iRhythm Technologies Announces Second Quarter 2022 Financial Results
08/04/2022 - 04:05 PM
SAN FRANCISCO, Aug. 04, 2022 (GLOBE NEWSWIRE) -- iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital healthcare solutions company focused on the advancement of cardiac care, today reported financial results for the three months ended June 30, 2022.
Second Quarter 2022 Financial Highlights
Revenue of $102.1 million , a 25.6% increase compared to second quarter 2021 Gross margin of 68.8% , a 0.8 percentage point improvement compared to second quarter 2021 Cash and short-term investments of $204.5 million at June 30, 2022 Raised full year 2022 revenue guidance to range from $415 million to $420 million Recent Operational Highlights
Reimbursement rates proposed by the Centers for Medicare and Medicaid Services (“CMS”) as part of the Proposed Medicare Physician Fee Schedule for Calendar Year 2023 that impact Zio XT for CPT codes 93247 and 93243 510(k) FDA clearance granted for clinically integrated ZEUS system for the Zio® Watch, developed in partnership with Verily as clinical grade watch to detect and characterize atrial fibrillation and integrate with clinician workflow Recent additions to the executive leadership team reflective of company's commitment to driving sustainable value and significant growth across multiple pillars iRhythm to hold investor day on September 21, 2022, in New York City, with content to incorporate key elements of long-term business strategy, details of stated growth vectors and long-range financial targets "We made steady progress in the second quarter, out-performing revenue expectations and delivering another quarter of record registrations in our core U.S. business, fueled by an all-time high number of new accounts doing business with us," said iRhythm CEO and President, Quentin Blackford. "New account openings were up 22% quarter-over-quarter and revenue volumes increased 10% sequentially, underscoring our solid performance amidst a difficult market environment. With business highlights regarding reimbursement and our Zio Watch clearance already announced in July, we are pleased with the way that the second half of 2022 has begun."
“We also rounded out our executive leadership team with recent additions that position us well to advance our long-term strategies for sustainable growth in our core U.S. market, expand into greater international geographies and enter adjacent markets. The sizable opportunity ahead of us to bring our innovative technology platform powered by data-driven artificial intelligence to patients, clinicians, healthcare systems and payers gets us excited every day. We look forward to sharing more details on this vision at an investor day during the third quarter," concluded Mr. Blackford.
Second Quarter Financial Results 25.6% to $102.1 million , from $81.3 million during the same period in 2021. The increase was primarily driven by Zio XT and AT volume growth and increases in Medicare pricing.
Gross profit for the second quarter of 2022 was $70.2 million , up 26.9% from $55.3 million during the same period in 2021, while gross margins were 68.8% , up from 68.0% during the same period in 2021. The increase in gross profit was primarily due to increased volume and average selling price, partially offset by increases in cost per unit.
Operating expenses for the second quarter of 2022 were $93.7 million , compared to $72.3 million for the same period in 2021 and $110.3 million in the first quarter 2022. The sequential decrease in operating expenses was due to the absence of one-time impairment and restructuring charges incurred in the first quarter 2022, associated primarily with a reduction in size of our San Francisco facility and severance and other employee exit related costs.
Net loss for the second quarter of 2022 was $23.9 million , or a loss of $0.80 per share, compared with net loss of $17.4 million , or a loss of $0.59 per share, for the same period in 2021.
Cash, cash equivalents and short-term investments were $204.5 million as of June 30, 2022.
Guidance $415 million to $420 million , which represents 29% to 30% growth over prior year results. Gross margin for the full year 2022 is expected to range from 68% to 69% and adjusted operating expenses are expected to range between $375 million and $385 million . Adjusted EBITDA for the full year 2022 is expected to range from negative $12.5 million to negative $17.5 million .
Webcast and Conference Call Information www.irhythmtech.com .
About iRhythm Technologies, Inc.
Use of Non-GAAP Financial Measures and Other Operating Metrics
Forward-Looking Statements
IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Balance Sheets (Unaudited) (In thousands, except share and per share data)
June 30, December 31, 2022 2021 Assets Current assets: Cash and cash equivalents $ 101,253 $ 127,562 Short-term investments 103,238 111,569 Accounts receivable, net 57,380 46,430 Inventory 14,422 10,268 Prepaid expenses and other current assets 8,526 9,693 Total current assets 284,819 305,522 Property and equipment, net 65,923 55,944 Operating lease right-of-use assets 63,940 84,587 Goodwill 862 862 Other assets 20,142 16,052 Total assets $ 435,686 $ 462,967 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable $ 5,987 $ 10,509 Accrued liabilities 49,954 51,486 Deferred revenue 2,977 3,049 Debt, current portion — 11,667 Operating lease liabilities, current portion 11,498 11,142 Total current liabilities 70,416 87,853 Debt, noncurrent portion 34,927 9,690 Other noncurrent liabilities 952 697 Operating lease liabilities, noncurrent portion 84,749 85,212 Total liabilities 191,044 183,452 Stockholders’ equity: Preferred Stock — — Common stock 28 27 Additional paid-in capital 725,748 685,594 Accumulated other comprehensive loss (583 ) (61 ) Accumulated deficit (480,551 ) (406,045 ) Total stockholders’ equity 244,642 279,515 Total liabilities and stockholders’ equity $ 435,686 $ 462,967
IRHYTHM TECHNOLOGIES, INC. Condensed Consolidated Statements of Operations (Unaudited) (In thousands, except share and per share data)
Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Revenue, net $ 102,051 $ 81,278 $ 194,429 $ 155,589 Cost of revenue 31,806 25,995 62,425 49,453 Gross profit 70,245 55,283 132,004 106,136 Operating expenses: Research and development 11,945 9,606 22,487 18,116 Selling, general and administrative 81,751 62,669 154,909 132,482 Impairment and restructuring charges — — 26,608 — Total operating expenses 93,696 72,275 204,004 150,598 Loss from operations (23,451 ) (16,992 ) (72,000 ) (44,462 ) Interest expense (482 ) (307 ) (2,511 ) (642 ) Other income, net 69 55 85 179 Loss before income taxes (23,864 ) (17,244 ) (74,426 ) (44,925 ) Income tax provision 33 116 80 214 Net loss $ (23,897 ) $ (17,360 ) $ (74,506 ) $ (45,139 ) Net loss per common share, basic and diluted $ (0.80 ) $ (0.59 ) $ (2.51 ) $ (1.54 ) Weighted-average shares, basic and diluted 29,843,141 29,318,894 29,720,415 29,242,089
IRHYTHM TECHNOLOGIES, INC. Reconciliation of GAAP to Non-GAAP Financial Information (Unaudited) (In thousands)
Three Months Ended June 30, Six Months Ended June 30, Adjusted EBITDA reconciliation 2022 2021 2022 2021 Net loss $ (23,897 ) $ (17,360 ) $ (74,506 ) $ (45,139 ) Income tax provision 33 116 80 214 Depreciation and Amortization 3,351 2,153 6,494 4,189 Interest expense, net 286 247 2,183 494 Stock-based compensation 15,098 10,260 29,001 30,490 Impairment and restructuring charges 175 — 27,041 — Adjusted EBITDA $ (4,954 ) $ (4,584 ) $ (9,707 ) $ (9,752 )
Three Months Ended June 30, Six Months Ended June 30, Non-GAAP restructuring and impairment reconciliation 2022 2021 2022 2021 Impairment and restructuring charges, as reported $ — $ — $ 26,608 $ — Restructuring related consulting fees 175 — 433 — Non-GAAP restructuring and impairment $ 175 $ — $ 27,041 $ — Adjusted net loss reconciliation Net loss, as reported $ (23,897 ) $ (17,360 ) $ (74,506 ) $ (45,139 ) Impairment and restructuring charges, as reported — — 26,608 — Restructuring related consulting fees 175 — 433 — Adjusted net loss $ (23,722 ) $ (17,360 ) $ (47,465 ) $ (45,139 ) Adjusted net loss per share reconciliation Net loss per share, as reported $ (0.80 ) $ (0.59 ) $ (2.51 ) $ (1.54 ) Impairment and restructuring charges per share — — 0.90 — Restructuring related consulting fees per share 0.01 — 0.01 — Adjusted net loss per share $ (0.79 ) $ (0.59 ) $ (1.60 ) $ (1.54 ) Adjusted operating expense reconciliation Operating expense, as reported $ 93,696 $ 72,275 $ 204,004 $ 150,598 Impairment and restructuring charges, as reported — — 26,608 — Adjusted operating expense $ 93,696 $ 72,275 $ 230,612 $ 150,598
