iRhythm Holdings — Third Quarter 2026 Earnings Summary

Financial Performance:

• Revenue for the three months ended September 30, 2026, was $221.6 million, a 14.9% increase from $192.9 million in the same period in 2025.
• Gross profit was $164.5 million, up 20.0% from $137.1 million in Q3 2025, resulting in a gross margin of 74.2%, an improvement of 310 basis points year-over-year.
• GAAP net loss was $29.9 million ($0.90 per diluted share), compared to a net loss of $5.2 million ($0.16 per diluted share) in Q3 2025.
• Adjusted net income was $27.8 million ($0.82 per diluted share), compared to an adjusted net loss of $2.0 million ($0.06 per diluted share) in Q3 2025.
• Adjusted EBITDA was $51.2 million with a margin of 23.1%, representing a $29.6 million increase and a 1,190-basis point margin improvement compared to Q3 2025.
• Operating expenses were $197.0 million in Q3 2026 compared to $145.6 million in Q3 2025; adjusted operating expenses were $138.6 million compared to $141.4 million in the prior year period.
• Unrestricted cash, cash equivalents, and marketable securities totaled $560.7 million as of September 30, 2026.
• Free cash flow for the three months ended September 30, 2026, was $(11.5) million, compared to $20.1 million in the same period in 2025.

Guidance and Future Outlook:

• Fiscal year 2026 revenue guidance was increased to $890 million to $895 million, which includes approximately $16 million of expected VitalConnect revenue contribution from the October 5, 2026 acquisition close through year-end.
• Fiscal year 2026 adjusted EBITDA margin guidance was increased to 15.5% to 16.0%, inclusive of VitalConnect.
• Guidance reflects continued volume-led growth, operating leverage, and disciplined investment in innovation and market expansion.

Business Segments and Product Lines:

• Revenue growth was driven by healthy volume-led demand for Zio Monitor and robust margin expansion across cardiology, primary care, innovative channels, and international markets.
• Completed the acquisition of VitalConnect on October 5, 2026, adding an immediate FDA-cleared mobile cardiac telemetry offering to broaden the cardiac monitoring portfolio and advance the multi-vitals strategy.
• Published three large-scale real-world studies demonstrating product superiority of Zio AT (CAMELOT-ALERT1), Zio Long-Term Continuous Monitoring (EXCALIBUR2), and performance improvements of Zio Monitor compared to Zio XT3 in over 1.7 million patients.
• Submitted FDA 510(k) applications for pediatric use of the Zio Monitor long-term continuous monitoring business.

Market and Competitive Landscape:

• Management noted broad-based momentum across care settings and channels, with demand for Zio Monitor exceeding expectations.
• The acquisition of VitalConnect expands the addressable market across the continuum of care and provides a best-in-class mobile cardiac telemetry (MCT) portfolio.

Risks and Challenges:

• GAAP net loss increased by $24.6 million year-over-year, primarily driven by litigation settlements and business transformation costs.
• Operating expenses increased significantly due to $49.8 million in litigation settlements and $6.6 million in business transformation costs (including $6.0 million related to the VitalConnect acquisition).
• Forward-looking statements highlight risks including intense competition, regulatory conditions, reimbursement changes, supply chain disruptions, and the successful integration of acquisitions.

Management Commentary and Tone:

• Quentin Blackford, President and CEO, stated that results reflect the continued strength of the core business and meaningful steps forward with significant margin expansion.
• Management expressed encouragement regarding early opportunities from the VitalConnect acquisition to broaden capabilities and serve more patients.
• The tone emphasized disciplined execution, innovation, and a focus on creating durable value for patients, clinicians, and stockholders.

Other Key Points:

• Closed a new $300 million senior secured revolving credit facility on November 3, 2026, to support long-term growth objectives.
• Q3 2026 gross profit included a one-time benefit from tariff refunds of approximately $3.1 million.
• Q3 2026 operating expenses included $49.8 million in litigation settlements and $6.6 million in business transformation costs.
• Long-term senior convertible notes on the balance sheet totaled $651.9 million as of September 30, 2026.
• Deferred revenue was $4.7 million as of September 30, 2026, compared to $4.2 million as of December 31, 2025.