What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-02-19 compared with 2025-02-20 · 328 added, 285 removed, 936 unchanged (40% of the section changed)

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of iRhythm Technologies, Inc.

To the Board of Directors and Stockholders of iRhythm Holdings, Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

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As of December 31, 2025, the Company’s contractual allowance balance was $46.6 million, a significant portion of which relates to revenue from services provided to patients where contracted third-party payors pay for the service on the patient's behalf.

As disclosed by management, management accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price and records as an adjustment to revenue as a contractual allowance.

As disclosed by management, management accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price and recorded as an adjustment to revenue as a contractual allowance.

The contractual allowance requires judgment by management and is based on historical collections, review of specific outstanding claims and consideration of relevant qualitative factors.

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Marketable securities 347,751 115,956

115,956 97,591

Accounts receivable, net 75,706 79,941

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Operating lease liabilities, current portion 16,686 15,867

15,867 15,159

Total current liabilities 151,890 110,920

Long-term senior convertible notes 649,504 646,443

Debt, noncurrent portion

Other noncurrent liabilities 908 8,579

Operating lease liabilities, noncurrent portion 64,994 74,599

74,599 79,715

Total liabilities 867,296 840,541

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32,526 shares issued and 32,297 shares outstanding at December 31, 2025, respectively;

and 30,954 shares issued and outstanding at December 31, 2023

and 31,621 shares issued and 31,392 shares outstanding at December 31, 2024, respectively

Additional paid-in capital 980,757 874,607

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income 403 165

Accumulated deficit ( 803,446 ) ( 758,895 )

Treasury stock, at cost;

229 and 0 shares at December 31, 2024 and 2023, respectively

229 shares at December 31, 2025 and 2024, respectively

( 25,000 ) ( 25,000 )

Total stockholders’ equity 152,746 90,908

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Selling, general and administrative 492,553 418,565 385,645

Impairment and restructuring charges 641 11,078 26,608

Impairment charges

4,458 641 11,078

Total operating expenses 584,657 523,036 456,967

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Interest income 21,521 21,938 6,353

21,938 6,353 2,350

Interest expense ( 13,154 ) ( 12,821 ) ( 3,650 )

( 12,821 ) ( 3,650 ) ( 4,138 )

Loss on extinguishment of debt — ( 7,589 ) —

( 7,589 ) — —

Other income (expense), net 5,442 1,253 ( 198 )

1,253 ( 198 ) ( 314 )

Total interest and other income (expense), net 13,809 2,781 2,505

Loss before income taxes ( 43,598 ) ( 112,724 ) ( 122,656 )

( 112,724 ) ( 122,656 ) ( 115,886 )

Income tax provision 953 565 750

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Other comprehensive income (loss):

Net change in unrealized (losses) gains from marketable securities

( 21 ) 453 ( 335 )

Net change in unrealized gain (loss) from marketable securities 249 ( 21 ) 453

Cumulative translation adjustment ( 11 ) 298 ( 169 )

298 ( 169 ) —

Comprehensive loss $ ( 44,313 ) $ ( 113,012 ) $ ( 123,122 )

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Comprehensive

Income (Loss) Treasury Stock

Income (Loss) Treasury Stock Total

Stockholders’

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Net loss — — — ( 123,406 ) — — ( 123,406 )

Net change in unrealized loss on marketable securities — — — — ( 335 ) — ( 335 )

Net change in unrealized gain on marketable securities — — — — 453 — 453

Cumulative translation adjustment — — — — ( 169 ) — ( 169 )

Balances at December 31, 2023 30,954 $ 31 $ 855,784 $ ( 645,606 ) $ ( 112 ) $ — $ 210,097

Issuance of common stock in connection with employee equity incentive plans, net 667 — 8,473 — — — 8,473

Purchases of capped call transactions — — ( 72,407 ) — — — ( 72,407 )

Purchase of treasury stock ( 229 ) — — — — ( 25,000 ) ( 25,000 )

Stock-based compensation — — 82,757 — — — 82,757

Net loss — — — ( 113,289 ) — — ( 113,289 )

Net change in unrealized gain on marketable securities — — — — 453 — 453

Net change in unrealized loss on marketable securities — — — — ( 21 ) — ( 21 )

Cumulative translation adjustment — — — — 298 — 298

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Issuance of common stock in connection with employee equity incentive plans, net 905 1 12,606 — — — 12,607

Purchase of capped call transactions — — ( 72,407 ) — — — ( 72,407 )

Purchase of treasury stock ( 229 ) — — — — ( 25,000 ) ( 25,000 )

Stock-based compensation — — 93,544 — — — 93,544

Net loss — — — ( 44,551 ) — — ( 44,551 )

Net change in unrealized loss on marketable securities — — — — ( 21 ) — ( 21 )

Net change in unrealized gain on marketable securities — — — — 249 — 249

Cumulative translation adjustment — — — — ( 11 ) — ( 11 )

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Net loss $ ( 44,551 ) $ ( 113,289 ) $ ( 123,406 )

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation and amortization 20,742 20,715 16,348

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Amortization of premium and accretion of discounts, net ( 3,127 ) ( 1,350 ) ( 5,040 )

( 1,350 ) ( 5,040 ) ( 474 )

Amortization of operating lease right-of-use assets 5,737 5,062 5,796

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Change in fair value of strategic investments ( 5,711 ) ( 1,902 ) —

( 1,902 ) — —

Provision for credit losses and contractual allowances 99,666 73,463 69,628

73,463 69,628 58,349

Acquired in-process research and development 3,036 32,371 —

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Accounts payable and accrued liabilities 28,044 ( 7,408 ) 17,325

( 7,408 ) 17,325 11,480

Deferred revenue 1,269 ( 374 ) 255

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Net cash provided by (used in) operating activities 80,863 3,390 ( 50,101 )

3,390 ( 50,101 ) ( 23,012 )

Cash flows from investing activities

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Purchases of marketable securities ( 466,114 ) ( 118,241 ) ( 164,285 )

( 118,241 ) ( 164,285 ) ( 188,569 )

Sales of marketable securities

Maturities of marketable securities 237,700 101,200 206,500

101,200 206,500 131,000

Purchases of strategic investments ( 2,300 ) ( 57,000 ) ( 3,000 )

( 57,000 ) ( 3,000 ) —

Purchase of acquired in-process research and development — ( 15,000 ) —

( 15,000 ) — —

Net cash used in investing activities ( 277,056 ) ( 122,983 ) ( 1,209 )

( 122,983 ) ( 1,209 ) ( 52,434 )

Cash flows from financing activities

Payment of SVB term loan and termination costs — ( 37,751 ) —

Proceeds from SVB term loan

Proceeds from Braidwell debt — 75,000 —

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Net cash provided by financing activities 12,607 511,381 8,820

511,381 8,820 26,716

Effect of exchange rate changes 1 ( 6 ) ( 169 )

( 6 ) ( 169 ) —

Net increase (decrease) in cash and cash equivalents ( 183,585 ) 391,782 ( 42,659 )

391,782 ( 42,659 ) ( 48,730 )

Cash and cash equivalents, beginning of year 427,955 36,173 78,832

Cash and cash equivalents, end of year $ 244,370 $ 427,955 $ 36,173

Year Ended December 31,

2025 2024 2023

Reconciliation of cash, cash equivalents and restricted cash

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$ 236,012 $ 419,597 $ 36,173

Restricted cash, long term

Restricted cash

$ 8,358 $ 8,358 $ —

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Interest paid

$ 9,919 $ 6,389 $ 2,960

Cash taxes paid

$ 1,196 $ 923 $ 1,130

Cash paid for operating lease liabilities

$ 15,875 $ 15,177 $ 14,105

Cash received from tenant improvement allowances

$ 745 $ 736 $ 1,603

Non-cash investing and financing activities:

Property and equipment costs included in accounts payable and accrued liabilities

$ 407 $ 275 $ 1,888

Right-of-use assets obtained in exchange for operating lease liabilities

$ — $ 4,009 $ 4,403

Capitalized stock-based compensation in property and equipment

$ 5,261 $ 6,779 $ 7,383

The accompanying notes are an integral part of these consolidated financial statements.

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("the Company") was incorporated in the state of Delaware in September 2006.

On January 12, 2026, the Company implemented a corporate holding company structure that resulted in the formation of a new parent holding company (the “Holding Company Transaction”) pursuant to an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) dated as of January 12, 2026, by and among the Company, iRhythm Holdings, Inc., a Delaware corporation ("iRhythm Holdings"), and LTCM Merger Sub, Inc., a Delaware corporation and a then- direct, wholly owned subsidiary of iRhythm Holdings (“Merger Sub”).

Pursuant to the terms of the Merger Agreement, Merger Sub merged with and into the Company, with the Company continuing as the surviving corporation and a wholly owned subsidiary of iRhythm Holdings (the “Merger”).

Following the Merger, iRhythm Holdings became the successor issuer and registrant to the Company.

Because the Holding Company Transaction occurred after the date of these financial stateme nts, unless expressly indicated or the context requires otherwise, for purposes of the consolidated financial statements and notes contained within, the term “the Company,” refers to iRhythm Technologies and its consolidated subsidiaries.

The Company is a leading digital healthcare company that creates trusted solutions that detect, predict, and prevent disease.

The Company's principal business is the design, development, and commercialization of device-based technology to provide remote cardiac monitoring services that it believes allow clinicians to diagnose certain arrhythmias quicker and with greater efficiency than other services that rely on traditional technology.

The Company's principal business is the design, development, and commercialization of device-based technology to provide ambulatory cardiac monitoring services that it believes allow clinicians to diagnose certain arrhythmias quicker and with greater efficiency than other services that rely on traditional technology.

Since first receiving clearance from the U.S.

Food and Drug Administration (“FDA”) for the Company's technology in 2009, the Company has supported physician and patient use of its technology and provided remote cardiac monitoring services from its Medicare-enrolled independent diagnostic testing facilities (“IDTFs”) and its qualified technicians.

The Company has provided the Zio remote cardiac monitoring services, including extended Holter, traditional Holter, and mobile cardiac telemetry (“MCT”) monitoring services (“Zio Services”), using the Zio Systems.

Food and Drug Administration (“FDA”) for the Company's technology in 2009, the Company has supported physician and patient use of its technology and provided ambulatory cardiac monitoring ("ACM") services from its Medicare-enrolled independent diagnostic testing facilities (“IDTFs”) and with its qualified technicians.

The Company has provided the Zio ACM services, including long-term continuous monitoring (“LTCM”), short-term continuous monitoring, and mobile cardiac telemetry (“MCT”) monitoring services (collectively, the “iRhythm Services”), using a proprietary system that combines an FDA-cleared and CE-marked wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data, with a proprietary FDA-cleared, CE-marked, Japan PMDA approved cloud-based data analytic software to help physicians monitor patients and diagnose arrhythmias (collectively, the “iRhythm ACM System”).

LTCM services (the “Zio LTCM Service”) and MCT services (the “Zio MCT Service”) are medical procedures typically ordered by physicians for patients not suspected of having life-threatening arrhythmias, but who are suspected of having infrequent, difficult-to-detect, or asymptomatic arrhythmias.

The Company is headquartered in San Francisco, California, which also serves as a clinical center.

The Company has additional clinical centers in Deerfield, Illinois and Houston, Texas, a manufacturing facility in Cypress, California and corporate office space in Solana Beach, California.

The Company has additional clinical centers in Deerfield, Illinois, Houston, Texas, and Manila, Philippines, a manufacturing facility in Cypress, California and corporate office spaces in Solana Beach, California and London, United Kingdom.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany accounts and transactions have been eliminated.

Reclassification

Certain prior period amounts have been reclassified to conform to the current year presentation.

These reclassifications have no impact on previously reported results of operations or financial position.

Risks and Uncertainties

Macroeconomic Factors and Supply Chain Constraints

The Company’s operations and performance may vary based on worldwide economic and political conditions, which have been adversely impacted by continued global economic uncertainty, political instability, and military hostilities in multiple geographies including ongoing geopolitical conflicts, such as the war in Ukraine and conflict in the Middle East, domestic and global inflationary trends, interest rate volatility, potential instability in the global banking system, global supply shortages, and a tightening labor market.

A severe or prolonged economic downturn or period of global political instability could drive hospitals and other healthcare professionals to tighten budgets and curtail spending, which could in turn negatively impact rates at which physicians prescribe the Company’s Zio Services.

The Company’s operations and performance may vary based on worldwide economic and political conditions, which have been adversely impacted by continued global economic uncertainty, political instability, and military hostilities in multiple geographies including ongoing geopolitical conflicts, such as the war in Ukraine and conflicts in the Middle East and Venezuela, domestic and global inflationary trends, interest rate volatility, potential instability in the global banking system, global supply shortages, tariffs on imports, and a tightening labor market.

In addition, higher unemployment rates or reductions in employer-provided benefits plans could result in fewer commercially insured patients, resulting in a reduction in the Company’s margins and impairing the ability of uninsured patients to make timely payments.

A weak or declining economy could also strain the Company’s suppliers, possibly resulting in supply delays and disruptions.

A weak or declining economy, or uncertainty surrounding tariffs, could also strain the Company’s suppliers, possibly resulting in supply delays and disruptions.

There is also a risk that one or more of the Company’s current service providers, suppliers, or other partners may not survive such difficult economic times, which could directly affect the Company’s ability to attain its goals on schedule and on budget.

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The Company cannot predict the timing, strength, or duration of an economic downturn, instability, or recovery, whether worldwide, in the United States, or within its industry.

The Company’s hybrid work arrangements and decision to pursue a sublease for its leased San Francisco headquarters resulted in an impairment of its right-of-use (“ROU”) asset and related leasehold improvements and furniture and fixtures during the years ended December 31, 2023 and 2022.

As the Company continues to evaluate its global real estate footprint, the Company may incur additional impairment charges related to real property lease agreements.

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Reimbursement

The Company receives revenue for the Zio Services primarily from third-party payors, which include commercial payors and government agencies, such as the Centers for Medicare & Medicaid Services (“CMS”).

The Company receives revenue for the iRhythm Services primarily from third-party payors, which include commercial payors and government agencies, such as the Centers for Medicare & Medicaid Services (“CMS”).

Third-party payors require the Company to identify the service for which it is seeking reimbursement by using a Current Procedural Terminology (“CPT”) code set maintained by the American Medical Association.

These CPT codes are subject to periodic change and update, which will impact the reimbursement rates for the Company’s Zio Services.

These CPT codes are subject to periodic change and update, which will impact the reimbursement rates for the Company’s iRhythm Services.

Based on relative value units, CMS annually updates the reimbursement rates for diagnostic tests performed by IDTFs via the Medicare Physician Fee Schedule.

CMS establishes national payment rates for the CPT codes the Company uses to report Zio Services performed by the Company.

Because remote cardiac monitoring technology, including the Zio System, is rapidly evolving, there is a continuing risk that relative value units assigned, and reimbursement rates set, by CMS may not adequately reflect the value and expense of this technology and associated monitoring services, and CMS may reduce these rates in the future, which would adversely affect the Company’s financial results.

CMS establishes national payment rates for the CPT codes the Company uses to report iRhythm Services performed by the Company.

Because remote cardiac monitoring technology, including the iRhythm ACM System, is rapidly evolving, there is a continuing risk that relative value units assigned, and reimbursement rates set, by CMS may not adequately reflect the value and expense of this technology and associated monitoring services, and CMS may reduce these rates in the future, which would adversely affect the Company’s financial results.

Third-party payors globally are increasingly challenging the utilization and overall cost for medical products and services.

The containment of healthcare costs has become a priority of governments on a global basis.

Third-party payors may decline to cover and reimburse claims or portions of claims.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the periods presented.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances, provision for credit losses, the useful lives of property and equipment, the recoverability of long-lived assets, including the estimated usage of the printed circuit board assemblies (“PCBAs”), the incremental borrowing rate for operating leases, fair value of strategic loan investments, accounting for income taxes, impairment of ROU assets, contingent consideration liabilities, and various inputs used in estimating stock-based compensation.

On an ongoing basis, management evaluates its estimates, including those related to revenue recognition, contractual allowances, provision for credit losses, the useful lives of property and equipment, the recoverability of long-lived assets, including the estimated usage of the printed circuit board assemblies (“PCBAs”), the incremental borrowing rate for operating leases, fair value of strategic investments, accounting for income taxes, impairment of ROU assets, contingent consideration liabilities, and various inputs used in estimating stock-based compensation.

Actual results may differ from those estimates.

Fair Value of Financial Instruments

The carrying amounts of certain of the Company’s financial instruments, which include cash equivalents, marketable securities, accounts receivable, accounts payable, accrued liabilities, and debt, approximate fair value due to their short maturities.

The carrying amounts of certain of the Company’s financial instruments, which include cash equivalents, marketable securities, accounts receivable, accounts payable, and accrued liabilities, approximate fair value due to their short maturities.

Cash, Cash Equivalents and Restricted Cash

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Under the terms of certain facility operating lease agreements, the Company is required to maintain a letter of credit as collateral during the term of the lease.

As of December 31, 2024, restricted cash of $ 8.4 million was pledged as collateral under the letter of credit with Silicon Valley Bank.

As of December 31, 2025 and 2024, restricted cash of $ 8.4 million was pledged as collateral under the letter of credit with Silicon Valley Bank.

Fair Value Option

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The Company does not require collateral.

During the first quarter of 2024, the Company experienced a temporary delay in the billing of the Company's contracted and non-contracted payer customers, performed by the Company's third-party claims processing

The delay was due to a cybersecurity incident experienced by Change Healthcare, a division of UnitedHealth Group, which the Company's third-party vendor engages for services relating to billing and collections.

While the Company substantially cleared the billing backlog as of the end of the first quarter of 2024, the delay in billing resulted in a temporary delay in the Company's cash collections.

As of December 31, 2024, the Company has received the majority of its cash collections from the delayed billings.

The delay was due to a cybersecurity incident experienced by Change Healthcare, a division of UnitedHealth Group, in which the Company's third-party vendor did engage for services relating to billing and collections.

While the Company substantially cleared the billing backlog as of the end of the first quarter of

2024, the delay in billing resulted in a temporary delay in the Company's cash collections.

The Company has received the majority of its cash collections from the delayed billings.

The Company records a provision for credit losses based on the assessment of the collectability of customer accounts, considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

CMS accounted for approximately 15 % and 25 % of accounts receivable for the years ended December 31, 2024 and 2023, respectively.

One commercial customer accounted for approximately 13 % of the Company's accounts receivable as of December 31, 2024.

As presented in Note 3, CMS accounted for approximately 24 %, 25 % and 25 % of the Company’s revenue for the years ended December 31, 2024, 2023, and 2022, respectively.

The following table summarizes customers' accounts receivable concentration representing 10% or more of the Company’s accounts receivable, net:

December 31, 2025 December 31, 2024 December 31, 2023

Centers for Medicare and Medicaid

14 % 15 % 25 %

Healthcare Institutions

15 % < 10 % < 10 %

Contracted third-party payors

12 % 13 % < 10 %

Inflationary Risk

The Company continuously monitors the effects of inflationary factors, such as increases in cost of goods sold and selling and operating expenses, which may adversely affect its results of operations.

Specifically, the Company may experience inflationary pressure affecting freight costs, the cost of the components for the Company’s Zio Services, overhead costs relating to maintenance of the Company’s facilities, and in the wages paid to its employees due to challenging labor market conditions.

Specifically, the Company may experience inflationary pressure affecting freight costs, the cost of the components for the Company’s iRhythm Services, overhead costs relating to maintenance of the Company’s facilities, and in the wages paid to its employees due to challenging labor market conditions.

Competitive and regulatory conditions may restrict the Company’s ability to fully recover these costs through price increases.

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These components and materials are critical, and there could be a considerable delay in finding alternative sources of supply.

Inventory owned by the Company is valued at cost, on the first in, first out (“FIFO”) basis, or the lower of cost or net realizable value.

Inventory owned by the Company is valued at the lower of cost or net realizable value, on the first in, first out (“FIFO”) basis.

The Company records write-downs of inventory that is obsolete or in excess of anticipated demand.

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Capitalized internal-use software is amortized, and recognized as cost of revenue or selling, general and administrative expenses, on a straight-line basis over the estimated useful life generally ranging between three to seven years .

The Company reuses PCBAs in each wearable Zio Monitor patch, Zio XT patch, and Zio AT patch, as well as the wireless gateway used in conjunction with the Zio AT patch.

As PCBAs are used in a wearable Zio Monitor patch, Zio XT patch, or Zio AT patch, a portion of the cost of the PCBA is recorded as a cost of revenue.

The Company reuses PCBAs in each wearable Zio monitor, Zio XT, and Zio AT, as well as the wireless gateway used in conjunction with Zio AT.

As PCBAs are used in a wearable Zio monitor, Zio XT, or Zio AT, a portion of the cost of the PCBA is recorded as a cost of revenue.

The Company bases the length of time estimates for charging a portion of the PCBAs cost through several considerations, including evaluation during product development, device loss rates, product launches and obsolescence, and the amount of time it takes the device to go through the manufacturing, shipping, customer shelf, and patient wear time and upload process.

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The Company capitalizes qualified implementation costs incurred in a hosting arrangement that is a service contract for which it is the customer in accordance with the requirements for cloud computing arrangements (“CCA”) to the extent it is incurred in the course of developing internal-use software.

These capitalized implementation costs are generally amortized over the fixed, non-cancellable term of the associated hosting arrangement on a straight-line basis are recorded in prepaid expenses and other current assets or in other noncurrent assets.

The Company amortizes capitalized implementation costs in a CCA on a straight-line basis over the terms of the associated hosting arrangement.

These capitalized implementation costs are generally amortized over the fixed, non-cancellable term of the associated hosting arrangement on a straight-line basis and are recorded in prepaid expenses and other current assets or in other noncurrent assets.

Goodwill represents the excess of the purchase price of an acquired business over the fair value of the underlying net tangible and intangible assets.

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For ROU assets, such circumstances may include subleases that do not fully recover the costs of the associated leases or commitments to sublease a property.

In addition, see Note 7, Impairment and Restructuring Charges , included in the notes to the consolidated financial statements .

Comprehensive Loss

Comprehensive loss represents all changes in stockholders’ equity during the year from non-owner sources.

The Company’s unrealized gains and losses on marketable securities represent the only component of other comprehensive loss that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive loss.

See Note 7, Impairment Charges , included in the notes to the consolidated financial statements .

Comprehensive Income (Loss)

Comprehensive income (loss) represents all changes in stockholders’ equity during the year from non-owner sources.

The Company’s unrealized gains and losses on marketable securities and cumulative translation adjustment represent the only components of other comprehensive income (loss) that are excluded from the reported net loss and that are presented in the consolidated statements of comprehensive income (loss).

Revenue Recognition

The Company has developed proprietary systems that combine a wire-free, patch-based, 14-day wearable biosensor that continuously records ECG data, with a proprietary cloud-based data analytic platform to help physicians monitor patients and diagnose arrhythmias.

The Company currently offers three Zio System options—the Zio Monitor System, the Zio XT System, and the Zio AT System.

The Zio Monitor System is a prescription-only, remote ECG monitoring system that consists of the Zio Monitor patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS algorithm, which supports the capture and analysis of ECG data recorded by the Zio Monitor patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS System.

The final step in the Zio Services is the delivery of an electronic Zio report to the prescribing physician with a summary of preliminary findings.

The Company currently offers three iRhythm ACM System options—the Zio monitor System, the Zio XT System, and the Zio AT System.

The Zio monitor System is a prescription-only, remote ECG monitoring system that consists of the Zio monitor that records the electric signal from the heart continuously for up to 14 days and the ZEUS algorithm, which supports the capture and analysis of ECG data recorded by the Zio monitor at the end of the wear period, including specific arrhythmia events detected by ZEUS.

The final step in the iRhythm Services is the delivery of an electronic Zio report to the prescribing physician with a summary of preliminary findings.

The Company’s Zio monitor services are generally billable when the Zio report is issued to the physician.

The Zio XT System is the previous generation of the Zio Monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, which supports the capture and analysis of ECG data recorded by the Zio XT patch at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm.

The Zio XT System is the previous generation of the Zio monitor System and is a prescription-only, remote ECG monitoring system that consists of the Zio XT that records the electric signal from the heart continuously for up to 14 days and ZEUS, which supports the capture and analysis of ECG data recorded by the Zio XT at the end of the wear period, including specific arrhythmia events detected by the ZEUS algorithm.

The Company’s Zio XT services are generally billable when the Zio report is issued to the physician.

The Zio AT System is a prescription-only, remote ECG monitoring system that similarly consists of the Zio AT patch that records the electric signal from the heart continuously for up to 14 days and the ZEUS System, but which also incorporates the Zio AT wireless gateway that provides connectivity between the Zio AT patch and the ZEUS System during the patient wear period.

The wireless gateway, slightly larger than a smart phone, is provided to the patient at the time of Zio AT patch application and collects and transmits data from the Zio AT patch to the cloud via a long- term evolution protocol.

The Zio AT System is a prescription-only, remote ECG monitoring system that similarly consists of Zio AT that records the electric signal from the heart continuously for up to 14 days and ZEUS, but which also incorporates the Zio AT wireless gateway that provides connectivity between Zio AT and ZEUS during the patient wear period.

The wireless gateway, slightly larger than a smart phone, is provided to the patient at the time of Zio AT placement on the patient and collects and transmits data from the Zio AT to the cloud via a long- term evolution protocol.

The Zio AT service revenue is recognized under two performance obligations — the patient wear period and delivery of electronic Zio reports.

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These contracts also impose a number of obligations regarding billing and other matters, and the Company’s noncompliance with a material term of such contracts may result in a denial of the claim.

The Company accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price recognized as revenue.

Company accounts for denied claims as a form of variable consideration that is included as a reduction to the transaction price recognized as revenue.

The Company makes estimates around the amount of denied claims within a reporting period, a process that requires management judgment.

The estimated denied claims are based on historical information and judgement includes the historical period utilized.

The estimated denied claims are based on historical information and judgment includes the historical period utilized.

The Company monitors the estimated denied claims against the latest available information, and subsequent changes to the estimated denied claims are recorded as an adjustment to revenue in the periods during which such changes occur.

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Direct labor includes payroll-related costs including stock-based compensation involved in manufacturing, clinical data curation, and customer service.

Material costs include both the disposable materials costs of the Zio patches and amortization of the re-usable printed circuit board assemblies (“PCBAs”).

Each Zio XT patch and Zio Monitor patch includes a PCBA, and each Zio AT patch includes a PCBA and gateway board, the cost of which is amortized over the expected useful life of the board.

Material costs include both the disposable materials costs of the Zio patches and amortization of the re-usable PCBAs.

Each Zio XT and Zio monitor includes a PCBA, and each Zio AT includes a PCBA and gateway board, the cost of which is amortized over the expected useful life of the board.

Research and Development

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Acquired in-process research and development (“IPR&D”) assets, as a result of an asset acquisition, for use in research and development activities with no alternative future use are expensed in the consolidated statements of operations on the acquisition date.

Accounting for acquisitions of IPR&D requires the Company to make certain judgements to determine if the transaction should be accounted for as an asset acquisition or a business combination, as well as assess if the IPR&D acquired has alternative future use in research and development activities.

Accounting for acquisitions of IPR&D requires the Company to make certain judgments to determine if the transaction should be accounted for as an asset acquisition or a business combination, as well as assess if the IPR&D acquired has alternative future use in research and development activities.

Selling, General and Administrative Expenses

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Other significant costs include travel expenses, consulting, public relations costs, direct marketing, tradeshow and promotional expenses and allocated facility overhead costs.

The Company incurred an immaterial amount of advertising expense during each of the years ended December 31, 2024, 2023, and 2022, which is included in selling, general and administrative expenses.

The Company’s general and administrative expenses consist primarily of payroll-related costs for executive, finance, legal and administrative personnel, including stock-based compensation.

The Company incurred $ 1.2 million, $ 1.2 million, and $ 1.1 million of advertising expense during each of the years ended December 31, 2025, 2024, and 2023, respectively, which is included in selling, general and administrative expenses.

The Company’s general and administrative expenses consist primarily of personnel costs for executive, finance, legal and administrative personnel, including stock-based compensation.

Other significant expenses include professional fees for legal and accounting services, consulting fees, recruiting fees, bad debt expense, third-party patient claims processing fees, business transformation, and travel expenses.

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The stock-based compensation is reduced by the estimated forfeiture and is expensed on a straight-line basis over the offering period.

Net Loss per Common Share

Net Income (Loss) per Common Share

Basic net income per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighted-average number of common shares outstanding during the period.

Diluted net income per share is computed using the weighted average number of common shares outstanding during the period and, when dilutive, potential common share equivalents.

Basic net loss per common share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period, without consideration of potentially dilutive securities.

Diluted net loss per common share is the same as basic net loss per common share for all periods presented, since the effect of potentially dilutive securities are anti-dilutive.

Potentially dilutive common shares consist of shares issuable from stock options, RSUs, PRSUs, and the Company’s senior convertible notes due 2029 (the “2029 Notes”).

Potentially dilutive common shares issuable upon vesting of RSUs, PRSUs are determined using the average share price for each period under the treasury stock method.

Potentially dilutive common shares issuable upon conversion of the Company's senior convertible notes are determined using the if-converted method.

In periods of net losses, we exclude all potentially dilutive common shares from the computation of the diluted net loss per share for those periods as the effect would be anti-dilutive

Recently adopted accounting pronouncements

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07 (“ASU 2023-07”), Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures , which updates reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses.

The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024.

The Company adopted ASU 2023-07 during the year ended December 31, 2024.

See Note 3, Business Segment and Revenue, for disclosure within the notes to the Company's consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU No.

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Two primary enhancements related to this ASU include disaggregating existing income tax disclosures relating to the effective tax rate reconciliation and income taxes paid.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis.

Early adoption is permitted.

The Company is currently evaluating this ASU to determine its impact on the Company's financial statement disclosures.

On March 6, 2024, the SEC adopted SEC Release Nos.

34-99678, The Enhancement and Standardization of Climate-Related Disclosures for Investors , to require the disclosure of certain climate-related information in registration statements and annual reports, including Scope 1 and 2 emissions and information about climate-related risks that have materially impacted, or are reasonably likely to have a material impact on, a company’s business strategy, results of operations, or financial condition.

In addition, under the final rules, certain disclosures related to severe weather events and other natural conditions will be required in audited financial statements.

The disclosure requirements will begin phasing in for the Company's reports and registration statements including financial information in the fiscal year ending December 31, 2025.

In April 2024, the SEC issued an order staying the final rules until the completion of judicial review.

The Company is currently evaluating the impact of this final rule on the Company's consolidated financial statements and related disclosures.

ASU 2023-09 is effective for annual periods beginning after December 15, 2024 and may be applied on either a prospective or a retrospective basis.

The Company adopted this ASU for the year ended December 31, 2025 on a prospective basis.

Prior period disclosures have not been adjusted to reflect the new disclosure requirements.

See Note 10, Income Taxes, for disclosure within the notes to the Company's consolidated financial statements.

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures , which requires disclosure about the types of costs and expenses included in certain expense captions presented on the income statement.

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The Company is currently in the process of evaluating the impact of this pronouncement on its related disclosures.

In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversion and Other Options.

The ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The ASU is effective for annual reporting periods beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted.

The ASU may be applied on either a prospective or a retrospective basis.

The Company is currently evaluating this ASU to determine its impact on the Company's consolidated financial statements and related disclosures.

In May 2025, the FASB issued ASU 2025-03, "Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (VIE)." This standard clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a VIE that meets the definition of a business.

The standard is effective for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years.

Early adoption is permitted, and the standard is to be applied prospectively to acquisitions after the adoption date.

The Company is currently evaluating the impact that the adoption of this new standard may have on the Company's consolidated financial statements and related disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient to measure credit losses on current accounts receivable and current contract assets.

The practical expedient assumes that current conditions as of the balance sheet will persist through the reasonable and supportable forecast period of eligible assets.

The ASU is effective for fiscal years beginning after December 15, 2025, and interim periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact that the adoption of this new standard may have on the Company's consolidated financial statements and related disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting for software costs.

The new guidance amends the existing standard that refers to various stages of a software development project to align better with the current software development methods, such as agile programming.

The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods, with early adoption permitted.

The ASU may be applied on either a prospective or a retrospective basis.

The Company is currently evaluating the impact that the adoption of this new standard may have on the Company's consolidated financial statements and related disclosures.

In December 2025, the FASB issued ASU 2025-11 Interim Reporting (Topic 270) related to interim disclosure requirements.

The amendments in this update clarify current interim disclosure requirements and provide a comprehensive list of required interim disclosures.

The update also incorporates a disclosure principle that requires entities to disclose material events that occur after the end of the last annual reporting period.

This update is effective for interim periods within annual periods beginning after December 15, 2027, though early adoption is permitted.

The Company is currently evaluating the impact that the adoption of this new standard may have on the Company's interim consolidated financial statements and related disclosures.

BUSINESS SEGMENT AND REVENUE

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The measure of segment assets is reported on the consolidated balance sheets as total assets.

Significant segment expenses within loss from operations, as well as within net loss, include cost of revenue, research and development, acquired in-process research and development, selling, general and administrative expenses, and impairment and restructuring charges which are each separately presented on the Company’s consolidated statements of operations.

Significant segment expenses within loss from operations, as well as within net loss, include cost of revenue, research and development, acquired in-process research and development ("IPR&D"), selling, general and administrative expenses, and impairment and restructuring charges which are each separately presented on the Company’s consolidated statements of operations.

Other segment items within net loss include interest and other income (expense), net, and income tax provision.

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Revenue generated from the United States comprised substantially all of the Company's revenue.

No other country comprised 10% or greater of the Company's revenue during each of the years ended December 31, 2024, 2023, and 2022.

No other country or customer, with the exception of CMS, comprised 10% or greater of the Company's revenue during each of the years ended December 31, 2025, 2024, and 2023.

Accounts Receivable, Provision for Credit Losses, and Contractual Allowances

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The Company establishes a provision for credit losses for estimated uncollectible receivables based on its assessment of the collectability of customer accounts and recognizes the provision as a component of selling, general and administrative expenses.

The Company records a provision for contractual allowances based on the estimated differences between contracted amounts and expected collection rates for services performed.

Such provisions are based on the Company's historical experience and are reported as a reduction of revenue.

The Company records a provision for contractual allowances, as a reduction of revenue, based on the estimated differences between contracted amounts and expected collection rates for services performed.

Such provisions are based on the Company's historical experience and expected future claims denials.

The Company updates the estimate for this provision each reporting period.

The Company regularly reviews the allowances by considering factors such as historical experience, credit quality, the age of the accounts receivable balances, and current economic conditions that may affect a customer’s ability to pay.

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Provision for credit losses 30,835 22,583 17,105

22,583 17,105 17,191

( 26,624 ) ( 15,291 ) ( 12,728 )

Write-offs ( 32,448 ) ( 26,624 ) ( 15,291 )

Balance, end of year $ 14,635 $ 16,248 $ 20,289

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provision for contractual adjustments 68,831 50,880 52,523

50,880 52,523 41,158

contractual adjustments ( 70,866 ) ( 52,608 ) ( 41,223 )

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ASC 606, Revenue from Contracts with Customers , requires an entity to present a revenue contract as a contract liability when the Company has an obligation to transfer goods or services to a customer for which the Company has received consideration from the customer, or an amount of consideration from the customer is due and unconditional (whichever is earlier).

Certain of the Company’s customers pay the Company directly for the Zio XT service upon shipment of devices.

Certain of the Company’s customers pay the Company directly for the Zio LTCM Service upon patient registration or shipment of devices.

Such advance payments are recognized as deferred revenue and are recorded as revenue when Zio reports are delivered to the healthcare provider.

During the years ended December 31, 2024 and 2023, $ 3.1 million and $ 3.0 million related to the contract liability balance at the beginning of 2024 and 2023, was recognized as revenue.

During the years ended December 31, 2025 and 2024, $ 2.9 million and $ 3.1 million related to the contract liability balance at the beginning of 2025 and 2024 was recognized as revenue, respectively.

The deferred revenue liability was $ 4.2 million and $ 2.9 million as of December 31, 2025 and 2024, respectively.

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Total cash equivalents and marketable securities $ 489,890 $ 285 $ ( 1 ) $ 490,174

$ 317,121 $ 57 $ — $ 317,178

Classified as:

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Total cash equivalents and marketable securities $ 317,121 $ 57 $ — $ 317,178

$ 110,128 $ 59 $ ( 2 ) $ 110,185

Classified as:

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Unrealized gains (losses) during the years ended December 31, 2025, 2024, and 2023 were not material.

As of December 31, 2024, the weighted average maturity for the Company's marketable securities was 211 days.

As of December 31, 2025 and 2024, all marketable securities are classified as available for sale, with contractual maturities due within one year or less.

The weighted average maturity for the Company's marketable securities as of December 31, 2025 and 2024 was 148 days and 211 days, respectively.

FAIR VALUE MEASUREMENTS

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Strategic investments — — 69,913 69,913

— — 61,902 61,902

Total $ 142,423 $ 347,751 $ 69,913 $ 560,087

Contingent consideration — — 20,407 20,407

— — 17,371 17,371

$ — $ — $ 17,371 $ 17,371

Total $ — $ — $ 20,407 $ 20,407

December 31, 2024

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Strategic investments — — 61,902 61,902

— — 3,000 3,000

Total $ 40,654 $ 276,524 $ 61,902 $ 379,080

Contingent consideration

— — 17,371 17,371

$ — $ — $ 17,371 $ 17,371

Fair Value of Strategic Investments

The Company hold strategic investments upon which it measures the fair value on a recurring basis.

The carrying value of these investments are $ 61.9 million and $ 3.0 million as of December 31, 2024 and December 31, 2023, respectively.

The Company holds strategic investments upon which it measures the fair value on a recurring basis.

The carrying value of these investments are $ 69.9 million and $ 61.9 million as of December 31, 2025 and 2024, respectively.

The Company's strategic investments are with privately held companies, and as such, limited information is available.

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The loan investments can convert into preferred shares of BioIS based upon certain qualifying financing events.

The aggregate fair value of the strategic loan investments is $ 56.4 million as of December 31, 2024.

The aggregate fair value of the BioIS strategic loan investments is $ 63.7 million and $ 56.4 million as of December 31, 2025 and 2024, respectively.

In accordance with ASC 820, Fair Value Measurement , the Company elected to apply the fair value option to these strategic loan investments, with changes in fair value reported within other income (expense), net in the Company's consolidated statements of operations at each reporting period.

During the year ended December 31, 2024, the Company increased the fair value of the strategic loan investments by $ 1.4 million.

During the year ended December 31, 2025 and 2024, the Company increased the fair value of the strategic loan investments by $ 7.3 million and $ 1.4 million, respectively.

The fair value of the loan investments in BioIS is determined by using a probability-weighted expected return model (“PWERM”) and a discounted cash flow valuation model with scenarios that correspond to the contractual settlement events.

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These unobservable inputs represent a Level 3 measurement, as they are supported by little or no market activity and reflect the Company's own assumptions in measuring fair value.

The recurring Level 3 fair value measurements of the loan investment include the following significant unobservable inputs as of December 31, 2024:

December 31, 2024

In June 2025, BioIS achieved the first of two regulatory milestones.

As of December 31, 2025, BioIS and the Company are in the process of completing all required contractual conditions in order to cancel $ 10.0 million in strategic loan investments plus accrued and unpaid interest.

Refer to Note 8, Commitments and Contingencies for further discussion.

The following table sets forth the recurring Level 3 fair value measurements of the loan investment including the significant unobservable inputs:

December 31, 2025 December 31, 2024

Discount rate 10.8 % 12.0 %

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Expected years (range) 2026 - 2029 2025 - 2029

In November 2024, the Company made a $ 2.0 million strategic loan investment in a separate privately-held company.

During the year ended December 31, 2025, the Company made a $ 2.3 million strategic loan investment in a separate privately-held company.

The fair value of the strategic loan investment was $ 2.4 million as of December 31, 2025 .

During the year ended December 31, 2024, the Company made a $ 2.0 million strategic loan investment in a separate privately-held company.

During the fourth quarter and year ended December 31, 2025, the Company recorded a full reserve against this strategic loan investment.

The fair value of the strategic loan investment was nil and $ 2.0 million as of December 31, 2025 and December 31, 2024, respectively.

The change in fair value is recorded within other income (expense), net in the Company’s consolidated statements of operations.

During the year ended December 31, 2023, the Company made a $ 3.0 million strategic equity investment in a separate privately-held company.

During the year ended December 31, 2024, the Company increased the fair value of the strategic equity investment by $ 0.5 million.

The carrying value of the strategic equity investment is $ 3.5 million as of December 31, 2024.

During the years ended December 31, 2025 and 2024, the Company increased the fair value of this strategic equity investment by $ 0.3 million and $ 0.5 million, respectively.

The carrying value of this strategic equity investment is $ 3.8 million and $ 3.5 million as of December 31, 2025 and 2024, respectively.

The change in fair value is recorded within other income (expense), net in the Company’s consolidated statements of operations.

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December 31, 2025 Year Ended

December 31, 2024 Year Ended

December 31, 2023

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Balance, end of period $ 69,913 $ 61,902 $ 3,000

$ 61,902 $ 3,000

Contingent Consideration Liabilities

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Refer to Note 8, Commitments and Contingencies, for further details relating to the BioIS contingent consideration liabilities.

The recurring Level 3 fair value measurements of contingent consideration liabilities associated with the development agreement milestones include the following significant unobservable inputs as of December 31, 2024:

December 31, 2024

The following table sets forth the recurring Level 3 fair value measurements of contingent consideration liabilities associated with the development agreement milestones including the significant unobservable inputs:

December 31, 2025 December 31, 2024

Probability of achievement (range) 79.0 % - 100.0 %

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Expected years 2026 2025 - 2026

During the year ended December 31, 2025, the Company increased the probability of achievement assumptions based upon the projected achievement of a remaining future regulatory milestone.

Refer to Note 8, Commitments and Contingencies, for further details relating to the BioIS regulatory milestones.

Contingent consideration liabilities for BioIS at the inception of acquisition of the licensed technology were $ 17.0 million.

Contingent consideration liabilities were $ 17.4 million and nil as of December 31, 2024 and 2023, respectively, with the current portion included within accrued liabilities and the noncurrent portion included within other noncurrent liabilities in the Company’s consolidated balance sheet.

Contingent consideration liabilities were $ 20.4 million and $ 17.4 million as of December 31, 2025 and 2024, respectively, and were included in accrued liabilities in the Company’s consolidated balance sheet.

The following table sets forth the changes in the estimated fair value of the Company’s contingent consideration liabilities measured on a recurring basis (Level 3) (in thousands):

December 31, 2025 Year Ended

December 31, 2024

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Balance at end of period $ 20,407 $ 17,371

Fair Value of Senior Convertible Notes and SVB Term Loan

The fair value, based on a quoted market price (Level 1), of the Company’s senior convertible notes due 2029 (the “2029 Notes”) is as follows (in thousands):

The following table sets forth the balances of the contingent consideration liabilities (in thousands):

December 31, 2025 December 31, 2024

Accrued liabilities $ 20,407 $ 9,701

Other noncurrent liabilities — 7,670

Balance at end of period $ 20,407 $ 17,371

Fair Value of Senior Convertible Notes

The fair value, based on a quoted market price (Level 1), of the Company’s 2029 Notes is as follows (in thousands):

December 31, 2025 December 31, 2024

Senior Convertible Notes due 2029 $ 924,097 $ 641,214

$ 641,214 $ —

The Company's SVB Term Loan debt obligation as of December 31, 2023 is classified as a Level 2 input.

The fair value of the Company's outstanding interest-bearing obligation as of December 31, 2023 approximated the carrying value of $ 35.0 million.

BALANCE SHEET COMPONENTS

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Raw materials and work-in-progress $ 10,645 $ 5,863

$ 5,863 $ 6,299

Finished goods 10,989 8,176

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Strategic equity investments 3,849 3,495

$ 61,902 $ 3,000

Total $ 69,913 $ 61,902

Other assets consisted of the following (in thousands):

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Other 1,694 1,924

$ 41,852 $ 45,039

The Company reuses PCBAs in each wearable Zio Monitor patch, Zio XT patch, and Zio AT patch, as well as the wireless gateway used in conjunction with the Zio AT patch.

As PCBAs are used in a wearable Zio Monitor patch, Zio XT patch, or Zio AT patch, a portion of the cost of the PCBA is recorded as a cost of revenue.

Total $ 44,718 $ 41,852

The Company reuses PCBAs in each wearable Zio monitor, Zio XT, and Zio AT, as well as the wireless gateway used in conjunction with Zio AT.

As PCBAs are used in a wearable Zio monitor, Zio XT, or Zio AT, a portion of the cost of the PCBA is recorded as a cost of revenue.

Charges to cost of revenue were $ 17.5 million, $ 13.7 million, and $ 9.0 million as of December 31, 2025, 2024, and 2023, respectively.

During the year ended December 31, 2024, PCBAs decreased by $ 4.3 million primarily driven by accelerated Zio XT PCBA amortization in conjunction with the commercial launch of Zio Monitor.

The Company recorded $ 2.7 million, $ 1.4 million, and $ 0.6 million amortization expense during the years ended December 31, 2024, 2023, and 2022, respectively, related to capitalized implementation costs in a CCA.

Property and Equipment

During the year ended December 31, 2025, PCBAs increased by $ 4.3 million primarily driven by additional purchases for Zio monitor and Zio AT to support the growth in commercial volumes.

The Company recorded $ 2.6 million, $ 2.7 million, and $ 1.4 million amortization expense during the years ended December 31, 2025, 2024, and 2023, respectively, related to capitalized implementation costs in the Company's cloud computing arrangements.

Property and Equipment, Net

Property and equipment, net consisted of the following (in thousands):

Useful Life 2025 2024

Laboratory and manufacturing equipment 2 to 7

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28,975 27,121

Internal-use software in service

Internal-use software in service 3 to 7

91,763 79,660

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Depreciation and amortization expense for the years ended December 31, 2025, 2024 and 2023 was $ 20.7 million, $ 20.7 million and $ 16.3 million, respectively, of which amortization related to internal-use software, was $ 14.5 million, $ 14.9 million, and $ 12.2 million, for the years ended December 31, 2025, 2024 and 2023, respectively.

During the year ended December 31, 2025, internal-use software both in service and in development increased by a combined $ 40.3 million, net of impairments .

This increase is related to internally developed and third-party expenditures for enhancements in the Company's core technology, products, and services and artificial intelligence.

Accrued Liabilities

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Accrued expenses 20,464 16,044

16,044 14,891

Claims payable 1,542 2,011

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Total accrued liabilities $ 128,747 $ 84,900

During the years ended December 31, 2024 and 2023, the Company incurred expenses in connection with efforts to streamline and globalize its operations.

As of December 31, 2024 and 2023, globalization costs included within accrued payroll and related expenses were de minimis and $ 2.4 million, respectively.

IMPAIRMENT AND RESTRUCTURING CHARGES

The Company's restructuring and impairment charges consisted of the following (in thousands):

Year Ended December 31,

2024 2023 2022

Restructuring charges $ — $ — $ 3,444

IMPAIRMENT CHARGES

Total $ 641 $ 11,078 $ 26,608

Restructuring

The following table provides a summary of changes in the liability associated with the restructuring plan during 2022 (in thousands):

Employee Severance

Balance as of December 31, 2022

Cash Payments

Balance as of December 31, 2023

In February 2022, the Company's board of directors (the “Board”) approved a restructuring plan (”2022 Restructuring Plan”) to allow it to effectively and efficiently scale its business, which resulted in total severance and other employment related costs of $ 3.4 million during the year ended December 31, 2022.

The Company's impairment charges consisted of the following (in thousands):

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The Company initiated an effort to pursue a sublease of one floor (approximately 50%) of its San Francisco, California facility.

As a result, the Company recorded an impairment charge of $ 23.2 million, consisting of its ROU asset and property and equipment (inclusive of leasehold improvements and furniture and fixtures) of $ 20.5 million and $ 2.7 million, respectively.

The impairment was recorded to impairment and restructuring charges within the consolidated statements of operations for the year ended December 31, 2022.

At December 31, 2023, the Company recorded an additional impairment of its ROU asset and related property and equipment (inclusive of leasehold improvements and furniture and fixtures) for its headquarters in San Francisco, California.

Due to continued declining real estate rental market conditions within San Francisco, California, the Company evaluated projected future cash flows related to the Company’s headquarters as compared to the remaining carrying value of the associated ROU asset and property and equipment.

As a result, the Company recorded an additional impairment charge of $ 11.1 million, consisting of its ROU asset and property and equipment (inclusive of leasehold improvements and furniture and fixtures) of $ 9.9 million and $ 1.2 million, respectively.

The impairment was recorded to impairment and restructuring charges within the consolidated statements of operations for the year ended December 31, 2023.

During the year ended December 31, 2023, as a result of the continued declining real estate rental market conditions within San Francisco, California, the Company recorded an impairment charge of $ 11.1 million, consisting of its ROU asset and property and equipment (inclusive of leasehold improvements and furniture and fixtures) of $ 9.9 million and $ 1.2 million, respectively.

The impairment was recorded to impairment charges within the consolidated statements of operations for the year ended December 31, 2023.

Significant judgment and estimates are required in assessing impairment of ROU assets, including identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, and determining appropriate discount rates.

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Commitments and Contingencies .

During the year ended December 31, 2024, the Company recorded an impairment charge of $ 0.6 million within the Company’s consolidated statements of operations related to internal-use software in development not expected to be completed.

No impairment charge related to internal-use software has been recognized for the years ended December 31, 2023 and 2022.

During the years ended December 31, 2025 and 2024, the Company recorded an impairment charge of $ 4.5 million and $ 0.6 million, respectively, within the Company’s consolidated statements of operations related to internal-use software in development not expected to be completed and placed in-service.

No impairment charge related to internal-use software has been recognized for the year ended December 31, 2023.

Refer to Note 8, Commitments and Contingencies, for further details relating to the internal-use software impairment charges recognized associated with the Company's development collaboration with Verily Life Sciences LLC during the year ended December 31, 2025.

COMMITMENTS AND CONTINGENCIES

Purchase Commitments

As of January 1, 2025, the Company's purchase commitments totaled $ 69.1 million, primarily related to inventory and revenue cycle front end service fees and expected to be due within a year.

As of December 31, 2025, the Company's purchase commitments totaled $ 71.4 million, primarily related to inventory and revenue cycle service fees and expected to be due within a year.

The Company leases office, manufacturing, and clinical centers under non-cancelable operating leases which expire on various dates through 2033.

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The Company recognized $ 4.0 million in additional ROU assets and lease liabilities upon commencement of the amended lease.

Total lease payments for the Solana Beach Lease approximate $ 9.6 million.

In August 2023, the Company entered into a five-year facility lease in Manila, Philippines, in order to further globalize the Company's operational footprint as a business service center.

The lease provides an option to extend the term of the lease for two periods of five years beyond the initial term, which the Company is not reasonably certain to exercise and therefore was not considered in determining the ROU assets and lease liabilities balance.

Total lease payments approximate $ 2.0 million as of the lease commencement date.

Total lease payments for the Solana Beach Lease approximate $ 9.6 million as of the lease commencement date.

Contractual obligations under operating lease liabilities were as follows (in thousands):

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Total lease liabilities $ 81,680

Other information related to the operating leases were as follows (in thousands):

Other information related to the operating leases were as follows:

Year Ended December 31,

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Operating lease expense (in thousands) $ 12,045 $ 11,831 $ 12,861

$ 11,831 $ 12,861 $ 13,524

Weighted average remaining lease term (years) 5.8 6.8 7.8

Weighted average discount rate (percentage) 7.2 % 7.3 % 7.3 %

Self-Insured Health Plan

As of January 1, 2025, the Company transitioned from a fully-insured program to a self-insurance program to cover U.S.

employees and their dependent health benefits.

As part of the program, the Company also has stop-loss coverage from a third party which limits the exposure to large claims.

The Company records a liability associated with these benefits by utilizing a third-party actuarial specialist, that includes both an estimate of claims filed and incurred but not yet reported based upon historical claims experience.

As of December 31, 2025, the Company's accrued health benefits liability was $ 2.6 million which is included within accrued liabilities on the Company's consolidated balance sheets.

Legal Proceedings

From time to time, the Company is involved in claims and legal proceedings or investigations, that arise in the ordinary course of business.

Such matters could have an adverse impact on the Company's reputation, business, and financial condition and divert the attention of its management from the operation of the Company's business.

Such matters could have an adverse impact on the Company's reputation, business, and financial condition and divert the attention of its management from the operation of its business.

These matters are subject to many uncertainties and outcomes that are not predictable.

On February 6, 2024, a putative class action lawsuit was filed in the United States District Court for the Northern District of California alleging that the Company and its current Chief Executive Officer, Quentin Blackford, its former Chief Financial Officer, Brice Bobzien, and its former Chief Financial Officer and former Chief Operating Officer, Douglas Devine violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder, and seeks unspecified damages purportedly sustained by the class.

On February 6, 2024, a putative class action lawsuit was filed in the United States District Court for the Northern District of California alleging that the Company and the Company's current Chief Executive Officer, Quentin Blackford, its former Chief Financial Officer, Brice Bobzien, and its former Chief Financial Officer and former Chief Operating Officer, Douglas Devine, violated Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5 promulgated thereunder, and seeks unspecified damages purportedly sustained by the class.

On July 19, 2024, an amended complaint was filed, naming the Company, Mr.

Blackford, Mr.

Devine, its Chief Commercial Officer Chad Patterson, its former Chief Technology Officer Mark Day, and its Chief Medical Officer, Chief Scientific Officer, and Executive Vice President of Product Innovation Mintu Turakhia as defendants.

On October 7, 2024, a second amended complaint was filed to include events from the recent FDA inspections, but otherwise included the same claims under the Exchange Act.

On December 10, 2024, defendants filed a motion to dismiss.

The Company's board members and certain of its current and former executives were named as defendants in two complaints filed as stockholder derivative actions in the United States District Court for the District of Delaware and the United States District Court for the Northern District of California, respectively.

iRhythm is named as a nominal defendant in both complaints.

The cases make similar allegations to those in the securities class action complaint described above and both cases have both been stayed pending the resolution of motion to dismiss briefing in the securities class action.

Devine, the Company's Chief Commercial and Product Officer Chad Patterson, the Company's former Chief Technology Officer Mark Day, and the Company's Chief Medical Officer, Chief Scientific Officer, and Executive Vice President of Advanced Technologies, Mintu Turakhia, as defendants.

On October 7, 2024, a second amended complaint was filed against the defendants to include events from FDA inspections, but otherwise included the same claims under the Exchange Act.

On December 10, 2024, the defendants filed a motion to dismiss.

On June 3, 2025, the Court granted in part the defendants’ motion to dismiss, including the dismissal of all individual defendants except for Mr.

On November 3, 2025, the plaintiff filed a motion to certify the case as a class action, which the defendants later opposed by motion.

Discovery is ongoing.

The Company's board members and certain of its current executives and former executives of the Company were named as defendants in two complaints filed as stockholder derivative actions in the United States District Court for the District of Delaware and the United States District Court for the Northern District of California, respectively.

The Company is named as a nominal defendant in both complaints.

The cases make similar allegations to those in the securities class action complaint described above and both derivative cases have been stayed pending the resolution of the securities class action.

The Company believes the above securities class action and derivative lawsuits to be without merit and plans to continue to defend itself vigorously.

On March 26, 2021, the Company received a grand jury subpoena from the U.S.

Attorney’s Office for the Northern District of California requesting information related to communications with the FDA and its products and services.

Attorney’s Office for the Northern District of California requesting information related to communications with FDA and its products and services.

On September 13, 2021, the Company received a second subpoena requesting additional information.

On April 4, 2023, the Company received a Subpoena Duces Tecum from the Consumer Protection Branch, Civil Division of the U.S.

Department of Justice (the “DOJ”), requesting production of various documents regarding our products and services.

Department of Justice (the “DOJ”), requesting production of various documents regarding the Company's products and services.

The Company is cooperating fully on these matters.

On July 1, 2024, the DOJ filed with the United States District Court for the Northern District of California a Petition for Order to Show Cause and Application for Enforcement with respect to the production of certain documentary materials which the Company asserts are protected by legal privileges.

The Company defended its privilege assertions over such materials in its response to the DOJ’s petition.

The matter has been briefed, and oral argument is scheduled for March 6, 2025.

On February 20, 2024, Welch Allyn, a subsidiary of Hill-Rom Holdings, Inc.

now part of Baxter International, Inc., filed a lawsuit against the Company in the United States District Court for the District of Delaware, alleging that its Zio devices infringe certain of Welch Allyn's patents and that the Company's infringement was willful.

The Company filed a motion to dismiss Welch Allyn’s willful infringement claims on April 11, 2024.

Welch Allyn filed an amended complaint on April 24, 2024 that continued to allege that the Company's devices infringe certain of its patents and that the Company's infringement was willful.

The Company filed a motion to dismiss Welch Allyn’s willful infringement allegations found in the amended complaint on May 22, 2024 and a hearing on the motion to dismiss was held on January 28, 2025.

After hearing arguments, the Court granted the Company's motion and the willful infringement claims in the amended complaint were dismissed without prejudice.

Welch Allyn filed a second amended complaint adding additional patent claims on February 14, 2025.

The Company is preparing to file a response to the allegations found in the second amended complaint no later than March 21, 2025.

On July 1, 2024, the DOJ filed with the United States District Court for the Northern District of California a Petition for Order to Show Cause and Application for Enforcement against the Company with respect to the production of certain documentary materials which the Company asserts are protected by legal privileges.

On May 30, 2025 following a hearing on the issue, the District Court ordered the Company to disclose certain of the documents, finding that the Company had waived its asserted legal privileges.

The Company has appealed the District Court's order to the Ninth Circuit Court of Appeals.

On July 17, 2025, the Ninth Circuit Court of Appeals stayed the District Court's production order until the appeal is resolved.

Both parties submitted initial briefing on the merits, and the Company's reply brief to the government is due in late February 2026.

The Company intends to continue to defend its privilege assertions over the documents at issue.

Regardless of the outcome of the appeal or the potential disclosure of the documents at issue, it is not clear what, if any, action the DOJ may take following resolution of the dispute over legal privileges.

On December 12, 2025, the Company received a civil investigative demand from DOJ’s Civil Division’s Commercial Litigation Branch seeking information and documents related to Zio AT and our associated claims for reimbursement.

The Company has cooperated, and is continuing to cooperate, fully in connection with these matters.

On February 20, 2024, Welch Allyn, Inc.

("Welch Allyn"), a subsidiary of Hill-Rom Holdings, Inc.

now part of Baxter International, Inc., filed a complaint against the Company in the United States District Court for the District of Delaware, which was amended on April 24, 2024, alleging that its Zio devices infringe certain of Welch Allyn's patents and that its infringement was willful.

Thereafter, the Company successfully petitioned the District Court to dismiss the willful infringement claims without prejudice.

On February 14, 2025, Welch Allyn filed a second amended complaint adding additional patent claims.

On March 21, 2025, the Company filed a response to the allegations found in the second amended complaint, denying all allegations of patent infringement and asserting defenses including patent invalidity.

On October 14, 2025, Welch Allyn filed a third amended complaint adding back claims for willful infringement.

On October 28, 2025, the Company filed a motion to dismiss the willful infringement claims, and that motion remains pending.

On December 23, 2024, the Company filed a petition with the USPTO seeking Inter Partes Review ("IPR") of the Welch Allyn patents asserted in the original complaint.

The IPR petitions became subject to a new consideration for “discretionary denial” of IPRs first announced by the USPTO after the Company filed its petitions.

Under this new basis, the Company's IPRs were denied institution.

The Company filed a Petition for Director review, seeking to vacate the denial in July 2025, but the Petition was denied.

The Company subsequently filed for Ex Parte Reexamination on four of the Welch Allyn patents being asserted, and the USPTO instituted re-examination of those four patents on January 20, 2026.

Welch Allyn seeks money damages and attorneys’ fees.

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(“BardyDx”), a subsidiary of Hill-Rom Holdings, Inc.

now part of Baxter International, Inc., filed a lawsuit against the Company in the United States District Court for the District of Delaware, alleging that our Zio Monitor device infringes one of its patents.

On December 26, 2024, BardyDx filed an amended complaint alleging that the Company's Zio Monitor device infringes two of BardyDx's patents.

The Company is preparing to file a response to the allegations found in the amended complaint no later than March 3, 2025.

BardyDx seeks money damages and attorneys’ fees.

The Company believes this lawsuit is without merit and plans to defend itself vigorously.

now part of Baxter International, Inc., filed a lawsuit against the Company in the United States District Court for the District of Delaware, alleging that its Zio monitor infringes one of its patents.

On December 26, 2024, BardyDx filed an amended complaint alleging that the Company's Zio monitor infringes two of BardyDx's patents.

On June 11, 2025, BardyDx filed a second amended complaint alleging that its Zio monitor infringes four of BardyDx’s patents.

The Company filed responses to the allegations found in the complaint and the amended complaints, denying all allegations of patent infringement, asserting defenses including patent invalidity, and asserting patent infringement counterclaims, which allege that BardyDx’s Carnation Ambulatory Monitor patch infringes five of its patents.

BardyDx filed an answer to the Company's counterclaims and filed counterclaims for declaratory judgment for non-infringement and invalidity of the patents asserted by the Company.

On September 5, 2025, the Company filed a motion for leave to amend its counterclaims to allege infringement of two additional patents, and that motion remains pending.

On January 22, 2026, BardyDx filed a motion to amend its pleadings to assert inequitable conduct with respect to two patents of the Company, and that motion also remains pending.

Both parties seek money damages and attorneys’ fees for the alleged infringement of their patents.

The Company believes BardyDx’s allegations of patent infringement are without merit and plans to defend itself vigorously.

Technology License Agreement

On August 30, 2024, the Company entered into a Technology License Agreement (the “License Agreement”) with BioIS, pursuant to which (i) the Company will receive a perpetual fully paid up license to certain of BioIS’ intellectual property, technology and products for research, development and commercialization of potential next generation products and services in certain fields of use, including an exclusive license to develop and commercialize pulse oximetry, accelerometry, and trending non-invasive blood pressure technologies for use within the Company’s ambulatory cardiac monitoring products and services, and (ii) the Company and BioIS agreed to negotiate in good faith a supply agreement for pulse oximetry hardware.

On August 30, 2024, the Company entered into a Technology License Agreement (as amended, the “License Agreement”) with BioIS, pursuant to which (i) the Company will receive a perpetual fully paid up license to certain of BioIS’ intellectual property, technology and products for research, development and commercialization of potential next generation products and services in certain fields of use, including (x) an exclusive license to develop and commercialize pulse oximetry, accelerometry, and trending non-invasive blood pressure technologies for use within the Company's ambulatory cardiac monitoring products and services, and (y) a limited, non-exclusive license to develop and commercialize products and services for use in unattended, home-based diagnostic testing and assessment of central and obstructive sleep apnea, and (ii) the Company and BioIS agreed to negotiate in good faith a supply agreement for pulse oximetry hardware.

Under the terms of the License Agreement, during the third quarter of 2024 the Company paid BioIS an upfront fee of $ 15.0 million in cash consideration in acceptance of the initial transfer of certain licensed technologies and data following the execution of the License Agreement.

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The Milestone Notes, plus accrued and unpaid interest, if any, shall be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026.

The Company has recorded a charge for $ 32.4 million for acquired IPR&D in the Company's consolidated statements of operations for the year ended December 31, 2024, which includes the upfront fee of $ 15.0 million as well as contingent consideration of $ 17.4 million related to the regulatory milestones.

Additionally, BioIS is eligible to receive low single digit royalty payments on annual net sales of certain products in the home sleep testing field, subject to certain adjustments specified in the License Agreement.

In June 2025, BioIS achieved the first of two regulatory milestones.

As of December 31, 2025, BioIS and the Company are in the process of completing all required contractual conditions in order to cancel $ 10.0 million in Milestone Notes plus accrued and unpaid interest.

During the year ended December 31, 2025 and 2024, the Company recorded a charge of $ 3.0 million and $ 32.4 million, respectively for acquired IPR&D in the Company's consolidated statements of operations.

Development Agreement

On September 3, 2019, the Company entered into a Development Collaboration Agreement with Verily Life Sciences LLC, an Alphabet company (“VLS”) and Verily Ireland Limited (“VIL” and together with VLS, “Verily”) (such Development Collaboration Agreement, as amended, the “Development Agreement”).

1 dated April 26, 2021 and Amendment No.2 dated January 24, 2022, the “Development Agreement”).

The Development Agreement involves joint development and production of intellectual property between the Company and Verily.

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In addition, the Company agreed to make additional milestone payments to Verily up to an aggregate of $ 12.75 million upon achievement of various development and regulatory milestones over the term of the Development Agreement.

The Company and Verily have achieved milestones tied to payments totaling $ 11.0 million to date and the Company is obligated to make additional payments over the term of the Development Agreement of $ 1.75 million, subject to the achievement of specified milestones.

The Development Agreement provides each party with licenses to use certain intellectual property of the other party for development activities in the field of Afib screening, detection, or monitoring.

Ownership of developed intellectual property will be allocated to the Company or Verily depending on the subject matter of the underlying developed intellectual property, and, for certain subject matter, shall be jointly owned.

In August 2025, the Company and Verily mutually terminated the Development Agreement, subject to the Company's continued rights to a license to certain intellectual property associated with a mobile app developed under the Development Agreement.

Through termination of the Development Agreement, the Company and Verily achieved milestones tied to payments totaling $ 11.0 million to date.

During the year ended December 31, 2025, the Company recorded an impairment charge of $ 2.5 million associated with capitalized internal-use software in development relating to the Zio Watch with the Company's clinically integrated ZEUS system.

The Company continues to expand its other development programs into other clinical-grade wearables to detect and characterize arrhythmias while integrating with clinicians' workflows.

Indemnifications

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The Company currently has directors’ and officers’ insurance.

The Company has never incurred material costs to defend lawsuits or settle claims related to these indemnification provisions, and believes that the estimated fair value of these indemnification obligations is not material and it has not accrued any amounts for these obligations.

The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions, and believes that the estimated fair value of these indemnification obligations is not material and it has not accrued any amounts for these obligations.

1.50 % Senior Convertible Notes due 2029

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Contractual coupon interest $ 10,057 $ 8,266 $ —

$ 8,266 $ — $ —

Amortized debt issuance costs 3,060 2,617 —

Total interest expense recognized on senior convertible notes due 2029 $ 13,117 $ 10,883 $ —

$ 10,883 $ — $ —

Effective interest rate 2.0 % 2.0 % — %

2.0 % — % — %

On March 7, 2024, the Company completed an offering of $ 661.3 million aggregate principal amount of unsecured senior convertible notes with a stated interest rate of 1.50 % and a maturity date of September 1, 2029.

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On or after June 1, 2029, until 5:00 p.m., New York City time, on the second scheduled trading day immediately preceding September 1, 2029, holders of the notes may convert the 2029 Notes, in multiples of $ 1,000 principal amount, at their option regardless of the foregoing circumstances.

As discussed in Note 1, Organization and Description of Business, on January 12, 2026, the Company completed the Holding Company Transaction.

The Holding Company Transaction constitutes a Merger Event as defined under the Indenture.

The Holding Company Transaction does not constitute a Fundamental Change or a Make-Whole Fundamental Change as defined under the Indenture.

As a result of the Holding Company Transaction, pursuant to Section 4.01(f) of the Indenture, Holders may convert their Notes at any time up through March 4, 2026, the thirty-fifth Trading Day after the effective date of the new corporate holding company.

Conversion Rights at the Company's Option

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On March 7, 2024, in connection with the offering of the 2029 Notes, the Company used approximately $ 80.2 million of the net proceeds for the repayment in full of the $ 75.0 million outstanding Initial Loan, as well as interest, fees and expenses associated with terminating the agreement.

Interest expense for the year ended December 31, 2024 was $ 1.8 million.

Interest expense for year ended December 31, 2024 consisted of contractual coupon interest and amortized debt issuance costs of $ 1.6 million and $ 0.2 million, respectively.

Interest expense for the year ended December 31, 2024 totaled $ 1.8 million, consisting of contractual coupon interest of $ 1.6 million and amortized debt issuance costs of $ 0.2 million.

The Company incurred $ 5.6 million of fees and expenses relating to the repayment of the Initial Loan and the termination of the Braidwell Credit Agreement, inclusive of unamortized debt origination costs, which has been recorded within loss on extinguishment of debt in the Company's consolidated statements of operations for the year ended December 31, 2024.

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On March 28, 2022, the Company entered into a Second Amendment (“2022 Amendment”) to its SVB Loan Agreement which provided for a term loans facility in the aggregate principal amount of up to $ 75.0 million (the “2022 Term Loans”), of which $ 35.0 million was borrowed at closing and a portion of the proceeds was used to pay in full the outstanding balance of $ 18.5 million under the SVB Loan Agreement.

The remaining $ 40.0 million of 2022 Term Loans may be borrowed from time to time at the Company’s option, in increments of at least $ 10.0 million, through December 31, 2023.

The Company will pay interest only on the 2022 Term Loans until April 1, 2025, when it will commence repaying the 2022 Term Loans in 24 equal consecutive monthly installments, with all obligations under the 2022 Term Loans maturing on March 1, 2027.

Interest charged on the 2022 Term Loans will accrue at a floating per annum rate equal to the greater of:

(A) the Prime Rate plus 0.25 %;

and (B) 3.5 %.

The Company is also required to pay fees on any prepayment of the 2022 Term Loans, ranging from 1.0 % to 3.0 % depending on the date of prepayment, and a final payment equal to 5.0 % of the principal amount of the 2022 Term Loans drawn.

Once repaid or prepaid, the 2022 Term Loans may not be reborrowed.

The Company accounted for the refinancing as an extinguishment of the original loans and paid a fee of $ 1.8 million, which was included in interest expense on the Consolidated Statement of Operations and recorded the 2022 Term Loans, net of issuance costs.

The issuance costs on the new loans are amortized over the term of the loan.

The 2022 Amendment also amended the terms of the revolving credit line under the SVB Loan Agreement, which provided for an aggregate principal amount of $ 25.0 million, to:

(i) extend the maturity date from August 1, 2023 to March 1, 2027, (ii) increase the letters of credit sublimit to $ 15.0 million and (iii) increase the cash management services sublimit to $ 15.0 million.

Interest charged on the principal amount outstanding under the revolving credit line accrues at a floating per annum rate equal to the greater of (A) the Prime Rate plus 0.25 % and (B) 3.5 %.

The Company is required to pay an annual fee equal to 0.15 % of the revolving credit line.

The 2022 Amendment also amended the SVB Loan Agreement to require the Company to comply, as of the last day of each fiscal quarter, with a quick ratio of at least 1.0 to 1.15 or minimum adjusted EBITDA trailing 6 months of at least $ 15.0 million.

None of the remaining $ 40.0 million of 2022 Term Loans was borrowed up through December 31, 2023.

The 2022 Amendment also amended the terms of the revolving credit line under the SVB Loan Agreement, which provided for an aggregate principal amount of $ 25.0 million.

On January 3, 2024, in connection with the entry into the Braidwell Credit Agreement, the Company used approximately $ 37.8 million of the net proceeds for the repayment in full of the $ 35.0 million outstanding principal balance as well as interest, fees and expenses associated with terminating the agreement.

Upon termination of the SVB Loan Agreement, SVB's security interest in the Company's assets and property was released.

The Company continues to hold $ 8.4 million in letters of credit with SVB, securing them with cash on deposit.

Interest expense for the years ended December 31, 2024, 2023 and 2022 was nil , $ 3.4 million and $ 2.1 million, respectively.

Contractual coupon interest for the years ended December 31, 2024, 2023 and 2022 was nil , $ 3.0 million and $ 1.7 million, respectively.

Amortized debt issuance costs for the years ended December 31, 2024, 2023 and 2022 was nil , $ 0.4 million, and $ 0.4 million, respectively.

In connection with the termination of the SVB term loan, interest expense, contractual coupon interest, and amortized debt issuance costs for the year ended December 31, 2024, were de minimis.

For the year ended December 31, 2023 interest expense, contractual coupon interest, and amortized debt issuance costs related to the SVB term loan totaled $ 3.4 million, $ 3.0 million, and $ 0.4 million, respectively.

The Company incurred $ 2.0 million of fees and expenses relating to the termination of the SVB Loan Agreement, which has been recorded within loss on extinguishment of debt in the Company's consolidated statement of operations during the year ended December 31, 2024.

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United States $ ( 45,602 ) $ ( 114,203 ) $ ( 122,974 )

$ ( 114,203 ) $ ( 122,974 ) $ ( 116,600 )

1,479 318 714

Foreign 2,004 1,479 318

Loss before income taxes $ ( 43,598 ) $ ( 112,724 ) $ ( 122,656 )

$ ( 112,724 ) $ ( 122,656 ) $ ( 115,886 )

The provision for (benefit from) income taxes consists of the following (in thousands):

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Total tax expense $ 953 $ 565 $ 750

Income tax expense differs from the amount computed by applying the statutory federal income tax rate as follows (in thousands):

As described in Note 2, Summary of Significant Accounting Policies, the Company has elected to prospectively adopt ASU 2023-09.

The following table is a reconciliation of the total income tax expense computed at the U.S.

federal statutory rate of 21% to the Company’s total income tax expense for the year ended December 31, 2025, in accordance with ASU 2023-09 (in thousands):

Year Ended December 31,

2024 2023 2022

Federal Statutory Tax Rate $ ( 9,156 ) 21.0 %

State Income Taxes, Net of Federal Benefit* 492 ( 1.1 )%

Foreign Tax Effects ( 91 ) 0.2 %

Nontaxable or Nondeductible Items

Stock-Based Compensation 1,545 ( 3.5 )%

Nondeductible Executive Compensation 100 ( 0.2 )%

Other 430 ( 1.0 )%

R&D Credits ( 3,357 ) 7.7 %

Change in Valuation Allowance 10,837 ( 24.9 )%

Other 153 ( 0.4 )%

Provision for income taxes $ 953 ( 2.2 )%

*State and local taxes in Texas, Philadelphia, and Oregon made up the majority (greater than 50 percent) of the tax effect in this category

The following table is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to ASU 2023-09 (in thousands):

Year Ended December 31,

Tax at statutory federal rate $ ( 23,672 ) $ ( 25,758 )

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Section 162(m) limitation - officers compensation 5,093 5,217

5,093 5,217 2,498

Other 425 823

Tax credits ( 2,160 ) ( 2,160 )

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Stock-based compensation 13,991 11,810

Capital research expenditures

Capitalized research expenditures

11,739 24,280

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Valuation allowance ( 254,681 ) ( 242,623 )

( 242,623 ) ( 217,779 )

Net deferred tax assets 21,963 12,397

Deferred tax liabilities:

Capitalized Internal Use Software

ROU assets ( 10,391 ) ( 12,094 )

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valuation allowance increased by $ 12.1 million, $ 24.8 million and $ 29.7 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The current year change in the U.S.

valuation allowance is primarily related to the increase in reserves and research and development not currently deductible.

The Company recorded an immaterial deferred tax asset related to the Company’s foreign operations in the UK.

The valuation allowance for deferred tax assets consisted of the following activity for the years ended December 31, 2025, 2024, and 2023 (in thousands):

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Federal losses incurred from 2018 can be carried forward indefinitely.

As of December 31, 2024, the Company had research tax credit carryforwards of approximately $ 16.1 million, and $ 12.0 million available to reduce future taxable income, if any, for both federal and state purposes, respectively.

As of December 31, 2025, the Company had tax credit carryforwards of approximately $ 20.3 million, and $ 14.5 million available to reduce future taxable income, if any, for both federal and California purposes, respectively.

The federal tax credit carryforwards expire beginning in 2027 and the California tax credits can be carried forward indefinitely.

Federal and state tax laws impose restrictions on the utilization of net operating loss carryforwards in the event of a change in our ownership as defined by the Internal Revenue Code (the “Code”), Section 382.

Federal and state tax laws impose restrictions on the utilization of net operating loss carryforwards in the event of a change in our ownership as defined by the Internal Revenue Code, Sections 382.

Under Section 382 of the Code, substantial changes in our ownership and the ownership of acquired companies may limit the amount of net operating loss carryforwards that are available to offset taxable income.

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The Company's policy is to include interest and penalties related to unrecognized tax benefits within the provision for taxes.

The Company determined that no accrual for interest or penalties was required as of December 31, 2024, 2023, and 2022.

Management determined that no accrual for interest or penalties was required as of December 31, 2025, 2024, and 2023.

The Company files income tax returns in the U.S.

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The Company currently has no federal, state or foreign tax examinations in progress, nor has it had any federal or state examinations since inception.

The table below is a summary of income taxes paid by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 (in thousands):

Year Ended December 31,

United Kingdom 887

Other Foreign 58

Total income taxes paid

iRhythm Philippines, Inc.

was granted an income tax holiday by the Philippine Board of Investments, providing a 0 % income tax rate for three years, from 2025 through 2027.

After such period, the subsidiary will be subject to a 5 % Special Corporate Income Tax on gross income earned for an additional ten years , through 2037.

For the year ended December 31, 2025, the tax holiday reduced income tax expense by approximately $ 0.5 million.

The benefit of the tax holiday on net loss per share (diluted) was $ 0.02 for 2025.

A deferred tax liability has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are indefinitely reinvested outside the U.S.

Income taxes are generally incurred upon a repatriation of assets, a sale, or a liquidation of the subsidiary.

The unrecognized deferred tax liability is not material for the periods presented.

On July 4, 2025, legislation referred to as the One Big Beautiful Bill Act ("OBBBA") was signed into law.

The OBBBA makes certain provisions of the Tax Cuts and Jobs Act of 2017 permanent and makes changes to some U.S.

corporate tax provisions, many of which have different effective dates.

Key corporate tax provisions of the OBBBA include the restoration of 100% bonus depreciation, the introduction of new Section 174A permitting immediate expensing of domestic research and experimental expenditures, modifications to Section 163(j) interest expense limitations, and the expansion of Section 162(m) aggregation requirements.

The provisions of the OBBBA did not have a material impact on the Company’s consolidated financial statements for the year ended December 31, 2025.

The Company continues to evaluate the impact of the OBBBA, but does not expect the OBBBA to have a material impact on its effective tax rate.

STOCKHOLDERS' EQUITY

The Company’s amended and restated certificate of incorporation authorizes the Company to issue 100,000,000 shares of common stock with a par value of $ 0.001 per share and 5,000,000 shares of preferred stock with a par value of $ 0.001 per share.

As of December 31, 2025, the Company’s amended and restated certificate of incorporation authorizes the Company to issue 100,000,000 shares of common stock with a par value of $ 0.001 per share and 5,000,000 shares of preferred stock with a par value of $ 0.001 per share.

The holders of common stock are entitled to receive dividends whenever funds and assets are legally available and when declared by the Board, subject to the prior rights of holders of all series of convertible preferred stock outstanding.

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Repurchased shares of the Company's common stock are held as treasury shares until they are reissued or retired.

Shares Reserved for Issuance

The Company had reserved shares of common stock for issuance as follows (in thousands):

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EMPLOYEE BENEFIT PLANS

Defined Contribution Plans

The Company has a defined contribution 401(k) retirement plan (the “401(k) Plan”) covering substantially all employees in the United States.

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The Company matches contributions up to 50 % and a maximum of $ 5,000 per year.

Total matching contributions were $ 6.2 million, $ 5.6 million, and $ 5.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

Additionally, the Company contributes to various plans for its international employees.

Total matching contributions made on behalf of the Company's employees were $ 6.3 million, $ 6.2 million, and $ 5.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

EQUITY INCENTIVE PLANS

2016 Equity Incentive Plan

In October 2016, the Company adopted the 2016 Equity Incentive Plan, (the “2016 Plan”).

The 2016 Plan was approved by the Company’s stockholders and became effective on October 19, 2016.

On the first day of each fiscal year starting from the 2017 fiscal year through the 2024 fiscal year, the 2016 Plan authorizes an annual increase in the number of shares available for issuance equal to the least of (i) 3,865,000 shares, (ii) 5 % of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by the Board.

In November 2024, the Board of Directors approved an amendment to the 2016 Plan that removed the provision for annual increases.

As of December 31, 2024, the Company has reserved approximately 6.4 million shares of common stock for issuance under the 2016 Plan.

A summary of awards available for grant under the Company's 2016 Equity Incentive Plan is as follows (in thousands):

On the first day of each fiscal year starting from the year ended December 31, 2017 through November 6, 2024, the 2016 Plan authorized an annual increase in the number of shares available for issuance equal to the least of (i) 3,865,000 shares, (ii) 5 % of the shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (iii) such number of shares determined by the Board.

On November 7, 2024, the Board of Directors approved an amendment to the 2016 Plan that removed the provision for annual increases.

As of December 31, 2025, the Company has reserved 5.8 million shares of common stock available for issuance under the 2016 Plan.

A summary of awards available for grant under the Company's 2016 Plan is as follows (in thousands):

Shares Available

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If the stock price of the Company's common stock on any purchase date in an offering period is lower than the stock price on the first trading date of that offering period, the offering period will immediately reset after the purchase of shares on such purchase date and automatically roll into a new offering period.

Restricted Stock Units and Performance-Based Restricted Stock Units

Restricted Stock Units, Performance and Market-Based Restricted Stock Units

The fair value of RSUs and PRSUs are based on the Company’s closing stock price on the date of grant.

A summary is as follows (in thousands, except weighted average grant date fair value):

Restricted Stock Units Performance Based Restricted Stock Units and Market-Based Units

Restricted Stock Units Performance and Market-Based Restricted Stock Units

RSUs Weighted

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Aggregate intrinsic value of the RSUs was $ 252.2 million, $ 126.6 million, and $ 165.1 million as of December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2024, 1.3 million shares of RSUs were expected to vest with an aggregate intrinsic value of $ 116.1 million.

As of December 31, 2025, 1.3 million shares, net of estimated forfeitures, of RSUs were expected to vest with an aggregate intrinsic value of $ 233.5 million.

Total grant date fair value of vested RSUs was $ 57.9 million, $ 55.7 million, and $ 60.0 million during the years ended December 31, 2025, 2024, and 2023, respectively.

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Aggregate intrinsic value of the PRSUs was $ 149.3 million, $ 79.8 million, and $ 95.9 million as of December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2024, 0.9 million shares of PRSUs were expected to vest with an aggregate intrinsic value of $ 76.7 million.

As of December 31, 2025, 0.8 million shares, net of estimated forfeitures, of PRSUs were expected to vest with an aggregate intrinsic value of $ 144.5 million.

Total grant date fair value of vested PRSUs was $ 20.1 million, $ 4.8 million, and $ 2.6 million during the years ended December 31, 2025, 2024, and 2023, respectively.

Market-based PRSUs

Performance and Market-Based PRSUs

The Company grants PRSUs to its key executives.

PRSUs can be earned in accordance with the performance equity program for each respective grant.

In February 2025, the Company granted market-based PRSUs to senior executive officers with a grant date fair value of $ 15.5 million.

The number of shares to be earned subject to these PRSU awards will be based on the cumulative annual growth rate (“CAGR”) of annual revenue unit volume calculated between January 1, 2024 and December 31, 2027 and measured against performance thresholds, as well as a relative comparison of the S&P Healthcare Equipment Select Industry Index to the Company's Total Shareholder Return (“TSR”).

Each PRSU award has a maximum cap of 200 % on the payout irrespective of above-median TSR performance, and maximum unit volume CAGR performance level.

The grant date fair value of the PRSU awards was based on the expected term of 2.8 years, interest risk free rate of 4.0 %, implied volatility of 56.02 % and no dividend yield.

These February 2025 awards are subject to the recipient senior executive officer's continued employment through the vesting date aligned with the Company's Board of Directors certifying the payout of the awards, no later than March 15, 2028.

In February 2024, the Company granted market-based PRSUs to senior executive officers.

These PRSUs to be earned will be based on the cumulative annual growth rate (“CAGR”) of annual unit volume calculated between fiscal years 2026's and 2023's annual unit volume growth and measuring a minimum performance threshold of 15 % to earn 50 % of target, and a maximum threshold of 25 % achieved to earn 200 % of target, as well as a relative comparison of the S&P Healthcare Equipment Select Industry Index to the Company's Total Shareholder Return (“TSR”).

The number of shares to be earned subject to these PRSU awards will be based on the cumulative annual growth rate (“CAGR”) of annual unit volume calculated between January 1, 2023 and December 31, 2026 and measured at a minimum performance thresholds, as well as a relative comparison of the S&P Healthcare Equipment Select Industry Index to the Company's Total Shareholder Return (“TSR”).

Each PRSU award has a maximum cap of 200 % on the payout irrespective of above-median TSR performance, and maximum unit volume CAGR performance level.

The fair value of market-based PRSUs were estimated at the date of grant using a Monte-Carlo simulation method.

The grant date fair value of the TSR was based on the expected term of 2.8 years, interest risk free rate of 4.4 %, implied volatility of 67.95 % and no dividend yield.

The grant date fair value of the PRSU awards was based on the expected term of 2.8 years, interest risk free rate of 4.4 %, implied volatility of 67.95 % and no dividend yield.

These February 2024 awards are subject to the recipient senior executive officer's continued employment through the vesting date of March 16, 2027.

In August 2023, the Company granted market-based retention PRSUs (“August 2023 awards”) to its Chief Executive Officer, other senior executive officers, and other members of the Company’s management team.

The purpose of the performance-based awards was tied to several important long-term operational objectives, including to:

(i) create stability among the leadership team, (ii) retain other critical talent and (iii) drive achievement of strategic objectives while the Company transforms and scales its business model.

The performance period of the August 2023 awards will be measured between July 1, 2023 and June 30, 2026, with Company results subject to adjustment by the Company’s TSR as compared to the TSR of the S&P Healthcare Index.

The fair value of market-based retention PRSUs were estimated at the date of grant using a Monte-Carlo simulation method.

The grant date fair value of the TSR was based on the expected term of 2.9 years, interest risk free rate of 4.4 %, implied volatility of 80.1 % and no dividend yield.

The August 2023 awards are subject to the respective continued employment of the recipients through the vesting date of August 7, 2026.

The following table summarizes stock option activity:

Options Outstanding

(in thousands)

(in thousands) Weighted-

Share Weighted-

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As of December 31, 2025, the options were fully vested.

The total estimated grant date fair value of options vested during the period was nil , $ 0.1 million, and $ 2.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The total estimated grant date fair value of options vested during the period was nil for the years ended December 31, 2025 and 2024, and $ 0.1 million for the year ended December 31, 2023.

Employee Stock Purchase Plan

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Non-Employee Stock-Based Compensation

In March 2022, the former CEO retired from the Board and as a non-employee consultant.

Vesting for all outstanding awards was accelerated upon his retirement.

The Company recognized expense of $ 0.9 million related to the retirement of the former CEO during the year ended December 31, 2022.

On June 3, 2022, the Company’s former Chief Clinical Officer (the “former CCO”) retired and entered into a Consulting Agreement (“CA”) with the Company.

Pursuant to the original terms of the awards, the former CCO will continue to vest in her outstanding awards as long as services are provided to the Company under the CA as a non-employee consultant.

In accordance with ASC 718, Compensation - Stock Compensation (“ASC 718”), the Company recognized expense related to all awards vested over the duration of the CA in the current period as an equity-based severance cost because the consulting services are not substantive.

The total expense related to the former CCO’s non-employee stock-based compensation recognized $ 0.4 million for the year ended December 31, 2022.

On July 25, 2022, the Company’s former Executive Vice President, Chief Commercial Officer (the “former EVP”) resigned and entered into a CA with the Company.

Pursuant to the original terms of the agreement, the former EVP continues to vest in outstanding awards during the period of his CA services.

In accordance with ASC 718, the Company recorded stock-based compensation expense related to the awards expected to vest over the duration of the CA, because the consulting services were substantive.

The total expense related to the former EVP’s non-employee stock-based compensation recognized for each of the years ended December 31, 2023 and 2022 was $ 0.1 million.

On March 10, 2023, the Company’s former Chief Operating Officer (the “former COO”) resigned and entered into a CA with the Company through July 2024.

On March 10, 2023, the Company’s former Chief Operating Officer (the “former COO”) resigned and entered into a Consulting Agreement (“CA”) with the Company through July 2024.

Pursuant to the terms of the CA, the former COO vested in outstanding awards as long as services are provided to the Company under the CA as a non-employee consultant.

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On August 31, 2024, the Company’s former Chief Financial Officer (the “former CFO”) resigned and entered into a CA with the Company through March 15, 2025.

Pursuant to the terms of the CA, the former CFO continues to vest in outstanding restricted stock unit awards during the period of his CA services.

In accordance with ASC 718, the Company will continue to record stock-based compensation expense related to the awards expected to vest over the duration of the CA, because the consulting services are substantive.

The total expense related to the former CFO’s non-employee stock-based compensation recognized for the year ended December 31, 2024 was $ 0.2 million.

Pursuant to the terms of the CA, the former CFO continued to vest in outstanding restricted stock unit awards during the period of his CA services.

In accordance with ASC 718, the Company recorded stock-based compensation expense related to the awards expected to vest over the duration of the CA, because the consulting services are substantive.

The total expense related to the former CFO’s non-employee stock-based compensation recognized for each of the years ended December 31, 2025 and 2024 was $ 0.1 million and $ 0.2 million, respectively.

NET LOSS PER COMMON SHARE

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data