iRhythm Holdings, Inc. (IRTC) · Nov 5, 2026 · Earnings
Beat — Adjusted EPS $0.82 vs ~$0.02 consensus; FY revenue guide $890M-$895M
iRhythm earnings narrowly missed revenue expectations, but adjusted profitability surged and 2026 guidance rose with VitalConnect included.
iRhythm is scaling its Zio ambulatory cardiac-monitoring platform while expanding into broader inpatient and hospital-to-home monitoring through the newly closed VitalConnect acquisition. The market was looking for roughly $222.23 million of third-quarter revenue and adjusted EPS near $0.02.
The core business was slightly softer than the top-line bar, but not materially so. Revenue reached $221.6 million, up 14.9% year over year, just below published consensus; however, gross profit grew faster than sales and gross margin expanded to 74.2%, helped by operating efficiencies, mix, and a one-time $3.1 million tariff refund.
| Q3 2026 | Q3 2025 | Consensus / prior guide | |
|---|---|---|---|
| Revenue (Financial Statements) | $221.6M (+14.9%) | $192.9M | ~$222.2M |
| Gross margin (Financial Highlights) | 74.2% (+310 bps) | 71.1% | |
| Adjusted EBITDA (EBITDA reconciliation) | $51.2M (+137.4%) | $21.6M | |
| Adjusted diluted EPS (EPS reconciliation) | $0.82 | $(0.06) | ~$0.02 |
| FY2026 revenue guidance (Guidance) | $890M-$895M | $870M-$880M prior | |
| FY2026 adjusted EBITDA margin (Guidance) | 15.5%-16.0% | 11.5%-12.5% prior |
Profitability was the real upside. Adjusted EBITDA more than doubled to $51.2 million, while adjusted operating expenses fell year over year despite continued investment. The adjusted EPS beat is unusually large because the quarter excludes a $49.8 million litigation settlement and other special costs, so it is not equivalent to a clean GAAP earnings breakout; still, the underlying gross-margin and cost-control improvement is genuine.
The guidance raise matters more than the tiny revenue miss. Management lifted full-year revenue guidance to $890 million-$895 million from $870 million-$880 million and raised the adjusted EBITDA-margin outlook to 15.5%-16.0% from 11.5%-12.5%. The increase partly reflects the October 5 VitalConnect acquisition and its expected $16 million contribution, so it is not entirely an organic acceleration; nevertheless, the margin reset indicates materially better operating leverage than investors had been modeling.
The main qualification is cash conversion and integration execution. Free cash flow was negative $11.5 million in the quarter, versus positive $20.1 million a year earlier, and the VitalConnect deal had already been announced and closed before this release, making the acquisition itself partly known rather than a fresh surprise. The next proof point is whether iRhythm can integrate the acquired MCT platform without giving back the newly improved margin profile.
Bottom line: This was a strong operational beat beneath a barely missed revenue headline. The higher full-year margin and revenue outlook meaningfully strengthen iRhythm’s execution story, though the EPS upside is inflated by one-time exclusions and VitalConnect still has to integrate cleanly.
VitalConnect integration and 2027 growth update
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