iRhythm at Bank of America Conference: Strategic Growth and Challenges

On Tuesday, 13 May 2025, iRhythm Technologies Inc (NASDAQ:IRTC) presented at the Bank of America 2025 Healthcare Conference, revealing a strong first quarter performance and strategic initiatives for the year. While the company exceeded revenue expectations and raised its guidance, it also faces challenges such as tariff impacts and a negative free cash flow outlook for 2025. The conference call, led by CFO Dan Wilson, highlighted a balance between growth investments and profitability improvements.

Key Takeaways

• iRhythm exceeded Q1 2025 revenue expectations by $5 million and raised full-year guidance by $15 million.
• The company is targeting a 15% EBITDA margin at $1 billion in revenue, with plans to increase this as revenue grows.
• iRhythm is advancing its product pipeline, including the Zio MCT submission to the FDA in Q3 2025.
• Tariffs are impacting gross margins, but mitigation strategies are in development.
• The primary care segment now represents over one-third of iRhythm’s volume, up from 20% in 2023.

Financial Results

• Q1 2025 Performance:

- Revenue exceeded expectations by $5 million.

- Achieved over 20% year-over-year growth for the second consecutive quarter.

• 2025 Guidance:

- Full-year revenue guidance raised by $15 million.

- Anticipated seasonality patterns: 22.5% (Q1), 25% (Q2), 25% (Q3), 27.5% (Q4).

• Gross Margin:

- Impacted by tariffs, reducing margins by 50-75 basis points.

- Efforts are underway to mitigate tariff exposure.

• Operating Expenses (OpEx):

- Aiming for 400-500 basis points of profitability expansion year-over-year.

• Free Cash Flow:

- Expected to be slightly negative in 2025 due to investments and inventory build-up.

- Anticipated to be free cash flow positive in 2026 and beyond.

• Long-Term Targets:

- Targeting a 15% EBITDA margin at $1 billion in revenue, with potential to increase to mid-20% as revenue exceeds $1 billion.

Operational Updates

• Zio AT Performance:

- Strong growth due to competitive disruption in late 2024.

- Continued account wins independent of disruption.

• Zio Monitor:

- Maintained or slightly increased market share.

- New generation device is 72% lighter than previous models.

• Primary Care Adoption:

- Over one-third of Q1 2025 volume from primary care prescribers.

• Epic Partnership:

- Pilot accounts show a 20% average volume uplift post-integration.

• Manufacturing Automation:

- Phase one launched, with further phases planned.

• FDA Remediation:

- On track with a 12-month remediation plan.

Future Outlook

• Zio MCT:

- FDA submission targeted for Q3 2025.

- Anticipating a faster ramp-up than previous product transitions.

• Market Share:

- Aiming to exceed initial market share gain targets in ambulatory telemetry.

• Multi-Sensing Platform:

- Developing capabilities for adjacent markets, including sleep disorder monitoring.

• Japan:

- Proceeding with commercialization despite a disappointing reimbursement rate.

- Focus on generating in-country clinical evidence.

Q&A Highlights

• Zio AT Growth Confidence:

- Sustained performance and new account wins drive confidence.

• Epic Partnership Impact:

- Initial accounts show uplift; broader implementation needed for full impact.

• Expansion into Primary Care:

- Driven by clinical champions and aligned incentives.

• Tariff Mitigation Strategies:

- Early stages; exploring alternative suppliers.

• R&D Focus:

- Investing in multi-sensing platform and AI tools.

Overall, iRhythm is focused on maintaining its growth trajectory while addressing challenges such as tariffs and cash flow. Readers are invited to refer to the full transcript for a more detailed account of the conference call.

Full transcript - Bank of America 2025 Healthcare Conference:

Stephanie Piazzola, Analyst, BofA: Thanks for joining us at the BofA Healthcare Conference. I’m Stephanie Piazzola. I cover medical devices at BofA. And next up, we have iRhythm CFO, Dan Wilson. So thanks for joining us and Stephanie from IR.

Dan Wilson, CFO, iRhythm: Thanks for having us.

Stephanie Piazzola, Analyst, BofA: So maybe we can get started with Q1 and the updated 2025 guidance. In Q1, you saw a strong beat of 5,000,000 and raised the guidance by 15. So maybe talk about some of the drivers of strength in the quarter and the confidence in them for the rest of the year driving that guidance raise.

Dan Wilson, CFO, iRhythm: Yeah, great. So Q1 was a great quarter for us. Second consecutive quarter where we grew over 20% year over year, which is a great benchmark for us and see a lot of momentum in the business, which played through in the quarter and then is reflected in the guide that we set out for the remainder of 2025. I would say, you know, no change to philosophy in terms of how we set guidance. We want to be thoughtful with the guidance that we put out there, high confidence guidance and things that are earlier in nature.

I’m sure we’ll talk about some of those that maybe we don’t have quite the same level of confidence or line of sight to. We’re going to leave those out and let those play through. So, primary driver of both the Q1 beat as well as the guidance range really was the strength of Zio AT, which grew tremendously in the quarter, again, second quarter in a row that had a very good Q4, and we saw that continue into Q1, gives us confidence that’s going to be sustainable and variable through 2025, which is reflected in that updated guidance.

Stephanie Piazzola, Analyst, BofA: Okay. And then when we think about the $15,000,000 raise and maybe the cadence of the year, is there any seasonality to consider? You gave some color on the Q2 weighting being similar with historical seasonality. So is that also how we should think about Q3 and Q4?

Dan Wilson, CFO, iRhythm: Yeah, I think historical seasonality is a good way to think about ’25. Nothing unique there. Rough numbers, 22.5%, twenty five %, twenty five %, twenty seven point five % in terms of full year revenue weighted across each of those four quarters. That’s kind of the expectation for Q4 or for 2025, so nothing unique from a seasonality standpoint. Looking at year over year comps, obviously with the strength we saw in the second half of twenty twenty four, particularly Q4, you know, that is a more difficult comp as we get to the back part of 2025, but otherwise nothing necessarily unique to call out.

Stephanie Piazzola, Analyst, BofA: And then following up on some of your comments in Zio AT and the good growth you’ve seen in the last two quarters and your confidence in that sustaining, maybe you can elaborate just a little bit on where that confidence is coming from and much visibility you have into that volume sustaining and what that assumes from a competitive perspective as well.

Dan Wilson, CFO, iRhythm: Yeah, yeah. So we did see a competitive disruption in the late Q3, Q4 timeframe. Last year 2024, we took advantage of that opportunity and were able to pick up a number of new accounts through that disruption. Importantly, that competitor and the disruption they had resolved itself in Q4. They were back on the market aggressively in Q4 and into Q1.

And despite that, we’ve been able to sustain a good amount of the business that we won during that disruption. So I feel really good about that sustaining for the remainder of 2025. And I would also say we’re winning new accounts with AT, even independent of this competitive disruption. I think the team has a lot of confidence in the product. You know, as we’ve been working through some of the regulatory matters, we have two 510Ks that were cleared in the October timeframe last year.

I think that was a good, you know, milestone, and the team has really been leaning in on Zio AT. So feel really good about, you know, our ability to win new accounts and launch those new accounts with Zio AT and expect that to continue through ’25.

Stephanie Piazzola, Analyst, BofA: And then maybe just to touch on the Zio monitoring side, you’re already at 70% share. So I guess, how should we think about any incremental share capture potential or just, you know, volume growth for the Zio monitoring?

Dan Wilson, CFO, iRhythm: Yeah, so we’re seeing really good things with the core business there too with Zio Monitor, which is nearly 90% of overall revenue. Interestingly, when we had our Analyst Day back in 2022 and set long range targets out five years to 2027, we assumed we would lose share in that market, right, starting at 70%, know, figured it was the right way to approach that. We’ve actually seen the opposite of that. We’ve not only maintained share in that market, but have continued to take, call it a point or two over the last couple of years. So I’d say our competitive positioning in that segment in particular has never been stronger.

We launched Zio Monitor, our new generation hardware device about eighteen months ago that has been really well received by the market. It is a beautiful product, 72% lighter than Zio XT, the legacy device, and really a great patient experience. We’ve also done a really good job in terms of generating clinical evidence that differentiates Zio XT and Zio Monitor relative to competitive technologies out there. So Camelot data that we released, I guess, a little more than a year ago, and then more recently, a similar set of data for commercial payers. Those are hundreds of thousands of patients in terms of the clinical data demonstrating the superiority of ZioMonitor, and that’s been a great, you know, tool for our sales team to drive continued, you know, penetration with ZioMonitor, and we feel really good about our competitive positioning.

Stephanie Piazzola, Analyst, BofA: Okay, great. And then maybe just to touch on the gross margin guidance and tariffs, your guidance for this year is flat, which contemplates 50 to 75 basis points of negative impact from tariff. So maybe you could just elaborate on where you have the most exposure to tariffs and anything more on the assumptions like when you start to see the impact and if that includes any mitigation actions that you could take.

Dan Wilson, CFO, iRhythm: To say the least, that has been a fluid situation. We set that guidance 50 to 75 basis points at the start of the year. At that time, the impact was really coming from imports from Mexico. Importantly, we do all of our manufacturing in The US, in California, we do source some components, some materials outside The US, which is where we’re seeing that tariff impact. It shifted a little bit on our most recent call, seeing more of an impact from imports from China and Taiwan being the main drivers there, and then obviously the updates over the weekend probably changed those numbers a little bit.

But feel good about that 50 to 75 basis points is kind of a worst case that doesn’t assume any kind of offsetting strategies that we’re looking to implement. I think there is opportunity execute on those and potentially reduce that exposure even in 2025, certainly going into 2026. So we’ll likely update that estimate on our next earnings call. We are driving gross margin improvements underneath that. It’s been offset a bit by the expected tariff, you know, exposure, but as we mitigate that or those, you know, that shifts, think we will potentially see gross margin expansion in 2025.

Stephanie Piazzola, Analyst, BofA: And what are some of the mitigation actions you’re looking at potentially taking?

Dan Wilson, CFO, iRhythm: Yeah, think there’s a number of different things, and we’re early in that strategy, so I don’t want to get too far down the road there, but again we’re in a maybe potentially bit of an easier position. We’re doing the manufacturing in The US, so it’s really just around where we source materials and if there’s opportunities to evaluate different suppliers there.

Stephanie Piazzola, Analyst, BofA: Got it. Maybe digging into AT a bit more and the primary care opportunity. Ending last year, you said you had 10% market share with Zio AT and that you expected to take one to two points this year. So I was curious, given the recent strength in Zio AT, do you have any updated thoughts on that one to two points of share gain? And maybe just remind us how you think about the market opportunity and how market share translates to revenue dollars.

Dan Wilson, CFO, iRhythm: Yep, so with the strength we’ve seen with AT the last two quarters, I think we are outpacing that one to two points of market share growth. You know, we’ll update that once we have a better picture of kind of overall market growth, but we are absolutely, you know, outgrowing the market and taking share, to one of the earlier comments, you know, expect that to maintain through 2025. So, we’re just over 10% market share in that segment. If you think about long term continuous monitoring, where we play with our ZioMonitor product, we’re 70% market share there. So a real opportunity to close the gap there, and there’s a significant overlap with the two prescriber bases, And a lot of benefit to prescribers and accounts to, you know, utilize the same vendor and same provider for both modalities.

So we feel really good about our ability to continue to grow our share there. Zio AT is performing well. We have a next generation product, Zio MCT, that we’re looking to submit with the FDA in Q3 this year. We believe that’s another unlock of opportunity for

Stephanie Piazzola, Analyst, BofA: us. And just to follow-up on that point, just how are things progressing with the FDA and your interactions on that filing?

Dan Wilson, CFO, iRhythm: Yep, yeah, continue to feel good about that Q3 filing date. Everything that we have control around, we continue to execute against and feel good about that Q3 timeline.

Stephanie Piazzola, Analyst, BofA: And then maybe thinking about post approval, how we should think about the potential ramp of adoption. Would you do a more limited market release first or could start with a more broad launch? Guess just trying to get a sense of the potential contribution in 2026.

Dan Wilson, CFO, iRhythm: Yep, so when we did a cut over from Zio XT to Zio Monitor, there was a period of time there where it was kind of a phased launch, right, over the course of twelve months or so. I think there is an opportunity to move faster from AT to Zio MCT. It’s on a hardware platform that has been utilized with Zio Monitor, so it’s been tested on patients, obviously. And so I think there’s opportunity to move faster there. Of course, we want to test the service, make sure we have the kinks worked out before going kind of full scale, but we’ll update guidance as we get a bit closer there, but our intention is to move to Zio MCT as quickly as we can.

Stephanie Piazzola, Analyst, BofA: Got it, and then maybe thinking longer term about the share potential here, I think you said you could see share capture being at 30 to 35%. Curious if any updated thoughts, I guess similar to my other question, given the recent strength, if you think that’s still reasonable, or if you could get there faster, which sounds like potentially yes, if your overall outlook on that has increased.

Dan Wilson, CFO, iRhythm: Yep, I do think with the strength that we’re seeing in AT, I think the benefit is when we get Zio MCT on the market, are launching from a position of strength, is only going to help things. So, you know, will we be satisfied with 30%, thirty five %? No, we want to continue to drive, you know, greater than that, but we got to, you know, get to that milestone first. So, feel good about it. We’re focused on getting that submission into the FDA as kind of the next milestone and ultimately launching thereafter and excited about what we can do with it.

Stephanie Piazzola, Analyst, BofA: Okay, great. Maybe touching on the primary care opportunity. Another growth driver you’ve talked about is the Epic partnership. I know it’s still early in the rollout, but curious how that’s going, how you’ve seen it contribute to volume growth so far, and maybe what you’re seeing in terms of Epic accounts that were already Zio users versus getting new ones.

Unidentified speaker: Yeah, absolutely. So I’m very pleased with some of these early positive signals with this Epic Ore integration. As you know, we are early in this rollout. As a reminder, though, we have been doing EHR integrations for a number of years at this point. And to date, just over forty percent of our registration volumes in the first quarter were from EHR integrated accounts.

Right? But the benefits of the Epic Aura integration specifically is that we shrink the timeline to implementation by upwards of 60% or more and reduce the resources from the accounts IT side to actually Right? So all of that is working to enhance clinician workflows, make it easier from the ordering process perspective, and also easier for the physicians to review the report within their native instance of EHR. Within these early pilot accounts, we have seen a bit of a volume uplift to date. Right?

We talked about versus preintegration to post integration, kind of the volume uplift is on average about 20% with some accounts showing kind of that 40% or more volume uplift. Right? This is very early. Again, as you know, these are the the pilot accounts. Right?

But we do have a steady cadence of additional accounts, both existing accounts who have already been familiar with Zio, but also new accounts who will go through this EHR integration in in 2025. So very pleased with those early signals. And I don’t think you currently have much baked into guidance for this year. Correct.

Stephanie Piazzola, Analyst, BofA: I guess just curious at what point you might start to consider adding that in, or is it more of next year?

Dan Wilson, CFO, iRhythm: Yeah, think if we continue to execute and work through that pipeline and see the, you know, a consistent kind of set of results in terms of that 20% uplift in volume, I think that at that point there’s an opportunity to bake it in. It’s still early, it’s only a handful of accounts to this point and want to see a bigger sample size before really baking in too much there.

Stephanie Piazzola, Analyst, BofA: Makes sense. And then on primary care adoption at IDNs, you’ve talked about a land and expand strategy there. So at this stage, I guess what’s the balance between the two and what you’re seeing once an account is landed in terms of expansion in those accounts?

Dan Wilson, CFO, iRhythm: Yeah, this land and expand strategy has been part of our strategy for a number of years, and I think we’ve gotten more kind of organized around and structured in terms of really implementing that strategy within our commercial team. So have organized the team in a way that supports both of those aspects, have a team that’s focused on landing new accounts and opening new accounts, and then have a team that immediately follows to drive some of these expansion plays within that account. That isn’t always primary care. There’s other opportunities for expansion. We’re getting an account to EHR integration is one play.

But more and more, you know, expanding into primary care is a big part of the strategy. And it’s really encouraging what we’re seeing. I believe it’s better for patients, better for physicians, better for payers to bring Zio upstream earlier in the of the care pathway for patients. It feels like everyone is supporting that. So cardiologists and electrophysiologists, are generally the clinical champion when an account is initially opened, they are supporting this move up to primary care.

They’re helping drive the education, and awareness of Zio upstream to the primary care physicians that are referring patients onto them. So, feels like all incentives are aligned, and really encouraged what we’re seeing there. We did call out, you know, over a third of volume in Q1 twenty five was through that primary care, through primary care prescribers. That has grown from call it, you know, 20% or so in full year 2023. So it’s been a nice growth driver for us.

I think it opens up a lot for us strategically, and then you know being in primary care there’s just a bigger opportunity to capture more patients through that channel.

Stephanie Piazzola, Analyst, BofA: And on that one third that you mentioned in Q1, I guess how do you see that trending through this year?

Dan Wilson, CFO, iRhythm: Yeah, we have not given forward guidance on that, but do expect that to continue to grow.

Stephanie Piazzola, Analyst, BofA: And then the other strategy you’ve talked about here is through the innovative channel partners, you announced you signed a new one in Q1. So I guess can you talk about the type of contribution you’re seeing so far from these partnerships? And in general, I guess what’s the process of getting these partnerships and how fast can they start contributing?

Dan Wilson, CFO, iRhythm: Yeah, this has been a really exciting part of what we’re seeing in the business more recently. I will say this is a strategy that we have been working towards for a number of years in terms of asymptomatic monitoring and preventative care. It’s been a big part of our strategy. We’ve been generating the clinical evidence, and I’d say we’re really starting to see that traction kind of play through in the market. Mention over a third of volume is through primary care.

Think about innovative channel being a sub segment of that, and call it low single digits as a percent of overall volume. I would say if you rewind eighteen, twenty four months ago, that was close to zero if not zero, so it has been starting to show up in our business. I do think we’re just getting started here. We did mention that one new account that we launched in Q1, there’s a number of others in the pipeline, and feel good about how that may ramp from here.

Stephanie Piazzola, Analyst, BofA: Maybe shifting to some questions on the P and L. Gross margin in Q1 came in ahead of your expectations, so maybe just talk about some of the puts and takes on the quarter.

Dan Wilson, CFO, iRhythm: Yeah, I would compliment our operations teams here, both on the manufacturing side as well as our clinical operations, and just how efficiently they are operating and executing. We did launch phase one of our manufacturing automation last subsequent phases to come, phases two and three. Later this year and next year, that’ll be a nice source of margin for us. And then I’d say it’s just leveraging the infrastructure that we have built over the last decade. The IDTF infrastructure that we have in The US, more and more offshore capabilities, and so leveraging that, operating efficiently, you’re seeing that show up in gross margin.

Stephanie Piazzola, Analyst, BofA: And then I guess moving down to OpEx and the operating leverage, you’ve talked about I guess any expectations for OpEx this year that you’ve shared and on those operational excellence initiatives driving operating leverage, guess talk a little bit about what some of those are.

Dan Wilson, CFO, iRhythm: Yeah, so we are focused more and more on profitable growth. We are still a growth company, we still see tremendous growth ahead of us. We want to be investing in that growth to capture those opportunities. At the same time, we want to continue to be more profitable. So we’re trying to find that right balance.

I think we have been finding that right balance kind of driving to that 400 to 500 basis points of profitability expansion year to year. That is, you know, reinvesting some of that revenue back into the business to go after some of these growth opportunities. So, feel like we’re finding the right balance. We did execute on some of these operational excellence initiatives you referred to last year. I’d say there it was really being thoughtful around how the company operates.

And We’ve been a high growth company for our entire lifespan, and oftentimes companies just grow and try to keep up with that scale and maybe not operating in the most efficient way possible. We looked at that in terms of how we grew, what our structures looked like, and found some opportunities to be more efficient there. I mentioned leveraging our global infrastructure. That is certainly a source of leverage for us, has been and will continue to be. And then I’d say from an automation standpoint, an IT systems standpoint, I think there’s a lot of opportunity to be more efficient there and continuing to drive leverage into the future.

I’m sure we’re going talk about FDA remediation activities. You know, there’s incremental $15,000,000 of spend going towards those activities. Ideally, we’re wrapping those up by this year, and that will fall off and be a nice source of leverage for ’26.

Stephanie Piazzola, Analyst, BofA: I guess I can ask now then on the progress on the Form four eighty three’s and the warning letters, just how everything’s tracking there.

Dan Wilson, CFO, iRhythm: Yeah, feel really good about the progress we’re making. We laid out a remediation plan, twelve month remediation plan with the FDA back in August. We continue to hit all of our commitments, of our timelines that we outlined there. So feel good about continuing to execute on that plan. We will be going above and beyond that as we’ve been talking about publicly, and really kind of a full overhaul of our quality management system.

We’re bringing an outside party in to essentially do an audit of our quality management system that’ll take place really in the back half this year, but feel really good about the progress we’re making.

Stephanie Piazzola, Analyst, BofA: And then on your, I guess, longer term margins, you have a long term goal of 15% EBITDA margins at $1,000,000,000 in revs and can get to mid-twenty percent as you exceed that revenue. I guess how are you tracking towards that goal?

Dan Wilson, CFO, iRhythm: Yep, on pace to deliver that, and again that is, you know, letting some leverage play through the P and L while also reinvesting back in the business, which we think is the right balance. That billion dollar target at 15% margins really is just a point in time, and we do expect to continue to be growing in that high teens, near 20% revenue standpoint, and believe that’s the right margin profile for a business of that nature with the opportunities that we have in front of us.

Stephanie Piazzola, Analyst, BofA: Wanted to ask on maybe your R and D outlook because you’ve talked about a number of adjacent market opportunities and multi sensing capabilities, so just curious about the outlook for investment needed to bring some of those opportunities to market and how we should think about that.

Dan Wilson, CFO, iRhythm: Yeah, I think we feel good about our R and D spend as a percent of revenue and kind of maintaining that level. Again, we think that’s the right level where we’re investing in these growth opportunities, and there’s a lot there, right? The multi sensing platform we want to continue to develop, obviously Zio MCT that’s front and center for us that we’re working towards getting on submission with the FDA in Q3, then moving on to that next generation platform. There’s a lot we can do on the back end too, terms of AI tools, clinical workflow tools. Those are all investments that we’re currently making, and there’s a nice healthy pipeline of things to continue to invest in, and we’ll look to make sure we’re maintaining that right level of investment.

Stephanie Piazzola, Analyst, BofA: And then maybe just a follow-up on the revenue opportunity from the multi sensing capability. You mentioned in the past that you can monitor for sleep disease for a few days and then, for cardiac arrhythmias, and increase the revenue opportunity without changing the cost. I guess anything more to share there on kind of what that model and opportunity looks Yeah,

Dan Wilson, CFO, iRhythm: that’s still an opportunity we believe in. That is an opportunity we’re pursuing. I’d say the benefit of that platform is kind of twofold. One, we believe it’s going to deepen kind of our competitive positioning or strengthen our competitive positioning in our core markets while also opening up opportunities in adjacent markets, Sleepy and probably the most obvious one and maybe nearest term one. We are working on those opportunities internally, nothing to guide you all to just yet in terms of when that may contribute to revenue, but it is active programs inside the company.

Stephanie Piazzola, Analyst, BofA: Got it. And then on free cash flow, you anticipate being slightly negative this year and becoming positive next year. I guess any color on the cadence of this year and kind of the exit rate into next year and some of the assumptions needed to get to the positive expectation for next year?

Dan Wilson, CFO, iRhythm: Yeah, we were positive free cash flow actually in the back half of last year, so would expect a similar type of profile for this year. We are investing in all of the things that I just mentioned, including some of the clinical workflow tools, the software tools that are used internally that aren’t necessarily in R and D, but are more capitalized investments. So those are active investments that we’re making. We did say on our most recent call, just given potential supply chain disruptions, we are investing in building up inventory reserves as well. That comes with some incremental cash needs for this year.

That’s a one time thing, and that’ll be kind of a source of leverage going into next year. So it’s an important milestone for the company, getting to free cash flow positive, setting up ’25 to be slightly negative, and then expect to be free cash flow positive in ’26 and beyond.

Stephanie Piazzola, Analyst, BofA: Got it. Then maybe just one on OUS and kind of the Japan update. You had expected $2,000,000 in revenue on the full year guide, but that’s come down a bit given the reimbursement update in Japan. So guess talk about your outlook here on the overall market opportunity given that reimbursement decision and maybe how we can think about this opportunity next year?

Unidentified speaker: Yeah, absolutely. So I think we’re still excited about the Japanese market strategically. It’s about 1,600,000 Ultra monitors performed per day or per year, excuse me. So it’s definitely strategically important country for us. We are moving forward with the commercialization in Japan.

But as you mentioned, it is at a reimbursement rate that was a bit disappointing for us. It’s in line with the Holter monitor rates in country. So we’re excited to move forward. We are focused today when we move forward commercially on generating in country clinical evidence. So what we understand is kind of missing there is some head to head comparisons with some of the other patch based monitoring technologies that are in the Japanese market today.

We are very confident that we can show the value of Zio specifically as all of our other clinical evidence to date has already shown. And so we’ll submit that for future reimbursement cycles kind of starting with next year, certainly. And then, you know, hopefully, the MHLW will recognize that value. So that’s what we’re doing to move forward there.

Stephanie Piazzola, Analyst, BofA: And then I guess on pricing overall, you mentioned it’s a low single digit pricing headwind this year, which I think is unique to this year versus last year, so I guess how do you think about pricing trending longer term?

Dan Wilson, CFO, iRhythm: Yeah, that low single digit pricing headwind has been fairly consistent the past several years and is something that we generally guide to, and that again has been consistent. So that’s the right way to kind of frame expectations. Certainly, we’ll look for opportunities to improve price where we can. We’re also focused on growing volumes, and sometimes there’s a trade off there. So that low single digit pricing headwind is a good way to think about it.

Stephanie Piazzola, Analyst, BofA: Okay. I think we are just about out of time. So we’ll

Dan Wilson, CFO, iRhythm: Thank you very much. Appreciate it.

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