iRhythm Raises 2026 Outlook After VitalConnect Close

The Tip Desk · November 7, 2026 · 3 min read

The digital health company lifted full-year revenue guidance to $890 million to $895 million after third-quarter sales of $221.6 million.

iRhythm Holdings (IRTC) raised its full-year 2026 revenue outlook to $890 million to $895 million and lifted adjusted EBITDA margin guidance to 15.5% to 16.0% after reporting third-quarter results and closing the VitalConnect acquisition.

The digital health care company said third-quarter revenue was $221.6 million, up 14.9% from $192.9 million a year earlier. That year-over-year pace slowed from 20.1% in the second quarter and 25.7% in the first quarter. The company attributed the increase primarily to sustained volume demand across its customer base, including contributions from newer growth channels.

Gross profit was $164.5 million. Gross margin reached 74.2%, a 310-basis-point increase from the year-ago third quarter, after 160 basis points of year-over-year expansion to 72.8% in the second quarter. The company said the gross-profit increase was due primarily to higher volume of Zio services and a one-time tariff-refund benefit of about $3.1 million, and that the margin gain also reflected operational efficiencies, product mix, and disciplined execution.

GAAP net loss widened to $29.9 million, or $0.90 a share, from a $5.2 million loss, or $0.16 a share, a year earlier. The quarter included a $49.8 million litigation settlement. Adjusted net income was $27.8 million, or $0.82 a share, compared with an adjusted net loss of $2.0 million, or $0.06 a share, a year earlier. The company said the adjusted improvement was driven primarily by revenue growth and operating leverage from efficiency initiatives.

Adjusted EBITDA was $51.2 million, and adjusted EBITDA margin was 23.1%. Adjusted operating expenses were $138.6 million. The company said the decline in adjusted operating expenses reflected a disciplined approach to investment while funding growth initiatives.

Free cash flow was negative $11.5 million in the third quarter. Operating cash flow included $50.0 million of Baxter patent litigation settlement costs. Unrestricted cash, cash equivalents, and marketable securities were $560.7 million as of September 30, 2026.

On October 5, 2026, iRhythm completed the acquisition of VitalConnect, a privately held ambulatory cardiac monitoring company, after announcing a definitive agreement in the second quarter. The company said the deal added an FDA-cleared mobile cardiac telemetry offering and advanced its multi-vitals strategy. Full-year 2026 revenue guidance includes about $16 million of expected VitalConnect revenue from the October 5 close through year-end. Adjusted EBITDA margin guidance is inclusive of VitalConnect.

President and Chief Executive Officer Quentin Blackford said demand for Zio Monitor exceeded the company’s expectations in the quarter, driven by volume growth across care settings and channels. The company also said it published three large-scale real-world studies covering Zio AT, Zio Long-Term Continuous Monitoring, and Zio Monitor versus Zio XT in more than 1.7 million total patients, and that it submitted FDA 510(k) applications for pediatric use with Zio Monitor long-term continuous monitoring.

On November 3, 2026, iRhythm closed a new $300 million senior secured revolving credit facility, which the company said provides additional liquidity to support long-term growth objectives.