iRhythm (IRTC) 1 Aug 242024 Q2 Earnings call transcript

Hello all, and welcome to iRhythm Technologies Second Quarter 2024 Earnings Conference Call. My name is Lydia, and I'll be your operator today. [Operator Instructions] I'll now hand you over to Stephanie Zhadkevich, Director of Investor Relations to begin. Please go ahead when you're ready.

Thank you all for participating in today's call. Earlier today, iRhythm released financial results for the second quarter ended June 30, 2024.

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

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

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

versus before achieved Brice quarter second will slight with in of demonstrating proposition. The in Zio's accounts, pipeline, out were Dan superiority, prior our to quarter of earlier diagnostic to year. evidence new data thanks and strong existing million, the announced clinicians growth negotiations to for and we category final competitors categories drive our opened average driven teams greenfield with have favorably the demand, in access. business Zio's business, CAMELOT our very This from with the that improved several growing to highest lowest to a selling discuss that systems. Payers prices. Within prior record was access health growth recognition drive retest across improvement and core provide drive accounts rate, and again, also months coverage as for directly the market results our yield as of the a continues XX we and health volume success in with along economic traction well both continued team updates and from realized today I value Finally, contracts as both strong core we by another patient XX.X% in transition representing data $XXX we favorable CFO remarks. Once within penetration close real-world have responded policies to to existing against CAMELOT, enabling built compelling revenue our

successfully modalities conversions such primary care arrhythmias, as customers days has new XX Holter evidence, steady for value of as of not stream well as monitoring of continued the competitors channel conversion of a driving of demonstrating a monitoring Afib. short-term within range focus from continued traditional the been Our from only with

resonating and by large year. Zio's mix winning monitor continuous total and to expansion aim that expanding we estimate care, addition care appreciate some if primary share begun quintuple care is a In more each well XX appreciation of EPs with who be will first value Aura pushing whom utility seen broadly by as care monitoring, and to then these by the to EP patients accounts accelerated initiatives long-term the identify begun believe IDNs, value than treatment the as care a towards delivery with symptomatic. of the cardiologists arrhythmias, will have shift their practices as constraints primary the there this competitive first such primary proposition cardiologists, capacity who have that cardiac-related is accelerate XXXX. to should further in physicians. We to some large them fourth launch market efficiency address specialty visit as many tool, of facing in for which by of million be integrated of the networks Zio In accounts, the helping quarter driving and towards into to right patient year more the into are introduced physicians and EHR the this appropriate proactively driving physicians in not earlier providers healthcare care patients in primary our and Zio providers the workflow national proposition is clearly with where ACM iRhythm of pathway the even diagnose palpitations primary time the only with Epic partnership, of trend enabling patient alleviate Zio

factors additional the care specifically serving monitoring and we which cost past health focus diagnostic and in been patients Additionally, years. arrhythmia of as place accounts value-based have innovative for product we care undiagnosed encouraging proactive primary the traction have compared specifically culmination solid signed that has health increases few as the progress utilization, few lower driving been our national rates organically met care fit of is contributors a The initially area found encapsulate have quarters over having future during Zio in retest proactive utilization over strategies. and in by value-based the the growth. several the believe market we on to past been in programs, a adopted care space, of monitoring. some we has with ability been continuous Zio second with be care. The the seen and with identify this Zio Rhythm that and showed the long-term alike with of conceived we've prescribing iRhythm's physicians for instead CAMELOT of will ease remains trials of we effectiveness of accounts settings use Even number by a other evidence the the large cost cost the quarter lowest the our with of lowest strong top quarter in more customer early arrhythmias highest In demonstrate pipeline that during proactive data organizations associated Zio's payer clinical our patients and competitors. What yield program been in undiagnosed parallel, arrhythmia Your monitoring channels excited with a We've approach. to for Monitor, Know to mSToPS nice is monitoring together second that known

to Zio to system Zio regarding the in submitted the County AT, to and and teams AT quality in of the and the on as and prepare collaboratively files X in the design and the process. We the our handling their safety, product factors observations July. further warning prepare to to evaluating updates submitted year. a of having wait subsequent fashion. FDA. With and on testing several inspections letter request MCT, clearance EMC for the these Zio during with a Recall January and this to labeling noted first provide second second agency the a filing will continue a to or timely We file that to make compliance, the our a stages in for to design the the device catch concluded made we of on warning continue X XXX(k)s XXX(k)s early committed letter analysis warning request. to CAPA back submitted of letter the The around were plan In will FDA provided the San the this FDA activities for near letter. The diligently the responses site At the Turning included the to hear that resolve areas the that in to and in our with believe from noted. half to be testing, quarter to and up week for observations work patient the our work to reports remediation compliance, late to look satisfy back FDA's satisfaction. X of yesterday and half diligently level, we ECG of of Zio primarily compatibility of progress a be the FDA on One the involvement is the XXX(k) reporting, the system customer's XXX(k) changes facilities product, MCT to respect we XXX to and changes quality to in regulatory FDA, made technicians next-generation submitted shortly. risk human was these XXX(k)s parallel, We're of and for previously Orange certified then we forward we'll responses we our back AT. focused and came at address following Francisco that submission to incremental complaint electromagnetic features the focus of remain high medical continue to responses for term, with our including second XXXX, agency the FDA data and company's continue intend

for Moving to our strategic pillars growth. future

better business, first strides way on of making core also that significant in excited for part to year. In cross-functional patching more open Western remain countries; The back opportunities with outside of and Austria, be to more we activities not demonstrates monitor new track culmination could are up XXXX. launch a commercial our beginning Netherlands, in effort X arrhythmias to Switzerland Europe, the anticipated We to the iRhythm's commitment this We globally. enormous patient Spain, patients before for introducing year-end millions to this of

MHLW Rhythm To an million and Switzerland drive support Heart in high KOLs centers limited the created in to being continuing second with advisory beyond, a have launch, and an of world, lever for towards informed late we launch received of of that potentially designation with Society, the in distinction X Japanese market designation to the prescribed our also year. medical is very with presentations, revenue top the Zio. Granted be last anticipate As evaluations countries partners commercial these in important benefit $X also plan. opportunity leading represents market physician XXXX, at and Recall has commercial year, from this completed Europe's step we the and could incremental to we educational XX and have of broad market that medical patients in events at could our with our each XXXX Japan, PMDA. held awareness this significant the per continue interest decision conferences an to who constitute and needs X.X move of recommendation Zio medical the major billion Zio. In XXXX ACM this specific million PMDA target has and with European year commercial potential Spain, from board active submission Japanese growth our regulatory foray in into long-range the first representing largest device X.X by regulatory a tests approximately into we X

MHLW we dossier the a our the to we would Japanese submitted that As finalized to engage regulatory PMDA, have with be reimbursement decision. immediately following continue

of letter We distribution are have we note intent a pleased to also signed that partner Japan. our with now in

to diagnostic. between cardiologists A of in validated views patient potential as make in that, performance. building collaborating foray as integration We with in them research coming look I'll performed to new we first process, we in apnea forward the with are clear OSA, indications, recent obstructive beginning service an can confirmed in a discuss key that physicians of an limited workflow service. These for progress launched the call integrated this X technology the of move service potential can half for all delivery, be OSA now offering launch overlap market in our product details were XXXX, for that that more and to this ordering and Thus February an turn the platform report has market XXXX. With and to with that validation, their prepare representing likely adjacent sleep evaluation to service a actively of population. to-date features plan financial XXXX type with points insights demand platform. Market sleep tests our current United with the of the market early and in then journey learnings to service we including combines indications. comprehensive States have indication streamline significant our patient unaddressed sharing We project we high-quality and for forward pilot a the have the continue far, that that report a high frictionless adopters months. In digital sizable arrhythmias insurance diagnostic into over facilitation in in physician would a look early decrease a seamless ACM into associated in pain a to indicated results are in multiple value and that evaluation launch from plan initial to patient and serve is cited Brice could

Thanks, Quentin.

in from have originally discussing Midwest, I've are Before extended have experienced past I'm at I and many and resided upcoming for the CFO family XX-plus Southern resides. of challenges. currently but role wanted from the we who briefly quarter, us, of California to my the immediate health where address much ones years, transition Like my the loved aging iRhythm.

the I've able While of members months, directly. working to my for help and and past family out the been of support residing couple Midwest

work ongoing became that was support to at here apparent family family I Trying could iRhythm, While I it while providing make the a this to support, firsthand. balancing focused, continue it needed evaluate clear my support needs my needs how also to decision.

to of my to family. With step away my the I've focus changing iRhythm attention on landscape decided from life,

attend most to shift near my but life, For family to of the I've career, prioritized personal in priorities and I mid-term. need to matters

have I have Over and the great of I'm row am I great cardiac to I There part this much us effective and team days company, loved ahead a on have the be we in here CFO thankful of truly years, leader being monitoring. seamless opportunity a for to so I iRhythm at be time a remain part and transitioning at of grateful seat of maturing last so ensure built. and been is XX, world-class a There a plan it. and couple transforming my to out transition. iRhythm, have will see role here as of front the period to August engaged to for continue but ambulatory are will

the quarter. to Turning

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

we average of as the results unit XXXX. Our by $XXX revenue selling demonstrated improvement in as in representing compared price to traction million, strong core results were of driven revenue second markets growth expected second XX.X% our quarter These XXXX year-over-year well quarter growth. our continued as achieved

growth, been in store store months, that with for volume defined opened home less enrollment accounts of approximately of U.S. as for accounted for approximately was have second in Service XX% XX and New growth our than volume new the XX% quarter. Zio the year-over-year

key have enhance our policy continued teams Zio to wins we enable achieve health will As to expanded Service. that patient growth our strategy, access revenue

that and million team X.X policies quarter, incremental existing with negotiations second up favorable driven X be for of to for lives, market an a to covered utilization. MCT coverage the coverage our updates Zio access for will greenfield number During also drove have open optimized contracts

market loop a shift XX-day implantable also and collaboration over monitoring data, mobile long-term MCT health group and or outcomes members, supported research and our policy to CAMELOT position to coverage. step-through by products for team, access payer a XXXX. national started improved care for services a by million commercial as exchange our access to for as policy a X, Additionally, and with our which XX This therapy favorable authorization Service. This and a allows successfully removes economics telemetry major for Zio step health Zio our in drove large continuous prior now policy the or recorders new prerequisite cardiac for enables need June provide

addition tireless team's health Zio supporting services quarter recognition successes for and critical and second the ahead patients, passion our bring are was that to important care XX.X%, these of In products for of margin to being a value continued efforts for alike. Gross expectations. an testament and the systems patients

our As clinical realize have specifically from anticipated, of team investments San from efficiency Center into our and our we Excellence. started of benefit the Francisco optimized operations to

beyond. from of items the margin contributed manufacturing XXXX one-time of in a enhance growth well believe future necessarily that manufacturing phases automation half and we reoccur in significant will nicely set project as not of and automation. manufacturing second and couple phase innovation as the Additionally, of continue quarter. Furthermore, of but for a we This the initial of to stage improvement May subsequent our and do XXXX scalability milestone second in will realized in we the with operational favorability achieved the launch future,

XXXX second Aura costs related in incur believe the and continue future year-over-year, loss was the of second of loss and and with the growth in to or current X.X% subpoena. as an and of a we $XX.X further MCT primarily of that for were approximately million Zio fees the to loss of of and letter increase up quarter Adjusted important FDA work compared second claims consulting of adjusted product in XX.X% to in net other line due or $X.XX expenses future quarter of company we million to into software $XX.X operating second compensation-related note in X.X% we will expectations. $X investments was in net Epic first EBITDA was funding Compared and to the million costs, quarter This XXXX. Adjusted as was XXXX. previously warning of believe integration per second quarter our efforts quarter to adjusted this drive these growth. closer an share minus XXXX X.X% support DOJ to compared adjusted provided XXXX of Please net per adjusted our in of cycle continue projects future quarter investments share, inclusive $X.XX the our continue quarter to enhance of and legal X.X% fees. We product offerings, expenses million, of ahead the guidance regulatory or $XXX.X revenue incremental that of XXXX, Second the will revenue the the loss that well submission, incremental to expenses functionality quarters. revenue sequentially development our operating in down development to move management as processing

guidance. to Turning

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

be customer core in driven market, we in penetration both drive the We accounts. our to and will by existing believe new that as to continue growth U.S. volume continue sustained year

revenue summer of be in that XXXX revenue. will expected years, As normal XX% with approximately believe third quarter seasonality in of full year we line previous

believe XXXX Turning to guidance basis XXXX. second of of efficiencies to year an operations the compared to gross full a progress raising we XX.X% quarter XXX midpoint points We the are clinical XX%, gross to approximately regards are margin, and range with year time. over these and manufacturing to sustainable during full our significant made margin at of improvement

important note the and to we repeat. one-time not need will will continue invest to to is growth However, previously enable that future it believe that do items to noted

quarter sequentially. third be margin As such, to down we slightly anticipate gross

plus we However, support margin gross this leverage continue reach will believe XXXX. as goal to XX% our to exit we additional

raising path the by throughout basis represent and targets XXX between adjusted X.X% also which to X% adjusted point and P&L. leverage are in stated guidance to margin to of by on would We driven sustainable operating EBITDA range our XXX focus margin basis our revenues, with line point EBITDA XXXX, XXXX a improvement improvements to compared our

basis expansion at third Looking see cadence back compared half margin approximately XXX quarter XXX this basis to EBITDA the points in we the by improve of year, to margin of adjusted to expect further fourth in the the Along year elevated the the to in second relative historically progress first more efficiency, quarter before revenue. margin expenses gross half quarter. with expanding points in are operating anticipated of

responses previously, $XX mentioned $X warning subpoena to and costs continue believe for that the to DOJ we be there year million XXXX. letter full with approximately the As million the of associated will to FDA of

As issues, majority these will the we come out X these navigate in the of of P&L costs future. the

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

of exit capital, anticipated. billings quarter. now cash Dan? to like levels Healthcare see we cybersecurity further resulting a as call to we second began see associated Dan and recovery were DSO the the in over the anticipate working During quarter from improvements We for collection pleased in Change remarks. second the XXXX. I'd of attack as We to the the to improvements to with first normalized quarter, in cash delayed turn improvements collection few

I'm step to seen smooth role. growth would in more thank our the for phase like Thank excitement looking to the of and honored the a and me transition. I ensuring with rest have transformation. and like I Brice. of forward excited a the what's In to you, us. I years positioning and than and contributing front about CFO team Brice progress my next Quentin, of expressing to would by iRhythm, iRhythm start tremendous amount success am for my X into and opportunity I in of ever to growth

engagement As company the I reflect able on strategic the and iRhythm. good a I drive continued supporting step growth investor analysts and covering to expectations doing will had to of our the so top financial have with profitably. into the understanding on base of role, and line be My I and focus am have

We have to working many I'm initiatives excited role. serve of supporting leading in to those future. Thank and in I all as continue iRhythm look motion, millions the new patients you, and efforts we more scale and and the to in with look you forward

Dan. you, Thank

many Before closing, thank to I'd his in our like to us for transform Brice contributions company. helping

benefits While see deals we're disappointed decision he we've personal his the efforts this step the the as transformation months, last beginning significant as to with see at unfortunate Brice time. XX over of embarked matters to I down just on financial respect

has progress will here Importantly, strategic work Brice. at this transition and been to financial industry, time track metrics investors, spend knowledge His as demonstrate nearby and company is we for ever. the iRhythm, and on quarter path transition with, we to background, we delivering potential for out. That in-depth seen and we continuing confidence a to with a I'd strong a successor remain he'll relationship Dan clear to iRhythm Succession amount our through long-term strong be ensure thank contributions together as that as with performance second seamless of good to in something planning to and allow financial we on that of many and strong our a long laid Dan. is where forward across look his the like Dan. in as are to headed. all forward The build increasing financial our to momentum building financial goals upon the Brice guidance have that

to address around recent inquiry like I'd activity into iRhythm. Department Justice's of Finally, the

of company's company on it of the partnership we the company counsel, the basis privilege. application to recall, a an seeking materials you'll responsive protection subpoena. In United with to are pertains the information of have for to not afforded As the DOJ In initial has documents and their and that of Civil as matters. extremely and and withheld our determined the top only April certain received we other for with cause, case, of attorney or Justice, Department products amount attorney-client the documents and X, the information show produced have DOJ's production seeking privilege that States Since the subpoena, documents we been to DOJ, order enforcement from services. work position inquiry, maintain responsive of Division outside XXXX, with The invade disagrees to DOJ's it petition for we inquiry filed collaborative, company on the tier an in legal interest administrative attempt the the of product. a outstanding July, to sets to significant is precedent best in continue certain privileged, future but and our it the that this regarding the

XXXX. enable certainty to brief first in pleased negotiated XX, the very briefing have for and step milestones with their X, DOJ's closing, reply results the opposition ahead this is speak At we year on to will the the lie is coming investigation not prefer capture focus incredibly with time, this them that schedule half cannot due with prepare we of and excited significant our of September that to are months multiple are opposition process pushes of of us. opportunities and from in speculate. In this next the this iRhythm's the fall. petition, DOJ's Our the due the August matter is a that into we and immediate XXXX, on directly

transform efficiency all multiple countries in globe. We're all while the across focus As keeping more drive we in the in to our ACM core in sustainability, to work financial the U.S. broadly. continuing and company, we serve while We're we're penetration the launching market the commercial expanding patients at markets driving times. internationally operational

are multiple to years. combined be next a excited look vital X, a building iRhythm in how digital defining generate is leader market As to increasingly or are we insights, assets XX the could and X address to data signs Operator? not clinical monitoring future, and pleased of I we'd quintuple with positioning that, like call come. With portfolio open healthcare unique years the health the for now care questions. could digital the in to more be the aim of to our in

first Andrew with Blair. comes William [Operator question Our from Instructions] today Margaret

very you're leaving the sorry and to meantime. and the off, Brice, First best very hear in your wish you family

do just on XXXs, us but So, it's observations? I you start observations feel think that guess know to wishing you new few it how as I quite anything then, know can the give minor you the early, it's resolve what that was maybe And those? surprising? a that confident around observations, -- you anything quickly you how Is early well. but can quickly I smaller in characterize or to again,

the for XX observations question. those we look, within thanks Margaret, will days. Well, respond Hey, to

got it it's our bit where a from in little attention it. let full point time. in me obviously, give at time. there, around at to this try I point But goes can't So, speculate more And this clarity

the relatively warning they I different about items. FDA the clear will, when may the ongoing of how versus not? the a in are meaning as a complaint is we're beginning it's time, mind, At product that category, places, new things down the this statistical as it established to you has understand And you land think you And or looking to are the technicians, perspective separate comes of ourselves techniques. comes for in issue and document to letter, result I think to And day, of handling to as code think now category. or continue fundamental whether that the those or the those of your FDA time. Keep going trying the view those sort start through. But we of controls has CCTs, you define, think this whole at when to a part a be X the how bit in about they it, different a how to of of FDA differently, right like start controls I to been reporting from think those end they clinical discussions. working you as be if the go IDTF, market this discussions or are from these frankly, period new I think the regulate leader, how I a discussions process

the there note, is overall in efficacy think no letter questions with it not That's being there the not an MCT product in our you the where or were these of the initial around, to course it's or you discussed. It's I in was product. around here not letter-to-file conversations inspections are warning of really FDA safety not like go are to important Or or identifying not? is to a we set not? those of This and around any it. report, a further. behind That's as processes AT how approach being report your marketed we legally the about us. issues product about is discussed Those things document or what complaints like, are how result

It's about specific nothing the we systems whatsoever. how to and to continue of So, our quality product, efficacy more robust. more or make build safety

maybe that sequential And look something year revenue helpful. as of increase? a look guidance, basis? that's outlook for we should that walk big is rest a drivers than then, then, Okay, at more else? we How And on you that it the bit at Is contract the through or of PCPs, little raised the beat.

can is Margaret. start I on Dan, Yes. Thanks, that. This

our remarks, from heard really So, we're board. and momentum the seeing feel we business, the across the prepared from really contributions about hopefully, seeing you trends the in good

heard XX%. store growth You being new

seeing new for nice us. contributing. to same-store growth, continues then nicely up open both and store, primary balanced care And from Monitor AT So, contribution certainly,

contemplated all in is and see So the that contribute that of continuing of to really through year. the guidance course

normal being heard for of seasonality on reflects You've us. remarks which QX XX% revenue, our full-year

comes next Instructions] JPMorgan. Allen with [Operator question from Our Gong

and I just echo my hope condolences I situation to family better. the everything gets with want for

guess X questions my of So bundle kind together. I'll I

one-timers But you expect first, of with around we the drivers some of at year there? And helped a sustainability margin, still improved the the DOJ us think that. to of of really end now, What the gross of We've looking or then there financials, scope kind do and the pretty give by follow-up scope that just mentioned just The filing you XX%? how the on a all what significantly. it investigation, idea, the not kind like quick that whether the a were you seen should were can of DOJ into? about better is but looks starting kind that also SG&A

I appreciate kind the the for thanks Allen, words. question.

as we've to working able activities to regards regards been about and gross investment So, with first talked we've to were we really drive with. the on shipping community was, frankly, trying question on couple some been to that diligence margin, that efficiencies procurement with biggest thing different about we've indirect an placed that organization. And to things. just that a the and the the drive We've we talked savings one-timers it's focus logistical of procurement vendors that

quarter. came pricing that of able the to dating QX ultimately back in We of are a second into through in credit retrospective get the way XXXX

So, used won't about moving benefit as the repeat think, will from quarters of you But matter. forward. that a then as can that moving frankly, the other the intake of that relevant that's tweaks is and, those organization gained that on negotiation that, necessarily I for do our talking imagine, that one, forward. And and, incremental fact we have that manufacturing to sustain well on solution CCTs of the component our by couple software works edges are we frankly, optimization solutions as

focus software the standpoint, for MCT, is right now, and really the development getting full Our around of development that submission it been a frankly, ready that from corner. on has

of we So work being in very had done little QX. that

resources benefit have then of talked And the us. about We're that that to points saw as expect them XXX about hire things solutions scale I for those the Both little reduced So bit. future takes those profile optimize the we hire we continue available to bit forward. that and as a don't fact a QX, continue will in And that basis volumes. moving you up continue of it get to resources in contributed continue to to of to We in to to need we those volumes, speed. cost time quarter. going to we preparation

one-time of you're those aren't scale that the be that in to it's of going to anything but get. things So, or nature, ahead investing ultimate surprised necessarily just are

going was on what about that's there. So was in made great the the that feel quarter, progress and we

to about things biggest some we things SG&A costs side, as the company bit first about as and replicate to meetings necessarily higher Those communicated level the back we thing regards and do some hit that with On specific talked this, QX have is, we higher half. than G&A. we the little of and don't that think selling a well as half that both being

in 'XX to certainly And for we move to the beyond. consider models year, some have the seeing and that though that seasonality forward so, you're sustainable through we'll QX as of continue and in rest there for is play

Allen, think frankly, the with don't question this to scope that the the provide respect point. whole lot can of on DOJ, at there's a information, I we more you

months. of they've set or I the several haven't over we've seen Like requested anything broad. the last documents indicated, think the always we different are questions

the As 'XX, a good out compile matter the quiet the of spoke motion of to relatively are time files history these point, 'XX, that in your documents to. And, 'XX, past, had period quality made a gone systems' fact, the documents being those there, 'XX. of until we for filings of it back with they to design sort around

But that them that requested topical cases that that the all requested. matters and many, precedent well. they've are case, attorney-client out in strongly we reports cooperative many, the produced other as we are many, very very been to them, feel need but privilege, same have And as what's all we everything try many documents, the So, that frankly, only with of sets they've to that it with there. we've this not for protect

have they information, I we're this the this we to speculate. you to. can't But protecting that privilege anything We'd give right think going more not about entitled now. we're specific attorney-client and than but that is speculating be So,

Our question with Marie Thibault comes BTIG. from next

reimbursable family. wishes one the get market Wanted Can best that Brice, what to the And -- of thanks parameters seat. about Dan, a that I what like? tell to on you about then, for is little into us all or space into to measured? a evaluation? are a there onto sleep launch to congrats bit the to look my evaluation spend a does talked being years actually efforts your next on acquisition question and and that help here there couple use new latch your last What Is you you needed year. more market product? and

Marie. Thanks,

through gets digital is ultimately to get the single make So, evaluation and makes to it we patient, The to identify capability market to without market then evaluation building scenes, the a order report an really happen. incremental a about I of capability physician data the or the through provide the product, the patient. the lot the phase, a investment think it back and entirely that IDTF behind it's product the received, portal that In physician. front-end acquisition we for to a interpret can seamless ensure

a third-party a test, or to to introduce virtual So, to physician to continue cardiology, see don't seamless. of to the go the sleep own them Out customer, To on will incredibly our leverage build the the patient, capability or our a while a sleep test. disease we much diagnose own. capabilities gate, it's home specialist more have efficient We They a it's leave somebody sleep sleep else. we workflow. sleep

a back to data, and of data iRhythm gate, patient, to the an ultimately the a the device party, the from third as provide So, report be the will provide packaged part procuring collect interpret sleep make iRhythm and of package, a leverage that out physician up that solution. we'll the that

All the back reimbursable a That's a and to a we'll of range And of to for that that that the that between bit somewhere can be report. the the is rate test $XXX payers. $XXX providing commercial of of $XXX and $XXX. ranges sort between be there's reimbursed rate and CMS between sleep service why way in

and test that's sleep to ultimately and right the intent sleep call it, in terms of the So, X that's for to platform. home capability continue service home deliver test financial how it develop report of, model. But our to off about it's our X to Over single think generation. days own time, of our

and the not will and time. hold road, into further to near step down But going that that's that come in entire term. in that we'll really us up the verticalize offering So,

Our Rescott next with David comes from question Baird.

resolution looking I'm new under role. new observations warning forward. I or the to whether up more Dan, with congrats the that just forward on going on of follow comments XXX(k)s, circumstances. Brice, not you wishes the first. to wanted you And and impact kind Great. working of obviously, XXX on kind your or curious the these any these the to echoing recently impact on even submitted total letter has of the best family on or that, these EBITDA submit of term? million if the just the spend the not that's I view can to business little around the to today. ability where margin I comments, I'm the incremental the to Zio $XX wondering spend the plus go the that comments longer-term then, longer impacts related the heard million drag think whether MCT? And for a that's If in the around $X case, bit DOJ longer. or how

Sure.

to think gave that July, indication we the here around nothing us of part discussions with at longer-term me those the let sort But, to hit speak associated product AT think in in on any and the any with there's the you the all could of So, and Brice those inspections to XXXs the about how that back around respect this. in XXXs clearing view or guys XXX(k). direction took Zio Dan, place or expense differently

been we file the not as addressing the the other response to earlier this week. to other remarks, have would my prepared the we gone -- And frankly, XXX(k) well to XXX(k) back the response catch-up did had So, inspection. in

go. got that to it's bit, a ready nearly little just but delayed So

will frame and on AT. next October shortly week approval Zio So, right that puts terms time the or end get on of by the that thereafter, that file track in us of sort of likely of for September,

There's differently think been all changed product. same with Zio has that perspective. given the nothing And MCT. should at we that MCT indication Zio from So, no around the

before see the year. Zio Zio as clear is for X get there, predicate that we of or that expectation But file get the the our AT will the do we to MCT. be to Of end need clearances MCT continue on course, Zio

a irritation The that the close has things discussion X well irritation have And rate below even the devices. literature published we to. Overall, had X%, of of One have pay It's little FDA is it. note, up it. would we up. years. our with bit the something wearable come is we around But something attention I in about it skin which around skin investors over step that that seen acceptable frankly, just a last right what's is asked

much you us onto Or the know move lower for the how about Zio asked Zio platform of be from we onto AT Zio things can will irritation quickly how Zio Monitor, proactively MCT MCT a is, Monitor? you because approved, once has gets MCT XT the quickly rate. move Zio FDA One could that which

think So, track. again, stay any given changes, that's been on not a favorable you. time. We've indication new around differently we and If point with conversations perspective, towards But this indication to in moving those that course, from there, the these of we'll time products. have of frame nothing our at changes

the million. $X Question is million $X now, $XX we million it XXXX. million the for to know believe $XX Yes. think way to Based everything that we on about appropriate on to

regards With feedback. provide we'll moving to means deviation. no certainly effectively, forward, what that So,

As of indication see extend longer. to don't is now, that going any this I meaningfully

profile creep becomes over something we EBITDA million to should forward. to meaningful spend But into XXXX, believe absolutely adjusted time, and this moving $XX comes about we'll the out of million contributor talk Now, a $X certainly that.

Our next Treybeck question comes from Nathan with Fargo. Wells

the to relate XT suggest AT. in you requested recent was wording The was document the might just as Brice, suggest I pleasure new that posted from in on a wanted with Zio seems the just there that Dan, Is it's And extends one you. anything just to congrats inquiry to role. well? time. been documentation core subpoena working that touch it DOJ on the Zio that the to more would

speculating we'd have of focused this time. I seems Nathan, have very Keep subpoena the AT it. received beginning, best around to MCT at who competitors MCT been in or even around the the from be at mean, the mind, category. products the ours same

and including cooperative for for. certainty everything and requested documents with that's been that, can't produce produced has what filing. But certainly, But of them that you broad, referring that they're that know in at been in the The we've with focus right? request don't very so time, we much you're same I tell to asking what very been where was have to that around So, and the it's focused, certain.

That's seemed speculate. document where the same to can't time, request I at So, it has the But to broad. with. been focused be begin

you -- can't at. certainly can't where or certain it's that's I for we So, that for tell --

Our comes next from Joanne question Wuensch Citigroup. with

of margin role. the you Dan, broker and in Anthony in the This driving And, for new I just back that is components XXX year components back ramping At XXX to of margin well think, bps expansion. some a Brice. conference, out the the I'll how back year? family, from about bps for up still the and another the from half June, the and these congrats was the from on It actually for you automation. CCTs Joanne, bps half your gross echo XXX laid up wishes speed, Is coming on in contribution from Monitor thinking you're then

bit the clinical the Yes. the operations that basis some team the Anthony, yes, second it operations is. efficiency That's the and play saw what way XXX earlier that than the we're from about actually thinking to regards quarter, from with team than played more it. focused quarter, Obviously, in second We through just and work incredibly performance through a thought. quickly points anticipated. by that team in we much we we that saw nice

automation, much were efficiency the in the the thing to of well but a we second pure saw playthrough the the efficiencies other as component fact in the couple things that not that that quarter. alluded manufacturing quarter. there The and component I to benefit contributed so was

and basis we that to as be we that take where XXX that move away we frankly, and expect However, XXXX. as we points doesn't into laid XXXX, out exit

with Research. comes Wolfe question Mike Polark next from Our

sneak looked million I it rate? guess national perked would couple I on payer. and of us than be, in there? things spoon-feed the from the back to large step-through shifts major new policy quarter expect been. little then changing? maybe new, there just around you're therapy. R&D. it it. in It What what's there a Or The there; is in XH? And a is, could removing what's that is different, to lumpy something you dollar in If is in I -- step a out. Is than ears for I'd second ILRs a terms, little appreciate higher good heard easy down -- X, my one it question you sounds going $XX step has and run calling up Can

thanks Mike, questions. the for

moving really side, basically that position something a testing, see cost get little submission. we forward. just in file second and would ultimately we even a QX in getting in QX bit not The beyond We moving was anticipate quarter. down submission. to to higher expect the quarter, regulatory start submission, in to further trend that That's as being deviation we will notably human working expenses R&D through finalization most and from the for, were some the the no factors forward. as I Software side, On trend higher ready, in ready Zio product get the say on work a Solutions for major the MCT, of regulatory that that then

Hey take the Mike, second it's Dan. I'll question.

So payer wins glad I'm nice side drove on the access market you the the captured and team side. there

I essentially new then decisions to up coverage, continue that Zio. few in recognition clinical patients think from the was different it covered make for getting there, some highlights it we we a onto and right? and economic that million evidence There and new lives, generate sized wins the lumped Some easier that and get be payers. policy to X.X coverage to

doesn't impact that in will ASPs and access up benefit. show coverage those up a that we absolutely and that But results but So, some there. it wins see for really policy start to volumes and get necessarily -- through time. show have will immediately, nice both Those Zio, of to wins the to long-term make really patients easier benefit ultimately,

it's I'll that because add have I encouraging CAMELOT just to in thing space. to see think to that it, one this continues impact Mike, the

And presented up the that line XX to period. studies. XX So to the monitoring CAMELOT Monitors' before back many days policies moving these with are being wear an get that's in in They days data comes can to Zio you required in directly that proactively time onto ILR. have down of

again, a to opening incremental think it's the for hurdles I it's product channels. It's us. It's wonderful has and onto to reduced thing been leading leading up to get But So, resonating. access. new CAMELOT

comes question Misra Ravi from Truist. next Our with

Ravi is Rich. This for on

questions end. just So on X our

the you it's maybe issues First, don't way that could in you into XXX program something around last then so couple you and undiagnosed the that. just What's Quentin, seem was I about mean? And patients channel driving are discussions are market the hoping talked the And them. like will. pretty of benign What sounds like beginning doing think just secondly, the of observations could about what of go the to think envision that the They things far, way I there? calls, you now? kind described on the what this talk they arrhythmia, around develop workflow least pilot at it kind risk you more you right of year. terms

Yes.

on. or around documentation, then of of at you hearing I product you're risk about to holistically your all. safety jump sort one is hearing, you control, much the how the to you one, sort respect process, -- That it read you're So, But the what topic what there That's how about terms or think reportable about, and I back process qualify it first more inspections you correctly. quantifying question feels be not. to of I'll the think Not deem the and how ask service. a in second observations therefore, is not hit and call with certainly

you with there. I'm So,

I think right about thinking you're the way. it

discussions potential, the market response around product everything around you a getting to in documenting although it's whether be never patient, going how or the no how or In are more If or we're reporting. last to see and through questions don't discussion mean, going in to the here. always to survives of are safety during risk FDA, letter? could report. these efficacy things quantifying that. several report Again, within have months There's leads product to we I where they've what navigate this think sufficient, that we where warning way the our all opportunity no course you then even it the seen should could the are point, speculate avoid been the to the respond don't the do it had to the of and That's with I this. chance MDR there's XX not I'm do at But, what's around lead or the can we a terms is the we've marketed. Again, another of to go? the risk serving the the days you that they there

to it with "Look, have transparent with they've where guys you're engage what well. to We've even reporting seen You in been the going very particular these report as said, us areas." We're point over we're and reported, report but continue can with on full right those are find that we're them the sort alignment until now. we exactly of what to to discussion shouldn't going should choose to topics having or be

who tremendous with these that mSToPS higher aperture they're where they that for data putting in of entity the of identifying arrhythmias, somebody the has sort lot arrhythmias or But exist. proactive So, them. really, up to is the some that The these meaningful rule with navigating undiagnosed the high-level monitoring there. monitoring the plans understand that before beneficial patients what's identifying because in in of proactively dollars having opportunity of identifies driving up or to of the opening room been a even through arrhythmias are show finding that. With in sort frankly, respect drives the place, proactive are these mSToPS event sort yields what to beyond plans criteria emergency this sort

in across be these for certain where ] looking top-down and looking to looking a those their that are yield approach So, bringing with their patients large ending in criteria for it's high They're up passed with populations. [ patients these proactively arrhythmias of work. and entities they're more rates covered a very associated

this we're So future. playing be it point it's continues more we who time, with out couldn't what several adopted have how the excited in seeing really see these at of we'll players how it. to move in that's into and But

from Annuity. Plovanic Canaccord comes question with next William Our

little a wanted clarity. Just

this driving with talked to we the that Is with and like plans? ASPs. sounds future? higher to And policy CAMELOT should directional you because So, the a on of lot expect you that change future about negotiate a is the is really able going and plans, you're mSToPS about How from perspective? ASPs the changes, the data, think in something this go

Yes. Not so much, Bill.

code. So many a the billing a establish rate of these a that is lot against category particular of industry broader for And times, plans code.

monitoring, in all this proposed one encouragingly, So for proposed frankly, example, we're you same element the But that take rule, meaningfully rule. the the cost level CMS, reimbursed increase had there. on was saw the long-term getting only cardiac

of Now, net-net, and some a that stable. But fee bit. bring remains adjustments physician the pricing factors other down adjusting

proactive these do where the in time at-risk think larger, I is in programs. opportunity itself So, monitoring presents

the this We bit price they're value have bringing them, going of we're them. to selling pay obviously, those be directly that the in ability an with to demonstrate at negotiate because we as willing the well. payer more the can more for situations, you into may to differently negotiate product to And be you plan a price whatever

initially incredible, far the begin sort expand all this rates pilots So, we're I But see targeting. of data. starts of time, been power sort surpassing you And programs Again, of us. in in the of that these against bit to model that's do out in gain for process why what these billing collecting have we where start the a yield we've set been more and to folks of broadly. historically bit a think flexibility some of evolve pricing probably to some up codes, opens

question Needham Our David with from next & Company. comes Saxon

maybe MCT. I is Dan. this Brice, sorry, Great. probably to on but And, wanted for ask for

as and higher like in maybe help my But you So product can market. lower launch still margin, share it's in take the XXXX a that it sounds understanding MCT dollars. that can MCT, is category, but

AT? different dollar should So, be we when ramps, and launch than the to it and that you're margins what meaningfully how think about product seeing to with does Will profitability? impact

a dollar it's Yes, stands good And I that. a From perspective, higher as absolutely question. now. product you're it reimbursed right. revenue is a it appreciate

to I it's that costly service more, would product. However, say,

we that fully perspective working we the from in MCT frankly, efficiencies we're on as that it. any category. However, And contemplated offset pressures ASP would but margin over only not designed a we also that the have was shift gross that into meant LRP to have time, that's

we're talked there. we things above XXs go. over pressure of we able in ultimately where as we that low margin that and cause that, efficiencies these about to Obviously, believe a incremental requires to So drive being absorb some us of gross time little bit that

However, that put running very LRP out still in community, we level. the the we're of that we and front feel to investor good about

go question Kalia with Oppenheimer. comes ahead. And our Please Suraj next from

Hope pleasure the on it's And sentiment. all Brice, new the been echo family Dan, a is well you. working front. with seat. the congrats I on

but the about So, if I don't future IDNs And a precursor of in should we a have asked. think being trend think gentlemen, ILRs, the you system lot one a of of to for your are relationship is Does towards with should word, I'm way. with couple working the more been we a in about quickly question. and know whatnot, the asymptomatic, symptomatic? policy of throw the Zio the -- terms asymptomatic all the I'll a how That some in Quentin, field? coordination pricing is questions little versus is change differential just curious, players ILR? policy changes right that larger

to in longer to it, respect around plays Great the maybe Yes. duration be see respect ILR. a Suraj. and question, don't into to field With the with out coordination an ILR field. step that being interesting We relationships offer monitoring how the it'll in through

for and we it procedures Zio is physicians, our payers. for compete are interesting proposition have against quite to expensive So, an one procedure. But what's product, doesn't is us, ILRs which ILR value

don't a have to if they're for. if because products, going ILR inclined of interesting procedures other beneficial straight these expensive that to the or cheaper for in they're reimbursing they to, data looking at look I get see I to really an think So, quite sorts therapies right? alternative, are how where And they're will, you that's versus

this who in I to ultimately, think how will So, ILRs payers the the actually respond it, to are be other competitors we and see. space, to continue or interested players going have

frankly, sort need. you monitoring to a an to finding XX necessary. showing of we're is requiring product what not you an that what us think is I of therapy be The ILR data step-through is, MCT days can get

out. how we'll So, see plays that

the move it's to influence well to But it if That's is versus a do a still the recommendation. still monitoring, turn. commercial payers try needing diligently I will, We're to pricing and and big work think asymptomatic. symptomatic market ahead to to I continuing of even USPSTF really proactively to market think full make overall early tell. out get you to too get of to recommend asymptomatic going influence hurdle USPSTF discussions, working there to to On with proactive the

pricing we'll that. So, go where the models into see from future

I of think comes back to it a yield. your diagnostic lot

You right a have worthwhile to in to to be results good the patient population that these targeting and payers. identify the of things very effective for at make being yield able ultimately out

Hadn't learn in into talking lot a a to taking pricing, X and we there come to it for the out. is, back years yet. this monitoring. fact of have but more about ago, were comes encouraged. The place as lot we plays we'll opportunity So, seen more couldn't space proactive how be We that play it there's see

working proactively to out on it, that it and seeing can into about Now, reach we're about players they their it and we're place starting see take begin put to inquire own ask network. programs

with see where we'll but excited it goes, So, we're it.

you. Thank

queue. no We in the further questions have

to like the any So, for call closing turn back to management I'd comments.

momentum further international and into operationally primary the like more expansion entry remain opening joining further addition in growing about our markets, contribute today. and world, success, explore, up business as ACM market in MCT more some leverage multiple with XXXX, we are for be progress to including the pleased excellent primary to back into we growth into you begin being the The to like the in levers that Japan, financial that half to a thank we the care us couldn't yet the us, which to more we is including that, as new to a innovative adjacencies opportunity. excited second Well, couldn't demonstrate Zio largest care We or sleep grow. And solution, efforts significant we of the in of our have of continue expansion our become start in to front channel. set year as continued new be

that, been to we With future be brighter. to take more couldn't our never So, near care. has forward again in and talking Thank We excited, you. the look you future.

This joining. today's concludes call. Thank you for

disconnect You line. may now your