgan) asked about the factors supporting the raised guidance and how much upside is tied to new channel partners versus Zio AT. CFO Daniel Wilson said most of the guidance increase was due to Zio AT’s durable momentum, with innovative channels contributing but still early.
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Allen Gong (JPMorgan) inquired about the impact of Japan’s initial reimbursement decision and potential for improvement. CEO Quentin Blackford acknowledged disappointment but said local clinical studies are planned to support future pricing discussions.
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Kallum Titchmarsh (Morgan Stanley) focused on Zio AT’s retention of share gains and the outlook for the Zio MCT launch. Blackford highlighted account stickiness due to product differentiation and broad customer base.
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Macauley Kilbane (William Blair) asked for quantification of benefits from Epic Aura integration. Blackford said early integrated accounts saw a high-20% increase in prescribing, but guidance does not yet include this uplift due to limited data.
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David Saxon (Needham & Company) asked what proportion of Zio AT growth is from competitor exits versus organic traction. Blackford responded that recent account additions and word-of-mouth are driving much of the continued growth, beyond competitor disruption.
Catalysts in Upcoming Quarters
In the coming quarters, our team will monitor (1) the pace and sustainability of Zio AT adoption, particularly as the company prepares for the Zio MCT product launch, (2) the expansion and diagnostic yield of primary care and value-based care channels, and (3) progress on FDA remediation and quality system enhancements. Additionally, we will track international market traction and any developments in reimbursement, especially in Japan.
iRhythm currently trades at $134, up from $109 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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