Second Quarter 2026
Filed Aug 6, 2026iRhythm Holdings Announces Second Quarter 2026 Financial Results
Revenue grew 20.1%, gross margin expanded 160 basis points, adjusted EBITDA reached $43.3 million, and the company increased full-year 2026 revenue and adjusted EBITDA margin guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $224.2 million | – | 20.1% increase |
| Gross profitGAAP | $163.2 million | – | 22.8% |
| Gross marginGAAP | 72.8% | – | 160-basis point improvement |
| Operating expensesGAAP | $165.7 million | – | – |
| Adjusted operating expensesnon-GAAP | $145.0 million | – | – |
| Net lossGAAP | $0.4 million | – | $13.8 million improvement |
| Net loss per diluted shareGAAP | $0.01 | – | – |
| Adjusted net incomenon-GAAP | $19.3 million | – | – |
| Adjusted net income per diluted sharenon-GAAP | $0.58 | – | – |
| Adjusted EBITDAnon-GAAP | $43.3 million | – | $27.6 million improvement |
| Adjusted EBITDA marginnon-GAAP | 19.3% | – | 1090-basis point improvement |
| Unrestricted cash, cash equivalents, and marketable securitiesother | $591.3 million | – | – |
full year 2026 outlook
- Revenue$880 million to $890 million
- Noteadjusted EBITDA margin between 13.0% and 14.0%
What drove it
- Revenue growth was driven primarily by sustained volume demand across the customer base, continued strength in the core business, and contributions from newer growth channels.
- Gross profit increased primarily due to increased volume of Zio services.
- Gross margin expansion was driven primarily by continued operational efficiencies, product mix, and scale benefits from higher volumes.
- The company achieved FDA clearance of its third-generation algorithm, which is expected to reduce clinician review time by approximately 50% over time and drive approximately $100 million of cumulative cost savings over the next five years.
- iRhythm entered into a definitive agreement to acquire VitalConnect for total consideration of approximately $287.5 million.
Concerns
- GAAP results remained a net loss of $0.4 million.
- Operating expenses increased to $165.7 million from $151.6 million.
- The VitalConnect transaction remains subject to closing risks, including required regulatory approvals, closing conditions, integration challenges, potential loss of key employees, customers or partners, and unforeseen liabilities and future expenditures.
- Guidance depends on continued volume-led growth, gross margin expansion, operating leverage, and disciplined investment in innovation and market expansion.
What to watch
- Progress toward closing and integrating the VitalConnect acquisition and realization of its anticipated strategic, commercial, operational and financial benefits.
- Adoption across cardiology, primary care, innovative channels, and international markets.
- Implementation of the third-generation algorithm and its expected effects on clinician review time and cost savings.
- Delivery against full-year 2026 revenue guidance of $880 million to $890 million and adjusted EBITDA margin guidance of 13.0% to 14.0%.
Balance sheet and cash flow
- Unrestricted cash, cash equivalents, and marketable securities were $591.3 million as of June 30, 2026.
Analysis
iRhythm reported a strong second quarter, with revenue of $224.2 million, up 20.1% from $186.7 million. Management attributed growth primarily to sustained volume demand, core-business strength, and newer growth channels. The company also described momentum across cardiology, primary care, innovative channels, and international markets.
Profitability improved materially. Gross profit rose 22.8% to $163.2 million, while gross margin reached 72.8%, a 160-basis point improvement. Management cited increased Zio services volume, operational efficiencies, product mix, and scale benefits from higher volumes. Adjusted operating expenses declined to $145.0 million from $145.2 million even as GAAP operating expenses increased to $165.7 million from $151.6 million.
The combination of revenue growth and operating leverage narrowed the GAAP net loss to $0.4 million from $14.2 million. Adjusted results moved to adjusted net income of $19.3 million, or $0.58 per diluted share, from an adjusted net loss of $10.2 million, or a net loss per diluted share of $0.32. Adjusted EBITDA was $43.3 million and adjusted EBITDA margin was 19.3%, representing improvements of $27.6 million and 1090 basis points, respectively.
Liquidity was $591.3 million of unrestricted cash, cash equivalents, and marketable securities as of June 30, 2026. The company entered into a definitive agreement to acquire VitalConnect for total consideration of approximately $287.5 million. It also received FDA clearance for its third-generation algorithm, which management expects to reduce clinician review time by approximately 50% over time and drive approximately $100 million of cumulative cost savings over the next five years.
Management increased full-year 2026 revenue guidance to $880 million to $890 million and adjusted EBITDA margin guidance to 13.0% to 14.0%. The guide is framed around continued volume-led growth, gross-margin expansion, operating leverage, and disciplined investment. Key execution items are sustaining demand and margin gains while completing and integrating the VitalConnect transaction.
Management, verbatim
Our second quarter results reflect strong execution across the business, with broad-based growth, meaningful margin expansion, and continued progress against our strategic priorities.
Quentin Blackford, President and Chief Executive Officer of iRhythm
We are driving adoption across an increasingly diverse set of care settings and channels, including primary care, while continuing to invest in the capabilities that we believe will shape the future of healthcare.
Quentin Blackford, President and Chief Executive Officer of iRhythm
Not in the filing
stated, not guessed- Segment revenue, segment growth rates, and segment profitability were not provided.
- GAAP operating income or loss was not provided.
- Prior-year gross margin was not provided.
- Prior-year adjusted EBITDA and adjusted EBITDA margin were not provided.
- Prior-quarter comparisons were not provided for reported metrics.
- Operating cash flow was not provided.
- Free cash flow was referenced as a non-GAAP measure but no free cash flow amount was provided in the filing text.
- Debt balance was not provided.
- Capital returns, including share repurchases and dividends, were not provided.
- Full-year 2026 gross margin, operating expenses, and tax-rate guidance were not provided.
- Previous-period outlook was not provided.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.