iRhythm(IRTC) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company achieved revenue of $131.9 million in Q1 2024, representing an 18.4% growth compared to Q1 2023 [11][34] - Adjusted operating expenses were$ 125.7 million, up 10% sequentially and 15% year-over-year [36] - Adjusted net loss in Q1 was approximately $38.1 million, or a loss of$ 1.23 per share, compared to a loss of $33.4 million, or$ 1.10 per share in Q1 2023 [62] - The company ended Q1 with approximately $569.1 million in unrestricted cash and short-term investments [40] Business Line Data and Key Metrics Changes - The company reported strong revenue volume growth driven by new account openings and deeper penetration within existing accounts [11][34] - New store growth accounted for approximately 46% of year-over-year volume growth, with home enrollment for Zio Services at about 21% of volume in Q1 [60] - Gross margin for Q1 was 66.3%, in line with expectations [60] Market Data and Key Metrics Changes - The company has seen continued traction in large integrated multidisciplinary care networks, with nearly half of accounts ordering Zio Services having at least one primary care prescriber [19] - In Europe and Japan, there is significant unmet clinical need for improved arrhythmia detection, with ongoing efforts to expand into these markets [24][30] Company Strategy and Development Direction - The company is focused on expanding its primary care channel and has entered partnerships with several national primary care networks [6][5] - A collaboration with Epic Aura aims to streamline the integration of Zio services into health systems, potentially saving up to 75% of the time typically required for integration [20][22] - The company is exploring adjacent markets, including a sleep pilot program to validate the value of streamlining the journey to a sleep diagnosis [25][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continued market capture in 2024, driven by strong fundamentals in the core business [5] - The company anticipates full-year revenue of approximately$ 578 million to $588 million, with material improvement expected in the back half of the year [37][39] - Management highlighted the importance of addressing the FDA warning letter and DOJ subpoena while maintaining focus on operational excellence [65][106] Other Important Information - The company has received CE marking under EU MDR for Zio monitor and ZEUS system, with plans for commercial launch in several European countries in the latter half of 2024 [30] - The company is preparing for the submission of a 510(k) for the new Zio MCT product in the second half of 2024 [31][81] Q&A Session Summary Question: Is the strong momentum from Q1 continuing into Q2? - Management confirmed that momentum has continued into Q2, with strong demand for both the monitor and AT product lines [70] Question: How meaningful are the time savings from the Epic Aura integration? - Management agreed that the time savings are significant and will likely lead to market expansion, with expectations for metrics to improve as the integration progresses [72][74] Question: Can you provide an update on the Signify Health partnership? - Management stated that the partnership is still in the pilot phase but expects a broader commercial launch in the back half of the year [86] Question: What is the current status of the FDA warning letter resolution? - Management expressed confidence in the collaboration with the FDA and the progress being made towards resolution [102][104] Question: What is the expected market share for the new MCT product? - Management indicated that while it is difficult to predict exact market share, they believe there is significant opportunity for growth in the MCT market [108]