IRTC

iRhythm’s second quarter results were met with a strong positive market reaction, reflecting the company’s ability to deliver both robust revenue growth and significant margin improvement. Management attributed this performance to sustained demand for the Zio ambulatory cardiac monitoring platform and effective commercial execution across cardiology, primary care, and new healthcare channels. CEO Quentin Blackford noted that the company’s operational discipline and successful integration of digital workflow tools were key factors behind the margin gains, stating that manufacturing automation and workflow optimization contributed to the uplift in gross margin. With new partnerships and expanding reach in both domestic and international markets, iRhythm’s momentum was broad-based this quarter. Is now the time to buy IRTC? Find out in our full research report (it’s free). Revenue: $224.2 million vs analyst estimates of $219.2 million (20.1% year-on-year growth, 2.3% beat) Adjusted EPS: $0.58 vs analyst estimates of $0.04 (significant beat) Adjusted EBITDA: $43.3 million vs analyst estimates of $26.13 million (19.3% margin, 65.7% beat) The company slightly lifted its revenue guidance for the full year to $885 million at the midpoint from $880 million Operating Margin: -1.1%, up from -10% in the same quarter last year Market Capitalization: $4.13 billion While we enjoy listening to the management’s commentary, our favorite part of earnings calls is the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Jon Young (Canaccord): asked about synergies from the VitalConnect acquisition, especially in the MCT business. CEO Quentin Blackford responded that a multi-product approach is needed to cover the full spectrum of physician and patient preferences in the MCT market, which the combined portfolio now addresses. Anthony (Citi, for Joanne Wuensch): inquired about the sustainability of EBITDA margin gains and whether there was a tariff refund benefit. CFO Dan Wilson clarified that there was no tariff benefit and said future investment will balance growth with profitability. Allen Gong (JPMorgan): questioned how VitalConnect positions iRhythm for new markets beyond MCT, such as remote patient monitoring and hospital-to-home. Blackford highlighted that the acquisition accelerates broader market entry and aligns with iRhythm’s multi-vital monitoring strategy. Marie Thibault (BTIG): asked for an update on direct-to-patient marketing efforts. Blackford said the company is in early stages but intends to expand investment in these initiatives given the positive initial indicators. Vijay Kumar (Evercore ISI): pressed on whether the acquisition would cannibalize iRhythm’s own MCT development and about anticipated share dilution. Blackford reaffirmed the need for multiple MCT solutions, while Wilson estimated share issuance would be less than 1.5% dilution. In upcoming quarters, the StockStory team will be watching (1) the integration and commercial rollout of VitalConnect’s platform, (2) the effectiveness of direct-to-patient and predictive analytics initiatives in driving new patient referrals, and (3) progress toward FDA clearance for Zio MCT and resolution of the outstanding FDA warning letter. Execution on international expansion and margin improvement from automation will also serve as important signposts of execution. iRhythm currently trades at $125.36, down from $128.12 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members). WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses. But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE. Stocks that have made our list include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 4:30 p.m. ET Senior Vice President, Finance and Investor Relations - Lisa Pecora President and Chief Executive Officer - Quentin Blackford Chief Financial Officer - Dan Wilson Operator: Hello, everyone. Thank you for joining us, and welcome to the iRhythm Technologies, Inc. Q2 2026 Earnings Conference Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Lisa Pecora, Senior Vice President, Finance and Investor Relations. Lisa, please go ahead. Lisa Pecora: Thank you, operator, and thank you all for joining iRhythm's second quarter 2026 earnings call. With me today are Quentin Blackford, iRhythm's President and Chief Executive Officer, and Dan Wilson, our Chief Financial Officer. Before we begin, please note that management will make forward-looking statements within the meaning of Federal Securities Laws under the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our intentions, beliefs, and expectations about future events, strategy, competition, products, operating plans, and performance. Forward-looking statements on this call are based on current estimates and assumptions, involve risks and uncertainties, and actual results may differ materially. These statements are made as of today, August 6th, 2026, and are time sensitive. We undertake no obligation to update or revise them except as required by law. Accordingly, you should not place undue reliance on these statements. For a discussion of risks and uncertainties, please refer to our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP. Unless otherwise noted, all references to financial measures on this call are presented on a non-GAAP basis. These non-GAAP measures should not be considered in isolation or as a substitute for or superior to GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release and the slides accompanying today's call. With that, I'll turn the call over to Quentin. Quentin Blackford: Good afternoon, everyone, and thank you for joining us. We had another very strong quarter, and I'm pleased to be here to discuss both our second quarter 2026 performance and the progress we are making against our long-term strategy. I will begin with a brief overview of the quarter, then discuss today's announced agreement to acquire VitalConnect, and finish with several key business updates. Dan will then talk about our financial performance and guidance in more detail. Second quarter revenue was $224.2 million, up 20.1% year-over-year. This marks our seventh consecutive quarter of growth above 20%, a meaningful accomplishment and a reflection of the durability of demand for Zio, the strength of our commercial execution, and breadth of our growth drivers. Momentum remains strong across cardiology, primary care, innovative channels, and international markets. We are particularly pleased to see that growth translate into exceptional margin expansion, demonstrating both the strength of our platform and the operating leverage inherent in our model. The combination of sustained top-line performance and increasing operating leverage gives us continued confidence in our strategy and the substantial opportunity ahead. Let me turn to our agreement to acquire VitalConnect, which we announced today. We have followed VitalConnect for some time and developed a great deal of respect for its technology, its people, and the platform the team has built. We are enthusiastic about bringing our organizations together because the combination meaningfully expands the ways we serve physicians, health systems, and patients while remaining closely aligned with our mission to improve diagnosis, prevent disease, and ultimately enhance patient care. VitalConnect brings a complementary and comprehensive platform that supports four cardiac monitoring modalities, mobile cardiac telemetry or MCT, event monitoring, long-term continuous monitoring, and short-term Holter. This technology is also FDA-cleared for continuous patient monitoring in the hospital, further expanding our capabilities beyond ambulatory cardiac monitoring and across the continuum of care. The strategic fit is compelling. VitalConnect reinforces our commitment to innovation in ambulatory cardiac monitoring and adds an FDA-cleared platform with a patient monitoring service up to 30 days, four-in-one device functionality, flexible service models, live looking capabilities, and multi-vital monitoring. These features complement our existing portfolio and give us additional tools to meet different clinical, operational, and economic needs of customers and patients. This acquisition also expands our ability to participate in the MCT segment. This is a large market segment, and customer needs vary considerably by workflow, site of care, and patient population. Adding VitalConnect's proven platform to our national sales force will give physicians and health systems on a nationwide basis greater choice and flexibility. Together with Zio AT and Zio MCT, the acquisition of VitalConnect creates a complementary set of solutions to serve different MCT customers and patients. VitalConnect is also important to the broader evolution of our platform. Its biosensor can monitor up to 11 physiological parameters, including ECG, heart rate, respiratory rate, and body temperature, providing a robust foundation for our multi-vital strategy. Over time, these capabilities allow us to address a wider range of clinical needs and care settings, including inpatient monitoring and hospital-to-home programs, creating additional avenues for sustainable long-term growth. Financially, we expect the transaction to strengthen our long-term growth profile. We anticipate a positive contribution to revenue growth beginning in 2027 and thereafter. Combining VitalConnect's business with the meaningful progress we continue to make in our base business, we remain confident in the combined company achieving our previously communicated adjusted EBITDA margin target of 15% next year. I also want to be clear about what this means to our current MCT strategy. We remain committed to both Zio AT and Zio MCT. Because the MCT market serves diverse physician workflows, sites of care, and patient preferences, we do not believe a single solution will address every need. Therefore, our objective is to provide a portfolio of complementary options. To that point, we continue to work towards a clearance for Zio MCT in the first half of 2027. In parallel, we will allocate resources towards understanding and accelerating performance with VitalConnect to ensure a rapid and successful integration of VitalConnect's product into our commercial force, as well as evaluate and define a product roadmap that combines the best of both product platforms and brings continued innovation to the market that serves the needs of our customers and patients. Turning to another central element of our strategy, reaching patients earlier in their care journey. We believe that at least 27 million people in the U.S. are at risk for arrhythmias, and many of these individuals first engage with the healthcare system through primary care, value-based care, and population health settings. This creates a significant opportunity to expand access to Zio by embedding long-duration cardiac monitoring more directly into the clinical workflows where patients are first identified, evaluated, and referred. During the quarter, we advanced our predictive arrhythmia solution strategy with the signing of two commercial agreements through our partnership with Lucem that combine predictive identification workflows with iRhythm monitoring solutions. These partnerships are intended to support earlier diagnosis and intervention, our pipeline of additional opportunities continues to develop. We are also expanding our predictive arrhythmia solutions work with Desert Oasis Healthcare using AI-driven analytics to identify patients who may benefit from cardiac evaluation and monitoring. We continue to see strong momentum in the innovative channels, which was our fastest-growing channel in the quarter. Demand remains robust across a growing network of value-based care, primary care, and population health partners. As these programs scale, utilization is expanding in both symptomatic and asymptomatic patient populations. Early pilot programs have demonstrated more than 85% accuracy in identifying patients with clinically relevant arrhythmias before they enter the diagnostic process. The early results of these programs are encouraging and support our conviction that earlier identification can improve outcomes and reduce total healthcare cost. Primary care is an important part of our upstream strategy, with the majority of the 27 million people in the U.S. at risk for arrhythmias entering the healthcare system through this pathway. To support that care journey, we recently launched our first-ever targeted direct-to-patient initiatives through the PatientPoint network, providing coordinated arrhythmia education for patients, physicians, and office staff. The goal is straightforward: increase awareness of symptoms and risk factors, help patients seek evaluation sooner, make the connection between primary care and cardiology more efficient. A key enabler of our growth strategy in verticals such as primary care is our strong commitment to technology integration. Approximately 60% of our volume now comes from EHR-integrated accounts, and nearly 80 of our top 100 customers are integrated today. By embedding cardiac monitoring more directly within provider workflows, these integrations reduce friction, improve efficiency, and help support early identification of patients who may benefit from monitoring. We believe this positions us well as cardiac care increasingly shifts upstream and towards earlier detection. International remains another emerging growth opportunity, supported by continued commercialization progress and clinical evidence generation during the quarter. For example, in the U.K., we are building momentum with the NHS, supported by award-winning Zio integration and expanding interest in primary care cardiac monitoring. In the Netherlands, we are deepening relationships with key opinion leaders as we position the business for future market expansion. In Japan, the higher reimbursement rate we discussed last quarter became effective on June 1st. In each of these markets, we are staying disciplined in how we execute, investing to generate clinical evidence, advance reimbursement, and build scalable commercial capabilities. Globally, we also continue to expand the body of evidence supporting the clinical and economic value of our platform. Data presented at the European Heart Rhythm Association, the American Diabetes Association, and the International Society for Pharmacoeconomics and Outcomes Research add to our body of clinical evidence on outcomes and economic benefits of early detection and disease management with long-term continuous monitoring. Turning to adjacent markets, sleep remains a large and under-penetrated opportunity with approximately 40 million sleep apnea patients in the U.S., many of whom overlap with arrhythmia populations. We continue to execute pilot programs and refine our strategy with a focus on simplifying fragmented workflows across the sleep ecosystem through a more integrated approach. Similar to cardiac monitoring, we believe streamlining these workflows can create meaningful value for patients, providers, and the broader healthcare system. We are encouraged by the potential while remaining measured in how we invest and scale. Before turning it over to Dan, I'd like to address several business and regulatory updates. First, a positive development during the period on reimbursement were the final LCDs issued by Noridian, CGS, and Palmetto, which addressed key areas of ambiguity in the initial drafts and delivered a constructive outcome. Importantly, these LCDs clarify appropriate modality-specific coverage without introducing additional access restrictions. Overall, the final policy removes a source of uncertainty for the market. Second, we achieved an important milestone this quarter with FDA clearance of our third-generation algorithm, which will be used across our entire platform. Once launched in the first half of 2027, we expect it to reduce clinical technician review time by as much as 50%, driving meaningful productivity gains and approximately $100 million of cumulative cost savings over five years while supporting continued margin expansion. We're also excited by the incremental opportunity to leverage this capability on the VitalConnect platform over time. This is a strong example of how our investments in data and AI can improve both the customer experience and the efficiency of our operating model. Third, as you know, we remain subject to an FDA warning letter and continue to work through the agency's review process. We have updated the agency on the completion of our remediation activities and our self-initiated third-party audit and look forward to their return in anticipation of closing out the warning letter. While the timing of any action remains with the agency, we remain focused on supporting the process and responding to any requests from the FDA. Fourth, I'd like to acknowledge that on July 31st, we agreed to settle our outstanding litigation with Baxter and its subsidiaries, Welch Allyn and Bardy Diagnostics, for a settlement payment of $50 million. With this matter now resolved, we can move forward with greater clarity and focus, directing our attention and resources towards the strategic initiatives, innovation, and execution that drive long-term value creation. Finally, I'd like to provide a brief update on the recent cybersecurity incident we announced in June. On June 8th, we identified unauthorized activity in certain third-party-hosted business applications. We promptly activated our response plan, engaging external experts and notifying law enforcement. The incident has been contained and the root cause identified. While certain data was exfiltrated, our investigation and remediation actions resulted in no material impacts to our products, patient care, business operations, or financial results. Looking forward, our priorities are clear. Sustained volume-led growth across cardiology, primary care, and innovative channels. Continuing to improve profitability through scale, productivity, and disciplined execution. Advancing key innovation initiatives, including next-generation MCT and predictive AI. Thoughtfully expanding into international and adjacent market opportunities, maintaining the strong operational and compliance foundation that supports long-term success in a rapidly evolving landscape. With that, I'll turn the call over to Dan. Dan Wilson: Thank you, Quentin. We delivered another quarter of strong financial performance, supported by sustained demand for our ambulatory cardiac monitoring services and continued operational discipline across the business. We generated robust year-over-year revenue growth while delivering record profitability, demonstrating our ability to scale efficiently and translate growth into significant operating leverage. We remain encouraged by the momentum across the business and the consistency of our execution. Revenue for the second quarter was $224.2 million, up 20.1% year-over-year, reflecting healthy demand across our customer base and continued momentum in newer growth channels. Volume remained the primary driver of growth, complemented by modest pricing gains and continued strong execution in collections. Our broad and expanding prescriber base continues to underscore the strength and durability of demand, while new stores contributed approximately 45% of year-over-year volume growth. Moving down the P&L, gross margin in the second quarter was 72.8%, an increase of 160 basis points year-over-year. This sustainable improvement was driven by targeted operational efficiencies, including manufacturing automation and workflow optimization, as well as product mix and scale benefits from higher volumes. Second quarter 2026 adjusted operating expenses were $145 million, compared to $145.2 million in the prior year period, a decrease of 0.1%. Our expense performance also reflects a focused approach to investment as we funded key growth initiatives while thoughtfully managing costs across the broader organization. As a result, we kept operating expenses essentially flat while delivering strong revenue growth and operating leverage. On the bottom line, GAAP net loss for the second quarter was $0.4 million, or net loss per diluted share of $0.01, compared to a GAAP net loss of $14.2 million, or net loss per diluted share of $0.44 in the second quarter of 2025. Adjusted net income for the second quarter was $19.3 million, or net income per diluted share of $0.58, compared to an adjusted net loss of $10.2 million, or net loss per diluted share of $0.32 in the second quarter of 2025. These results highlight the progress we've made in building a more profitable business as operating leverage across the organization contributed to significant year-over-year improvement in earnings. Adjusted EBITDA for the second quarter was $43.3 million, or 19.3% of revenue, representing an improvement of more than 1,000 basis points compared to the prior year. The year-over-year improvement reflects our disciplined spend management, moderating FDA remediation expenses, and timing of innovation and growth-related investments. This performance underscores the operating leverage we are building in our business model and our confidence in delivering against our longer-term target of 15% adjusted EBITDA margin in 2027. Free cash flow during the second quarter was positive $37.5 million, a record for the company and reflective of the inherent operating leverage in the business and disciplined working capital management. We ended the quarter with $591.3 million in cash equivalents, and marketable securities, a strong cash position that provides us with substantial flexibility to fund future growth initiatives. Before turning to our guidance for the remainder of this year, I wanted to give a few comments on the financial aspects of the VitalConnect transaction. We expect the acquisition to positively contribute to revenue growth beginning in 2027 and thereafter, with VitalConnect currently at an approximately $65 million annual revenue run rate. For gross margin, we expect that the combined company will remain above 70% gross margin by leveraging the scale, operational infrastructure, and AI capabilities we have built. Finally, as previously noted, we remain confident in the combined company achieving our previously communicated adjusted EBITDA margin of 15% in 2027. We look forward to providing more detailed guidance following the closing of the transaction. Turning to our updated financial outlook for Q3 and full year 2026, which does not include any contribution related to our pending acquisition of VitalConnect. We are raising full year 2026 revenue guidance to $880 million-$890 million, representing 18%-19% year-over-year growth. This outlook reflects sustained demand across our core business while maintaining the same disciplined approach to forecasting newer and emerging channels. On a full-year basis, we now expect a modest positive contribution from pricing relative to 2025, attributable to the price benefit we realized in the first half, with revenue growth continuing to be driven primarily by volume growth across Zio Monitor, Innovative Channel, Zio AT and International. In the third quarter of 2026, we anticipate revenue to be in the range of $221 million-$223 million, consistent with typical revenue seasonality. For gross margin, we remain confident in our ability to sustain the strong margin performance we've delivered year to date, while continuing to drive meaningful improvement relative to 2025. The efficiencies we've created across clinical operations and manufacturing, combined with increasing scale and the adoption of AI-driven workflow tools, support further reductions in our cost to serve over time. With respect to the broader macro and geopolitical environment, we've taken proactive steps to manage potential cost pressures and do not currently expect a material impact on our gross margin outlook. Based on our performance year to date and outlook for the remainder of 2026, we are raising our full-year adjusted EBITDA margin guidance to 13%-14%. This reflects the benefits of continued scale, disciplined expense management, and a balanced investment approach across our key growth initiatives. We anticipate certain investments and growth initiatives, including targeted investments in primary care expansion, to ramp in the second half of the year. For the third quarter, we expect adjusted EBITDA margin of 12%-13%. Excluding certain unique items such as litigation settlement payments and transaction costs, we continue to expect free cash flow to increase year-over-year in 2026, with stronger cash generation in the back half of the year, driven by the normal operating cadence of the business. Before closing, I'd like to briefly address the preliminary physician fee schedule proposed by the Centers for Medicare & Medicaid Services, or CMS. We view the proposed reimbursement rates up low single digits across both long-term continuous monitoring and mobile cardiac telemetry as further validation of the healthcare industry's continued focus on earlier disease detection, preventative care, and evidence-based clinical decision-making. These trends align closely with Zio's strengths in delivering objective diagnostic insights through extended, uninterrupted cardiac monitoring. We look forward to reviewing the final rule, which is expected later this year, and will provide additional commentary at that time. In closing, our second quarter results reflect the strength of our execution and the increasing profitability of our business model. Moving forward, we remain focused on expanding patient access, operating efficiently, and investing thoughtfully in the opportunities that position us for long-term success. With the addition of VitalConnect, we look forward to delivering profitable growth where we will continue to balance profitability expansion with disciplined investments towards growth. I will now turn the call back to Quentin for closing remarks. Quentin Blackford: Thank you, Dan. This was an excellent quarter for iRhythm. We are encouraged by the momentum in our business and the opportunities we see to further expand our impact. We delivered our seventh consecutive quarter of revenue growth above 20%, expanded margins significantly, generated strong free cash flow, and raised our full-year outlook. Our results reflect the strength of the Zio platform, the consistency of our execution, and most importantly, the work of our people. At the same time, today's agreement to acquire VitalConnect represents an important next step in the evolution of iRhythm. It adds complementary monitoring capabilities, expands our presence in MCT, and provides a foundation for multi-vital monitoring in additional care settings that will meaningfully benefit patients and customers over time. We're enthusiastic about the strategic potential of the combination, but we will remain disciplined in how we integrate the business, prioritize investments, and pursue the opportunities ahead. Our strategy is clear: expand access, advance innovation, and execute with discipline. Before we move to Q&A, I want to thank the entire iRhythm team. Over the past month, Newsweek recognized iRhythm as both one of America's greatest workplaces and one of the world's greenest companies. Those recognitions belong to our employees. Their talent, dedication, and commitment to our mission are what make our performance possible, and our culture remains one of the most important competitive advantages we have. With that, we're now happy to take your questions. Operator: We will now begin the question and answer session. Please limit yourself to one question. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Jon Young with Canaccord. Jon, your line is open. Please go ahead. Jon Young: Great, thanks. Congratulations on the strong quarter, congratulations on the VitalConnect acquisition. I know it's a high-quality company that we've known for several years. Could you walk through the synergies you expect with the MCT business specifically? How will you position their existing MCT offering versus upcoming Zio MCT? How do you expect this will accelerate the MCT category overall for iRhythm? Thanks. Quentin Blackford: Yeah. Thanks, Jon. Appreciate that question. Look, we've followed VitalConnect for quite some time at this point and understand their technology really well, I think we understand the MCT category really well as well. I think what we've come to realize is that there's going to have to be multiple product offerings in that category to ultimately succeed. We remain committed to AT, to MCT, and now the VitalPatch. If you look at it, Zio AT for us was a product that could really serve about 50% of that MCT market, just given the short duration, 14 days, not being able to get out to 30 days, not having the live looking capability, the downgradable four-in-one capability. Those were all things that were sort of shortcomings with AT, yet it still served a good part of the market. VitalPatch opens up the remaining 50% of that market. Even our own Zio MCT product would only open up probably another 20%-30%. Having VitalPatch in there gives us access to the entire market, which is probably a $1 billion market growing in the high single digits. It's a probably incremental $500 million market opportunity for us. We're excited with it. We're excited to get this through HSR review. We expect that to close by the end of the year, our focus is going to be integrating this into the commercial team in the very first part of next year. Operator: Your next question comes from the line of Joanne Wuensch with Citi. Your line is open. Please go ahead. Anthony: Hi, good afternoon. This is Anthony on for Joanne. Thanks for taking our question. This was a pretty impressive quarter on EBITDA margins, keeping OpEx essentially flat. Any reason not to maybe raise EBITDA a bit more? Also just a quick follow-up, was there any tariff refund benefit this quarter? Thank you. Dan Wilson: Thanks, Anthony. Appreciate the question. Maybe hitting the second part of your question there first. No, there was not a tariff benefit realized in the quarter. That was not part of the 19% adjusted EBITDA margin that we delivered in the quarter. You heard in my prepared remarks there are some investments that we intend to make in the back part of the year. We are raising full-year adjusted EBITDA guidance and are ready to deliver, call it over 400 basis points of improvement versus 2025. We're really excited about that leverage that's coming through in the business. At the same time, we see a lot of opportunities ahead of us to continue to grow the business and talked about primary care, continuing to open that up, innovative channel, sleep, other initiatives like that. We always want to be thoughtful and drive towards profitable growth and really balance those investments in the business to drive growth, but also deliver profitability expansion. Excited about what is showing through in the business, excited about the setup for the rest of the year, and really excited about what the investments can mean for future growth of the business. Operator: Your next question comes from the line of Allen Gong with JPMorgan. Your line is open. Please go ahead. Allen Gong: Hi. Thanks for the quarter, and congrats on the good quarter and deal. I guess I want to dive a little bit deeper into a question I was like just to ask. I understand that VitalConnect helps expand the remaining 50% of the market, but arguably it could also handle the 50% of the market that is currently addressed with AT. With VitalConnect, a big value of the technology is the additional markets that it seems to open. I think we've talked to them, they've valued the transition care and patient monitoring hospital at home as markets in the $ billions as well. I guess just again on the positioning, should we think of this as more of a new product to target those opportunities and unlock the remaining 20%-30%? When we think about technologies that you've talked about maybe being a stepping stone into other modalities like sleep apnea, is this the deal that we should have been looking for? Quentin Blackford: Hey, Allen, thanks for the question. I think you go back to my prepared remarks, we certainly hit on those exciting new opportunities that come via the VitalConnect transaction. They are exciting to us, and honestly, they're part of sort of the roadmap that we've been focused on for some time now. In-hospital monitoring is certainly interesting to us. They've done a nice job of entering into that space already and beginning to make inroads there. The hospital-to-home segment is something that we've talked about in the past, particularly as we build out our own multi-vital product capability. Now VitalConnect accelerates that capability, having multi-vital capabilities already on their platform. Those are nice synergies in the transaction and very synergistic relative to the overall strategy of our company. I wouldn't leave out RPM as well. Remote patient monitoring is another area of focus that they've built out a capability very nicely around. That's something that we've also had on our roadmap as well. This certainly goes well beyond just the MCT market. It absolutely opens up incremental opportunity within MCT, and I think we're going to be able to benefit patients and customers meaningfully more as a result of it. MCT alone is not the only reason that we're interested and excited about VitalConnect. You hit the nail on the head with respect to those incremental ancillary market opportunities that I do think can be valued in the billions of dollars in terms of market potential. We're in the early stages. We're going to be thoughtful and measured in how we continue to lean into those, we certainly want to lean into the experience of VitalConnect and what they've learned there and capitalize on the inroads that they've already made. Operator: Your next question comes from the line of Marie Thibault of BTIG. Your line is open. Please go ahead. Marie Thibault: Hi. Thanks for taking the question. I just wanted a quick check-in on the direct-to-patient marketing that you've started, I think in some select zip codes. Can you give us an early read on what you're learning from those efforts, and should we expect that you'll plan to expand that program here in the quarter to come? Thanks for taking the question. Quentin Blackford: You certainly, Marie, should expect that we're going to continue to lean into and expand it, and that's part of the incremental spend in the back part of the year that Dan was alluding to. We know that direct-to-patient and direct-to-consumer, primary care, these are all areas that have real potential behind them, and early indicators are that they are real opportunities. We will continue to invest in those. They'll be measured as we go to make sure that we're seeing the sort of returns that we expect to around them before we just lean into them even harder. We're excited by those. We are in the very early stages of the initial DTP efforts and the in-clinic, in-physician office marketing that we're doing with patients. It's a little bit early to measure those results, I will tell you that the confidence is high enough right now that we're going to continue to lean into it and excited by what we're going to see out of it. We're a little early, we're excited by it. Operator: Your next question comes from the line of Stephanie Elghazi with BofA. Your line is open. Please go ahead. Stephanie Elghazi: Hi, thanks for taking the question and congrats on a good quarter and the deal. I just wanted to check on Zio MCT and how that's tracking relative to previous expectations for the launch in the first half of next year and any progress you would share on the mobile gateway data submission to the FDA. Thank you. Quentin Blackford: Thanks, Stephanie. We continue to make progress on Zio MCT. It continues to be a priority for us and an area that our teams are focused on. As you'll note, in my prepared remarks, I commented on the fact that we remain focused on getting clearance on that product in the first half of next year. I think it's important for you to realize, though, that we expect VitalConnect will close before the end of the year, which means we are going to be focused on integrating that VitalPatch into our commercial team's hands right around the turn of the year, the very early part of next year, which requires training and launching across a nationwide platform. That will be our number one focus as we enter into this deal and transaction and look to close it here in the near term. At the same time, we're going to continue to focus on the submission of MCT and getting that clearance so that we do have optionality as we go into the future. I think it's important for folks to realize VitalConnect is the primary focus here in the near term as we look to launch a new product into the MCT space, which will be that VitalPatch. Operator: Your next question comes from the line of David Saxon with Needham. Your line is open. Please go ahead. David Saxon: Great. Good afternoon, Quentin and Dan. Thanks for taking my questions, I'll echo the congrats on the quarter and the deal. I just have a multi-parter on the VitalConnect deal. You talked in the script $65 million run rate. I think that reflects a slowdown they saw in the first quarter due to a transition. My understanding is they recovered from that and are kind of ramping and targeting about $100 million next year. Is that a fair way to think about what they could do from a revenue contribution perspective in 2027? The second part of the question is just, my math, you have a leader in the extended Holter category obviously. You'll probably get a couple points there from their platform, and I would guess your MCT share is going to have a two handle in front of it. Just talk about your confidence in getting it through the regulators and whatnot. Thanks so much. Quentin Blackford: There's a lot in there, and I'll ask Dan to jump in and help if I miss on anything or just remind me of what we've missed because I want to try to hit all of it for you. This is a company that we've spent a lot of time getting to know over the years and certainly have really come to appreciate their technology and frankly, the teams behind the company that have been building it. There have been some structural considerations over the years that made it very difficult to step in and acquire the company. We've had those conversations with the teams over the years, and Peter and that team did a nice job of addressing those right towards the end of last year and into the beginning of this year, which did create a little bit of a hiccup in that business. They've come out of it really nicely. They're growing quite nicely now, and we're excited by what we're seeing in that business. They have addressed that, and I see that as temporal, and the recent business trends would certainly indicate that was the case as well. Having addressed that particular issue now opened up the opportunity together with nice gross margin improvements that we were seeing in that business to step in and acquire the company. We're excited to be at the point now to be able to do that. In terms of run rate revenue, what that looks like for next year, we're not going to get out and guide to 2027 at this point in time. Some of that's going to be contingent upon exactly when the deal does close, and we're going to wait till that happens to give you sort of a forward look and a guidance of the combined companies. Again, our idea is that this thing will close by the end of the year, but until it does close, we're going to hold back on providing combined company guidance. At the last point on HSR review or getting through the FTC, this is very much about the MCT product category. It's a very pro-competitive transaction. There's a tremendous amount of competition that remains in the MCT category. The largest players in this space really focus in MCT between BioTel and Preventice and others. I think that the combination of our company and VitalConnect doesn't change that competitive dynamic within the MCT category. We're excited by the opportunity, feel very good about the ability to get through the FTC and the HSR review, and we'll keep you updated on how we progress through that. Dan Wilson: David, I'll just add on the revenue. I can't necessarily speak to what they've quoted historically. The $65 million run rate that I had in my prepared remarks, that does contemplate our revenue accounting, which, as you know, we essentially report a net revenue that follows a contractual allowance. That is our revenue recognition. That's how we derived that $65 million. Hopefully that's helpful. Operator: Your next question comes from the line of Nathan Treybeck with Wells Fargo. Your line is open. Please go ahead. Nathan Treybeck: Great. Good evening. Congrats on a strong quarter and on the deal. Quentin, are you seeing any sign that the very strong growth you've seen in innovative channels is beginning to normalize, or do you still believe those channels are still in early innings? If you could just talk about the cadence of new partner adds in the quarter, and I guess what's implied in the second half relative to the first half. Quentin Blackford: Yeah, we continue to be excited with the innovative channel opportunity. I just think whether it's primary care, whether it's value-based care, population health, there's so many different angles in that innovative channel business that has us excited. The teams continue to add new partners as we go. We saw another healthy quarter of new partners coming on board. I think that the reality is they all come on board at different paces and in different ways, and that gets a little bit hard to forecast and predict. We've not changed our way of thinking about how we look at innovative channels into the back half of the year and in our guidance. It's more of a wait-and-see approach with that business. It has been encouraging. It continued to grow incredibly well in the second quarter. It was exciting to see our very first employer-sponsored plan sign up within the innovative channel business. I continue to think that employer-sponsored plans remains a meaningful opportunity in these self-insured populations. I'm excited to see that door begin to open. I think we're still in the very early innings here. We'll continue to lean into it, focus on it, but we're also going to be measured in how we think about it in our guidance. We'll let those results play through before we get ahead of ourselves. Operator: Your next question comes from the line of Vijay Kumar of Evercore ISI. Your line is open. Please go ahead. Vijay Kumar: Hi, guys. Thank you for taking my question. Quentin, I want to go back on the deal. I just want to make sure we understand the deal rationale. This feels like a dual product strategy within MCT. I know you have a 2.0 product that's going to address the other part of the market. It just feels like, is this going to be cannibalistic? How is VitalConnect going to fit in? Does this reduce your enthusiasm for 2.0? I know there's been some questions about delays on 2.0 submission to the FDA. Has that been submitted to the FDA? I think on the stock issuance, do we know the number of shares that are expected to be issued to fund the deal? Quentin Blackford: I'll let Dan hit on the stock issuance piece. It very much is a dual product strategy within the MCT category. Back to my prior comments, I think it's going to take multiple products to really serve that MCT category as effectively as possible. There are just so many different preferences when it comes to physician needs and expectations in that category, patient needs and expectations. There's some that like the longer wear duration that can get out to what will be 21 days in our MCT product as a single wearable patch. There's others that don't mind replacing a patch every seven days or so, and getting out to 30 days of monitoring is more important to them. Sometimes the downgradable aspect is more important to physicians or to patients, or having the live look-in as they're wearing the device, being able to peek in and see what's going on. Those are all different requirements that our customers, physicians, and patients ultimately have in this category. I do think a dual product strategy is the right one. You mentioned Zio MCT 2.0. I think maybe you're referring to Zio MCT, which is what we're working to get clearance with the FDA. That continues to progress, and we continue to seek that. There ultimately would've been a pathway in our own product roadmap that would've taken Zio MCT onto Zio MCT 2.0 that would've introduced many of the features that you're seeing in the VitalPatch as well. Now we've accelerated that into our product portfolio, and frankly, we'll have multiple product offerings to serve this segment sooner than what we had ever anticipated in the organic roadmap pathway that we had. Dan Wilson: Vijay, on your question on number of shares issued, just as a reminder, $50 million in equity and calculated with a 30-day volume weighted average price. That equates to just a little more than 420,000 shares, which is less than 1.5% dilution. Operator: Your next question comes from the line of David Rescott with Baird. Your line is open. Please go ahead. David Rescott: Great. Thanks for taking the question, and congrats on the quarter and the deal. I wanted to ask maybe a two-parter on the deal itself. I totally appreciate the MCT angle, but you called out some of these multi-parameter sensing capabilities that can open the door to some additional markets longer-term. I recall two years ago or so, you did this licensing agreement with BioIntelliSense for some of their sensor capabilities. Curious if you could paint us maybe a picture around what these additional parameters get you beyond what you've been working on so far today, and maybe not necessarily the timelines, but how we should think about some of these additional opportunities to break into multi-parameter monitoring could come about. When you think about the either cost synergies or investments that you've made, that VitalConnect has made, is there anything in particular that you can call out there when you think about more of the cost synergy side of it? Thank you. Quentin Blackford: Sure. Let me hit on the first one, and then Dan can take the second part of that. When you think about the multi-vital opportunity or the incremental sensing parameters that are out there is some overlap in what VitalConnect has already been able to achieve on their VitalPatch along with what we were looking to do in our own efforts internally. It does speed us up in terms of bringing some of those incremental sensing capabilities onto an iRhythm platform or a combination of iRhythm and VitalConnect's platform now. There are also some incremental capabilities that we were focused on and that we acquired through that IP license with BioIntelliSense. Those are important. As an example, we really like the PPG capability that BioIntelliSense has. We find it to be very differentiated, unique, like our freedom to operate in and around that. You would ultimately see that come together in our platform, including the VitalPatch. Those are important and complementary to each other as we think about the future. They don't obsolete each other. They just help build an even stronger product into the future that we think can serve many more patients, obviously open up new markets. I think multi-vital monitoring is going to be very important in the whole hospital into the home segment. It's going to be important with RPM capabilities. These are all new markets that aren't contributing to our revenue or growth profile today, but in the future, I believe have the potential to do that. We're excited by it. There's still work to be done, to be honest with you, on the whole product roadmap. You'll hear more from us into the future, but early thoughts around it are exciting. Dan Wilson: David, on the second part of your question there, I will say growth really is the primary focus of the acquisition. We see a real opportunity there to leverage the commercial engine that we've built and the reach that we have there, the clinical service capabilities we've built, and I'm excited about seeing that come to life as we bring VitalConnect into the combined company. On the cost side, I would say we've built operational capabilities and scale that we really believe will allow the two companies to operate more efficiently than they would independently. Much like our core business, our focus is on profitable growth as we think about this deal. A lot to leverage there in terms of the capabilities that we've built, and if you think about it, they're really call it 10 years behind us in terms of the build-out of capabilities and operational infrastructure, and that's exactly what we're going to bring to bear as we welcome them to iRhythm. Operator: Your next question comes from the line of Mike Polark with Wolfe Research. Your line is open. Please go ahead. Jerron: Hey, this is Jerron for Mike. Thanks for taking the question. I think if I heard correctly, you mentioned that new stores contributed 45% to volume growth, which is down from previous quarters. Maybe what's driving that decel, and how should we think about that in the cadence in the coming quarters? Thanks. Dan Wilson: Yeah. Appreciate the question there. We have commented previously that number can fluctuate and vary quarter-to-quarter. You have heard us speak to a number of the large accounts that we opened up in 2025, and if you recall, that was in the early part of 2025. Those accounts and in addition to those of a few innovative channel partners, kind of rotated out of new store into same stores as we define it there. We saw that flip a little bit to the same store side. I would say importantly, still seeing solid growth from both sides of the business and would likely expect that to stay a little more weighted towards same store, given the dynamics that I just mentioned. Operator: Your next question comes from the line of Richard Newitter of Truist Securities. Your line is open. Please go ahead. Richard Newitter: Hi. Thanks for taking the questions, guys. Great quarter. Congrats on the deal. I actually have two questions on the deal. I'll ask them both from the front. First one is, Quentin, what exactly is the top priority or the biggest thing you need to do or entailed in integrating Vital into your infrastructure. Is there anything that's kind of, you've got to get this right, or this is kind of the heaviest lift? If you just answer that and where the biggest kind of focus is there. The second question is, you mentioned earlier, you said heading into 2027, Vital is your key priority, and it sounds like you were talking about that relative to Zio MCT. I just want to clarify if that's the case. If in any way is this a signal that you're deprioritizing Zio MCT in favor of Vital? Thank you. Quentin Blackford: Thanks, Rich. Let me hit the first one. In terms of what needs to happen to make sure this is successful right out of the gate, I think there's really two things that I'm most focused on and will be driving as an organization, the team. One is introducing the VitalPatch across a nationwide commercial team, increasing access of this product for patients and physicians alike across the entire country. This is a company that began, grew, scaled sort of in the northeast, north central, the southeast. Taking it from, call it, 30 reps under their control to a commercial force of 200 plus on our side. We're going to make sure that goes off well, that we're trained up well, and that our customers have a great experience with this as it makes its way into the market. Along with that, from an operational perspective, that means we need to be able to scale the volumes quite quickly to support what we think will come with a nationwide launch. Think about that from an inventory, supply chain, distribution, logistics, intake capability. Those are all things that we're very much focused on and will be spending time really ensuring that we're able to meet that demand as the two companies come together. With respect to prioritization and MCT, it's important to realize we are continuing our efforts on MCT. We're not backing away from MCT. I do believe that you need a multi-product strategy in this MCT category to ultimately be able to go after the entire marketplace. Zio MCT will be a superior product to Zio AT. Over time, we need to move away from Zio AT and onto a Zio MCT platform. We know it has a better cost profile. There's more automation that we can put to it in our manufacturing centers. It has a longer wear profile. These are all very important things to us. I think if you go back to my prepared remarks, you see our focus is on continuing to be on getting that product cleared with the FDA and ensuring we have optionality in that MCT product space or market space. However, just given where we think that we're going to close with VitalConnect, we're going to be in a situation where that product is going to be available to our commercial team ahead of clearance with MCT, or at least that's our belief, because we think that we'll get through the FTC by the end of the year. That means we need to be prepared for an integration of VitalPatch onto our commercial force as quickly as possible. I'm just trying to lay out for you sort of how when we think about things coming together, I think VitalPatch and VitalConnect gets closed earlier, we're not going to wait around for an MCT clearance to then figure out, do you introduce one product versus the other? We're going to lean right into VitalPatch, get that out there, and get going with it. Operator: Your next question comes from the line of Suraj Kalia with Oppenheimer. Your line is open. Please go ahead. Suraj Kalia: Hi, Quentin. Can you hear me all right? Quentin Blackford: We got you. Suraj Kalia: Perfect. Gentlemen, congrats on the quarter. Quentin, forgive me, many calls going on at the same time, I must have probably missed this. Is the value proposition for VitalConnect really about their VitalConnect MCT product? Partly within the question is, the algorithm is going to be different for VitalConnect versus the Zio MCT, even if we keep the bridge devices and everything aside for now, I'm just talking about the software component. Maybe if you can help us understand that, is the logic here to push VitalConnect initially till Zio MCT comes online? I'm just trying to understand the need for VitalConnect at this time, especially on the MCT side. Apologies again if you've already talked about this. Quentin Blackford: Well, I think VitalConnect brings, and the VitalPatch in particular, brings incremental features beyond Zio MCT that are very interesting to us and are important to be able to compete in the entire MCT category. Again, the four-in-one capability, the live looking capability, getting out to 30 days, as an example, opens up a remaining part of the market that Zio MCT can't get to. That's a meaningful market opportunity. That's another $200 million-$300 million market opportunity that frankly, Zio MCT just could never have gotten to. Back to my point of needing to have various products and feature sets. I think that's very important to be able to compete in the entire MCT category. Yes, we do like what VitalPatch brings to us with an MCT, the MCT product, or sorry, the MCT market. I do think it opens up incremental opportunity on our own Zio MCT product. Beyond that, it also opens up things like inpatient monitoring, in-hospital monitoring that they have clearance for. It opens up opportunities like hospital into the home, RPM capabilities. Those are all unique capabilities of their product and their platform that we're excited about and believe open up new revenue opportunities into the future. Operator: Your final Quentin Blackford: Sorry, you had one last point on the software algorithms. Look, we're going to be able to bring the best of both companies together in this respect. We've done a good amount of work around the clinical side of it. We feel good about their product. Obviously, we, as iRhythm, have invested tremendously over the years in clinical data. We'll continue to do that in the future on the combined platform, I think leverage our learnings and put the best product into the market. Operator: Thank you. Your final question comes from the line of Mason Carrico with Stephens Inc. Your line is open. Please go ahead. Mason Carrico: Hey, guys. Thanks for fitting me in here. A lot's been asked, I think you guys have mentioned the potential for a publication or some data later this year showcasing real-world economics within the innovative partner channel. Is that still on track? What other initiatives are you deploying to help potentially accelerate these partners moving from pilot to more enterprise-wide deployment? Quentin Blackford: That's a great question, you're exactly right. We commented on that in the past. We do continue to expect to see some of that real-world data make its way into the marketplace in the back half of this year. We expect one of our innovative channel partners to continue to work to publish information. We've had one that has begun to speak about it from the podium. We expect more to come, we also have some work that we're doing with one of these innovative channel partners too that we'll likely publish. I do expect you're going to see some real-world data, cost benefit data, cost savings data, make its way into the market. Operator: Your next question comes from the line of Brandon Vazquez with William Blair. Your line is open. Please go ahead. Brandon Vazquez: Hey, everyone. Thanks for the question and congrats on the quarter end on the deal. I'll just leave it to one question, maybe a big picture question. As you bring in this complimentary technology from VitalConnect, do you think as you look down in the future, sleep or maybe even we've had discussions in the past about diagnosing bowel disease, et cetera, does this expedite or make a clearer line of pathway to some of the future TAM expansion opportunities? If so, does that look like a commingling of the two products, maybe on the back end at least, or does the hardware eventually merge? Do you always keep two pathways? Just talk a little bit about that, what this deal might look like in three to five years instead of just in the next couple of years. Thanks. Quentin Blackford: Yeah, it's a great question, and that's part of what really excites us about the opportunity. When you start to look out three, four, five years, you think about the new markets that are starting to come into reality at that point in time, whether it is you're in hospital monitoring in the Med Surg ward within the hospitals, as an example. You can start to see the whole hospital into the home monitoring, really trying to bend the cost curve of readmission back into the hospital. I think we're going to be able to monitor all the appropriate modalities off of this sensor that are important. Importantly, we have an IDTF capability in the background that is providing monitoring for a lot of these health systems that just don't have the capacity to do it. I love the way we're positioned to be able to get after some of those new market opportunities out into the future. I do think other disease states are going to continue to grow and become more prevalent. You've heard us talk about sleep. Sleep continues to be important to us. We'll continue to lean into it. I like what we're learning there. It's going to be a real opportunity for us. Heart failure is another one that I think has a real opportunity to be impacted. I think the combination of our two companies gives us a platform with a lot of flexibility on it where we can take the best from both sides over time and really improve what is available to patients and physicians in the marketplace. A lot yet to come, but there's a lot of capabilities on our own platform that I think would be terrific on their platform, and I think there's a lot of things in their platform that could be terrific on ours, and that's what we'll be focused on bringing together over time. We're excited by the combination, and we think it opens up a lot of incremental market opportunities and a lot of incremental product features that ultimately millions and millions of patients are going to get the benefit of. Operator: There are no further questions at this time. I will now turn the call back to Quentin for closing remarks. Quentin Blackford: In closing, I'd like just to take an opportunity to recognize our employees on a terrific quarter. In many respects, a record quarter across so many measures for us, and it's really their commitment and execution that has made this possible for the company. We continue to deliver strong results while continuing to invest in the opportunities that are going to drive the growth of the company into the future. With a differentiated market position, expanding capabilities, the strategic addition of VitalConnect, we believe we're well positioned to extend our leadership and create long-term value. As we celebrate our 20th anniversary, I couldn't be more proud of the team, more optimistic of the future, and I thank all of you guys for joining us today. See you soon. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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Medical technology company iRhythm Technologies (NASDAQ:IRTC) reported Q2 CY2026 results exceeding the market’s revenue expectations , with sales up 20.1% year on year to $224.2 million. The company expects the full year’s revenue to be around $885 million, close to analysts’ estimates. Its non-GAAP profit of $0.58 per share was significantly above analysts’ consensus estimates. Is now the time to buy IRTC? Find out in our full research report (it’s free). Revenue: $224.2 million vs analyst estimates of $219.2 million (20.1% year-on-year growth, 2.3% beat) Adjusted EPS: $0.58 vs analyst estimates of $0 (significant beat) Adjusted EBITDA: $43.3 million vs analyst estimates of $26.13 million (19.3% margin, 65.7% beat) The company slightly lifted its revenue guidance for the full year to $885 million at the midpoint from $880 million Operating Margin: -1.1%, up from -10% in the same quarter last year Market Capitalization: $4.21 billion iRhythm’s second quarter results were met with a strong positive market reaction, reflecting the company’s ability to deliver both robust revenue growth and significant margin improvement. Management attributed this performance to sustained demand for the Zio ambulatory cardiac monitoring platform and effective commercial execution across cardiology, primary care, and new healthcare channels. CEO Quentin Blackford noted that the company’s operational discipline and successful integration of digital workflow tools were key factors behind the margin gains, stating that manufacturing automation and workflow optimization contributed to the uplift in gross margin. With new partnerships and expanding reach in both domestic and international markets, iRhythm’s momentum was broad-based this quarter. Looking forward, iRhythm’s updated guidance is shaped by the pending acquisition of VitalConnect, continued expansion into new care settings, and investments in technology-driven workflow improvements. Management highlighted plans to leverage VitalConnect’s multi-modal monitoring platform to address a wider range of clinical needs and expand into markets such as mobile cardiac telemetry and remote patient monitoring. CFO Dan Wilson emphasized that productivity enhancements from AI-driven tools and further integration into provider workflows are expected to support future profitability, while investments in direct-to-patient initiatives and primary care channels will remain a priority for growth. Management cited the combination of strong Zio platform demand, operational efficiencies, and new product initiatives as the main drivers behind the quarter’s performance. Zio platform drives growth: Broad adoption of iRhythm’s Zio ambulatory cardiac monitoring system remained the primary engine for revenue, with robust uptake in both traditional cardiology and upstream primary care settings. Management pointed to increased integration with electronic health records (EHR) as a driver of efficiency and provider adoption. VitalConnect acquisition expands capabilities: The announced agreement to acquire VitalConnect will add a complementary four-in-one cardiac monitoring platform and open access to the entire mobile cardiac telemetry (MCT) market, which management estimates as a $1 billion opportunity. This also accelerates iRhythm’s entry into inpatient and hospital-to-home monitoring segments. Margin expansion through automation: Gross margin improvements were achieved via targeted manufacturing automation, workflow optimization, and scale benefits from higher volumes. CEO Quentin Blackford explained that the third-generation algorithm, once deployed, is projected to cut technician review time by up to 50%, supporting further margin gains. Innovative channels and partnerships: New agreements—such as those with Lucem for predictive arrhythmia solutions—contributed to rapid growth in the innovative channel, particularly among value-based care and population health partners. Early pilot programs reportedly identified patients with arrhythmias before they entered the diagnostic process. Regulatory and operational milestones: The company secured final coverage determinations from major Medicare contractors, mitigating reimbursement uncertainty. Additionally, iRhythm resolved litigation with Baxter and addressed a recent cybersecurity incident without material impact on operations. These developments remove distractions and allow management to focus on growth and integration priorities. Management’s outlook centers on leveraging new product capabilities, expanding in primary care and international markets, and integrating VitalConnect to drive sustainable growth and profitability. VitalConnect integration and product expansion: The successful acquisition and integration of VitalConnect is expected to unlock new revenue streams in mobile cardiac telemetry and inpatient monitoring. Management emphasized the importance of offering a portfolio of solutions to address varying physician and patient needs, while also accelerating the company’s roadmap for multi-vital monitoring. Continued investment in technology and direct-to-patient initiatives: Ongoing investments in AI-driven workflow tools and direct-to-patient marketing are intended to improve efficiency, enhance patient identification, and support margin expansion. Management noted that early results from these initiatives are promising, and spend is expected to increase in the second half of the year as pilots scale. Disciplined cost management and regulatory vigilance: Future profitability will depend on maintaining tight expense control, especially as the company ramps up investments in new channels. Management also identified the resolution of its outstanding FDA warning letter and successful navigation of regulatory reviews as important for sustaining operational momentum. In upcoming quarters, the StockStory team will be watching (1) the integration and commercial rollout of VitalConnect’s platform, (2) the effectiveness of direct-to-patient and predictive analytics initiatives in driving new patient referrals, and (3) progress toward FDA clearance for Zio MCT and resolution of the outstanding FDA warning letter. Execution on international expansion and margin improvement from automation will also serve as important signposts of execution. iRhythm currently trades at $138.66, up from $128.12 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free for active Edge members). ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time. 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iRhythm Holdings, Inc. IRTC reported adjusted earnings per share of 58 cents in the second quarter of 2026, against an adjusted loss per share of 32 cents a year ago. The figure beat the Zacks Consensus Estimate by 5900%. GAAP loss per share for the quarter was 1 cent compared with 44 cents in the year-ago period. iRhythm registered revenues of $224.2 million in the second quarter, up 20.1% year over year. The increase was primarily driven by sustained volume demand across the customer base, reflecting continued strength in the core business and contributions from newer growth channels. The figure surpassed the Zacks Consensus Estimate by 2.2%. In the year-to-date period, the company’s shares have declined 27.9% compared with the industry’s loss of 0.8%. The broader S&P 500 Index has increased 13.1% in the same time frame. Image Source: Zacks Investment Research iRhythm derives revenues from the following sources: Contracted third-party payors, Centers for Medicare & Medicaid Services, Healthcare institutions and Non-contracted third-party payors. Contracted third-party payor revenues totaled $113.8 million in the quarter, up 16.4% year over year. Centers for Medicare & Medicaid Services revenues increased 31.6% to $58.6 million. Healthcare institutions generated revenues of $37.8 million, up 18.7% from the prior-year quarter. Non-contracted third-party payor revenues rose 11.1% to $14.1 million. In the quarter under review, iRhythm’s gross profit increased 22.8% year over year to $163.2 million. Gross margin expanded 160 basis points (bps) to 72.8%, reflecting operational efficiencies, product mix and scale benefits from higher volumes. Selling, general and administrative expenses increased 4.2% year over year to $131.7 million, while research and development expenses decreased 5.6% to $19.8 million. Adjusted operating expenses were $145.0 million, down 0.1% year over year despite continued investments in growth initiatives. The operating loss narrowed to $2.5 million from $18.7 million in the prior-year quarter. iRhythm exited second-quarter 2026 with cash and cash equivalents of $246.7 million compared with $240.1 million at the end of first-quarter 2026. Cumulative net cash provided by operating activities at the end of second-quarter 2026 was $24.9 million compared with $19.8 million a year ago. iRhythm has increased its outlook for the full year 2026. IRTC now projects full-year revenues between $880 million and $890 million, up from the prior outlook of $875 million to $885 million. The Zacks Consensus Estimate is pegged at $884.1 million. The company expects an adjusted EBITDA margin between 13% and 14%, up from 12% to 13% previously. iRhythm Holdings, Inc. price-consensus-eps-surprise-chart | iRhythm Holdings, Inc. Quote iRhythm delivered a strong second quarter, delivering solid earnings and revenue growth. The quarter reflected broad-based commercial momentum across cardiology, primary care, innovative channels and international markets. Innovative channels were the fastest-growing area, supported by value-based care, primary care and population-health partnerships. Approximately 60% of volumes now come from EHR-integrated accounts, while nearly 80 of iRhythm’s top 100 customers are integrated, helping streamline workflows and expand patient access. On the innovation front, iRhythm secured FDA clearance for its third-generation algorithm, which management expects to reduce clinical technician review time by as much as 50% and generate approximately $100 million in cumulative cost savings over five years. The company is advancing predictive arrhythmia solutions, with new commercial agreements through its Luum partnership and expanded work with Desert Oasis Healthcare. iRhythm entered into an agreement to acquire Vital Connect for approximately $287.5 million. The transaction is expected to broaden its cardiac monitoring portfolio across mobile cardiac telemetry, event monitoring, long-term continuous monitoring and short-term Holter, while creating opportunities in inpatient and hospital-to-home monitoring. Alongside continued investments in Zio MCT, primary care, international expansion and adjacent markets such as sleep diagnostics, these initiatives support iRhythm’s strategy of expanding access and evolving into a broader cardiac monitoring and intelligence platform. iRhythm currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the broader medical space are West Pharmaceutical WST, The Cooper Companies COO and Cardinal Health CAH, each carrying a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. West Pharmaceutical reported second-quarter 2026 adjusted earnings per share (EPS) of $2.37, which beat the Zacks Consensus Estimate by 13.9%. Revenues of $872.3 million surpassed the Zacks Consensus Estimate by 4.2%. West Pharmaceutical has an estimated long-term earnings growth rate of 16%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.40%. The Cooper Companies reported a second-quarter fiscal 2026 adjusted EPS of $1.21, which beat the Zacks Consensus Estimate by 10.00%. Revenues of $1.08 billion beat the Zacks Consensus Estimate by 2.6%. The Cooper Companies has an estimated long-term earnings growth rate of 8.3%. COO’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 5.80%. Cardinal Health reported a third-quarter fiscal 2026 adjusted EPS of $3.17, which beat the Zacks Consensus Estimate by 13.2%. Revenues of $60.94 billion missed the Zacks Consensus Estimate by 2.3%. Cardinal Health has an estimated long-term earnings growth rate of 17%. CAH’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 10.27%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iRhythm Holdings, Inc. (IRTC) : Free Stock Analysis Report Cardinal Health, Inc. (CAH) : Free Stock Analysis Report The Cooper Companies, Inc. (COO) : Free Stock Analysis Report West Pharmaceutical Services, Inc. (WST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved seventh consecutive quarter of 20%+ revenue growth, driven by durable demand across cardiology, primary care, and international markets. Announced the acquisition of VitalConnect to gain a comprehensive platform supporting four cardiac monitoring modalities, including mobile cardiac telemetry (MCT) and event monitoring. Strategic rationale for the acquisition centers on expanding into the remaining 50% of the MCT market that current Zio AT products cannot address due to duration and live-look limitations. Management highlighted significant operating leverage, with adjusted EBITDA margins improving by over 1,000 basis points year-over-year due to manufacturing automation and disciplined spend. The VitalConnect platform provides a foundation for a multi-vital strategy, monitoring up to 11 physiological parameters to address inpatient and hospital-to-home care settings. Achieved FDA clearance for a third-generation algorithm expected to reduce clinical technician review time by up to 50% and drive $100 million in cumulative cost savings over five years. Successfully resolved outstanding litigation with Baxter/Welch Allyn for a $50 million settlement, removing a significant legal overhang and providing greater strategic focus. Raised full-year 2026 revenue guidance to $880 million-$890 million, reflecting sustained core demand and modest positive pricing contributions. Anticipate the VitalConnect transaction to close by year-end 2026, with a primary commercial focus on integrating the VitalPatch into the sales force in early 2027. Reiterated confidence in achieving a 15% adjusted EBITDA margin target for the combined company in 2027 despite incremental integration investments. Maintained commitment to the Zio MCT clearance timeline for the first half of 2027 to provide a multi-product portfolio for diverse physician workflows. Expect to ramp investments in primary care expansion and direct-to-patient initiatives through the PatientPoint network in the second half of 2026. Remains subject to an FDA warning letter; management has completed remediation activities and a third-party audit, awaiting the agency's return for final review. Reported a June 2026 cybersecurity incident involving unauthorized activity in third-party applications; confirmed containment with no material impact on financial results or patient care. Constructive final LCDs from Noridian, CGS, and Palmetto clarified modality-specific coverage, removing market uncertainty regarding reimbursement access. The VitalConnect acquisition involves approximately $50 million in equity, resulting in less than 1.5% dilution based on a 30-day volume-weighted average price. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management explained that Zio AT only serves about 50% of the MCT market; VitalConnect opens the remaining 50% by offering 30-day monitoring and live-look capabilities. Confirmed a dual-product strategy is necessary because no single solution addresses all clinical, operational, and economic needs of diverse physician workflows. The 19.3% adjusted EBITDA margin in Q2 did not include any one-time tariff benefits; it was driven by core operational efficiencies. Management will reinvest some margin gains into primary care and direct-to-patient marketing in H2 2026 to drive long-term growth. VitalConnect accelerates the roadmap for in-hospital monitoring and remote patient monitoring (RPM) due to its existing FDA clearances in those segments. Management views these ancillary markets as multi-billion dollar opportunities that complement the core ambulatory cardiac business. The top priority is training iRhythm's 200+ person sales force to sell VitalPatch, which previously only had about 30 reps supporting it. Operational focus will be on scaling supply chain and clinical intake capacity to handle the anticipated volume surge from a nationwide launch.

Interested in iRhythm Technologies? Here are five stocks we like better. Strong Q2 performance: Revenue rose 20.1% year over year to $224.2 million, while adjusted EBITDA reached $43.3 million and free cash flow hit a record $37.5 million. Gross margin improved to 72.8%, and the company reported a near break-even GAAP net loss. VitalConnect acquisition expands the portfolio: The deal adds mobile cardiac telemetry, continuous monitoring and hospital-monitoring capabilities, with VitalConnect generating an estimated $65 million annual revenue run rate. Closing is expected by the end of 2026, pending review, with positive revenue-growth contribution anticipated beginning in 2027. 2026 outlook raised: iRhythm now expects full-year revenue of $880 million to $890 million and an adjusted EBITDA margin of 13% to 14%. The company also received FDA clearance for a next-generation algorithm expected to reduce technician review time by up to 50%, though it remains subject to an FDA warning letter and paid $50 million to settle litigation. Top 3 Robotics and Automation Stocks for the Next AI Boom iRhythm Technologies (NASDAQ:IRTC) reported second-quarter revenue growth of 20.1% and raised its full-year outlook, while announcing an agreement to acquire VitalConnect to broaden its cardiac monitoring portfolio and enter additional patient-monitoring markets. Revenue for the quarter ended at $224.2 million, marking iRhythm’s seventh consecutive quarter of growth above 20%, President and Chief Executive Officer Quentin Blackford said. Growth was supported by demand for the company’s Zio ambulatory cardiac-monitoring services across cardiology, primary care, innovative channels and international markets. → Meta’s Earnings Drop Shows Wall Street Wants More Than Ad Growth 4 Stocks With Huge Cash Holdings at Silicon Valley Bank “Volume remained the primary driver of growth,” Chief Financial Officer Dan Wilson said, adding that modest pricing gains and collections execution also supported the quarter. New accounts contributed about 45% of year-over-year volume growth, while the company said several large accounts added in early 2025 have transitioned into its same-store growth category. Second-quarter gross margin increased 160 basis points year over year to 72.8%, driven by manufacturing automation, workflow improvements, product mix and scale benefits, Wilson said. Adjusted operating expenses were essentially flat at $145 million, compared with $145.2 million in the prior-year period. → Visa’s BioCatch Deal Could Make Fraud Prevention a Bigger Business The company reported a GAAP net loss of $0.4 million, or $0.01 per diluted share, compared with a GAAP net loss of $14.2 million, or $0.44 per diluted share, a year earlier. Adjusted net income was $19.3 million, or $0.58 per diluted share, compared with an adjusted net loss of $10.2 million, or $0.32 per diluted share, in the second quarter of 2025. Adjusted EBITDA reached $43.3 million, or 19.3% of revenue, improving by more than 1,000 basis points from the prior-year period. Free cash flow was positive $37.5 million, which Wilson described as a company record. iRhythm ended the quarter with $591.3 million in cash equivalents and marketable securities. Second-quarter revenue: $224.2 million, up 20.1% year over year. Gross margin: 72.8%, up 160 basis points year over year. Adjusted EBITDA: $43.3 million, or 19.3% of revenue. Free cash flow: $37.5 million. Cash equivalents and marketable securities: $591.3 million. → Ulta's Growth Is Real, But So Are the Risks Blackford said VitalConnect would add a platform spanning mobile cardiac telemetry, or MCT, event monitoring, long-term continuous monitoring and short-term Holter monitoring. Its technology is also FDA-cleared for continuous patient monitoring in hospitals. VitalConnect’s biosensor can measure up to 11 physiological parameters, including ECG, heart rate, respiratory rate and body temperature. The company said the technology could support future opportunities in inpatient monitoring, hospital-to-home programs and remote patient monitoring. iRhythm expects VitalConnect to contribute positively to revenue growth beginning in 2027. Wilson said VitalConnect is currently operating at an approximately $65 million annual revenue run rate based on iRhythm’s revenue-recognition approach. The company expects the combined business to maintain gross margin above 70% and said it remains confident in reaching its prior target of a 15% adjusted EBITDA margin in 2027. The transaction is expected to close by the end of 2026, subject to review. Blackford characterized it as pro-competitive, noting that the MCT market includes competitors such as BioTel and Preventice. He said iRhythm expects to prioritize integration of VitalConnect’s VitalPatch product into its national commercial organization in early 2027. Management said it intends to maintain a multi-product MCT strategy. Zio AT, Zio MCT and VitalPatch address different physician, patient and workflow preferences, according to Blackford. While the company remains focused on obtaining FDA clearance for Zio MCT during the first half of 2027, VitalPatch will be the near-term priority for commercial integration if the acquisition closes as anticipated. Wilson said the deal includes $50 million in equity, calculated using a 30-day volume-weighted average price, equating to a little more than 420,000 shares and less than 1.5% dilution. iRhythm continued to target earlier identification of arrhythmias through primary care, value-based care and population-health settings. Blackford said the company estimates that at least 27 million people in the United States are at risk for arrhythmias, with many first entering the healthcare system through primary care. During the quarter, iRhythm signed two commercial agreements through its partnership with Lucem to combine predictive identification workflows with iRhythm monitoring. It also expanded work with Desert Oasis Healthcare using AI-driven analytics to identify patients who may benefit from cardiac evaluation and monitoring. The innovative channel was iRhythm’s fastest-growing channel during the quarter. Early pilot programs have demonstrated more than 85% accuracy in identifying patients with clinically relevant arrhythmias before they enter the diagnostic process, Blackford said. The company also began direct-to-patient educational initiatives through the PatientPoint network and said it expects to continue investing in those efforts during the second half of the year. Approximately 60% of iRhythm’s volume now comes from EHR-integrated accounts, with nearly 80 of its top 100 customers integrated, Blackford said. Internationally, the company cited progress with the U.K.’s National Health Service, relationships with key opinion leaders in the Netherlands, and a higher reimbursement rate in Japan that took effect June 1. iRhythm said final local coverage determinations issued by Noridian, CGS and Palmetto clarified modality-specific coverage without adding access restrictions. Wilson also said preliminary CMS physician-fee-schedule proposals indicated reimbursement rate increases in the low-single-digit percentages for long-term continuous monitoring and MCT. The company received FDA clearance for its third-generation algorithm, which it plans to launch across its platform in the first half of 2027. Blackford said the algorithm is expected to reduce clinical technician review time by as much as 50% and generate approximately $100 million in cumulative cost savings over five years. iRhythm remains subject to an FDA warning letter. Blackford said the company has updated the agency on completed remediation activities and a self-initiated third-party audit, while awaiting the FDA’s further review. The company also disclosed that it settled outstanding litigation with Baxter and its subsidiaries, Welch Allyn and Bardy Diagnostics, on July 31 for a $50 million payment. Separately, iRhythm said a June cybersecurity incident involving certain third-party-hosted business applications was contained and did not materially affect products, patient care, operations or financial results. For 2026, iRhythm raised revenue guidance to $880 million to $890 million, representing growth of 18% to 19%. Third-quarter revenue is expected to range from $221 million to $223 million. The company increased its full-year adjusted EBITDA margin outlook to 13% to 14%, while projecting a third-quarter adjusted EBITDA margin of 12% to 13%. iRhythm Technologies, Inc is a medical technology company that develops and commercializes wearable cardiac monitoring devices and associated data analytics services. Founded in 2006 and headquartered in San Francisco, California, the company's flagship product is the Zio® patch, a discreet, single-use, continuous ECG recorder designed to monitor heart rhythms for up to 14 days. iRhythm's digital diagnostics platform combines biosensor technology with proprietary algorithms to detect arrhythmias and streamline data interpretation for physicians. The Zio service is prescribed by cardiologists and other healthcare providers to aid in the diagnosis of atrial fibrillation, bradycardia, tachycardia and other rhythm disorders. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "iRhythm Technologies Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

This article first appeared on GuruFocus. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. iRhythm Holdings Inc (NASDAQ:IRTC) delivered its seventh consecutive quarter of revenue growth above 20%, with Q2 revenue reaching $224.2 million, up 20.1% year-over-year. The company achieved record profitability, with adjusted EBITDA margin expanding to 19.3% in Q2, an improvement of over 1,000 basis points year-over-year. iRhythm Holdings Inc (NASDAQ:IRTC) announced the acquisition of VitalConnect, which expands its product portfolio into the full MCT market and adds capabilities for hospital monitoring, hospital-to-home programs, and multivital monitoring. The FDA cleared the company's third-generation algorithm, which is expected to reduce clinical technician review time by up to 50% and generate approximately $100 million in cumulative cost savings over five years. The company raised its full-year 2026 revenue guidance to $880-$890 million (18-19% growth) and raised its adjusted EBITDA margin guidance to 13-14%. iRhythm Holdings Inc (NASDAQ:IRTC) generated record free cash flow of $37.5 million in Q2 and ended the quarter with a strong cash position of $591.3 million. The company resolved its outstanding litigation with Baxter for a $50 million settlement, removing a source of uncertainty and allowing management to focus on strategic initiatives. Final LCDs from Noridian, CGS, and Palmetto provided constructive reimbursement outcomes, clarifying modality-specific coverage without adding access restrictions. iRhythm Holdings Inc (NASDAQ:IRTC) remains subject to an FDA warning letter, and the timing of its resolution is uncertain and dependent on the agency's review process. The company experienced a cybersecurity incident in June, which resulted in the exfiltration of certain data, although it reported no material impact on operations or financial results. The VitalConnect acquisition introduces integration risks, including the need to scale volumes quickly and train a nationwide commercial team, which could divert focus from other initiatives like ZioMCT. The company's ZioMCT product launch is still pending FDA clearance, and management indicated that VitalConnect's VitalPatch will be the primary commercial focus in the near term, potentially delaying ZioMCT's market entry. The company expects to incur certain unique items, such as litigation settlement payments and transaction costs, which could impact free cash flow in the near term. New store contributions to volume growth decreased to 45% from previous quarters, indicating a shift towards same-store growth and potential normalization in new account acquisition. The company faces potential cost pressures from the broader macro and geopolitical environment, including tariffs, although it does not currently expect a material impact on gross margin. Warning! GuruFocus has detected 5 Warning Signs with CENX. Is IRTC fairly valued? Test your thesis with our free DCF calculator. Q: Can you walk through the synergies you expect with the MCT business specifically? How will you position their existing MCT offering versus upcoming Zio MCT? How do you expect this to accelerate the MCT category overall for iRhythm? A: Quentin Blackford, President and CEO: We've realized that multiple product offerings are needed to succeed in the MCT category. Zio AT could serve about 50% of that market due to its 14-day duration and lack of live-looking capability. VitalPatch opens up the remaining 50% of the market, which is roughly a $1 billion market growing in the high single-digits, representing an incremental $500 million market opportunity. We expect the deal to close by the end of the year, with integration into the commercial team in the first part of next year. Q: This was a pretty impressive quarter on EBITDA margins, keeping OpEx essentially flat. Any reason not to maybe raise EBITDA a bit more? And then also just a quick follow-up, was there any tariff refund benefit this quarter? A: Dan Wilson, CFO: No, there was not a tariff benefit realized in the quarter. We are raising full-year adjusted EBITDA guidance and are ready to deliver over 400 basis points of improvement versus 2025. We see a lot of opportunities ahead to continue to grow the business, including primary care, innovative channels, and sleep. We always want to be thoughtful and drive towards profitable growth while balancing investments in the business to drive growth and deliver profitability expansion. Q: I understand that Vital Connect helps expand the remaining 50% of the market, but arguably it could also handle the 50% of the market that is currently addressed with AT. And with VitalConnect, a big value of the technology is the additional markets that it seems to open. So should we think of this as more of a new product to target those opportunities and unlock the remaining 20% to 30%? And then when we think about technologies that you've talked about maybe being a stepping stone into other modalities like sleep apnea, is this the deal that we should have been looking for? A: Quentin Blackford, President and CEO: The in-hospital monitoring and hospital-to-home segments are exciting to us and part of the roadmap we've been focused on for some time. Vital Connect accelerates our multivital product capability, having multivital capabilities already on their platform. Remote patient monitoring (RPM) is another area of focus they've built out nicely. This goes well beyond just the MCT market and opens up incremental opportunities that can be valued in the billions of dollars in market potential. We're in the early stages and will be thoughtful and measured in how we lean into those. Q: I just wanted to quick check in on the direct-to-patient marketing that you've started, I think in some select zip codes. Can you give us an early read on what you're learning from those efforts? And should you expect that you'll plan to expand that program here in the quarters to come? A: Quentin Blackford, President and CEO: You should expect that we're going to continue to lean into and expand it, and that's part of the incremental spend in the back part of the year. We know that direct-to-patient, direct-to-consumer, and primary care are all areas with real potential. We are in the very early stages of the initial DTP efforts, so it's a little bit early to measure results, but the confidence is high enough right now that we're going to continue to lean into it. Q: I just wanted to check on Zio MCT and how that's tracking relative to previous expectations for the launch in the first half of next year and anything, any progress you would share on the mobile gateway data submission to the FDA. A: Quentin Blackford, President and CEO: We continue to make progress on Zio MCT and remain focused on getting clearance in the first half of next year. However, we expect Vital Connect will close before the end of the year, which means we will be focused on integrating the Vital Patch into our commercial team's hands right around the turn of the year. That will be our number one focus as we enter into this deal. At the same time, we're going to continue to focus on the submission of MCT and getting that clearance so that we do have optionality as we go into the future. Q: So you talked in the script $65 million run rate. I think that reflects a slowdown they saw in the first quarter due to a transition. And my understanding is they recovered from that and are kind of ramping and targeting about $100 million next year. So is that a fair way to think about what they could do from a revenue contribution perspective in '27? And then the second part of the question is just, I mean, my math, you have a leader in the extended Holter category, obviously. You'll probably get a couple of points there from their platform. And I mean I would guess your MCT share is going to have a two handle in front of it. So just talk about your confidence in getting it through kind of the regulators and whatnot. A: Quentin Blackford, President and CEO: There were some structural considerations over the years that made it difficult to acquire the company, but the team addressed those towards the end of last year, which created a little bit of a hiccup in the business. They've come out of it really nicely and are growing quite nicely now. We're not going to guide to 2027 at this point; we'll wait until the deal closes to provide combined company guidance. On HSR review, this is very much about the MCT product category, which remains very competitive with players like BioTel and Preventice. The combination of our company and Vital Connect doesn't change that competitive dynamic, so we feel very good about the ability to get through the FTC and HSR review. Q: Quentin, are you seeing any sign that the very strong growth you've seen in innovative channels is beginning to normalize? Or do you still believe those channels are still in early innings? And then you could just talk about the cadence of new partner adds in the quarter and I guess what's implied in the second-half relative to the first half? A: Quentin Blackford, President and CEO: We continue to be excited with the innovative channel opportunity. Whether it's primary care, value-based care, or population health, there are so many different angles that have us excited. We saw another healthy quarter of new partners coming on board. We saw our very first employer-sponsored plan sign up within the innovative channel business, which remains a meaningful opportunity in the self-insured population. We're still in the very early innings here and will continue to lean into it, For the complete transcript of the earnings call, please refer to the full earnings call transcript.

iRhythm Holdings, Inc. (IRTC) came out with quarterly earnings of $0.58 per share, beating the Zacks Consensus Estimate of a loss of $0.01 per share. This compares to a loss of $0.32 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +5,900.00%. A quarter ago, it was expected that this company would post a loss of $0.56 per share when it actually produced a loss of $0.35, delivering a surprise of +37.5%. Over the last four quarters, the company has surpassed consensus EPS estimates four times. IRHYTHM HLDGS, which belongs to the Zacks Medical Info Systems industry, posted revenues of $224.17 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 2.18%. This compares to year-ago revenues of $186.69 million. The company has topped consensus revenue estimates four times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. IRHYTHM HLDGS shares have lost about 29.8% since the beginning of the year versus the S&P 500's gain of 12.8%. While IRHYTHM HLDGS has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for IRHYTHM HLDGS was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.03 on $220.97 million in revenues for the coming quarter and $0.13 on $881.52 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Info Systems is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the broader Zacks Medical sector, Outlook Therapeutics, Inc. (OTLK), has yet to report results for the quarter ended June 2026. This company is expected to post quarterly loss of $0.09 per share in its upcoming report, which represents a year-over-year change of +79.6%. The consensus EPS estimate for the quarter has been revised 12.5% higher over the last 30 days to the current level. Outlook Therapeutics, Inc.'s revenues are expected to be $1.2 million, down 20% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report iRhythm Holdings, Inc. (IRTC) : Free Stock Analysis Report Outlook Therapeutics, Inc. (OTLK) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

SAN FRANCISCO, Aug. 06, 2026 (GLOBE NEWSWIRE) -- iRhythm Holdings, 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 June 30, 2026. Second Quarter 2026 Financial Highlights Revenue of $224.2 million, a 20.1% increase compared to second quarter 2025 Gross margin of 72.8%, a 160-basis point increase compared to second quarter 2025 Net loss of $0.4 million, a $13.8 million improvement compared to second quarter 2025 Adjusted EBITDA and adjusted EBITDA margin of $43.3 million and 19.3%, respectively, a $27.6 million and 1,090-basis point improvement, respectively, compared to second quarter 2025 Unrestricted cash, cash equivalents, and marketable securities of $591.3 million as of June 30, 2026 Increased fiscal year 2026 revenue guidance to $880 million to $890 million and adjusted EBITDA margin guidance to 13.0% to 14.0% Recent Operational Highlights Delivered another strong quarter, demonstrated by robust volume led revenue growth and expanded margins, with continued momentum across cardiology, primary care, innovative channels, and international markets Entered into a definitive agreement to acquire Vital Connect, Inc. ("VitalConnect"), a privately held company that offers complementary ambulatory cardiac monitoring technology, for total consideration of approximately $287.5 million. Upon closing, the transaction is expected to immediately expand iRhythm's addressable market and advance its evolution into a broader cardiac monitoring and intelligence platform Achieved FDA clearance of our third-generation algorithm, which is expected to reduce clinician review time by approximately 50% over time and drive approximately $100 million of cumulative cost savings over the next five years Continued to scale our Predictive Arrhythmia Solutions™ footprint with Desert Oasis Health Care, an affiliate of Heritage Provider Network, supporting earlier identification of patients who may benefit from cardiac evaluation and monitoring through AI-driven predictive analytics Recognized by Newsweek in 2026 as one of America’s Greatest Workplaces for Leadership and among the World’s Greenest Companies, reflecting iRhythm’s continued commitment to strong leadership, workplace culture, and sustainability “Our second quarter results reflect strong execution across the business, with broad-based growth, meaningful margin expansion, and continued progress against our strategic priorities,” said Quentin Blackford, President and Chief Executive Officer of iRhythm. “We are driving adoption across an increasingly diverse set of care settings and channels, including primary care, while continuing to invest in the capabilities that we believe will shape the future of healthcare. We are also thrilled to have entered into a definitive agreement to acquire VitalConnect, a transaction we believe will allow us to serve more patients, while also creating long-term value for clinicians and stockholders.” Second Quarter 2026 Financial ResultsRevenue for the second quarter of 2026 was $224.2 million, up 20.1% from $186.7 million during the same period in 2025. The increase was driven primarily by sustained volume demand across our customer base, reflecting continued strength in our core business and contributions from newer growth channels. Gross profit for the second quarter of 2026 was $163.2 million, up 22.8% from $132.9 million during the same period in 2025, while gross margin was 72.8%, a 160-basis point improvement compared to second quarter 2025. The increase in gross profit was primarily due to increased volume of Zio services. The increase in gross margin was primarily driven by continued operational efficiencies, product mix, and scale benefits from higher volumes. Operating expenses for the second quarter of 2026 were $165.7 million, compared to $151.6 million for the same period in 2025. Adjusted operating expenses for the second quarter of 2026 were $145.0 million, compared to $145.2 million during the same period in 2025. The decrease in adjusted operating expenses, period over period, reflects a disciplined approach to investment, as we funded key growth initiatives while thoughtfully managing costs across the broader organization. GAAP net loss for the second quarter of 2026 was $0.4 million, or net loss per diluted share of $0.01, compared with GAAP net loss of $14.2 million, or net loss per diluted share of $0.44, for the same period in 2025. Adjusted net income for the second quarter of 2026 was $19.3 million, or net income per diluted share of $0.58, compared with an adjusted net loss of $10.2 million, or net loss per diluted share of $0.32, for the same period in 2025. The improvement was primarily driven by our revenue growth and operating leverage achieved through implementation of efficiency initiatives. Unrestricted cash, cash equivalents, and marketable securities were $591.3 million as of June 30, 2026. 2026 Annual Guidance For the full year 2026, iRhythm expects revenue between $880 million and $890 million and adjusted EBITDA margin between 13.0% and 14.0%, reflecting continued volume-led growth, gross margin expansion, and operating leverage while maintaining disciplined investment in innovation and market expansion. 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 Holdings, 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 EBITDA margin, adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted operating expenses and free cash flow. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures may be helpful to investors. However, non-GAAP financial measures are presented for supplemental informational purposes only, have limitations as analytical tools, and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our disclosure of non-GAAP financial measures as a tool for comparison. 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 EBITDA margin estimates for full year 2026 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of adjusted EBITDA estimates is not available without unreasonable effort. Adjusted EBITDA is defined as net income (loss) before income tax provision, depreciation and amortization, interest expense, and interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment charges, business transformation costs, certain intellectual property litigation expenses, certain corporate litigation settlements (net of expected insurance recoveries), costs related to the cybersecurity incident (net of expected insurance recoveries), and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources. 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. An investor can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as ‘anticipate’, ‘estimate’, ‘expect’, ‘intend’, ‘will’, ‘project’, ‘plan’, ‘believe’, ‘target’ and other words and terms of similar meaning in connection with any discussion of future actions or operating or financial performance. In particular, these statements include statements regarding financial guidance, market opportunity, ability to penetrate the market, expansion into new health programs, international market expansion, anticipated productivity and quality improvements, anticipated demand for our products and expectations for growth, and statements regarding the expected timing and completion of the VitalConnect transaction; the anticipated strategic, commercial, operational and financial benefits of the transaction; the ability to expand into new markets, care settings, customer categories and commercial partnerships; the potential to take advantage of and accelerate VitalConnect's growth, deepen customer relationships and realize cross-selling opportunities; the anticipated effect on long-term value for clinicians and stockholders; our expectation of the transaction’s effect on our ability to serve more patients, future product development, regulatory approvals and commercialization; the success of integration and the retention of key employees; the anticipated growth of the mobile cardiac telemetry category; and the expected impact on revenue growth, adjusted EBITDA and adjusted EBITDA margin. 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 our Quarterly Report on Form 10-Q expected to be filed on or about August 6, 2026. Additional important factors that could cause our actual results to differ materially from those indicated in the forward-looking statements include, among others: the possibility that the acquisition of VitalConnect may not be completed on the anticipated terms or timing; the failure to obtain required regulatory approvals or satisfy other closing conditions; challenges in integrating VitalConnect and realizing anticipated benefits and synergies on the expected timeline or at all; business disruption or diversion of management’s attention; changes in market demand, reimbursement, competition or regulation; product development or regulatory delays; the loss of key VitalConnect employees, customers or partners; and unforeseen liabilities and future expenditures associated with the transaction. 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 [email protected] Media ContactKassandra [email protected] *Certain numbers expressed may not sum due to rounding. 1 Net loss for the three and six months ended June 30, 2026 includes $0.3 million and $0.6 million of acquired in-process research and development expense, and $1.7 million and $2.0 million for the three and six months ended June 30, 2025, respectively. 2 Excludes third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc.3 Excludes charges for securities class action litigation settlement, net of expected insurance recoveries.4 Represents expenses directly related to the Cybersecurity Incident, net of expected insurance recoveries, including investigation and remediation, customer notifications, and professional and consultancy expenses.5 Income tax impact of Non-GAAP adjustments listed.

As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q1. Today, we are looking at patient monitoring stocks, starting with iRhythm (NASDAQ:IRTC). Patient monitoring companies within the healthcare equipment industry offer devices and technologies that track chronic conditions and support real-time health management, such as continuous glucose monitors (CGMs) and sleep apnea machines. These businesses benefit from recurring revenue from consumables and software subscriptions tied to device sales (razor, razor blade model). The rising prevalence of chronic diseases like diabetes and respiratory disorders due to an aging population as well as growing adoption of digitization are good for the industry. However, these companies face challenges from high R&D costs and reliance on regulatory approvals. Looking ahead, the sector is positioned for growth due to tailwinds like the rising burden of chronic diseases from an aging population, the shift toward value-based care, and increased adoption of digital health solutions. Innovations in AI and machine learning are expected to enhance device accuracy and functionality, improving patient outcomes and driving demand. However, there are headwinds such as pricing pressures as healthcare costs are a key focus, especially in the US. An evolving regulatory landscape and competition from more tech-forward new entrants could present additional challenges. The 4 patient monitoring stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.8% below. In light of this news, share prices of the companies have held steady as they are up 3.5% on average since the latest earnings results. Pioneering the shift from bulky, short-term heart monitors to sleek, wire-free patches, iRhythm Technologies (NASDAQ:IRTC) provides wearable cardiac monitoring devices and AI-powered analysis services that help physicians detect and diagnose heart rhythm disorders. iRhythm reported revenues of $199.4 million, up 25.7% year on year. This print exceeded analysts’ expectations by 2.8%. Overall, it was a very strong quarter for the company with a beat of analysts’ EPS estimates and full-year revenue guidance meeting analysts’ expectations. iRhythm achieved the highest full-year guidance raise of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 2.1% since reporting and currently trades at $126.48. We think iRhythm is a good business, but is it a buy today? Read our full report here, it’s free. Revolutionizing diabetes care with its tubeless "Pod" technology, Insulet (NASDAQ:PODD) develops and manufactures innovative insulin delivery systems for people with diabetes, primarily through its Omnipod product line. Insulet reported revenues of $761.7 million, up 33.9% year on year, outperforming analysts’ expectations by 4.2%. The business had a very strong quarter with a beat of analysts’ EPS estimates. Insulet pulled off the biggest analyst estimate beat and fastest revenue growth among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 1.9% since reporting. It currently trades at $164.36. Is now the time to buy Insulet? Access our full analysis of the earnings results here, it’s free. Founded in 1989 to address the then-underdiagnosed condition of sleep apnea, ResMed (NYSE:RMD) develops cloud-connected medical devices and software solutions that treat sleep apnea, COPD, and other respiratory disorders for home and clinical use. ResMed reported revenues of $1.43 billion, up 10.8% year on year, exceeding analysts’ expectations by 0.8%. It was a satisfactory quarter as it also posted a beat of analysts’ EPS estimates. ResMed delivered the weakest performance against analyst estimates and slowest revenue growth in the group. As expected, the stock is down 2% since the results and currently trades at $209.64. Read our full analysis of ResMed’s results here. Founded in 1999 and receiving its first FDA approval in 2006, DexCom (NASDAQ:DXCM) develops and sells continuous glucose monitoring systems that allow people with diabetes to track their blood sugar levels without repeated finger pricks. DexCom reported revenues of $1.19 billion, up 15% year on year. This result topped analysts’ expectations by 1.4%. More broadly, it was a satisfactory quarter as it also logged a beat of analysts’ EPS estimates but a slight miss of analysts’ organic revenue estimates. DexCom had the weakest full-year guidance update among its peers. The stock is up 20.1% since reporting and currently trades at $71.50. Read our full, actionable report on DexCom here, it’s free. Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure? These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.