iRhythm Technologies, Inc. has recently released its 10-K report. The company, headquartered in San Francisco, California, is a digital healthcare company that provides ambulatory electrocardiogram (ECG) monitoring products for patients at risk for arrhythmias in the United States. Its Zio service is an ambulatory cardiac monitoring solution that combines a wire-free, patch-based, and wearable biosensor with a cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias.
Financial Metrics and Business Changes/Challenges Reported: The company's Zio Services revenue is primarily from third-party payors, including contracted third-party payors, Centers for Medicare and Medicaid, and healthcare institutions. The breakdown for 2023 was 54% from contracted third-party payors, 25% from Centers for Medicare and Medicaid, 14% from healthcare institutions, and 7% from non-contracted third-party payors. Adjusted EBITDA, a key measure used to assess financial performance, was $(4,863) for 2023, compared to $(11,263) for 2022, and $(35,705) for 2021. Macroeconomic factors, such as delays in payments, supply chain disruptions, uncertain or reduced demand, and initiatives to address financial and operational challenges, could materially adversely affect the company's future results of operations and liquidity. Revenue for the year ended December 31, 2023, increased by 20% to $492.7 million compared to $410.9 million in 2022. The increase was primarily due to higher demand for Zio Services. Cost of revenue for 2023 increased by 24% to $160.9 million compared to $129.3 million in 2022, primarily due to increases in headcount-related costs associated with the increase in the volume of Zio Services. Research and development expenses for 2023 increased by 29% to $60.2 million compared to $46.6 million in 2022, primarily due to higher headcount-related costs and further development of product offerings. * Selling, general and administrative expenses for 2023 increased by 20% to $385.6 million compared to $322.2 million in 2022, primarily due to increased headcount-related costs and business transformation costs.
The market has reacted to these announcements by moving the company's shares -6.1% to a price of $108.09. For more information, read the company's full 10-K submission here.
