iRhythm (IRTC) 3 Aug 232023 Q2 Earnings call transcript

Hello, and welcome to today’s iRhythm Technologies, Inc. Q2 2023 Earnings Conference Call. My name is Bailey, and I will be your moderator for today’s call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. [Operator Instructions]

to conference like host, to now Zhadkevich. Stephanie would pass over the our I ahead. go Please

XXXX. all, you, iRhythm the June results today, in released for XX, ended quarter Thank second participating financial for today’s call. Earlier

will of Before we begin, of statements during the like harbor to federal forward-looking Securities XXXX. securities call include Reform the to Private make the provisions that that safe remind this within statements you I’d management Act meaning laws Litigation pursuant of

call that should intentions, could this various not statements be Any statements. differ fact in statements forward-looking reflect based statements. expectations beliefs or competition, performance. and operating are of historical current about be these statements forward-looking management’s contained assumptions and from and implied estimates to events, deemed and or by upon plans These products, strategies, are our events to actual those cause results uncertainties anticipated materially include future that These risks and

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

list and to the For respectively, the refer Exchange and recent our Form section of XX-K on with Factors annual and Securities please description most associated with Form risks a Commission. XX-Q, quarterly business, Risk reports our of filed the and and uncertainties

adjusted results in presented of prepared to to GAAP. are information have we The expenses certain will EBITDA, financial during U.S. on Also call, and references for not the of prepared Unless financial not all measures metrics adjusted loss. in with substitute to with accordance operating discuss results, our adjusted cash-based or as should including isolation non-GAAP that noted, considered respect been net GAAP with accordance a non-GAAP additional and otherwise in presentation a be superior basis.

release is GAAP law, in required measures. to today, or reconciliation This contains call Please our future financial any as events update for obligation, whether intention comparable to and measures projections conference of accurate X, and refer a otherwise. except iRhythm to time-sensitive statements, financial the or or most only directly information, by any XXXX. the or the XX-Q new tables these information live disclaims of forward-looking revise August broadcast as of because earnings

And CEO. the turn to President I’ll with Quentin call and iRhythm’s Blackford, that, over

Good thank Financial you, and our joining EVP Dan cover today’s call. us. remarks our Thank Corporate Investor me today and all Bobzien, you afternoon, Brice Relations, on for Officer; of Stephanie. Development prepared and My Chief join Wilson, against turn business our and detailed a I’ll review the over made provide quarter updated results our of to initiatives. progress Brice during updates financial of and the XXXX guidance. then second operational and we’ve call growth to

second the growth momentum $XXX.X XXXX. growth We compared XXXX, to channels second million expectations was the multiple quarter the solid our we recognized revenue and prior represented In of in the of the and first realized quarter saw continued which in ahead built quarter, quarterly on year. of a of we record across XX%

accounts. continuous long-term penetration the usage Holter Zio of XT monitoring short-term as was space, as Fueling shift our outpacing a expanding from the gain market Zio new by were results traction These opened levels additional to within accounts, national account strong and see driven large to openings, record primary within market an existing and continued towards from near market. both increased ACM this as well XT AT we away Zio of continued the care volume growth continued continued growth

other brands modalities resonating CAMELOT full was teams data and second commercial for account was XT The our and customers, versus of clinical the our the use in also quarter driving The is value Zio that available quarter impacting with first account to field. wins retention.

requirements. their recent influencing authorization successes policies, or in utilization journal Full requirements CAMELOT long-term updating data are data, of peer-reviewed and including CAMELOT manuscript to payer a and is is positively publication prior ECG responding process. for these removing in of now also are payers previous early, the where While it Holters policies

real-world payers demonstrate of We into analyses additional healthcare to data to expand further physicians, and patients, to the are systems. the clinical beginning also these Zio value services of

also EHR and intended are driving workflows Integrations, making which and administratively simpler their our into for allow an Zio meaningful inroads integrate are We customers of with process existing staff. to

time functional our services X cross achieved incredible million in this Through estimated which million to care, an the patient Zio customer’s to registrations collaboration and accounts. in internal cost. efforts our significant estimated teams health April, translated to received customers, great is EHR and integrated our systems with XXX,XXX of support project have staff staff saved all-time milestone a back for time this we by believe We $X we with hours may through past

existing EHR XXXX, of new and throughout XX% through total pace EHR only up with accounts more volume Integration at of than accelerated both Integration, has year-over-year. registrations the The

the innovative are developing continue to more We within excited this as very for and coming we continue millions years. solutions to patients strive customers to serve progress our

we long-term to a the wear XXXX, are upcoming service. lighter, smaller, more thinner, and We As result to Zio can this of Zio this monitoring Launch device next-generation XT, continuous that also patient the our compliance yield of into move for awaiting believe half best-in-class we times. our extended Monitor diagnostic back breathable quarter as later device improve eagerly provide compared

as showed delivering diagnostic evaluation service. compared period. and high-quality well data compliance XT, XX-month phase X,XXX-plus the increase wore from March, Zio by the Monitor same the at Zio when ACC ACC this confirmed to Monitor first and a findings used from in XXX Monitor concluded market past patients Zio data evaluation Zio market the over and first who an The May being as Initial patient were was real-world showed the patients that presented yield with in

measured into a this, As rollout that from while purposeful possible from implementing customers the iRhythm. we sure come fashion. details we with our To as have commercial look rollout to we planning away patients they are full do are designed additional ahead. support allows service as us best-in-class launch, to strategy in you We sharing Monitor a move that forward to we with a and expect phased Zio of making quickly transition to bring months the in XT availability patients to Zio

the sustainable Turning to Japan, essential we needs Health Ministry medical Japanese In in in iRhythm’s pillars to large or us high is designation are several presence. and growth, specific announce giving a Zio, additional were strengthening we’ve milestones granted market. thrilled Welfare noting, by recently designation that for of Worth this our this we the to July. differentiated position MHLW had international long-term to early

care tests adoption resulting of Japan service. as the standard entry reminder, Zio in for very in market attractive annually. very patch-based Japan a the million point with and ACM the Holter with utilizes a is limited As disruptive, innovative technologies, technology, X.X largest as a ACM of prescribed still second a world of monitor

closely value MHLW to the differentiated to Rhythm existing appreciate with By job clinical help Society, Japanese the teams clinical an our Zio’s standard exceptional AI did using Zio’s the working when Heart evidence and trial Holter extensive compared care. of

Shonin review Following July. application we regulatory for this designation, our in submitted

enables premium in priority marketing or the and for Japanese review potential the paves for authorization Japan. it way specifically pharmaceutical the by PMDA, for Zio medical the also pricing Importantly, designation and device agency

submission with the and our progress quarters. PMDA during We of will closely the in the to continue Shonin on updating look future you work forward to review

engagement we for the hospitals. engagement of with targeted service country’s one market to experience future. have in broader commercial initial were early to Switzerland, healthcare in also will This of pleased launch in Europe, announce we five university that providers the opened In preparation onboarding evaluation Zio allow our the first a

accelerate market parallel. September, at our strategic patients as Investor plan shared our this with to access monitoring of steps worldwide initial last in plan cardiac experience our As to to priming we growth Day dynamics gain long-term reimbursement represents the in phase regional more international

growth. employees. hyper future business financial pillars, been I’ve for our on full-time progress quarter achieved the to of We Manila as organization, growth our execution center the business welcome enhancing While the the within in services first and scale also global operational pleased profile milestone wave drive our focused we the with a significant excellence during throughout made in preparing are we to

in business our activities ongoing our with We’ve the this in been as improvements transformation is very progress nice financial profile demonstrated being quarter. pleased the by made

on warning response. May, late we medical our reporting the the FDA system on to we device requirements. disclosed, received with in FDA focused which previously related XXth, as Since AT have non-conformities quality alleged and and Lastly, the letter a requirements system May thorough Zio warning letter a receipt engaged from submitted the of and

labeling We cardiac have them the AT we the been needed for the system provision telemetry engagement to are of used is device and mobile understanding how with that have encouraged modifications clarified of by believe improve ambulatory the user’s now the the agency, Zio and services. the with collaborative

focus the while work and potential to CDRH following team that submit up XXX(k) proposed the have we AT regarding as product further FDA’S changes the that address of Zio review to file direction design with In to features addition, under catch areas need system. a occurred for the a enhanced the letters of product changes the to also

we the to collaboratively with the to responses, review continues we’ll understand are concerns. address work our to and pleased we them continue While progress FDA with their

make Zio AT will services. While always labeling subject to changes review allow MCT their market is until for we’ve requested agreed as device completed, to the that to to us change continue ambulatory a

system the to we the warning customers, our diligently remain patient the letter and system, AT Zio the and timeline to we submission satisfaction. original of do compliance, our next-generation Considering and Zio continue to work MCT related proposed commitments expect design safety, other enhancements impacted. to to our FDA’s We quality, be committed collaboratively will and resolve the to for

of we potential months Zio we for delayed current the be anticipate and work resulting filing requirements, regulatory introduction Zio XXXX through Zio MCT system. a next-gen to XX product market by in on estimates, Based MCT modifications approximately as our AT

our such Zio submission intend for X.X features to by a Given the design directly time, into initial strategy later additional MCT our has Zio we had enhancements planned the MCT to previously system that additional product that shifted move pulling generation. regarding we

that technologies as timelines to bring We evaluate to we to innovative quickly will ensure market as our expedite can options product continue and possible.

will continue date. not the the growth beginning the in the the levers easily growth in closing, achieved of first The tremendous In could committed that manner. to delivered multiple goals of team. teams making operationally driving investments laid through at outstanding and necessary being are the be into and distracted I of of business results we the have to XXXX potential an We focused to the efficient prouder despite remain and out half iRhythm year

believe more never our well excited company. will to in we about to and of sizable market positioned that global are monitoring years opportunity continue ahead. We’ve ambulatory capture the of We been future this coming cardiac the grow share the our significantly

I’ll performance. now to that, the over turn With financial call our discuss to Brice

Quentin. Thanks,

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

U.S. momentum As our results demonstrated growth. realize core $XXX.X previously a mentioned, of significant in second we revenues as market million or quarter XX.X% year-over-year our

new accounted Zio XT accounts for have for at mix, being store account new driven as openings second Looking penetration while store was over XX% we to growth. the year-over-year new accounts the months, churn. continue highest also less account volume existing in been quarter second This same-store open XX by reduced our quarter and of that than increase defined of ever

the national Services quarter. in our line within the the quarter-over-quarter, and Zio business. quarter both of year-over-year second selling volume were enrollment pricing and prices place was second commercial for with Medicare for in in approximately stable rates Home during portfolio XX% Average

have As of efficient our to IDTF leverage continued XXXX, serve we of most patients. in our to the beginning footprint the manner

to units fee minor proposed for relatively second physician codes, as that CPT release proposed codes. After for CPT did physician the all to XXXX used CMS reductions included updates value well schedule labor conversion calculate clinical cuts payments calendar factor close, as their to quarter to the all year relative

be However, the year we increase modifier. rule an as also Francisco’s the iRhythm’s index calendar proposed practice XXXX in geographic will we to immaterial understand believe of rule Thus, today. proposed CMS incorporated it business the cost San impact net

devices CMS intend proposed and as rule the finalized until stakeholders rule with and a Longer-term, industry intend properly other to medical groups point, only continue to at As CMS and to value we this innovative to Systems. AI this of November the understand is proactively with we Zio the engage work the such timeframe. in is

improvement and continue of as of by the XXXX the second first in XX.X%, for to cost to rest gross the a the basis were serve compared significantly leverage XXXX. infrastructure. a down versus second and margin Both year-over-year was quarter quarter sequentially basis volume improvements a Moving XX our cost and ramp we unit point quarter reduction representing the driven P&L, fixed point to XXX improvement of

and year-over-year. sales million, and in Sequentially, second, were quarter taxes, primarily X% the growing offset Second as not payroll quarter to was decreased personnel up sequentially by volumes. adjusted first expenses in items spend the by down timing annual did leadership XX.X of reoccur operating as slightly as meetings, expenses seasonal such higher support driven X% well that

duplicative starting operationalize slow some third the quarter to to costs services Also, Philippines incurred in the as the of the begin of first we XXXX, as global expected, leverage down business center and parties. during

the to as the XXXX, the expenses in growth. support led in of was business’s significant to percentage increase benefit Compared dramatically that the quarters, encouraging operating to by the payroll-related volume a primarily second expenses leverage. was sequentially adjusted quarter prior of revenue is compared Particularly SG&A G&A due reduced to

of or is of long-term to million per first net per value from on operational in to a this share $XX.X that $X.XX a focus trend believe compared quarter the XXXX. the share over quarter we adjusted loss in $X.XX the is of realize loss a $XX.X or efficiency. was million loss Adjusted of We net that sustainable begin our a second as loss

Year-over-year, as business. core a per $X.XX we net share our in improvement adjusted leverage operating continue drive to saw loss in we

$X.X quarter global we line business continue expectations in were up Second center. as business to generally transformation million, services XXXX costs stand our with

$X.X EBITDA Importantly, $XX.X XXXX year-over-year. and $X.X positive million, of quarter increase second an sequentially in reflecting increase million of adjusted an the million was

in the we efficiency. around see organization operational put momentum as building the clearly focus can greater You

Turning to guidance.

million of reflect We to the into thoughtful in performance growth approximately $XXX This remaining million. seasonality to full-year seen $XXX are the outlook to XXXX, our XX% anticipated updating our of compared representing year. also consideration of third a to first continue to the remainder XXXX and we of navigate revenue takes quarter XX% range in the while typically half as XXXX the approximately

revenues full-year realized in of third the XX% approximately years. quarter with anticipate We line in to be non-COVID

XX% the margin continue to and XX% between full-year. gross that believe approximately We will range for

As of as pressure U.S. back half Monitor the Services margin marketplace. previously our we ramp contemplates to in Zio detailed, our guidance XXXX gross launch to into the full-year commercial

current This will new and include XT System for cost an our reflect inventory Zio levels our evaluation we of Monitor product. may the as underutilized scale

will approximately and range that $XXX operating expenses anticipate adjusted million. to in continue We XXXX million between $XXX

costs of operating Justice the associated adjusted our Notably, FDA expense engagement guidance Department and now the inquiry. contemplates with

we’ve these drive will However, able the been the remainder in the efficiencies to of that business offset incremental increases for year.

the we to and With range approximately will the created with guidance X.X% operating of in XXXX margin and that revenue. between an update believe revenue now EBITDA efficiencies expenses, X% adjusted

and will costs, As exclude to a continue adjusted stock-based EBITDA expenses. compensation costs, reminder, transformation restructuring

drive to one-time In to XXXX, to improve efficiency, and we experience. continued anticipate continue high-quality efforts million and approximately to patient customer of transformation $XX million costs scalability, $XX non-GAAP restructuring related incurring and ongoing business provide globalization the

enable serve activities these patients to related incurred future, internationally. more expenses the to in markets operating our the we XXXX especially into and as core that grow believe leverage We in will further

in Finally, and with investments position future we ended drive a second the strong invest cash core short-term $XXX.X growth in innovation lay continued business, to quarter million and our the in foundation expansion. for financial of

for With I and to that, questions. now Dan would open call the Operator? Quentin, like

question one Thank and request themselves Thank that you. one limits you. person to We Instructions] each [Operator follow-up.

Margaret from Margaret. question first the today Our of Please go from Kaczor comes line ahead, Blair. William

Your now open. line is

guidance, So can $X And in low for the XT just right? of that because I Hey. you part give see guidance versus of afternoon, referenced terms AT any start, this wanted to Good million. if the on we question. in of end, quarter. Thanks saw guys. taking up breakdown I to Maybe guys growth

beat our had obviously to this numbers. a You at really nice quarter, least relative

we’re You’re seeing near record accelerating new about talking account accounts, national adds, growth. the

the of get short, high story range? we’ll trying of was not the know long raise and why that guidance So part understand, I’m in to end AT the I you. past,

to Margaret. figures Brice specifics for really QX. continuing business some AT where to AT was encouraged get into around momentum overall, thanks XT on at how in Hey, I the of within the question, matter, the grew of in the that Look, both we up with let step the continue itself. the quarter think two Sure. I’ll off exactly it be and for business with

of end full-year, Certainly, guide. of But else, in in to the QX. on more terms the I high than ahead think anything we’re point get ourselves we going ahead time not of are this the in at

bullish very going with half it. year, the about thoughtful back to we we’re seeing. We’re into momentum respect of the to that want the be But

to there, of into speak So to read there’s I’ll but quarter. Brice results the nothing let the

question. past. good talked we’ve Margaret, the And in about Yes. this

seeing think in you AT component, across it’s a range. meets can from we’ve about I And range pretty where When from XT about both think the significant registration in think lines it’s perspective, of XX% that perspective, of north an high-XXs that growth you the we’re that then the about business. past. talked

So we’re the to of we not Quentin’s about made as we and to feel point. sure great navigate we’re need where of and year thoughtful make just ourselves. the be We operationally being progress ahead back getting the at half

is then the warning the That’s on comments a letter. bit Okay. of In to second changes, leave the the And market. on little on your I to requiring label the is, product to touch the thing FDA kind wanted helpful.

of then change that kind correctly? of asking to sort? that So ability that, leave AT or what’s sell be you. Does of they’re I And the impact that anything new it on for? understand two, the all your label market. accounts You that limit will one, did able or to Thank add that

the as They’ve labeling We some suggested just of process right the limits, patient clarifying for think of life adjusted speak. label and most changes of to product, is in and labeling with, in the alignment as to which well our is we’re of trigger about had That FDA work sort working Margaret. with more the things. the those we’re it. sort we way full those And that through Yes, the duration clearly of into around matters the of around physician, changes. the

the there the our monitor monitor So your or an product into to sell to to as continue reached product. the nothing market impede we’ve to can going alignment sorry, market And point, that’s that, or, future. we yes, it’s MCT ability

Thanks, Perfect. guys.

you. Thank

question go next The Allen. JPMorgan. Allen line ahead, you. Please Thank from from today Gong comes the of

now is line open. Your

Lily is the much on actually that. just you Thanks Maybe seen on in announced? bit the any you that for trends since This so of Hi. talk taking following Zio softness of the sort warning letter? Have Allen. result up AT a light in about that just for seeing was question. in demand been you’ve Could in

Yes.

for of the course most came over quarter, keep that the think mind part the it. the letter the I of in part latter warning in

our out fact And you, we been So the proactive sure the was we warning really results exactly were that AT at and encouraged we’ve a customers was we’ve were I speak even where to make that with letter. that very engaging warning tell with business, focus to the the by address there I’ll proactively in customers. seen to get post to our letter that

strong. continues So be momentum to

half To of of comps bit easier had considering, as the the product back half about to get the with going we we’re it with be as thoughtful earlier, do we’re line. challenges year. about The the quarter think last in AT back Brice’s the I in year. a it fourth in point excited that ever

ourselves the get just is going but of the with to this guidance. end nice, of respect we’re setup to at high So ahead point not our

get runway of MCT of gained the in out bullish market on next-generation AT there. very device space the there’s think in incredibly our business to a be that MCT the that AT, to there, our and continues excited we’re but product to of We a lot momentum Certainly, strong it. think with We space. amount in there’s differentiated. share is be But tremendous

there keeping looking you’re helpful. the what terms we in this That’s inquiry. Is that much. then share Great. thinking new timelines anything the actually into? And how to willing Any be mind they’re on just of business? impacting DoJ so you’d and be should maybe Thanks in about

of the only focus to Yes. this the on With we respect point to lot what or back exactly I to time, received not knowing on at also It’s get we for in in received mean, whole one industry document the point the would the DoJ, that. I hard to, the them. request documentation that are in a space our the producing clarity MCT any of we’re believe that update real is. subpoena one competitors not area

So with them. complying we’re

The continue We cooperate been very have interactions to with them. cordial.

to you in going with work really But it’s a to share We’re to continue terms don’t of to around you to what say. timeline expect, with know them. giving directly hard there. I what

not be As point to the information shared. at we we community time, have investor updates, those. new have as in we’ll But this any just committed updating there’s

Got it. Thank you.

Thank from you. The Morgan today Kallum the comes go next Please Stanley. line from of Titchmarsh ahead, question Kallum.

Your is line open. now

guys. Thanks,

Just international me, from possible. one on if

Can you the obviously, about more modeling guess and should the this what relative bit out once think in Japan. I in how about there? ramp good the here launch and here to U.S. we approved, time Thanks. over relative development maybe saw talk to we So a

Yes.

in Japan. excited super seeing we’re about what We’re

hasn’t more that technologies milestone patch-based that significant. us it’s to capturing the importantly, differentiated to meaningful and yet. general a a it designation creates specific us. long-term think needs, frankly encouraging is most then even within not high that group because in I I us for valued to And Zio differentiation market is fact real monitoring for medical in just some think have, that is And

We’re on file identified with the to application. now Shonin we as respect

to that our having us we’ll needs the best reimbursement, medical a discussions go I into and another probably segment. is around which is I high months. certainly, immediately pricing position six XX puts in think, premium think X estimate, that runs to probably months in designation, then push really And for

being the ACM market, think X.X each a market see more in you when than and pricing be which second it’ll into think again largest is contribution, market prescribed probably the year. I XXXX test about But the of late into turn us think, in XXXX. million for coming attractive we I as timing in every world you that very product

So way but as more to early available what the us more in it market clarity year in we when into into to think XXXX. XXXX, of not come but to around market, probably a we’ll product revenue be the get driver about contribution on that a speak of will for the begins come the

And then please. maybe Got just one follow-up, it.

from So few you there emergence could penetration think on then of it just Holter of rate now. to down are penetration products sits Maybe penetration? where right have at moment. that be Zio if in devices and traditional impact quite the seen guess relative might compelling market, the and would U.S. any ACM you’ve changed of helpful there I break the out a numbers the you the quantify

Yes.

I think patch-based XX% utilizing that penetration technology. rate sits somewhere of right overall around market the

in sit a continues of this to that entire industry. So meaningful there’s I runway front think

we fair think the share I have XX%. that of

out product certainly released best-in-class CAMELOT, I the that. would earlier the year think the we have we validate that’s there in that data

here got that’s only industry. well. as going point And not I technologies of fuel long but for competitors And significant care runway that to our the in back the become in this to these patch-based a for standard think ourselves, you growth, as

all and lift be to case going is tide rising for the that’s to the in this going scenario, years. several think boats I

grow device and The the that a progress around level primary the does the is degree several market care the we where it I of that see question you market use. the with bigger considering this years. interest I the think is to how easy than this next to meaningful where real the utilizing overall opportunity continues really can grow is technology gets overall to over that there. more significantly exciting And becomes double this physicians think it size

you’ve got working in your favor. two things So

the early got then size overall the of technology as got you’ve it increase the moves care, standard triple to of of meaningfully sort the opportunity double, if the and not really adoption market. You’ve of

a Thanks guys. lot, Got it.

you. Thank

question next The go today Thibault you. line from from the Thank comes BTIG. Marie ahead, of Marie. Please

Your is open. line now

FDA questions much clarification to congrats the great and a on process. quarter. Wanted ask so Hi. Thanks for the taking here letter a on warning

communicated that just submit wanted with you in proposed still the on Certainly also timelines a front, are you’ve separate I sorts think agency, about a just XXX(k). and features to the a about design thinking anything discussions heard say and understand enhanced more that potential design your those of need I to the enhanced thing, to determining little proposed with features. you’re Any MCT clarity the that. they’ve understand that bit on is but wanted learn FDA,

letter looking that catch and was and the there. With thanks review tell with question. that’s Hey, catch move a letters something And Yes. forth dialogue the the file getting up therefore, us they has is at they whether our or XXX(k), file up respect they they’re see okay approach for Marie, great the with of CDRH an to to are to back certainly like if would still lot A terrific. and and been the to would XXX(k). that or FDA. comfortable And to like with see that there a in I’ll you the collaboration

any now, active the around the part In timing can’t their the that, frame of than it’s specific you and it. I terms other around midst time give of of we’re review it right in

So longer. It quick. it take could a could be bit

would then up which MCT. frames, is to with time that’s to get going while the and a a that through up required leave that we’ve of be need market we in thought maybe to a frankly, to them XXX(k) that submit the those of we could highly through confident catch through catch XXX(k), this work to we way and that MCT but about able that we’re it’s product the we marketplace work continue Zio agency there in product FDA, The time would bit take and the

a the of talk through the we lot is the contemplating navigating that when FDA. about product, the delay So MCT of with sort and product in this AT

a impacting that’s what’s those bit. time So frames

the trigger notify put the With It’s be they’re straightforward. approaching relatively match patch features, to that the the to patient capability respect when identifying on away limit. they might to design itself

So itself. start Zio so that approaching begins think It’s it, see light that the on to that. as as device flash you’re limit trigger you that say, working to about counter, into, a a Suite,

it’s So that the the the the these informative that are are relatively would FDA easy But it. on, design in with features changes sell we any nothing patient product we’ve and to and enhancements of working the way just or functions physician. how identified more

in of approach So of when about to our XXX(k), think learn sort more time, continue said, point provide navigate good and how us, that information the we And the forward up at throughout it. staying I we can feel or interactions, the that’s catch file but to as see FDA exactly if clarified to the how the they’d like we product can the in we date, tone the with interactions, this market and if a course, and about process. okay with file they’re that

to uptick thinking rates year? product. that phase positive for in the of of in That’s product? you changes hear is Quentin. understood. launch? about out end all we a thinking enhanced about And prescribing? Okay. detail, about here Thanks return well Zio in that My ways Good be Should think you. or the we that How the broad really follow-up the coming Any are new Monitor. how all feedback Thank to be any launch by should on

the will the and customers’ get excited we’re patients it half back start being about hands. And of QX year. that these launch Yes. here monitoring our our Marie, continue into market in remainder to of really place. throughout the will we’re excited it super And and

excited. we’re pushing bit multiple As customers, different them out of you really you’re time channels but a these know, things take multiple into as and

as far contemplation there to going rate, time it start be the to thus to the it far. thought and take any utilized device As the we out about in to all haven’t of It’s necessarily way be for some system. it come through frankly back for return improvement and

from So nothing guidance contemplated a perspective.

do time and any contemplated would we So stands guidance not that there’s over we that believe the benefit is get, now. in benefit a

incredibly stands those well opportunity the incremental sorts with been in volume the have Monitor but things with be XT. it levels, not not any an that Absolutely, there’s Launch. monitor? we that performing Do has to also there enhanced We think ramping as contemplated associated of with now. guide have been is, for Zio Penetration volumes, contemplated

Okay. Good Very luck with you. good. Thank it.

Thank you.

line Securities. today the Richard go Truist Thank Newitter Please from next Richard. question from you. The ahead, comes of

is line now open. Your

Hi. the This Thanks for Rich. on Sam for taking is questions.

First reasonable second those one to get point guidance finer in that expect in on for Is AT year-over-year contemplated and to put expect a it an the acceleration comps does as the half, AT in it’s easier? growth given guide.

Yes.

through could about definitely a it So play it in gets growth we out some we with the of see to original our The accelerated were, we’re keeping it we thinking way before there. there and comps, is so expectations line on is we’re numbers see be it the XXX%, what comp ahead want easier. easier – ourselves. could get But

So that’s had no it. to we the thought Really way guidance. assumed what the original about adjustment we originally from

result Thank as margin could one-time impressive some on hopefully, we one, about just Got XXXX it. business and think year. some helpful. And costs about about the next letter. and second into cost And as how we with these, the those here quarter. coming out with think coming And be? DOJ the question. taking they costs leveraging in sustainable actually out, of the of you That’s then warning for think But

Yes.

we’re the coming results. with margin a happy So really gross in quarter, XX.X% the in XX.X% of QX. quarter off

in quarter or were QX some point, So nice to improvement sequential duplicative standpoint. from there’s that QX. Honestly, a your costs

out as those leveraging for being efficiency customer And that clinical our of up third-party of creating had. resources some in some that’s And lot global in side we’ve others these that are a areas QX, are our care there just and Manila. focus ops center that And standing well came there. in is of the business still but as

a is to duplicative the of there did some I, about in still bit So the the me, but run think to see we that’ll tail get a Monitor we it Zio down. evaluate have – a Launch for the margin, I I scale. short being inventory while talked system, because XT and levels, in as headwind start about cost take to the we gross

or It’s little probably I so. back be relatively the QX, million So, I you’re spend, pulls think, $XXX is but going bit margin gross as a spend a in about think, to model, thinking consistent.

and to think as play you’ll great out the year, move more We’ll up your do into of will the for time, we and through. there it XXX always the about XXX. throughout we’re running, sustainable. us model. this have going XXXX be range operations put volatility, over fully but, talk And trajectory about see that’s just to work new take why we we Now I It’s some that we feel But heading. is a absolutely quarters and those few to really until

the Thanks for taking question.

you. of Wells comes ahead, the go The Nathan. next line Nathan Thank from Fargo. from Treybeck Please question today

now is open. line Your

taking Thanks Hi. the for question.

Just an is moment marketing on to MCT warning letter, change clarify device? there at for AT your the as any to the claims Zio

There’s the just how it to I continue device and indicated there’s no device. clarification we’re but and the we’ll market to No. the label patient, as enhance further marketing MCT No. for in as help earlier, the in itself, an understanding difference

Thanks. in on a – it terms the the what comment the on of Thanks. this device? great. the delay? bring give market device? that next-gen so can Zio Will to to Okay, you submission due anything be MCT And you can of will XX-day kind you next-gen And

Yes.

So great question.

use to X.X getting start product first certainly device beyond utilizing to By our gateway that today, today. capabilities the that’s of smart it AT period of in like XX. MCT The wear days we the going generation versus introduce our was the the to device out version, looking XX extend north does a

days, days. opportunities XX go get that, not if to up now introduce to XX open closer you XX even starts to it out days, that When beyond

that smart can opens So, device, a making device. a feature opens through more inform just yes, There’s information it available do inform things the of to to up physician. through things lot smart more up like patient, you a a manner, timely set, a on

MCT into first to we’re going product there not we’ll generation, differentiators more originally in that competitive time are we’ll think itself forward. the bring other second now things some some the of reasons, after be to of Now I planned but the we launch pull there the for real delivered that that that in generation had disclose at are point this

getting get about that through we some tremendous clearance, opportunity excited enhanced closer it’s as the future. So to But submitting and we’ll of start about us we’re talk to features. those a ultimately for that MCT, think in I

Great. Thanks.

Baird. from you. David from go next Thank Rescott ahead, question of The today the comes David. Please line

line Your open. now is

here. question. taking strong the the for on Congrats Thanks guys. quarter Hey,

extended on with essentially to timeline a of and coming wanted two-part more device Zio MCT proxy Zio have first in not X.X I Just now your an what between kind here. MCT? just the question. just there’s new coming that’s XXXX of and clarify enhancement the about Zio that One, talking of is a MCT the

question, extended of And that then if of the I’m the which wondering there. you growth second the part described that you’ve to just here timelines that the get in kind or five-year that you have XX% kind outlook way impact

all? timelines impacts at wondering if I more talked about that previously think the here growth just and you linear

it get in our for five at I path trying don’t the billion to see impacting question. thanks David, the $X it I to revenue. that over all. to we’re a years see don’t impacting where

the AT growing I think, I business. do do by think AT can be continue encouraged on even there things we nicely some us. the product. we It’s in momentum are for to very that

can will to MCT bring to of device it. next-generation that get to we the enhance the we market continue Before that

initial of see don’t that billion revenue change frames device introduced the Zio bringing I of into another business I’m it the second and any to in first time market. will product calling into It’s will that our but $X taking X.X, AT There generation. the get originally the talked between, and trajectory and what say, about. that the we’re forward that were our MCT to getting be we’re features ultimately the to getting that we long-term MCT not just now in what will version So really generation be

think weeks, that we our able a with want month or device. we generation letter we approval a with it’s note, and sort focus so MCT make or important is of first FDA them. of to within all I appropriately, Zio submit sure our of being the were the FDA, on reality product concerns Now to through with of of is we to The the AT address navigate matter warning their

want to filing. a and AT anything going focus we comfortable, introduce we’re feel them as like there’s clear there, we navigate agency that not the And through a with other before until path on get MCT than to we we but

with really So happy on MCT. the we’re progress

We’re first excited designed. A by lot of generation it. is that

second of continue designing our it to to of while into at agency on those move we the the we with market. ability the end And some features Now up work get better even speeds in an day, AT. the to product generation on

all off been where think sense. label of guess, of the that on or in discussions these if just on thought I’m the table based more based kind the if this about has I you warning the point the I FDA Makes on the maybe kind wondering, what of just less is about essentially said, clarifications you. risk warning the Okay. the we’ve talked or just kind letter submitted, you and accepted for you the come has FDA removed then, around device market, you clarification with Thank to the that letter. the maybe risk on off at are changes.

look, agency to think, out still review still I realized we And that respect of want the is And agency, go the any the right? the could open, review Yes. they open, is direction anytime that to.

we to updates. them device. have some need MCT updates like, aligned speak, the with the label what market that We’ve absolutely and absolutely question, We the there’s aligned those initial requirements updates, labeling your have can one, product suggested we as putting respect continue both, to to those labeling we into that changes labeling suggested but they So an we those alignment as on look with and agency? we’re with some have with there the

that file not through alignment the either approach we going they’re review they’re there’s agency. that is part that. into file. is that yet that get And the looking have letter with. took The there to letter So comfortable with to the digging of They’re ultimately, they’re to one to comfortable into the we’re

We continue to approach. the was believe that right it

sort the as well respect agency down case, to catch file. put letter could know We’ve around the to view the of our point path up look point and consultants but of have that those XXX(k) that, a we you And had it up file, you on external would where a align of letter a that this then, the catch of likely experts run fact view. would different changes into, get at with that’s XXX(k) to to if file

would In multiple would market that with disruption to nothing interactions the stay product, there’s market date. would that product is the begun And of made months clear in make to the the had indication clear interested they the there of that that that in continue marketing or warning were we’ve any we’ve go halting where agency they shipment be to my that the this. they the now we they product seizing in letter, and that it. with interactions in product, is, would those we with had of have to would give product in any would and with view not have or And scenario, continue us that the them delaying, believe that interaction the if

should date and As the we we’re where pleased that far. thus a gone midpoint infer this the that the with matter fact, of interactions confidence I think, to that guidance, have in sort of the fact we’re raising fact the has our of

can So that very product through believe about the a we way market future, and we throughout. continue the to the to this remain will in be excited in continue navigate successful

you. Thank Great.

Please you. Needham. line from Saxon ahead, comes the David Thank today question David. The of next from go

Your is now line open.

give are with a thanks wanted maybe to update afternoon, with two-parter just your I on to start my an transferring taking here. for where Good reimbursement, SF guys, and questions. you first, Maybe Yes. IDTF. volumes

in obviously contracts as what remind proposing, have seen but could renew? think of, CMS at what commercial changes terms helpful payers. then commercial us rates historically And is if you’ve frame I done, be maybe can just you secondly, you see what it’d We

Sure.

through our We XX% as to the say that IDTF, San with San our of line Francisco we’re total So run would as IDTF. in the will still in roughly operating far expectations. I volume progression Francisco that XXXX believe

the well. I what anything And the So speed from was. but there, operating with continue investor bring up we’re we’ll change plan community progressing should line to to think in again, we’re

side, for mind, the with probably As rule. the changes year XXXX. contemplated factor, conversion some that’s CMS impacts. as were physician side reimbursement the far proposed units those on announcement calendar CMS with you in small reduction And across And reimbursement there for probably some saw in relative the our reductions all to the CPT the for value labor a codes. small two reductions In to clinical about X% the X%

importantly, the by about As Francisco, increased San X%. I you probably modifier think saw geographic being

So our as it, perspective. we think our from XX% immaterial of business on about to that’s X% X% net-net

why maybe CMS We’ll certainly but to as information with a is as a and reduction at and work these continue isn’t as to can necessarily necessary, that’s to should small we continue it much reduction. a relatively So provide look we rule. proposed

There As proposed CMS low And range. few guided commercial low it goes, do sweet on Again, pricing follow then far Those still digits single-digit on are beginning right it. landing range. from that a falls to payers incorporated in the spot commercial be that rule. based that and right that said single that we’ve as we’re this XXXX pricing. the would into

originally. expectations our what would from no deviation So been have

pilot my follow-up, for that on monetizing Watch, Thanks for about I kind Zio super I a of maybe timing how thinking helpful. That’s Okay. the that, so just an and heard on Brice. product. guess give questions. you’re anything as And taking Thanks haven’t update then, date

Great. Yes.

So around to again, continue with watch, development make to that. teams in the respect and progress

we’ll here of but the over turn I’m there. I has next of beginning there, focus the Year the more excited entirely that in were progress the bring year, be to being probably questions can just made is time. about and the what navigating And turned through and into New product pilots, watch term AT expect posed near Our the would in very the

Thank you. Great.

of Canaccord. Plovanic from ahead, today next Bill. The comes Thank question you. go from Please the Bill line

Your line now is open.

for tonight. Maybe the on Bill to the questions It’s everyone. commented our go on side. quarter. strong. John you I could continues taking for know I and be congrats to that, PCP Hey, Thanks

You’re QX, the about around success any, seeing you of of the opportunities. a two its lot Maybe time talk from opened many PCPs. Thanks. talk may be commercial in number accounts But force you of that? how field were high new metrics dividing just the could how those there. provide between And about

of of something I tell exactly from accounts further coming what we’ve PCPs, the into given we’ll that be disclose specific I that the may the national a national are lot market. primary brought good care will. look if having those about and you new we’re percent the any of you some Yes. to that We’ve spoken new we’ve think color of around focused can on future. that Many success don’t are of board. in segment accounts, accounts

the And really model. so that more success the the that continues around about excited that having to interest there maybe we’re build and importantly,

benefits and the that that but easy to of question with benefits these benefits I workflow happen care think so so application beginning where patient, to significant primary even It’s – majority the IDNs there’s in the is diagnostic the sort to no of use capability networks, future. the is just of it’s patch that are beyond mind these see. in my going this are

value are channel the EP, earlier which a who from of time a of or with? with then device in devoting have spend much placed them the specialist. the frankly where kind of the the Well, your dealing primary how need cardiologist it I really that on helps having reps the they we think pathway we care And primary time? the this were we’re already identify physician, by They question the to care with comes lot of relationship accounts care do see success having the their the hits in

to upon an determination patient a not? off with or based Zio And what need the office they’re they coming will visit they report that the seeing of schedule Do make patch. in

and primary look determination. prescribe at then a the device, their existing see the these a they’ll care accounts lot report within the Suite network, specialists Zio and of now make you So having

accounts that’s medical then large call got reps, team of in or point, lot terms where specialist, down that that in these on at refocusing networks sales these this not really national, sort whole deeper we strategic a past, And can into time the a top channel. of So a the that we’ve a go focused that They’re national point the approach. allow national announced broad us in to like across players at level focusing of one we’ve the from go more come to big time.

is this of So about excited in great going progress. a to incredibly lot the I’m future. where go

the all data follow-up. on this spent appreciate Investor especially Thanks. program? you the Any I know And and the Know Day the then of now. opportunity, model the maybe risk that you lot color. my a that – CAMELOT asymptomatic Your about as just Rhythm update I have at talking with

would be around Thanks. updates Just any that program great.

here payers that or be in does and that. an arrhythmias, a formal pilots about we we’ll quarter connect parties. but it’s have say, Your or how undiagnosed expect, discussions around that the as seeing Know an we’re of think population also in COPD in disease say, see go in population sleep beyond lot But just around honestly, that disease. seeing to, and beyond connections, I third these where a historically would quite population, of interest I we’re or arrhythmia population, diabetic It’s continue to with branch this it a Rhythm, more starting they’re asymptomatic the hypertensive Yes, the population of to in starting it. to defined some state

point and open to and that therefore idea can a ways see in those things place, patients connections been lot ultimately the connections we reduce can is, validate then cost time at records, increase in put of in terms track pilots up of of better markets. identifying They medical those treat to discussion see getting That’s identify and a this downstream. that, lot find these and the where that undiagnosed with populations arrhythmias and we those in those have opportunities

about I how how it think see a I in just you, asymptomatic excited being Your population. how although Rhythm, we’re the it earlier today growing it is it’s maybe around So tell bit would Know we defined or defined terms we of versus very broadening

bit. it’s So growing a

Thanks Great. so much.

The from next ahead, from line today comes of you. go question Suraj Thank Please Suraj. the Kalia Oppenheimer.

open. now is line Your

Quentin me you all hear afternoon, Brice. Good right? and Can

We Yes. Suraj. can you, hear

must going on Perfect. the redundant. I on, calls Hey, congrats if me Quentin, it. is so quarter. missed please Quentin, many forgive have this

comments on to about back I I going sure just was Specifically Zio But also the want warning misbranding. you your talking heard if Quentin, labeling recall, letter make AT, changes. about

sure you’re make to is a all you want just can understanding I MCOT. bill clear all, Medicare there So as

trigger the thresholds With the there’s event down not that throttles, is aspect. or surprise change, the no status few – there to quo, months on going no is on line be a that

That’s correct, Suraj.

So, updated to some we’re labeling their the labeling the and they’ve we’ve around agency those updates we’ve work certainly to And features product around the suggested, of and the recommendations. more aligned aligned that are that all, through device. as making patient to, device device physician market the they’ve informing that, we again, process MCT that of as recommended in not and some changes, this can features any we continue clearly an the more really changing the clearly at and which of of the again, the with it,

an MCT. now MCT billing code in question, can but clear for that meet of requirements the well in billing bill bill, determination code mind, does how keep right? also tell we as or around That’s of AMA’s will requirements not we and the you very I you AMA FDA definition the feel what the you make very And comfortable

our in mind, there So changes all. nothing at

MCT we’ll AT product market an as and way. We see to continue to continue that

with going points Quentin, the completely pressure XX/X. be, on enough. different. with your the of about is real-time field, model XX-day rolling assumption, money terms aspects Zio think shared like, don’t Should Zio this MCT for is versus competitors X.X in iRhythm that given business the future, we really centers the to more and MCT, just the I envision next-gen with fundamentally any in MCT specifically, you’ll by Fair in XX/X. the economics make go out Obviously, of your any approach.

than the know than AT with an don’t it. Yes, similar competitive the competitive MCT I trigger address to we no put to no is Zio product a approach. When it battery patch battery Zio a different or physician approach off we limit of any limit, take issues. by a second very competitive It’s send on. product a in issue. It and patient our any design works or is a would that replace has would is have new they’re longer their trigger recharge Yes. different approach products. recording. the limit, And, life any They battery device which frankly, that a product. as to the have dies, why to

us the days. days the as different a the you’re good devices the no but today. MCT We device, believe as We that the than of get into for off XX wear are anything traditional valuable that competitive getting future. opportunities extend can there data XX it’s market off are in ours that period that So to and position as you is very

going different competitive But a see the MCT we’re it design in that that. AT. marketplace continue whole some This position it I features to we’re has than of terms positioning, the differentiate lot new how don’t it and to enhanced got to product. excited within by

should collect the the I is, What on rephrased. the technical fee so you side have I Quentin, the me, Medicare. in or Forgive by MCOT guys was collection meant $XXX professional and

side, I X.X is be not that’s could rolled eventually, it On out? shared by it’s economics the the about. the collected collective, and If was economics when there some is right, other of cardiologist, aspect talking

Yes.

to going fashion, we’re in that talk envision we closer probably suppose at about something how were we more this of that that X.X, don’t time. or position position get market it talk would if point we the were as pricing I marketplace. some look, if launch rolling think in to think, it we would to discuss we how on in can into that’s that getting then to date And the we differently that. closer about in change could out I to I

you my again. congrats questions enough. Gentlemen, taking for and Fair thank

Suraj. Thanks, Hey.

The Wolfe Michael. next question Please you. Polark ahead, today from the Thank from comes of Mike go line Research.

Your line is now open.

the was and kind Know on like USPSTF Your Hey, taking up there Rhythm question. for it articulate three, horizon, good this a or wanting a the to enrollment path there’s was been answer at pick fell to I broaden short over full period you so the of underpowered. kind as two, Is know dream as a that wanted can question and reminder of the one of of for GUARD-AF of of be today tons screening. answered might evidence with something four-year kind there thread of a afternoon. long time, of I Thank and impactful unlock USPSTF to ask a that you the major asked generated that or point? on trials be is kind obviously positioned but

that? just so with organization all this And stand steps with – an where And what today? then does are the the like next

will around the for them Yes. to USPSTF proactive continue certainly to need screening. identify we work getting the with Look,

USPSTF payers. reviewing important year works of sort they’re And, I certainly open on necessarily and I that you to opportunity the every have think more commercial although an think to It’s stores these doors future with right? open the have here readily, look, cycles, don’t typically the that of not part that’s things.

the to year, expect that going point, later we economic study. this data to But out data be there’s mSToPS around

payers. sort to the of value around it some less very to adjusted the you’re to I start becomes out came attractive coming around life that, that quality which very attractive. of GUARD-AF. been we of and presented very, year get information XX,XXX, seen than the life already know back economic going some see you incremental in quality of Zio, think data that’s economic terms year, very, when $XX,XXX for We’ve particular, in adjusted

as sit capturing payers And lot we of a with frankly, it’s attention, of in it. front

they the back work not not to So that folks This USPSTF, here. we’ve is burner paying are move attention on, the and takes something it focused but time, put and on cycles. on

delivers. that So continue value we will work data this we’re to going device together, case to to of the but them, continue the makes pull for with

using an Helpful. My so and IDTF in days you local a Europe like, or as doing one a small and build you IDTF you’re And of I that opposed Manila a to vision both? service you you of just product-first in support, something know company this are example curious go evolves I’m intercountry company. more more building cross-border local like markets? as or both start might Are all European a up is Japan, what early of what and bit service or one numbers countries of or well as product or as of that. kind support is. little international so piece of little how the you open want where as any Manila on in much. these is you in where it’s But, places Thank this, to enabled other kind leverage a a country to maybe and

those about are because on, a very the we’ve good early we the we is stack And those of speed. reality put on a just international areas of built, up countries it’s things is leverage, place our question, on and daily through opportunity. believe question with sort every the UK from the Actually, think, being and already able country the I different. are focus that It’s of a in think great that Mike. to higher move navigate a basis can as aspect say, that those we And unique bit

time, Over meet important build those capabilities that’s to we’ll one continue us particularly could we needs we out want markets. to patients. But those of requirements, go to any our to sure can meet important we and before that into very local privacy very make around

that into comes we into which go think we all So markets as about, of consideration first.

leverage terms near-term. Switzerland evaluate in very to and really to but is a locally ease the in out on market started company product build from there also degree, perspective. way requirements. get to those the we’ll capabilities there. here we with mentioned, are regulatory start Japanese file the I that Japan, a compliant into that get of next the can on list across here in We’ll Spain, in Netherlands a we’re we’ll that

still that are with working those in country. administrators So local the through things we’re that

clear we unique a than country to launch, maybe we’ve think will one, here. pathway is every a that different define more and closer little path bit for clearly right of required. the all question each So get I commercial And got your one different but a as but is just

infrastructure, might ourselves. to have will Some bit of although build those leverage we a

go services, In at terms those of are looking where we’re things product-first a well. as certainly versus country we

are going not there but ahead to ourselves get So there, opportunities. of

you. Thank

are There no additional this waiting at you. time. Thank questions

So I’d like over to to back pass management the closing for remarks. conference team the any

Well, time today. again, your for you thank Sure.

together. date progress the our strong sharing We’ll never the the that operational take road care. see and us. in the the next our in stronger the you a just few and teams With course believe to of many in with forward months. been on of next the quarterly look that quarter, over of I that, update future sits put have We’re performance excited business We’ve incredibly ahead pleased to or more short

conference your concludes for Thank call. This today’s all participation. you

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