IRhythm Holdings Inc · Q4 2020 earnings

Briefing

iRhythm reported a revenue increase driven by Zio XT volume and Zio AT expansion, with a gross margin decline due to costs related to Home Enrollment, higher shipping costs, and COVID-related expenses.

iRhythm Technologies announced strong fourth-quarter results, with a 33.3% increase in revenue compared to the same period in 2019. The company's revenue reached $78.8 million, driven by Zio XT volume and Zio AT expansion. However, the gross margin decreased by 2.5% due to costs related to Home Enrollment, higher shipping costs, and COVID-related expenses. The company is unable to provide revenue or margin guidance, and unable to provide full year OPEX guidance due to continuing uncertainties in reimbursement.

• Revenue increased by 33.3% to $78.8 million compared to Q4 2019, driven by Zio XT volume and Zio AT expansion.
• Gross margin decreased to 74% from 76.5% in Q4 2019 due to Home Enrollment costs, higher shipping costs, and COVID-related expenses.
• Adjusted EBITDA was $6.5 million, a $15.7 million increase compared to Q4 2019.
• Net loss was $9.7 million, or $0.33 per share, compared to a net loss of $17.3 million, or $0.65 per share, in Q4 2019.

Headline financials

Revenue & EPS history

Due to continuing uncertainties in reimbursement, the company is unable to provide revenue or margin guidance, and unable to provide full year OPEX guidance. For the first quarter of 2021, the company expects volume growth of 5% over the fourth quarter of 2020 and operating expenses to range from $77 million to $79 million. For the full year, stock-based compensation is expected to increase by $20 million roughly evenly throughout the year due to the CEO transition and retention of key executives during the transition.