iRhythm Holdings, Inc.
For the period ended Mar 31, 2026. Filed Apr 30, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed Apr 30, 2026
IRTC$90.22-30.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-10-30.
0001388658-25-000217
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-04-30.
0001388658-26-000039
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 100 previous paragraphs and 92 current paragraphs.
53 unchanged; 27 reworded; 11 added; 20 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 4 previous and 4 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
Overall average selling price increased modestly during the three months ended March 31, 2026, as compared to the prior year period. The increase is in part attributable to lower estimated contractual allowance reserves recognized during the three months ended March 31, 2026, as compared to the prior year period. In the first quarter of 2026, we experienced contractual allowance reserve improvements resulting from improved market access, contracting execution, and collection performance. During the first quarter of 2025, we recognized higher contractual allowance reserves, resulting from billing disruptions due to the Change Healthcare cybersecurity incident in the first quarter of 2024, as well as higher payor claim denials. Additionally, during the first quarter of 2026, we also experienced annual reimbursement increases across certain payor categories, including CMS.
Current report
Other Income, Net
Current report
Other income, net increased by $0.3 million to $1.2 million during the three months ended March 31, 2026, as compared to other income, net of $0.9 million during the three months ended March 31, 2025. The increase in other income, net was primarily attributable to increases in the fair value of our strategic loan and equity investments.
Current report
On July 4, 2025, legislation referred to as the One Big Beautiful Bill Act ("OBBBA") was signed into law. The OBBBA makes certain provisions of the Tax Cuts and Jobs Act of 2017 permanent and makes changes to some U.S. corporate tax provisions, many of which have different effective dates. Key corporate tax provisions of the OBBBA include the restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental expenditures, modifications to Section 163(j) interest expense limitations, and the expansion of Section 162(m) aggregation requirements. We continue to evaluate the impact of the OBBBA, but do not expect the OBBBA to have a material impact on our effective tax rate.
Current report
On September 3, 2019, we entered into a Development Collaboration Agreement with Verily Life Sciences LLC, an Alphabet company (“VLS”) and Verily Ireland Limited (“VIL” and together with VLS, “Verily”) (such Development Collaboration Agreement, as amended by Amendment No. 1 dated April 26, 2021 and Amendment No. 2 dated January 24, 2022, the “Development Agreement”). The Development Agreement involved joint development and production of intellectual property between us and Verily.
Current report
In August 2025, we and Verily mutually terminated the Development Agreement, subject to our continued rights to a license to certain intellectual property associated with a mobile app developed under the Development Agreement. During the year ended 2025, we recorded an impairment charge of $2.5 million associated with capitalized internal-use software in development relating to the Zio Watch with our clinically integrated ZEUS system.
Current report
During the three months ended March 31, 2026, cash provided by financing activities was $0.1 million, a decrease of $1.6 million as compared to $1.7 million during the three months ended March 31, 2025. The decrease was related to proceeds from the issuance of common stock primarily from stock option exercises in connection with our employee equity incentive plan.
Current report
On January 12, 2026, we implemented the Holding Company Transaction. The Holding Company Transaction constituted a Merger Event as defined under the Indenture. The Holding Company Transaction did not constitute a Fundamental Change or a Make-Whole Fundamental Change as defined under the Indenture. As a result of the Holding Company Transaction, holders of the 2029 Notes had the right to exchange their 2029 Notes at any time up through March 4, 2026, the 35th trading day following the effective date of the Holding Company Transaction.
Current report
On January 12, 2026, in connection with the Holding Company Transaction, we entered into a supplemental indenture to the Indenture (the “First Supplemental Indenture”) in order to (a) provide that (i) the right to convert each $1,000 principal amount of 2029 Notes into shares of iRhythm Technologies common stock was changed to a right to convert such principal amount of 2029 Notes into shares of our common stock; (ii) iRhythm Technologies shall continue to have the right to determine the form of consideration to be paid or delivered, as the case may be, upon conversion of the 2029 Notes; (iii) any amount payable in cash upon conversion of the 2029 Notes in accordance with the Indenture shall continue to be payable in cash; (iv) any shares of common stock of iRhythm Technologies that iRhythm Technologies would have been required to deliver upon conversion shall instead be deliverable in shares of our common stock; and (v) the Daily VWAP (as defined in the Indenture) shall be calculated based on the value of a share of our common stock; and (b) provide for the full and unconditional guarantee by us of the obligations of iRhythm Technologies under the 2029 Notes and the Indenture.
Current report
Guarantor Information
Current report
In connection with the Holding Company Transaction, on January 12, 2026, we, as guarantor, iRhythm Technologies, and U.S. Bank Trust Company, National Association, entered into the First Supplemental Indenture. As of March 31, 2026, there was a $661.3 million aggregate principal amount of issued and outstanding 1.50% Convertible Senior Notes due 2029 of iRhythm Technologies, our wholly owned subsidiary, that are fully and unconditionally guaranteed by us. Accordingly, pursuant to Rule 3-10 of Regulation S-X, separate consolidated financial statements of iRhythm Technologies, Inc. have not been presented. As permitted under Rule 13-01(a)(4)(vi) of Regulation S-X, we have excluded summarized financial information for iRhythm Technologies because the assets, liabilities and results of operations of iRhythm Technologies are not materially different than the corresponding amounts in our consolidated financial statements.
Removed paragraphs (20)
Previous report
Impairment Charges
Previous report
Impairment charges consist of amounts recorded to write down the carrying value of long-lived assets to fair value.
Previous report
Loss on Extinguishment of Debt
Previous report
Loss on extinguishment of debt reflects the losses incurred in the early repayment of debt. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our loss on extinguishment of debt.
Previous report
Other Income (Expense), Net
Previous report
N/M - Not meaningful
Previous report
Impairment Charges
Previous report
During the three and nine months ended September 30, 2025, we recorded impairment charges of nil and $2.5 million, respectively, associated with capitalized internal-use software in development relating to the Zio Watch with our clinically integrated ZEUS system. We do not intend to commercially launch the Zio Watch. During the three and nine months ended September 30, 2024, we recorded an impairment charge of $0.6 million related to internal-use software in development not expected to be completed. See Note 7, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Previous report
Other income, net decreased by $0.6 million to $0.6 million during the three months ended September 30, 2025, as compared to other income, net of $1.2 million during the three months ended September 30, 2024. Other income, net increased by $2.9 million to $3.7 million during the nine months ended September 30, 2025, as compared to $0.8 million during the nine months ended September 30, 2024. The decrease in other income, net for the three months ended September 30, 2025 was primarily attributable to changes in unrealized gains and losses over foreign currency. The increase in other income, net, for the nine months ended September 30, 2025 is primarily attributable to the increase in fair value of our strategic investments.
Previous report
Loss on Extinguishment of Debt
Previous report
Loss on extinguishment of debt was $7.6 million for the nine months ended September 30, 2024. The loss was related to the early extinguishment of both the SVB Loan Agreement and the Braidwell Term Loan Facility during the first quarter of 2024. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for details of our financing activities.
Previous report
On July 4, 2025, the United States enacted tax reform legislation commonly referred to as the One Big Beautiful Bill Act (“OBBBA”). Included in this legislation are provisions that allow for the immediate expensing of domestic U.S. research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S. taxation of profits derived from foreign operations. The provisions of the OBBBA did not have a material impact on our unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2025. We do not expect the OBBBA to have a material impact on our effective tax rate. However, we do anticipate future cash tax benefits due to changes in the tax laws for depreciation and research and development expenses.
Previous report
Under the terms of the Development Collaboration Agreement dated September 3, 2019, as amended, between us and Verily Life Sciences LLC ("VLS") and Verily Ireland Limited ("VIL" and together with VLS, "Verily"), we agreed to make milestone payments to Verily up to an aggregate of $12.75 million upon achievement of various development and regulatory milestones. During the three months ended September 30, 2025, we formally terminated the Development Collaboration Agreement with Verily, including no further milestone payment obligations. Through termination of the Development Collaboration Agreement, we and Verily achieved milestones tied to payments totaling $11.0 million. In the second quarter of 2025, we recorded an impairment charge of $2.5 million associated with capitalized internal-use software in development relating to the Zio Watch with the Company's clinically integrated ZEUS system. We continue to expand our product development program into other clinical-grade wearables to detect and characterize arrhythmias while integrating with clinicians' workflows.
Previous report
During the nine months ended September 30, 2025, cash provided by financing activities was $9.6 million, a decrease of $498.7 million as compared to $508.4 million during the nine months ended September 30, 2024. The decrease was primarily attributed to $661.3 million in proceeds from the issuance of our 2029 Notes during the nine months ended September 30, 2024. The decrease was offset by $37.8 million associated with the payment of the SVB Loan Agreement and related termination costs, payment of $5.8 million associated with the Braidwell Term Loan Facility debt issuance and termination costs, payment of $17.4 million associated with debt issuance costs for our 2029 Notes, payment of $72.4 million for the purchase of the 2029 Capped Calls, and payment of $25.0 million for the repurchase of shares of our common stock. Additionally, proceeds from the issuance of common stock associated with employee equity incentive plans increased by $4.2 million.
Previous report
Braidwell Debt
Previous report
On January 3, 2024 (the “Closing Date”), we entered into the Credit, Security and Guaranty Agreement (the “Braidwell Credit Agreement”) with Braidwell Transactions Holdings LLC – Series 5 (“Braidwell”), which provided for a senior secured term loan in an aggregate principal amount of up to $150.0 million (the “Braidwell Term Loan Facility”). An initial tranche of $75.0 million (“Initial Loan”) was funded on the Closing Date. An additional tranche of $75.0 million was accessible through the one year anniversary of the Closing Date, so long as we satisfied certain customary conditions.
Previous report
Our net proceeds from the Initial Loan were approximately $35.0 million, after deducting costs, fees and expenses, and repayment of our existing term loan from Silicon Valley Bank, as discussed below.
Previous report
On March 7, 2024, in conjunction with the issuance of the 2029 Notes, we used approximately $80.2 million of the net proceeds for the repayment in full of the $75.0 million outstanding Initial Loan and $5.2 million for interest, fees and expenses associated with terminating the Braidwell Credit Agreement.
Previous report
SVB Term Loan
Previous report
On January 3, 2024, in connection with the entry into the Braidwell Credit Agreement, we used approximately $37.8 million of the net proceeds for the repayment in full of the $35.0 million outstanding principal balance as well as interest, fees and expenses associated with terminating the agreement. Upon termination of the SVB Loan Agreement, SVB’s security interest in our assets and property was released. We continue to hold $8.4 million in letters of credit with SVB, securing them with cash on deposit.
Reworded paragraphs (27)
Previous wording
Each Zio System combines an FDA-cleared, CE-marked and Japan PMDA-approved wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data with a proprietary, FDA-cleared, CE-marked, and Japan PMDA-approved cloud-based data analytic software to help physicians monitor patients and diagnose arrhythmias. Since receiving FDA clearance, we have provided the iRhythm Services to over eight million patients and have collected over 2 billion hours of curated heartbeat data.
Current wording
Each iRhythm ACM System combines a wire-free, patch-based, 14-day wearable biosensor (FDA-cleared, CE-marked and/or Japan PMDA-approved, as applicable) that continuously records ECG data with a proprietary, cloud-based data analytic software (FDA-cleared, CE-marked, and Japan PMDA-approved) to help physicians monitor patients and diagnose arrhythmias.
Previous wording
Since first receiving clearance from FDA for our technology in 2009, we have supported physician and patient use of our technology and provided ambulatory cardiac monitoring services from our Medicare-enrolled IDTFs and with our qualified technicians. We have provided our iRhythm Services using our Zio Systems.
Current wording
Since first receiving clearance from FDA for our technology in 2009, we have supported physician and patient use of this technology and provided ACM services from our Medicare-enrolled IDTFs and with our qualified technicians. We have provided our iRhythm Services using our iRhythm ACM System. Since receiving FDA clearance, we have provided the iRhythm Services via more than twelve million patient reports and have collected over 3 billion hours of curated heartbeat data.
Previous wording
We receive revenue for the iRhythm Services primarily from third-party payors, which include contracted third-party payors and CMS. The remainder of our revenue comes from healthcare institutions, which are typically hospitals or private physician practices, who purchase the iRhythm Services from us directly. We rely on third-party billing partners to submit patient claims and collect from commercial payors, certain government agencies, and patients.
Current wording
We receive revenue for our iRhythm Services primarily from third-party payors, which include contracted third-party payors and CMS. The remainder of our revenue comes from healthcare institutions, which are typically hospitals or private physician practices, who purchase the iRhythm Services from us directly. We rely on third-party billing partners to submit patient claims and collect from commercial payors, certain government agencies, and patients.
Previous wording
We define Adjusted EBITDA for a particular period as net loss before income tax (benefit) provision, depreciation and amortization, interest expense, and interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment and restructuring charges, business transformation costs, certain intellectual property litigation expenses and settlements, and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources. Beginning in the first quarter of 2025, we have excluded third-party attorneys' fees and expenses associated with patent litigation brought against the Company by Welch Allyn, Inc. and Bardy Diagnostics, Inc., subsidiaries of Baxter International, Inc. Factors we considered in arriving at this determination to exclude these patent litigation costs from our Adjusted EBITDA include frequency and complexity of the patent litigation, the counterparty involved, and the expected magnitude of patent litigation costs for this matter.
Current wording
We define Adjusted EBITDA for a particular period as net loss before income tax provision, depreciation and amortization, interest expense, and interest income and as further adjusted for stock-based compensation expense, changes in fair value of strategic investments, impairment charges, business transformation costs, certain intellectual property litigation expenses and settlements, and loss on extinguishment of debt. Business transformation costs include costs associated with professional services, employee termination and relocation, third-party merger and acquisition, integration, and other costs to augment and restructure the organization, inclusive of both outsourced and offshore resources.
Previous wording
1 Net loss for the three and nine months ended September 30, 2025, includes $0.3 million and $2.3 million of acquired in-process research and development expense, respectively. Net loss for the three and nine months ended September 30, 2024 includes $32.1 million of acquired in-process research and development expense.
Current wording
1 Net loss for the three months ended March 31, 2026 and 2025, includes $0.3 million of acquired in-process research and development expense.
Previous wording
Our future results of operations and liquidity could be materially adversely affected by macroeconomic factors contributing to delays in payments of outstanding receivables, supply chain disruptions, including shortages, tariffs on imports, and inflationary pressure, uncertain or reduced demand, and the impact of any initiatives or programs that we may undertake to address financial and operational challenges faced by our customers.
Current wording
Our future results of operations and liquidity could be materially adversely affected by macroeconomic factors contributing to delays in payments of outstanding receivables, supply chain disruptions or shortages, commodity price increases, tariffs on imports, and inflationary pressure, uncertain or reduced demand, a tightening labor market, and the impact of any initiatives or programs that we may undertake to address financial and operational challenges faced by our customers.
Previous wording
Cost of revenue includes direct labor, material costs, equipment and infrastructure expenses, amortization of internal-use software, allocated overhead, royalties, and shipping and handling. Direct labor includes payroll-related costs including stock-based compensation involved in manufacturing, clinical data curation, and customer service. Material costs include both the disposable materials costs of the Zio patches and amortization of the PCBAs. Each Zio XT patch and Zio Monitor patch includes a PCBA, and each Zio AT patch includes a PCBA and gateway board, the cost of which is amortized over the expected useful life of the board. We expect cost of revenue to increase in absolute dollars as our revenue increases due to increased direct labor, direct materials, and variable spending, as well as amortization of internal-use software, partially offset by economies of scale in relation to fixed costs such as overhead and facilities costs.
Current wording
Cost of revenue includes direct labor, material costs, tariffs, equipment and infrastructure expenses, amortization of internal-use software, allocated overhead, royalties, and shipping and handling. Direct labor includes payroll-related costs including stock-based compensation involved in manufacturing, clinical data curation, and customer service. Material costs include both the disposable materials costs of the Zio patches and amortization of the PCBAs. Each Zio XT and Zio monitor includes a PCBA, and each Zio AT includes a PCBA and gateway board, the cost of which is amortized over the expected useful life of the board. We expect cost of revenue to increase in absolute dollars as our revenue increases due to increased direct labor, direct materials, and variable spending, as well as amortization of internal-use software, partially offset by economies of scale in relation to fixed costs such as overhead and facilities costs.
Previous wording
Our gross margin has been and will continue to be affected by a variety of factors, including increased contracting with third-party payors and institutional providers. We have in the past been able to increase our pricing as third-party payors become more familiar with the benefits of the iRhythm Services and move to contracted pricing arrangements. We expect increases to the cost of revenues due to increases to materials and electronics components pricing, labor rates, shipping rates, amortization of capitalized internal-use software, along with increases in the general level of inflation and tariffs on imports (which may complicate and increase costs associated with our supply chain). We expect to partially offset these increases by reduced costs from obtaining volume purchase discounts for our material costs, implementing scan-time algorithms and process improvements, automating manufacturing assembly and packaging, and through software-driven and other workflow enhancements to reduce labor costs. We experienced an improvement in our gross margin from 2023 to 2024, and continue to focus on improving annual gross margins in the future, while navigating through the macroeconomic and supply chain headwinds discussed above that we expect to face.
Current wording
Our gross margin has been and will continue to be affected by a variety of factors, including increased contracting with third-party payors and institutional providers. We have in the past been able to increase our pricing as third-party payors become more familiar with the benefits of the iRhythm Services and move to contracted pricing arrangements. We expect increases to the cost of revenues due to increases to materials and electronics components pricing, labor rates, shipping rates, amortization of capitalized internal-use software, along with increases in the general level of inflation and tariffs on imports (which may complicate and increase costs associated with our supply chain). We expect to partially offset these increases by reduced costs from obtaining volume purchase discounts for our material costs, implementing scan-time algorithms and process improvements,
Previous wording
Interest expense is attributable to borrowings under our loan agreements and 2029 Notes. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our debt.
Current wording
Interest expense is attributable to borrowings under our 2029 Notes. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information on our debt.
Previous wording
Other income (expense), net consists primarily of changes in fair value of our strategic loan and equity investments, as well as realized and unrealized foreign currency exchange gains or losses.
Current wording
Other income, net consists primarily of changes in fair value of our strategic loan and equity investments, as well as realized and unrealized foreign currency exchange gains or losses.
Previous wording
Comparison of the Three and Nine Months Ended September 30, 2025, and 2024
Current wording
Comparison of the Three Months Ended March 31, 2026 and 2025
Previous wording
Revenue, net increased by $45.3 million, or 31%, to $192.9 million during the three months ended September 30, 2025, as compared to $147.5 million during the three months ended September 30, 2024. Revenue, net increased by $110.7 million, or 26%, to $538.2 million during the nine months ended September 30, 2025, as compared to $427.5 million during the nine months ended September 30, 2024. For the three and nine months ended September 30, 2025, the increase in revenue was primarily attributable to an increase in volume of iRhythm Services resulting from increased demand. In particular, during the three and nine months ended September 30, 2025, Zio AT as a proportion of our total revenue volume grew significantly compared to the prior year primarily as a result of new customer account growth. Additionally, we have experienced higher volumes from larger healthcare enterprise accounts which utilize both Zio Monitor and Zio AT. Offsetting the revenue growth from volume and product mix were higher contractual allowance reserves recognized during the three and nine months ended September 30, 2025, partially resulting from revisions of estimated reserves in 2025 from billing disruptions due to the Change Healthcare cybersecurity incident from the first quarter of 2024, as well as partially resulting from higher payer claims denials from revenue growth associated with our contracted third-party payors and CMS. Overall average selling price slightly increased during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Overall average selling price remained relatively stable during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024.
Current wording
Revenue, net increased by $40.7 million, or 26%, to $199.4 million during the three months ended March 31, 2026, as compared to $158.7 million during the three months ended March 31, 2025. The increase in revenue was primarily attributable to an increase in volume of iRhythm Services resulting from increased demand. In particular, during the three months ended March 31, 2026, total revenue volume for both Zio monitor and Zio AT grew, compared to the prior year, resulting from existing and new account growth within our third-party payors, CMS, and healthcare institutions customer groups. We have experienced higher volumes from larger healthcare enterprise accounts which utilize both Zio monitor and Zio AT.
Previous wording
Cost of revenue increased by $9.7 million, or 21%, to $55.8 million during the three months ended September 30, 2025, as compared to $46.1 million during the three months ended September 30, 2024. Cost of revenue increased by $24.0 million or 18%, to $159.1 million during the nine months ended September 30, 2025, as compared to $135.1 million during the nine months ended September 30, 2024. For the three and nine months ended September 30, 2025, the increase was primarily due to increases in material component costs (inclusive of tariffs), amortization costs related to Zio Monitor and Zio AT PCBA, material scrap costs, headcount-related costs, and freight costs associated with the increase in volume of iRhythm Services.
Current wording
Cost of revenue increased by $8.6 million, or 17%, to $58.0 million during the three months ended March 31, 2026, as compared to $49.5 million during the three months ended March 31, 2025. The increase was primarily due to increases in material component costs (inclusive of tariffs), amortization costs related to Zio monitor and Zio AT PCBA, material scrap costs, headcount-related costs, and freight costs associated with the increase in volume of iRhythm Services. Offsetting the increase in cost of revenue for the three months ended March 31, 2026 were lower per unit costs related to our operating efficiencies.
Previous wording
Research and development expenses increased by $5.3 million, or 34%, to $21.0 million during the three months ended September 30, 2025, as compared to $15.7 million during the three months ended September 30, 2024. Research and development expenses increased by $11.2 million, or 21%, to $63.6 million during the nine months ended September 30, 2025, as compared to $52.4 million during the nine months ended September 30, 2024. The increase in research and development expenses for the three and nine months ended September 30, 2025 was primarily due to higher employee-related costs (including stock based compensation) which include supporting ongoing FDA remediation and sustaining activities, product development consulting costs, and costs to further development, enhancement, and functionality of our current and future product offerings.
Current wording
Research and development expenses decreased by $0.2 million, or 1%, to $21.4 million during the three months ended March 31, 2026, as compared to $21.5 million during the three months ended March 31, 2025. Research and development expenses remained at consistent levels supporting ongoing FDA remediation and sustaining activities, product development consulting, and further development, enhancement, and functionality of our current and future product offerings.
Previous wording
Acquired IPR&D expenses decreased by $31.8 million, or 99%, to $0.3 million during the three months ended September 30, 2025, as compared to $32.1 million during the three months ended September 30, 2024. Acquired IPR&D expense decreased by $29.8 million or 93%, to $2.3 million during the nine months ended September 30, 2025, as compared to $32.1 million during the nine months ended September 30, 2024. The decrease in Acquired IPR&D expense for the three and nine months ended September 30, 2025 was primarily due to the Technology License Agreement (the “License Agreement”) we entered into with BioIntelliSense, Inc. (“BioIS”) during the third quarter of 2024. The $32.1 million charge for acquired IPR&D in the third quarter of 2024 consisted of an upfront license acquisition fee of $15.0 million along with contingent consideration related to regulatory milestones for the license acquisition fee of $17.1 million. As noted above, for the three and nine months ended September 30, 2025, we recognized acquired IPR&D expenses of $0.3 million and $2.3 million, respectively, as additional license acquisition fee contingent consideration related to regulatory milestones. See Note 5, Fair Value Measurements, and Note 7, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Current wording
Acquired IPR&D expenses remained flat during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. See Note 5, Fair Value Measurements, and Note 7, Commitments and Contingencies, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for further details.
Previous wording
Selling, general and administrative expenses increased by $20.8 million, or 20%, to $124.2 million during the three months ended September 30, 2025, as compared to $103.4 million during the three months ended September 30, 2024. Selling, general and administrative expenses increased by $51.8 million, or 16%, to $370.5 million during the nine months ended September 30, 2025, as compared to $318.8 million during the nine months ended September 30, 2024. For the three and nine months ended September 30, 2025, the increase in selling, general, and administrative expenses were primarily attributable to increases in headcount-related costs (including stock-based compensation), legal and professional fees, provisions for credit losses, and claims processing fees. Additionally, during the three and nine months ended September 30, 2025 the Company incurred $3.2 million and $7.0 million, respectively, related to certain intellectual property litigation costs, which were not incurred during the comparable periods in 2024. Business transformation costs for the three and nine months ended September 30, 2025 were $0.9 million and $2.3 million, respectively, as compared to $7.4 million and $8.7 million for the three and nine months ended September 30, 2024, respectively. During the three and nine months ended September 30, 2024, business transformation costs primarily related to severance, professional fees, and third-party merger and acquisition fees.
Current wording
Selling, general and administrative expenses increased by $15.9 million, or 13%, to $135.9 million during the three months ended March 31, 2026, as compared to $120.0 million during the three months ended March 31, 2025. For the three months ended March 31, 2026, the increase in selling, general, and administrative expenses were primarily attributable to increases in legal and professional fees for litigation matters, provisions for credit losses, and claims processing fees. Offsetting the increase were lower headcount-related costs (including stock-based compensation). Intellectual property litigation costs relating to our ongoing litigation with Welch-Allyn and BardyDx, wholly-owned subsidiaries of Baxter, during the three months ended March 31, 2026 were $3.7 million, as compared to $0.8 million for the three months ended March 31, 2025. Business transformation costs for the three months ended March 31, 2026 were $0.3 million as compared to $0.5 million for the three months ended March 31, 2025.
Previous wording
Interest income decreased by $0.5 million to $5.9 million during the three months ended September 30, 2025, as compared to $6.5 million during the three months ended September 30, 2024. Interest income remained relatively flat at $16.2 million during the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024. The decrease for the three months ended September 30, 2025 is primarily attributable to lower interest rates on invested balances, as compared to the same period in 2024. Interest income remained flat for the nine months ended September 30, 2025, as compared to the prior period, due to higher average invested balances in 2025 offset by lower interest rates on invested balances.
Current wording
Interest income remained flat during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
Previous wording
Interest expense remained relatively flat during the three months ended September 30, 2025, as compared to the three months ended September 30, 2024. Interest expense increased by $0.3 million to $9.8 million during the nine months ended September 30, 2025, as compared to $9.5 million during the nine months ended September 30, 2024. The increase in interest expense during the nine months ended September 30, 2025, is primarily attributable to the $661.3 million 2029 Notes borrowed in March 2024.
Current wording
Interest expense remained flat during the three months ended March 31, 2026, as compared to the three months ended March 31, 2025. The interest expense is primarily attributable to the $661.3 million 2029 Notes borrowed in March 2024.
Previous wording
Income tax provision decreased by $0.2 million, or 87%, during the three months ended September 30, 2025, as compared to an income tax provision of $0.2 million during the three months ended September 30, 2024. Income tax provision increased by $0.1 million, or 22%, to $0.5 million during the nine months ended September 30, 2025 as compared to $0.4 million during the nine months ended September 30, 2024.
Current wording
Income tax provision decreased by $0.2 million, or 25%, to $0.5 million during the three months ended March 31, 2026, as compared to an income tax provision of $0.7 million during the three months ended March 31, 2025. The income tax provision for each three-month period primarily relates to state and foreign taxes.
Previous wording
As of September 30, 2025, we had cash and cash equivalents of $255.6 million, marketable securities of $309.6 million, and accounts receivable, net of $76.2 million. We continuously review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the current macroeconomic environment, including inflation, interest rate volatility, and potential instability in the global banking system. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds. During the first quarter of 2024, we experienced a temporary delay in the billing of our contracted and non-contracted payer customers, performed by our third-party claims processing vendor. The delay was due to a cybersecurity incident experienced by Change Healthcare, a division of UnitedHealth Group, in which our third-party vendor did engage for services relating to billing and collections. While we substantially cleared the billing backlog as of the end of the first quarter of 2024, the delay in billing resulted in a temporary delay in our cash collections. We have received the majority of our cash collections from the delayed billings. During the first quarter of 2025, we experienced higher levels of contractual adjustments associated with our gross accounts receivable. Additionally, through our revenue cycle management transformation we have focused our efforts in part to resolve payor claims denials and unpaid portions of patient-responsible balances in a more timely basis.
Current wording
As of March 31, 2026, we had cash and cash equivalents of $240.1 million, marketable securities of $309.5 million, and accounts receivable, net of $80.9 million. We continuously review our liquidity and anticipated capital requirements in light of the significant uncertainty created by the current macroeconomic environment, including inflation, interest rate volatility, and potential instability in the global banking system. We intend to continue to make investments to support our business, which may require us to engage in equity or debt financings to secure additional funds.
Previous wording
On August 30, 2024, we entered into a Technology License Agreement (the “License Agreement”) with BioIS, pursuant to which (i) we will receive a perpetual fully paid up license to certain of BioIS’ intellectual property, technology and products for research, development and commercialization of potential next generation products and services in certain fields of use, including an exclusive license to develop and commercialize pulse oximetry, accelerometry, and trending non-invasive blood pressure technologies for use within our ambulatory cardiac monitoring products and services, and (ii) iRhythm and BioIS agreed to negotiate in good faith a supply agreement for pulse oximetry hardware.
Current wording
On August 30, 2024, we entered into a Technology License Agreement (as amended, the “License Agreement”) with BioIS, pursuant to which (i) we will receive a perpetual fully paid up license to certain of BioIS’ intellectual property, technology and products for research, development and commercialization of potential next generation products and services in certain fields of use, including (x) an exclusive license to develop and commercialize pulse oximetry, accelerometry, and trending non-invasive blood pressure technologies for use within our ambulatory cardiac monitoring products and services, and (y) a limited, non-exclusive license to develop and commercialize products and services for use in unattended, home-based diagnostic testing and assessment of central and obstructive sleep apnea, and (ii) iRhythm and BioIS agreed to negotiate in good faith a supply agreement for pulse oximetry hardware.
Previous wording
Under the terms of the License Agreement, during the third quarter of 2024 we paid BioIS an upfront fee of $15.0 million in cash consideration. In connection with the License Agreement, we also purchased an aggregate of $40.0 million of convertible promissory notes from BioIS of which $20.0 million of the convertible promissory notes (“Milestone Notes”) were designated for satisfaction of the Company's regulatory milestone payment obligations. The Milestone Notes, plus accrued and unpaid interest, if any, shall be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026. In June 2025, BioIS achieved the first of two regulatory milestones. As of September 30, 2025, we are in the process of completing all required contractual conditions in order to cancel $10.0 million in Milestone Notes plus accrued and unpaid interest.
Current wording
Under the terms of the License Agreement, during the third quarter of 2024 we paid BioIS an upfront fee of $15.0 million in cash consideration. In connection with the License Agreement, we also purchased an aggregate of $40.0 million of convertible promissory notes from BioIS of which $20.0 million of the convertible promissory notes (“Milestone Notes”) were designated for satisfaction of our regulatory milestone payment obligations. The Milestone Notes, plus accrued and unpaid interest, if any, will be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026. In June 2025, BioIS achieved the first of two regulatory milestones. As of March 31, 2026, we are in the process of completing all required contractual conditions in order to cancel $10.0 million in Milestone Notes plus accrued and unpaid interest.
Previous wording
During the nine months ended September 30, 2025, cash provided by operating activities was $54.7 million, as compared to cash used in operating activities of $15.8 million during the nine months ended September 30, 2024. Cash provided by operating activities increased by $70.5 million primarily attributable to reductions in our net loss driven by our revenue growth, timing of cash collections associated with our accounts receivable, and timing of payments associated with our accounts payable and accrued liabilities. These increases in cash provided by operating activities were offset by increase to both inventory and prepaid expenses and other current assets, supporting growth in our operations and securing additional inventory stock.
Current wording
During the three months ended March 31, 2026, cash used in operating activities was $26.2 million, as compared to cash used in operating activities of $7.9 million during the three months ended March 31, 2025. Cash used in operating activities increased by $18.3 million, primarily attributable to a higher level of payments associated with our accrued payroll and related expenses as a result of annual bonuses paid during the first quarter of each year under our annual bonus plan. Additional increases in cash used in operating activities were associated with timing of purchases of inventory and PCBAs. These increases in cash used in operating activities were offset by reductions in our net loss driven by our revenue growth.
Previous wording
During the nine months ended September 30, 2025, cash used in investing activities was $228.3 million, an increase of $227.4 million, as compared to cash used in investing activities of $0.8 million during the nine months ended September 30, 2024. The increase in cash used in investing activities was primarily attributable to a net increase in the change in marketable securities of $287.6 million, primarily from an increase in the purchases of marketable securities of $338.1 million, as well as an increase in purchases of property and equipment of $7.5 million. This was offset by a decrease of $52.7 million in cash used for the purchases of strategic investments, as well as cash used of $15.0 million for purchases of acquired in-process research and development from BioIS, during the nine months ended September 30, 2024.
Current wording
During the three months ended March 31, 2026, cash provided by investing activities was $30.2 million, an increase of $68.4 million, as compared to cash used in investing activities of $38.1 million during the three months ended March 31, 2025. The increase in cash provided by investing activities was primarily attributable to a net increase in the change in marketable securities of $67.3 million, primarily from an increase in the maturities of marketable securities of $127.0 million offset by an increase in purchases of marketable securities of $59.7 million, as well as a decrease in purchases of property and equipment of $2.5 million. These increases in investing activities were offset by purchases of strategic investments of $1.5 million.
Previous wording
In connection with the offering of the 2029 Notes, we entered into the privately negotiated capped call transactions (the “2029 Capped Calls”) with certain financial institutions. The 2029 Capped Calls will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of our common stock that will initially underlie the 2029 Notes. The 2029 Capped Calls are expected generally to reduce potential dilution to our common stock upon conversion of the 2029 Notes and/or offset any cash payments that we could be required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap. The 2029 Capped Calls have an initial cap price of $218.10 per share, subject to adjustments, which represents a premium of 100% over the closing price of our common stock of $109.05 per share on The Nasdaq Global Select Market on March 4, 2024.
Current wording
In connection with the offering of the 2029 Notes, we entered into the privately negotiated capped call transactions (the “2029 Capped Calls”) with certain financial institutions. The 2029 Capped Calls will cover, subject to anti-dilution adjustments substantially similar to those applicable to the 2029 Notes, the number of shares of our common stock that will initially underlie the 2029 Notes. The 2029 Capped Calls are expected generally to reduce potential dilution to our common stock upon conversion of the 2029 Notes and/or offset any cash payments that we could be required to make in excess of the principal amount of converted 2029 Notes, as the case may be, with such reduction and/or offset subject to a cap. The 2029 Capped Calls have an initial cap price of $218.10 per share, subject to adjustments, which represents a premium of 100% over the closing price of our common stock of $109.05 per share on The Nasdaq Global Select Market on March 4, 2024. We completed the purchase of the 2029 Capped Calls on March 7, 2024, for the amount of $72.4 million.
Previous wording
Our contractual obligations as of December 31, 2024, are presented in our Annual Report on Form 10-K filed with the SEC on February 20, 2025. There were no significant changes to our lease obligations during the nine months ended September 30, 2025. As of September 30, 2025, we had approximately $77.1 million of open purchase order commitments in the ordinary course of business, the majority of which are due within one year. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for changes in our debt obligations during the nine months ended September 30, 2025.
Current wording
Our contractual obligations as of December 31, 2025, are presented in our Annual Report on Form 10-K filed with the SEC on February 19, 2026 (the "Annual Report"). There were no significant changes to our lease obligations during the three months ended March 31, 2026. As of March 31, 2026, our purchase commitments totaled $80.3 million, primarily related to inventory and revenue cycle service fees and expected to be due within a year. See Note 8, Debt, in the notes to our unaudited condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q for changes in our debt obligations during the three months ended March 31, 2026.
Previous wording
Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Updates to our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. The critical accounting estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There were no material changes to our critical accounting estimates during the nine months ended September 30, 2025.
Current wording
Our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, to the consolidated financial statements included in the Annual Report. Updates to our significant accounting policies are described in Note 2, Summary of Significant Accounting Policies, in the notes to our unaudited condensed consolidated financial statements in Part 1, Item 1 of this Quarterly Report on Form 10-Q. The critical accounting estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of the Annual Report. There were no material changes to our critical accounting estimates during the three months ended March 31, 2026.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
automating manufacturing assembly and packaging, and through software-driven and other workflow enhancements to reduce labor costs. We experienced an improvement in our gross margin from 2023 to 2025, and continue to focus on improving annual gross margins in the future, while navigating through the macroeconomic and supply chain headwinds discussed above that we expect to face.