iRhythm Technologies (IRTC) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 revenue of $148.0 million, up 19.3% year-over-year, driven by record Zio product demand, growth in existing and new accounts, and expansion into primary care channels.

• International expansion progressing, with commercial launches planned in four Western European countries by year-end and regulatory decision in Japan expected late 2024.

• Addressed FDA warning letter for Zio AT system, with 510(k) submissions pending and ongoing collaboration with regulators.

• Net loss for Q2 2024 was $20.1 million ($0.65 per share), with adjusted net loss at $18.8 million ($0.61 per share).

• Announced CFO transition, with Dan Wilson to succeed Brice Bobzien effective August 31, 2024.

Financial highlights

• Q2 2024 revenue reached $148.0 million, a 19.3% increase year-over-year.

• Gross margin was 69.9%, up from 69.5% in Q2 2023, aided by operational efficiencies.

• Adjusted operating expenses were $125.2 million, up 25.5% year-over-year, mainly due to compensation, product development, and regulatory costs.

• Adjusted EBITDA was $5.0 million (3.4% of revenue), up from -9.2% in Q1 2024.

• Ended Q2 with $561.5 million in unrestricted cash, cash equivalents, and marketable securities.

Outlook and guidance

• Raised 2024 revenue guidance to $580–$590 million, reflecting sustained volume growth.

• Increased full-year gross margin guidance to 68.5%-69%, a 150 bps improvement over 2023.

• Adjusted EBITDA margin guidance raised to 3.5%-4% of revenue, a 450-500 bps improvement over 2023.

• Q3 revenue expected to reflect normal seasonality at ~25% of full-year revenue.

• $8–$10 million in costs expected for FDA and DOJ matters in 2024, with most to be eliminated in future periods.