8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 3, 2023

iRhythm Technologies, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	001-37918	20-8149544
(State or other jurisdiction of<br>incorporation or organization)	(Commission<br>File Number)	(I.R.S. Employer<br>Identification Number)

699 8th Street, Suite 600

San Francisco, California 94103

(Address of principal executive office) (Zip Code)

(415) 632-5700

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $0.001 Per Share	IRTC	The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On August 3, 2023, iRhythm Technologies, Inc. issued a press release regarding its financial results for the second quarter ended June 30, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K.

The information in this Item 2.02, including Exhibit 99.1 to this Form 8-K, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The information contained in this Item 2.02 and in the accompanying Exhibit 99.1 shall not be incorporated by reference into any other filing under the Exchange Act or under the Securities Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits

(d)	Exhibits.
Exhibit No.	Description
---	---
99.1	Press release issued by iRhythm Technologies, Inc., dated as of August 3, 2023
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	IRHYTHM TECHNOLOGIES, INC.
Date: August 3, 2023	By:	/s/ Brice A. Bobzien
		Brice A. Bobzien
		Chief Financial Officer

Document

Exhibit 99.1

iRhythm Technologies Announces Second Quarter 2023 Financial Results

SAN FRANCISCO, August 3, 2023 - iRhythm Technologies, Inc. (NASDAQ: IRTC), a leading digital health care company focused on creating trusted solutions that detect, predict, and prevent disease, today reported financial results for the three and six months ended June 30, 2023.

Second Quarter 2023 Financial Results

•Revenue of $124.1 million, a 21.6% increase compared to second quarter 2022

•Gross margin of 69.5%, a 70-basis point improvement compared to second quarter 2022

•Cash, cash equivalents and marketable securities of $164.7 million as of June 30, 2023

•Updated fiscal year 2023 revenue guidance in a range of approximately $485 million to $490 million

Recent Operational Highlights

•Second-highest quarter ever of Zio XT new account openings and continued volume growth across both Zio XT and Zio AT with balanced growth across multiple channels

•Zio granted high medical needs designation by Japanese Ministry of Health, Labour, and Welfare ("MHLW") and the Company submitted a Shonin pre-market application to the Pharmaceuticals and Medical Devices Agency ("PMDA") for regulatory review

•Upcoming data presentations at the European Society of Cardiology ("ESC") Congress in Amsterdam, the Netherlands, from August 25-28, 2023

"We delivered another strong performance during the second quarter as we realized continued balanced growth across both Zio XT and Zio AT and across multiple channels, building on the solid momentum we achieved earlier this year," said Quentin Blackford, iRhythm’s President and CEO. "Revenue growth of 21.6% year-over-year was driven by increasing demand for Zio services as we continue to redefine the standard of cardiac care and demonstrate our unique value proposition to customers, patients, and payers. This past quarter was the first in which our commercial teams were able to speak to the CAMELOT study of real-world evidence for Zio XT as we continued to increase penetration within our existing accounts and gained traction within the primary care space."

"As we've moved into the third quarter, we have also hit several milestones that we believe are important to building our international presence. In Japan, we are thrilled that the Zio Monitor System has been granted high medical needs designation by the MHLW at the recommendation of the Japanese Heart Rhythm Society (JHRS), and we look forward to continuing our collaboration with the JHRS and the PMDA during their review of our regulatory dossier. In Switzerland, we have initiated our first engagement with one of the country's five university hospitals. With continued momentum in our core U.S. business, progress with market access exploration and operational efforts in certain international markets, an improving financial profile, and the broader Zio Monitor commercial launch in the United States later this year, we are encouraged by the significant opportunities ahead of us that we believe will allow us to capture growth for years to come," concluded Mr. Blackford.

Second Quarter Financial Results

Revenue for the second quarter of 2023 was $124.1 million, up 21.6% from $102.1 million during the same period in 2022. The increase was driven by growth in volume of Zio services, partially offset by a decline in net average selling price.

Gross profit for the second quarter of 2023 was $86.2 million, up 22.7% from $70.2 million during the same period in 2022, while gross margin was 69.5%, up from 68.8% during the same period in 2022. The increase in gross profit was primarily due to increased volume and a reduction in cost per unit.

Operating expenses for the second quarter of 2023 were $105.1 million, compared to $93.7 million for the same period in 2022. Adjusted operating expenses for the second quarter of 2023 were $99.7 million, compared to $93.5 million during the same period in 2022. This increase in adjusted operating expenses resulted primarily from increased payroll-related costs to support growth in operations.

Net loss for the second quarter of 2023 was $18.5 million, or a diluted loss of $0.61 per share, compared with net loss of $23.9 million, or a diluted loss of $0.80 per share, for the same period in 2022. Adjusted net loss for the second quarter of 2023 was $13.1 million, or a diluted loss of $0.43 per share, compared with an adjusted net loss of $23.7 million, or a diluted loss of $0.79 per share, for the same period in 2022.

Cash, cash equivalents, and marketable securities were $164.7 million as of June 30, 2023.

Exhibit 99.1

2023 Annual Guidance

iRhythm projects revenue for the full year 2023 to grow approximately 18% to 19% compared to prior year results, ranging from approximately $485 million to $490 million. Gross margin for the full year 2023 is expected to range from 69% to 70% and adjusted operating expenses are expected to range between $417 million and $427 million. Adjusted EBITDA margin for the full year 2023 is expected to range from approximately 0% to 0.5% of revenues.

Webcast and Conference Call Information

iRhythm’s management team will host a conference call today beginning at 1:30 p.m. PT/4:30 p.m. ET. Investors interested in listening to the conference call may do so by accessing the live and archived webcast of the event, which will be available on the investors section of the Company’s website at investors.irhythmtech.com.

About iRhythm Technologies, Inc.

iRhythm is a leading digital health care company that creates trusted solutions that detect, predict, and prevent disease. Combining wearable biosensors and cloud-based data analytics with powerful proprietary algorithms, iRhythm distills data from millions of heartbeats into clinically actionable information. Through a relentless focus on patient care, iRhythm’s vision is to deliver better data, better insights, and better health for all.

Use of Non-GAAP Financial Measures

We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (GAAP) in this press release, including adjusted EBITDA, adjusted net loss, adjusted net loss per share, and adjusted operating expenses. We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. See the schedules attached to this press release for additional information and reconciliations of such non-GAAP financial measures to their most directly comparable GAAP measures. We have not reconciled our adjusted operating expenses and adjusted EBITDA estimates for full year 2023 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort.

Adjusted EBITDA excludes non-cash operating charges for stock-based compensation, depreciation and amortization as well as non-operating items such as interest income, interest expense, income tax provision, impairment and restructuring charges, and business transformation costs.

We exclude the following items from non-GAAP financial measures for adjusted net loss, adjusted net loss per share and adjusted operating expenses:

•impairment and restructuring charges, and

•business transformation costs, which include one-time professional services and severance costs to augment and restructure the organization to use both outsourced and offshore resources.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements include statements regarding financial guidance, market opportunity, ability to penetrate the market, anticipated productivity improvements and expectations for growth. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include risks described in the section entitled “Risk Factors” and elsewhere in our filings made with the Securities and Exchange Commission, including those on the Form 10-Q expected to be filed on or about August 3, 2023. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. iRhythm disclaims any obligation to update these forward-looking statements.

Investor Relations Contact

Stephanie Zhadkevich

(919) 452-5430

investors@irhythmtech.com

iRhythm Media Contact

Saige Smith

(262) 289-7065

irhythm@highwirepr.com

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

(unaudited)

(in thousands)

	June 30, 2023		December 31, 2022
Assets
Current assets:
Cash and cash equivalents	$	61,578	$	78,832
Marketable securities	103,161		134,312
Accounts receivable, net	51,108		49,918
Inventory	14,478		15,155
Prepaid expenses and other current assets	11,816		10,555
Total current assets	242,141		288,772
Property and equipment, net	89,845		75,670
Operating lease right-of-use assets	57,917		60,666
Goodwill	862		862
Other assets	38,723		22,252
Total assets	$	429,488	$	448,222
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	7,150	$	7,517
Accrued liabilities	64,469		65,497
Deferred revenue	3,695		3,051
Operating lease liabilities, current portion	14,099		13,031
Total current liabilities	89,413		89,096
Debt, noncurrent portion	34,942		34,935
Other noncurrent liabilities	1,012		1,307
Operating lease liabilities, noncurrent portion	80,242		83,072
Total liabilities	205,609		208,410
Stockholders’ equity:
Preferred stock	—		—
Common stock	30		28
Additional paid-in capital	803,792		762,380
Accumulated other comprehensive loss	(152)		(396)
Accumulated deficit	(579,791)		(522,200)
Total stockholders’ equity	223,879		239,812
Total liabilities and stockholders’ equity	$	429,488	$	448,222

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Condensed Consolidated Statements of Operations

(unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue, net	$	124,130	$	102,051	$	235,566	$	194,429
Cost of revenue	37,905		31,806		73,660		62,425
Gross profit	86,225		70,245		161,906		132,004
Operating expenses:
Research and development	13,677		11,945		28,519		22,487
Selling, general and administrative	91,420		81,751		191,763		154,909
Impairment and restructuring charges	—		—		—		26,608
Total operating expenses	105,097		93,696		220,282		204,004
Loss from operations	(18,872)		(23,451)		(58,376)		(72,000)
Interest expense	(832)		(482)		(1,782)		(2,511)
Interest and other income, net	1,435		69		2,867		85
Loss before income taxes	(18,269)		(23,864)		(57,291)		(74,426)
Income tax provision	213		33		300		80
Net loss	$	(18,482)	$	(23,897)	$	(57,591)	$	(74,506)
Net loss per common share, basic and diluted	$	(0.61)	$	(0.80)	$	(1.89)	$	(2.51)
Weighted-average shares, basic and diluted	30,502		29,843		30,400		29,720

Exhibit 99.1

IRHYTHM TECHNOLOGIES, INC.

Reconciliation of GAAP to Non-GAAP Financial Information

(unaudited)

(in thousands, except per share data)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Adjusted EBITDA reconciliation
Net loss	$	(18,482)	$	(23,897)	$	(57,591)	$	(74,506)
Interest expense	832		482		1,782		2,511
Interest income	(1,468)		(196)		(2,902)		(328)
Income tax provision	213		33		300		80
Depreciation and amortization	3,791		3,351		7,367		6,494
Stock-based compensation	14,099		15,098		32,350		29,001
Impairment and restructuring charges	—		—		—		26,608
Business transformation costs	5,409		175		11,095		433
Adjusted EBITDA	$	4,394	$	(4,954)	$	(7,599)	$	(9,707)
	Three Months Ended June 30,				Six Months Ended June 30,
---	---	---	---	---	---	---	---	---
	2023		2022		2023		2022
Adjusted net loss reconciliation
Net loss, as reported	$	(18,482)	$	(23,897)	$	(57,591)	$	(74,506)
Impairment and restructuring charges	—		—		—		26,608
Business transformation costs	5,409		175		11,095		433
Adjusted net loss	$	(13,073)	$	(23,722)	$	(46,496)	$	(47,465)
Adjusted net loss per share reconciliation
Net loss per share, as reported	$	(0.61)	$	(0.80)	$	(1.89)	$	(2.51)
Impairment and restructuring charges per share	—		—		—		0.90
Business transformation costs per share	0.18		0.01		0.36		0.01
Adjusted net loss per share	$	(0.43)	$	(0.79)	$	(1.53)	$	(1.60)
Weighted-average shares, basic and diluted	30,502		29,843		30,400		29,720
Adjusted operating expense reconciliation
Operating expense, as reported	$	105,097	$	93,696	$	220,282	$	204,004
Impairment and restructuring charges	—		—		—		(26,608)
Business transformation costs	(5,409)		(175)		(11,095)		(433)
Adjusted operating expense	$	99,688	$	93,521	$	209,187	$	176,963