iRhythm Technologies (IRTC 17.42%), a medical device company specializing in cardiac monitoring technology, reported its Q2 FY2025 results on July 31, 2025. The highlight was record revenue (GAAP) of $186.7 million, up 26.1% from the previous year and beating analyst expectations by $12.7 million. The company also delivered a Non-GAAP loss per share of $0.32, much better than the anticipated $0.49 loss. Gross margin rose to 71.2%, demonstrating operational improvements. Overall, the quarter showcased robust growth and margin progress, though net losses remain an ongoing concern as iRhythm continues to scale its technology-driven healthcare business.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $(0.32) | $(0.49) | $(0.61) | 47.5% (improvement) |
| Revenue (GAAP) | $186.7 million | $173.98 million | $148.0 million | 26.2% |
| Gross Margin | 71.2% | 69.9% | 1.3 pp | |
| Adjusted Operating Expenses | $145.2 million | $125.2 million | 16.0% | |
| Adjusted EBITDA | $15.7 million | $5.0 million | 214% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q4 2024 earnings report.
Understanding iRhythm Technologies' Business and Growth Drivers
iRhythm Technologies is best known for its Zio platform, which combines wearable electrocardiogram (ECG) sensors and a cloud-based analytics system to detect cardiac arrhythmias. These devices generate long-term heart rhythm data, offering higher diagnostic accuracy than traditional monitoring methods. The Zio family includes the Zio Monitor long-term patch, the Zio XT, and the Zio AT, a mobile cardiac telemetry (MCT) solution for patients needing real-time analysis.
The company’s focus spans technological innovation, market expansion in the U.S. and abroad, adapting to regulatory requirements, navigating competition, and building strategic partnerships. Success factors include advancing data-driven analytics, achieving regulatory compliance, growing adoption among healthcare providers, and scaling through value-based and international care channels.
Quarter in Review: Record Revenue, Margin Progress, and Product Developments
The latest quarter was marked by an all-time high revenue figure, up 26.1% year-over-year (GAAP). Growth was propelled by expanded demand in core U.S. Zio accounts, broader adoption of the Zio AT telemetry device, and continued entry into international markets. Gross margin (GAAP) increased by 1.3 percentage points to 71.2%, driven by higher volumes and operational efficiencies, even as the product mix shifted toward Zio AT, which tends to carry lower margins than the legacy Zio Monitor solution.
Adjusted EBITDA, a measure of earnings before interest, taxes, depreciation, amortization, and some non-recurring items, soared from $5.0 million in the second quarter of 2024 to $15.7 million in the second quarter of 2025. Still, iRhythm remains unprofitable. The GAAP net loss narrowed to $14.2 million from $20.1 million compared to Q2 2024, while adjusted net loss per share was $0.32, a significant improvement but still reflecting ongoing losses as the business continues to invest in scale, research and development, and regulatory remediation.
Several business highlights surfaced throughout the period. The Zio AT, a real-time MCT monitoring patch, showed strong results, benefiting from both organic momentum and competitor disruptions. iRhythm’s market share in the MCT segment rose to an estimated 11–12% as of Q4 2024, and the company reported annual market share gains of 1–2 percentage points over the past 12 to 24 months. The company’s ongoing partnership with Lucem Health, focused on predictive analytics for early arrhythmia detection, underlines a commitment to artificial intelligence-driven healthcare.
The international segment is still a small contributor, with about 1 percentage point of annual growth guided for non-U.S. markets in 2025, including new launches in Europe and a planned commercial rollout in Japan. Regulatory compliance remained a focus, with most activities related to prior FDA inspection findings targeted for completion by mid-2025. Operationally, iRhythm continued to leverage its business services center in the Philippines and ramped up automation at its California facility, both aimed at driving further efficiency and cost savings.
Forward Outlook and Key Areas to Watch
After this quarter, management raised its full-year 2025 guidance. The company now expects revenue to reach $720–$730 million for full year 2025, representing around 24.0% growth compared to the prior year. Adjusted EBITDA margin is forecast at 8.0–8.5% of revenues for FY2025. This outlook for FY2025 factors in several headwinds: a projected 8% reduction in Medicare reimbursement rates for Zio AT, and possible new tariffs on imported supplies, which could cut gross margin by 0.5–0.75 percentage points, as estimated by management for FY2025. Management projects “flat” gross margins for FY2025, with gains from volume and efficiency anticipated to be offset by pricing and tariff pressures.
Looking ahead, investors should monitor trends in Zio AT adoption (as further shift to this product could pressure future margins), the pace of international expansion, and progress in regulatory remediation activities. In terms of product pipeline, no financial contribution from sleep apnea or new adjacent products has been built into current full-year FY2025 forecasts, but the company expects advancements in those areas. Adjusted operating expenses rose 16.0%, reflecting continued investment in new and sustaining development activities, as well as incremental costs to serve a growing volume of patients globally. With over $545 million in unrestricted cash and marketable securities as of June 30, 2025, liquidity appears strong and capable of supporting growth plans. IRTC does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
