iRhythm Technologies Announces Third Quarter 2017 Financial Results and Raises Guidance for Full Year 2017
SAN FRANCISCO, Nov. 01, 2017 (GLOBE NEWSWIRE) -- iRhythm Technologies, Inc. (NASDAQ:IRTC), a leading digital health care solutions company focused on the advancement of cardiac care, today reported financial results for the three and nine months ended September 30, 2017.
Recent Highlights
- Revenue for the quarter ended September 30, 2017 increased 49% year-over-year to $25.0 million
- Gross margin for the third quarter 2017 was 72% versus 69% in the third quarter of 2016
“Third quarter and year-to-date performance highlight the progress we are making in establishing our Zio Service as the new standard of care for ambulatory cardiac monitoring,” said Kevin King, CEO. "This consistent growth in demand has enabled us to confidently expand our salesforce and infrastructure throughout 2017, as well as make significant progress in growing in-network coverage, which has meaningfully increased our productivity and volume.”
Third Quarter Financial Results
Revenue for the three months ended September 30, 2017 was $25.0 million, an increase of 49% year-over-year and 5% sequentially. Revenue growth remains predominantly driven by increased volume of the Zio Service in both new and existing accounts, as well as continued success with in-network contracting efforts.
Gross profit for the third quarter of 2017 was $18.1 million, or 72% gross margin, up from $11.5 million, or 69% gross margin, in the same period of the prior year. Margin expansion is primarily attributable to productivity gains through the company’s machine-learned algorithms associated with report generation, the impact from the mix shift to contracted claims, and continued reduction of device-related manufacturing costs.
Operating expenses for the third quarter of 2017 were $24.1 million, an increase of 70% compared to $14.2 million for the same period of the prior year. The increase in operating expenses was primarily driven by accelerated salesforce expansion investments and a material increase in stock-based compensation.
Loss from operations for the third quarter of 2017 was $6.5 million, compared to $4.1 million for the same period of the prior year.
Cash, cash equivalents, and investments totaled $107.4 million as of September 30, 2017.
Guidance for Full Year 2017
iRhythm projects revenue for the full year 2017 to range from $96 to $97 million, gross margins for the full year 2017 to range from 71.5% to 72.5% and operating expenses for the full year 2017 to be between $93 and $95 million. This compares to previous guidance of $94 to $96 million in revenue, 71.5% to 72.5% in gross margins, and $89 and $92 million in operating expenses for the full year 2017 provided on August 2, 2017.
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 dialing (844) 348-0016 for domestic callers or (213) 358-0876 for international callers, and referencing Conference ID: 96279903 or from the webcast on the “Investor Relations” section of the company’s website at: www.irhythmtech.com.
About iRhythm Technologies, Inc.
iRhythm is a leading digital health care company redefining the way cardiac arrhythmias are clinically diagnosed. The company combines wearable biosensor devices worn for up to 14 days and cloud-based data analytics with powerful proprietary algorithms that distill data from millions of heartbeats into clinically actionable information. The company believes improvements in arrhythmia detection and characterization have the potential to change clinical management of patients.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements regarding expectations for expansion in our salesforce, increases in our in-network contracting and financial guidance. 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 Form 10-Q filing made with the Securities and Exchange Commission on August 7, 2017. 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: Media Contact
Lynn Pieper Lewis or Leigh Salvo Aaron Murphy
(415) 937-5404 (415) 229-3331
investors@irhythmtech.com media@irhythmtech.com
IRHYTHM TECHNOLOGIES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands)
| September 30, 2017 | December 31, 2016 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 20,429 | $ | 51,643 | ||||
| Short-term investments | 87,017 | 54,407 | ||||||
| Accounts receivable, net | 12,039 | 9,406 | ||||||
| Inventory | 1,314 | 1,390 | ||||||
| Prepaid expenses and other current assets | 1,989 | 1,671 | ||||||
| Restricted cash | — | 91 | ||||||
| Total current assets | 122,788 | 118,608 | ||||||
| Investments, long-term | — | 10,981 | ||||||
| Property and equipment, net | 6,207 | 4,653 | ||||||
| Goodwill | 862 | 862 | ||||||
| Other assets | 3,798 | 3,052 | ||||||
| Total assets |
$ | 133,655 |
$ | 138,156 |
||||
| Liabilities, Convertible Preferred Stock and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 2,076 | $ | 2,103 | ||||
| Accrued liabilities | 11,436 | 10,165 | ||||||
| Deferred revenue | 904 | 947 | ||||||
| Accrued interest, current portion | 149 | — | ||||||
| Debt, current portion | 1,479 | — | ||||||
| Total current liabilities | 16,044 | 13,215 | ||||||
| Debt | 32,053 | 32,227 | ||||||
| Deferred rent, noncurrent portion | 169 | 26 | ||||||
| Accrued interest, net of current portion | — | 126 | ||||||
| Total liabilities | 48,266 | 45,594 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock | 28 | 22 | ||||||
| Additional paid-in capital | 230,831 | 219,718 | ||||||
| Accumulated other comprehensive loss | (30 | ) | (9 | ) | ||||
| Accumulated deficit | (145,440 | ) | (127,169 | ) | ||||
| Total stockholders’ equity | 85,389 | 92,562 | ||||||
| Total liabilities and stockholders’ equity | $ | 133,655 | $ | 138,156 | ||||
IRHYTHM TECHNOLOGIES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||
| 2017 | 2016 | 2017 | 2016 | ||||||||||||
| Revenue | $ | 25,035 | $ | 16,780 | $ | 70,327 | $ | 45,368 | |||||||
| Cost of revenue | 6,920 | 5,282 | 20,002 | 15,097 | |||||||||||
| Gross profit | 18,115 | 11,498 | 50,325 | 30,271 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development | 3,790 | 1,635 | 9,187 | 4,847 | |||||||||||
| Selling, general and administrative | 20,308 | 12,529 | 57,787 | 36,658 | |||||||||||
| Total operating expenses | 24,098 | 14,164 | 66,974 | 41,505 | |||||||||||
| Loss from operations | (5,983 | ) | (2,666 | ) | (16,649 | ) | (11,234 | ) | |||||||
| Interest expense | (862 | ) | (807 | ) | (2,522 | ) | (2,388 | ) | |||||||
| Other expense, net | 321 | (602 | ) | 900 | (1,015 | ) | |||||||||
| Net loss | $ | (6,524 | ) | $ | (4,075 | ) | $ | (18,271 | ) | $ | (14,637 | ) | |||
| Net loss per common share, basic and diluted | $ | (0.29 | ) | $ | (2.80 | ) | $ | (0.81 | ) | $ | (10.20 | ) | |||
| Weighted-average shares used to compute net loss per common share, basic and diluted | 22,811,907 | 1,454,307 | 22,446,399 | 1,434,583 | |||||||||||
