IRTC Q2 Deep Dive: Core Business Momentum and Product Expansion Shape Outlook

Medical technology company iRhythm Technologies (NASDAQ:IRTC) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 26.1% year on year to $186.7 million. The company’s full-year revenue guidance of $725 million at the midpoint came in 4.2% above analysts’ estimates. Its non-GAAP loss of $0.32 per share was 32.5% above analysts’ consensus estimates.

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StockStory’s Take

iRhythm’s second quarter results were driven by accelerating growth in its core long-term cardiac monitoring business, expanded adoption of the Zio AT product, and increased contributions from innovative channel partnerships. Management attributed the strong revenue growth to record new account openings, particularly among integrated delivery networks, and highlighted new partnerships, such as with Lucem Health, that leverage artificial intelligence to identify at-risk patients earlier. CEO Quentin Blackford noted, “We achieved record new account openings in long-term continuous monitoring driven by innovative channel partnerships and continued strong growth from recently launched IDN customers.”

Looking ahead, iRhythm's raised guidance is anchored by expectations of sustained growth in its core business, ongoing momentum with innovative channel partners, and the planned launch of next-generation products like Zio MCT. Management emphasized that expanded EHR integrations and broader partnerships will support proactive, preventative care models. Blackford explained, “Our expanding innovation pipeline and multiple growth vectors position us to maintain our leadership while capturing significant opportunities ahead.” The company is also investing in operational efficiencies, supply chain resilience, and quality management systems to support long-term profitability.

Key Insights from Management’s Remarks

Management attributed Q2 performance to strong execution across core and new accounts, accelerating Zio AT adoption, and early success with strategic partnerships and product integrations.

• Core account expansion: iRhythm saw record growth in its long-term cardiac monitoring business, led by new integrated delivery network accounts and expanded EHR (electronic health record) integrations, which simplified workflows and increased prescribing patterns by over 20% post-integration.
• Zio AT product momentum: The Zio AT mobile cardiac telemetry service delivered another record quarter, with new and existing accounts rapidly adopting the product alongside Zio monitor, reinforcing the company’s dual-solution strategy and driving incremental volume growth.
• Innovative channel partnerships: Newly contracted partners, including Signify Health and CenterWell, contributed to higher-than-expected volume, with over 1,000 new prescribers added and a pipeline of 40 active partnership discussions, supporting the vision of repeat and proactive patient monitoring.
• AI-driven patient identification: A partnership with Lucem Health is enabling the use of predictive artificial intelligence to identify at-risk patients for arrhythmias earlier, yielding high detection rates and supporting broader adoption among innovative channel partners.
• International and regulatory progress: The company reported continued expansion in the UK, four additional European countries, and Japan, while also advancing quality management systems and addressing FDA regulatory requirements, including planning a third-party audit to reinforce compliance.

Drivers of Future Performance

iRhythm’s outlook is shaped by robust core business trends, innovative partnerships, and investment in next-generation products, offset by continued regulatory and tariff considerations.

• Expansion of innovative partnerships: Management expects ongoing growth from new and existing channel partners, with a steady cadence of account additions and a focus on repeat monitoring for at-risk patient populations. This approach is projected to support both volume growth and broader market penetration.
• Next-generation product launches: The upcoming Zio MCT device, featuring improved form factor, longer wear time, and advanced software, is intended to address competitive gaps in the mobile cardiac telemetry market and expand iRhythm’s share beyond its current low double-digit footprint.
• Operational and regulatory initiatives: Investments in operational efficiency, supply chain resilience, and compliance—such as inventory buildup to mitigate supply disruptions and enhancements to quality management—are expected to underpin profitability. Management also highlighted ongoing FDA engagement, with future product launches and regulatory milestones representing key execution risks and opportunities.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the rate of new account additions and expanded adoption from innovative channel partners, (2) the commercial rollout and regulatory approval timeline for the next-generation Zio MCT device, and (3) progress on FDA remediation and third-party quality audits. Execution on international market expansion and ongoing EHR integration efforts will also be important markers of success.

iRhythm currently trades at $163.64, up from $140.17 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

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