IRTC

iRhythm is finally showing operating leverage on its Zio ambulatory cardiac monitoring franchise. FY2025 revenue grew 26.2% to $747M with a 70.6% gross margin, net loss narrowed 60.7% to -$44.6M, and operating cash flow exploded from ~$3M to $80.9M (+2,285%). The MD&A confirms a diversified payor mix — 52% contracted third-party, 24% CMS, 17% healthcare institutions — and the company has delivered 12M+ patient reports across nearly 3 billion hours of curated ECG data, which is a defensible data moat for the FDA-cleared/CE-marked patch + cloud analytics platform.

The balance sheet is workable but not pristine. $236M cash funds the business, yet equity is just $153M against $867M in liabilities (5.68x leverage), and the -$803M accumulated deficit reflects a long history of GAAP losses. Cash dropped 43.8% YoY, capex rose 36% to $46.3M, and management is actively excluding 'business transformation costs' and patent litigation from Welch Allyn and BardyDx from Adjusted EBITDA — a tell that real cash costs persist below the headline non-GAAP number. The 5-year total-return chart in Item 5 shows IRTC at $74.80 vs. $100 baseline at end-2025, badly trailing both NASDAQ ($187) and the S&P Healthcare Equipment index ($79) — investors have been burned despite the operational progress.