iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital
health care company focused on creating trusted solutions that
detect, predict, and prevent disease, today reported financial
results for the three months ended March 31, 2024.
First Quarter 2024 Financial
Highlights
- Revenue of $131.9 million, a 18.4%
increase compared to first quarter 2023
- Gross margin of 66.3%, a 160-basis
point decline compared to first quarter 2023
- Unrestricted cash, cash equivalents
and marketable securities of $569.1 million as of March 31,
2024
- Increased fiscal year 2024 revenue
guidance to a range of $578 million to $588 million
Recent Operational
Highlights
- Over half a million registrations
during the first quarter driven by continued growth from primary
care prescribers, further penetration within existing accounts, and
expansion into near-record new account openings for Zio long-term
continuous monitoring services
- Announced collaboration with Epic’s
Aura platform to drive efficiencies through EMR integration and
enable streamlined access to Zio services through improved
operational efficiency for clinicians
- Presented heart failure prediction
algorithm data at ACC in April, demonstrative of the scientific
evidence our teams and academic partners are generating in support
of EKG as a critical vital sign for predictive clinical
insights
- Upcoming data presentation at the
Heart Rhythm Society (HRS) in Boston, MA, from May 16 - 19,
2024
"During the first quarter of 2024, we were very
pleased with the continued momentum in our core markets that
enabled record unit volumes as well as strong new account
openings," said Quentin Blackford, president and chief executive
officer of iRhythm. "First quarter revenue growth of 18.4%
year-over-year was driven by sustained growth in our existing
accounts but also significant contribution from accounts opened
within the past twelve months. We have been very encouraged with
the growing traction within the primary care channel, highlighting
Zio's value proposition as a workflow efficiency tool to expand
ambulatory cardiac monitoring capacity within large care networks.
When combined with progress that we are making with electronic
health integration and emerging clinical evidence on the potential
for EKG data to provide future clinical insights, we could not be
more excited about our positioning to create significant value for
patients, clinicians, healthcare systems, and stakeholders."
First Quarter Financial
ResultsRevenue for the first quarter of 2024 was $131.9
million, up 18.4% from $111.4 million during the same period in
2023. The increase was driven by growth in demand for Zio
services.
Gross profit for the first quarter of 2024 was $87.5 million, up
15.6% from $75.7 million during the same period in 2023, while
gross margin was 66.3%, down from 67.9% during the same period in
2023. The increase in gross profit was primarily due to increased
volume of Zio services provided due to higher demand. The decrease
in gross margin was primarily due to accelerated recognition of the
cost of our legacy Zio XT components associated with our ongoing
Zio monitor commercial launch as well as costs related to scaling
and training newly onboarded clinical cardiac technicians at our
San Francisco IDTF center of excellence.
Operating expenses for the first quarter of 2024
were $125.7 million, compared to $115.2 million for the same period
in 2023. Adjusted operating expenses for the first quarter of 2024
were $125.7 million, compared to $109.5 million during the same
period in 2023. This increase in adjusted operating expenses
resulted primarily from increased headcount-related and third-party
costs to support growth in operations and the further development,
enhancement, and functionality of our current and future product
offerings.
Net loss for the first quarter of 2024 was $45.7
million, or a diluted loss of $1.47 per share, compared with net
loss of $39.1 million, or a diluted loss of $1.29 per share, for
the same period in 2023. Adjusted net loss for the first quarter of
2024 was $38.1 million, or a diluted loss of $1.23 per share,
compared with an adjusted net loss of $33.4 million, or a diluted
loss of $1.10 per share, for the same period in 2023.
Unrestricted cash, cash equivalents, and
marketable securities were $569.1 million as of March 31,
2024.
2024 Annual Guidance iRhythm
projects revenue for the full year 2024 to grow approximately 17%
to 19% compared to prior year results, ranging from approximately
$578 million to $588 million. Gross margin for the full year 2024
is expected to range from 68% to 69% and adjusted EBITDA margin for
the full year 2024 is expected to range from approximately 3% to 4%
of revenues.
Webcast and Conference Call
InformationiRhythm’s management team will host a
conference call today beginning at 1:30 p.m. PT/4:30 p.m. ET.
Interested parties may access a live and archived webcast of the
presentation on the “Events & Presentations” section of the
company’s investor website at investors.irhythmtech.com.
About iRhythm Technologies,
Inc.iRhythm is a leading digital health care company that
creates trusted solutions that detect, predict, and prevent
disease. Combining wearable biosensors and cloud-based data
analytics with powerful proprietary algorithms, iRhythm distills
data from millions of heartbeats into clinically actionable
information. Through a relentless focus on patient care, iRhythm’s
vision is to deliver better data, better insights, and better
health for all.
Use of Non-GAAP Financial
Measures We refer to certain financial measures that are
not recognized under U.S. generally accepted accounting principles
(GAAP) in this press release, including adjusted EBITDA, adjusted
net loss, adjusted net loss per share and adjusted operating
expenses. We use these non-GAAP financial measures for financial
and operational decision-making and as a means to evaluate
period-to-period comparisons. See the schedules attached to this
press release for additional information and reconciliations of
such non-GAAP financial measures. We have not reconciled our
adjusted operating expenses and adjusted EBITDA estimates for full
year 2024 because certain items that impact these figures are
uncertain or out of our control and cannot be reasonably predicted.
Accordingly, a reconciliation of adjusted operating expenses and
adjusted EBITDA estimates is not available without unreasonable
effort.
Adjusted EBITDA excludes non-cash operating
charges for stock-based compensation, depreciation and amortization
as well as non-operating items such as interest income, interest
expense, impairment and restructuring charges, loss on
extinguishment of debt, and business transformation costs.
We exclude the following items from non-GAAP
financial measures for adjusted net loss, adjusted net loss per
share and adjusted operating expenses:
- impairment and restructuring charges,
- loss on extinguishment of debt, and
- business transformation costs to scale the organization.
Forward-Looking StatementsThis
press release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and the Private Securities Litigation Reform Act of 1995. These
statements include statements regarding financial guidance, market
opportunity, ability to penetrate the market, anticipated
productivity improvements and expectations for growth. Such
statements are based on current assumptions that involve risks and
uncertainties that could cause actual outcomes and results to
differ materially. These risks and uncertainties, many of which are
beyond our control, include risks described in the section entitled
“Risk Factors” and elsewhere in our filings made with the
Securities and Exchange Commission, including those on the Form
10-Q expected to be filed on or about May 2, 2024. These
forward-looking statements speak only as of the date hereof and
should not be unduly relied upon. iRhythm disclaims any obligation
to update these forward-looking statements.
Investor Relations
ContactStephanie Zhadkevich(919)
452-5430investors@irhythmtech.com
iRhythm Media ContactSaige Smith(262)
289-7065irhythm@highwirepr.com
IRHYTHM TECHNOLOGIES, INC.Condensed
Consolidated Balance
Sheets(unaudited)(In thousands,
except par value) |
|
|
March 31, 2024 |
|
December 31, 2023 |
|
|
|
|
Assets |
|
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
520,421 |
|
|
$ |
36,173 |
|
Marketable securities |
|
48,671 |
|
|
|
97,591 |
|
Accounts receivable, net |
|
89,712 |
|
|
|
61,484 |
|
Inventory |
|
14,873 |
|
|
|
13,973 |
|
Prepaid expenses and other current assets |
|
13,778 |
|
|
|
21,591 |
|
Total current assets |
|
687,455 |
|
|
|
230,812 |
|
Property
and equipment, net |
|
112,274 |
|
|
|
104,114 |
|
Operating lease right-of-use assets |
|
48,073 |
|
|
|
49,317 |
|
Restricted cash, long-term |
|
8,358 |
|
|
|
— |
|
Goodwill |
|
862 |
|
|
|
862 |
|
Other
assets |
|
52,733 |
|
|
|
48,039 |
|
Total assets |
$ |
909,755 |
|
|
$ |
433,144 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
$ |
8,440 |
|
|
$ |
5,543 |
|
Accrued liabilities |
|
70,044 |
|
|
|
83,362 |
|
Deferred revenue |
|
3,068 |
|
|
|
3,306 |
|
Operating lease liabilities, current portion |
|
15,289 |
|
|
|
15,159 |
|
Total current liabilities |
|
96,841 |
|
|
|
107,370 |
|
Long-term senior convertible notes |
|
644,076 |
|
|
|
— |
|
Debt,
noncurrent portion |
|
— |
|
|
|
34,950 |
|
Other noncurrent
liabilities |
|
908 |
|
|
|
1,012 |
|
Operating lease liabilities, noncurrent portion |
|
77,640 |
|
|
|
79,715 |
|
Total liabilities |
|
819,465 |
|
|
|
223,047 |
|
Stockholders’ equity: |
|
|
|
Preferred stock, $0.001 par value – 5,000 shares authorized; none
issued and outstanding at March 31, 2024 and December 31,
2023 |
|
— |
|
|
|
— |
|
Common stock, $0.001 par value – 100,000 shares authorized; 31,326
shares issued and 31,097 shares outstanding at March 31, 2024,
respectively; and 30,954 shares issued and outstanding at
December 31, 2023 |
|
31 |
|
|
|
31 |
|
Additional paid-in capital |
|
806,621 |
|
|
|
855,784 |
|
Accumulated other comprehensive loss |
|
(89 |
) |
|
|
(112 |
) |
Accumulated deficit |
|
(691,273 |
) |
|
|
(645,606 |
) |
Treasury stock, at cost; 229 and 0 shares at March 31, 2024
and December 31, 2023, respectively |
|
(25,000 |
) |
|
|
— |
|
Total stockholders’ equity |
|
90,290 |
|
|
|
210,097 |
|
Total liabilities and stockholders’ equity |
$ |
909,755 |
|
|
$ |
433,144 |
|
|
|
|
|
|
|
|
|
IRHYTHM TECHNOLOGIES, INC.Condensed
Consolidated Statements of
Operations(unaudited)(In
thousands, except per share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue, net |
|
$ |
131,929 |
|
|
$ |
111,436 |
|
Cost of revenue |
|
|
44,413 |
|
|
|
35,755 |
|
Gross profit |
|
|
87,516 |
|
|
|
75,681 |
|
Operating expenses: |
|
|
|
|
Research and development |
|
|
16,994 |
|
|
|
14,842 |
|
Selling, general and administrative |
|
|
108,660 |
|
|
|
100,343 |
|
Total operating expenses |
|
|
125,654 |
|
|
|
115,185 |
|
Loss from operations |
|
|
(38,138 |
) |
|
|
(39,504 |
) |
Interest expense |
|
|
(2,860 |
) |
|
|
(950 |
) |
Interest and other income,
net |
|
|
2,952 |
|
|
|
1,432 |
|
Loss on extinguishment of
debt |
|
|
(7,589 |
) |
|
|
— |
|
Loss before income taxes |
|
|
(45,635 |
) |
|
|
(39,022 |
) |
Income tax provision |
|
|
32 |
|
|
|
87 |
|
Net loss |
|
$ |
(45,667 |
) |
|
$ |
(39,109 |
) |
Net loss per common share,
basic and diluted |
|
$ |
(1.47 |
) |
|
$ |
(1.29 |
) |
Weighted-average shares, basic
and diluted |
|
|
31,033 |
|
|
|
30,297 |
|
|
|
|
|
|
|
|
|
|
IRHYTHM TECHNOLOGIES, INC.Reconciliation
of GAAP to Non-GAAP Financial
Information(unaudited)(in
thousands, except per share data) |
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted EBITDA
reconciliation |
|
|
|
|
Net
loss |
|
$ |
(45,667 |
) |
|
$ |
(39,109 |
) |
Interest
expense |
|
|
2,860 |
|
|
|
950 |
|
Interest
income |
|
|
(3,057 |
) |
|
|
(1,434 |
) |
Income
tax provision |
|
|
32 |
|
|
|
87 |
|
Depreciation and amortization |
|
|
5,131 |
|
|
|
3,576 |
|
Stock-based compensation |
|
|
20,991 |
|
|
|
18,251 |
|
Business
transformation costs |
|
|
— |
|
|
|
5,686 |
|
Loss on
extinguishment of debt |
|
|
7,589 |
|
|
|
— |
|
Adjusted
EBITDA |
|
$ |
(12,121 |
) |
|
$ |
(11,993 |
) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
|
2023 |
|
Adjusted net loss
reconciliation |
|
|
|
|
Net loss, as reported |
|
$ |
(45,667 |
) |
|
$ |
(39,109 |
) |
Business transformation
costs |
|
|
— |
|
|
|
5,686 |
|
Loss on extinguishment of
debt |
|
|
7,589 |
|
|
|
— |
|
Adjusted net loss |
|
$ |
(38,078 |
) |
|
$ |
(33,423 |
) |
|
|
|
|
|
Adjusted net loss per
share reconciliation |
|
|
|
|
Net loss per share, as
reported |
|
$ |
(1.47 |
) |
|
$ |
(1.29 |
) |
Business transformation costs
per share |
|
|
— |
|
|
|
0.19 |
|
Loss on extinguishment of
debt |
|
|
0.24 |
|
|
|
— |
|
Adjusted net loss per
share |
|
$ |
(1.23 |
) |
|
$ |
(1.10 |
) |
Weighted-average shares, basic
and diluted |
|
|
31,033 |
|
|
|
30,297 |
|
|
|
|
|
|
Adjusted operating
expense reconciliation |
|
|
|
|
Operating expense, as
reported |
|
$ |
125,654 |
|
|
$ |
115,185 |
|
Business
transformation costs |
|
|
— |
|
|
|
(5,686 |
) |
Adjusted operating
expense |
|
$ |
125,654 |
|
|
$ |
109,499 |
|
|
|
|
|
|
|
|
|
|
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