Hello, everyone. Thank you for joining us, and welcome to the iRhythm Holdings, Inc. Q3 2026 Earnings Conference Call. After today's prepared remarks, we will host a question-and-answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Francis Pruel, Head of Strategic Finance and Investor Relations. Francis, please go ahead.

Thank you, Operator, and thank you all for joining iRhythm's third quarter 2026 earnings call. With me today are Quentin Blackford, iRhythm's President and Chief Executive Officer, and Dan Wilson, our Chief Financial Officer. Before we begin… Please note that management will make forward-looking statements within the meaning of federal securities laws under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, statements regarding our intentions, beliefs, and expectations about future events, strategy, competition, products, operating plans, and performance. Forward-looking statements on this call are based on current estimates and assumptions, involve risks and uncertainties, and actual results may differ materially. These statements are made as of today, November 5, 2026, and are time sensitive. For a discussion of risks and uncertainties, please refer to our most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and other filings with the SEC. Additionally, during the call, we will discuss certain financial measures that have not been prepared in accordance with GAAP. Unless otherwise noted, all references to financial measures on this call are presented on a non-GAAP basis. These non-GAAP measures should not be considered in isolation or as a substitute for or superior to GAAP results. Reconciliations to the most directly comparable GAAP measures can be found in our earnings release and the slides accompanying today's call. And with that, I'll turn the call over to Quentin.

Good afternoon, everyone, and thank you for joining us for our third quarter earnings call. We are pleased with iRhythm's progress in the quarter, and our results reflect the positive growth trajectory of our business across multiple channels, as well as the meaningful operating leverage we continue to generate as we scale the Zio platform. I'll begin with the key highlights from the quarter and provide updates on our strategic priorities before turning the call over to Dan for a more detailed review of our financial results and outlook. Third quarter revenue was $221.6 million, up nearly 15% year-over-year against our toughest comparison of the year, as we lapped more than 30% growth in the third quarter of 2025. Overall performance was consistent with our guidance, with our Core Zeo Monitor business again outperforming our expectations. That Monitor business continues to be driven by durable demand and sustained momentum across primary care, innovative channels, and international markets. We continue to expand the cardiac diagnostics market both within traditional cardiology settings and across these underpenetrated opportunities. The strong performance in the Core Monitor business was offset by Zeo AT, where revenue was roughly flat compared to the prior year. Thank you for joining us. Now I'm going to spend some time talking about the strategy we continue to execute to evolve from a leader in ambulatory cardiac monitoring into a broader cardiac and vitals monitoring and intelligence platform. First I will walk through the opportunities that Vital Connect brings and then provide an update on the ZOMCT program. As a reminder, we closed the Vital Connect acquisition on October 5th, well ahead of our prior expectation of closing by year-end. This acquisition is an exciting milestone for iRhythm, as it significantly expands our capabilities and market opportunity. It also immediately adds a complimentary FDA-cleared mobile cardiac telemetry offering to our portfolio. VitalConnect's platform can be used to monitor multiple physiological parameters, including ECG, heart rate, respiratory rate, and body temperature, as well as fall detection and the ability to connect additional parameters such as blood pressure and pulse oximetry. Its platform supports ambulatory, inpatient, remote patient monitoring, and hospital-to-home care, expanding our relevance across the patient journey and creating new opportunities within hospitals and health systems. VitalConnect will serve as our immediate MCT growth platform while also providing important multi-modality capabilities. It supports MCT, cardiac event monitoring, extended monitoring, and Holter use cases with up to 30 days of monitoring service, live look and functionality, and the flexibility to transition between monitoring pathways when clinically appropriate. Thank you for joining us. Thank you for listening. Realizing the full potential of Vital Connect requires more than expanding our product portfolio. We are integrating the technology into our customer EHR systems, incorporating Vital Connect's Vista Center data and Live Look-In functionality, and enabling multi-modality workflows. These capabilities are essential to driving broader adoption, particularly among our existing large integrated health system customers. In parallel, we are preparing the business to scale across supply chain, clinical operations, customer support, technology, quality, and implementation capacity. The earlier-than-expected transaction close allows us to accelerate commercial training into the first two weeks of November, enabling our teams to begin engaging customers while we continue building the integration and operating infrastructure required for broader adoption. Our focus is squarely on executing a disciplined integration, and our initial progress reinforces our confidence in the significant value and new growth opportunities this acquisition will unlock for iRhythm. Thank you for joining us. Mervin Smith, Mervin Smith, Mervin Smith, The addition of VitalConnect's capabilities open up what we believe will be a significant, immediate growth opportunity, and this decision will allow us to focus on unlocking that value for patients and shareholders, while being deliberate in our planning and preparation to, in turn, maximize the value of our planned next-generation ZOMCT, our integrated MCT portfolio, in your investment. That said, we've made tangible progress with ZOMCT that gives us greater visibility into the path ahead. We've begun producing and testing the actual ZOMCT system in the configuration we intend to submit to the FDA, and we are advancing the remaining verification, documentation, and regulatory work. We expect to submit our ZOMCT filing to the FDA in 2027. ZOMCT is an important part of our long-term portfolio as it is designed to build upon the simplicity of patients' and physicians' value in ZOAT by providing an extended wear period and enhanced detection algorithms. We believe that an MCT portfolio today of ZOAT and Vital Connect give us an immediate, best-in-class mobile cardiac telemetry portfolio that will further improve with the future introduction of ZOMCT, which we expect will eventually replace ZOAT. Turning next to ZOAT, we remain confident in its clinical value in the complementary set of solutions it creates with Vital Connect. Thank you for joining us. ZOAT performance was below our expectations during the quarter, where revenue was flat compared to the prior year versus our expectations of growth generally in line with our overall business. Based on customer and commercial feedback, we believe this was in part driven by delayed purchasing decisions following the announcement of a Vital Connect acquisition as they considered the combined portfolio and the potential availability of Vital Connect through the iRhythm sales channel. Thank you for watching. Thank you for joining us. We believe our Vital Connect and ZUAT portfolio provides a strong foundation to participate more broadly in the MCT market in the near term, with ZUMCT remaining an important addition to the portfolio over time. Turning to innovative channels in primary care, we continue to see encouraging momentum as we expand cardiac monitoring beyond traditional cardiology settings. What is becoming clearer is that the market opportunity ahead of us is not simply about taking market share. It is about expanding our serviceable market in a meaningful way. There is a measurable care gap for patients at risk of arrhythmias that can be addressed through better patient identification, better clinical workflow, and better access. Thank you for joining us. Thank you. Thank you. Thank you. Starting with Innovative Channels, which was our fastest growing business during the quarter once again, our partners increasingly view Zio as a way to identify and engage appropriate patients earlier rather than waiting for these patients to reach a specialist after repeated symptoms or acute care events. Importantly, our partners can make these determinations with confidence as our early pilots have demonstrated greater than 85% accuracy in identifying patients with clinically relevant arrhythmias before they enter the diagnostic process. Primary care, more broadly, is also an important part of our upstream strategy. Zio's rule-in and rule-out capability can help primary care clinicians begin their diagnostic process earlier, enabling cardiologists to focus on patients who need higher acuity care. We recently launched targeted initiatives through the Patient Point Network, coordinating arrhythmia education for patients, physicians, and office staff. Thank you for joining us. Thank you for joining us. The next phase is to turn these programs into a repeatable playbook through provider education, patient activation, targeted primary care coverage, workflow and EHR enablement, and continued clinical and economic evidence generation. Thank you for watching. Thank you for joining us. We also submitted an application to the FDA for a pediatric indication for our Zio Monitor, representing another potential meaningful opportunity to meet care needs for these patients and expand our core monitoring market. If cleared by the FDA, this would represent iRhythm's first pediatric indication, and we are excited about the potential to serve this market segment. We are also excited about recent clinical developments. In October, we published results from our Excalibur study in clinical cardiology, extending the evidence generated through Camelot and Avalon into the Medicare Advantage population. The results once again demonstrated strong diagnostic performance with Zio long-term cardiac monitoring, along with lower downstream healthcare utilization and cost across a large, diverse insured population. Excalibur, Camelot, and Avalon And with respect to the FDA warning letter, as previously noted, we have completed our remediation activities, updated the agency accordingly, and are expecting a follow-up inspection, although we don't yet know when that will occur. As we look ahead, I believe iRhythm is well positioned to execute our long-term strategy. Our core business continues to generate durable growth and meaningful operating leverage. We are expanding our reach across primary care and innovative channels, investing in new clinical applications, and strengthening our operating foundation. With Vital Connect, we have meaningfully expanded our addressable market, strengthened our immediate MCT offering, and created a platform to serve patients' providers across a broader continuum of care. Our priorities remain focusing on disciplined execution and delivering sustained volume-led growth and continued profitability and free cash flow generation. With that, I'll turn the call over to Dan.

Thank you, Quentin. Our third quarter results demonstrated solid top line performance and exceptional operating leverage across the business. As we look ahead, we remain focused on balancing continued revenue growth through targeted investments in our key strategic growth pillars while delivering robust profitability, expanding margins, and strong free cash flow generation. Revenue for the third quarter was $221.6 million, up 14.9% year-over-year, reflecting durable demand and continued progress in important growth verticals such as primary care and innovative channels. In the quarter, Xeomonitor was the primary driver of growth and performed ahead of our expectations. Transcription by CastingWords Moving down the P&L, third quarter gross margin was 74.2%, an increase of 310 basis points year over year. This result reflects continued progress in manufacturing automation, operational efficiencies, and disciplined execution. In addition, gross margin benefited from one-time tariff refunds of approximately $3 million, which contributed roughly 140 basis points during the quarter. Excluding this benefit, gross margin performance remained strong and consistent with our ongoing efforts to drive operating leverage. Third quarter 2026 suggested operating expenses were $138.6 million compared to $141.4 million in the prior year period, representing a decrease of 2%. Thank you for listening. On the bottom line, gap net loss for the third quarter was $29.9 million, or a net loss per diluted share of $0.90, compared to a gap net loss of $5.2 million, or a net loss per diluted share of $0.16 in the third quarter of 2025. Adjusted net income for the third quarter was $27.8 million, or adjusted net income per diluted share of $0.82, compared to an adjusted net loss of $2 million, or adjusted net loss per diluted share of $0.06 in the third quarter of 2025. As a reminder, our gap results in the period included a $50 million charge related to an IP litigation settlement previously announced. Adjusted EBITDA for the third quarter was 51.2 million, or 23.1% of revenue, an improvement of over 1,100 basis points compared to the prior year. Our adjusted EBITDA performance in the period showcases once again the significant scalability in our cost structure. Free cash flow in the third quarter was negative $11.5 million, which included the one-time $50 million payment related to the IP litigation settlement mentioned earlier. Thank you for watching. In addition, on November 3rd, we obtained a new $300 million revolving credit facility that provides additional liquidity and financial flexibility as we invest in future growth. Now turning to our updated financial outlook for Q4 and full year 2026, which includes the recently acquired Vital Connect business, we are raising full year 2026 revenue guidance to $890 million to $895 million, representing 19% to 20% year-over-year growth. This outlook assumes Xeo Monitor year-over-year growth of mid-teens in Q4, approximately $16 million of Vital Connect revenue in Q4, consistent with our prior disclosure that the business was operating at a $65 million annual run rate, and Xeo AT sequentially flat to Q3, given the purchasing delays we believe contributed to the product's slowdown in Q3 and the uncertainty around how quickly demand patterns may normalize as we introduce Vital Connect and integrate the combined portfolio. For the full year, we continue to expect a modest positive contribution from pricing relative to 2025, reflecting the benefit we have realized year to date. However, our primary growth driver remains volume expansion across Xeo Monitor, Innovative Channels, and International. Turning to gross margin, we expect to build on our strong performance in the fourth quarter, with gross margin for the organic iRhythm business remaining generally consistent with third quarter levels, excluding the one-time benefit associated with tariff refunds recognized during the period. Inclusive of Vital Connect, we expect to deliver total company gross margin above 70% in the fourth quarter. Thank you for watching. This increased margin outlook incorporates the addition of the recently acquired Vital Connect business as well as the strength of our underlying business and continued operating leverage balanced against investments toward growth and innovation efforts. Excluding certain one-time items, such as litigation settlement payments and transaction costs, we continue to expect free cash flow to increase year-over-year in 2026 with positive free cash flow generation in the fourth quarter inclusive of the addition of Vital Connect. Before turning the call back to Quentin for closing remarks, I'd like to provide some initial perspectives on our outlook for 2027. Thank you for joining us. Within MCT, we are excited about bringing together ZOAT and Vital Connect to engage customers with a broader, more comprehensive portfolio. Our teams are already preparing for this next phase, including commercial training and customer engagement across the combined offering. At the same time, we intend to remain measured in our expectations for ZOAT until we see growth re-accelerate as part of the combined portfolio. Thank you for joining us. Thank you for watching. Turning to profitability for the combined company, we continue to expect gross margin above 70% and remain committed to delivering an adjusted EBITDA margin of at least 15% in 2027. Importantly, our focus remains on profitable growth. We expect continued leverage down the income statement from operational excellence, implementation of our next generation AI algorithm, disciplined spending, and moderating investment associated with our FDA remediation activities, while continuing to fund our highest priority growth opportunities in primary care, innovative channels, home sleep testing, and integrating Vital Connect. Thank you for joining us.

Thank you, Dan. Our third quarter performance underscores that we are continuing to execute effectively against our strategy. With record profitability, we are well positioned to reinvest in the business while continuing to drive long-term value creation. Finally, as we prepare to celebrate our 20th anniversary as a company and our 10th anniversary as a public company with ringing the NASDAQ opening bell next week, I could not be more excited about the future ahead. It is a privilege to be part of this journey and I remain confident in the significant value we can deliver to patients, With that, we're now happy to take your questions.

Question and Answer Session Your first question comes from the line of John Young with Canaccord. Your line is open. Please go ahead.

Hi, guys. Thank you for taking the question tonight. I want to ask a question just on the guidance changes here. You know, looking at the organic guidance, excluding the $60 million, if I'm asked this right, it looks like Q4 organic growth is implied at 10% to 12% versus the 14.9% or so of this quarter. Is that all just AT headwind? And was that headwind consistent through this quarter? And what are you seeing now? Thanks.

Hey, John, thanks for that question. Yes, what you're seeing in the fourth quarter is really the impact of the AT business slowing down. And I think we put in our prepared remarks that the monitor business will continue to grow in that mid-teens range. If you think about it, you know, how we're thinking about Q4 is that the volume growth in the AT business will continue to be consistent with what we saw in Q3, essentially flat year over year. We do have a bit of a headwind from a revenue dollar perspective in the AT business with a benefit that was in the fourth quarter of last year. It's not going to repeat itself. So that AT business in the fourth quarter on a dollar basis is going to be down about 10% on a volume basis will be flat year over year. When you normalize for that, you're going to get the monetary Hey guys, thanks for taking the question.

Can you just spend a little bit of time on these delays and what's impacting AT? I mean, I don't think it's every day that you have an organization. It kind of sounds like you're saying that there's a bunch of physicians or a lot of physicians that are holding back because they know that they might be able to get Vital Connect later. It's an interesting comment given Vital Connect was relatively small. And so just help us understand, like, what are you actually seeing? What's going on in the accounts? Why are things getting delayed out? And is it vital connected that they're waiting for? That part wasn't entirely clear. Thanks.

Yeah, sure. Thanks, Brandon. So what we're seeing in the AT business is actually, you know, sustainable, durable performance in the core accounts that we perform in with AT today. Where we've seen a slowdown is the new account onboarding. essentially, as they understand Vital Connect or the Vital Patch is a product that's going to become available in our platform, what they don't want to do is move forward with integrating with the iRhythm platform today that only has ZOAT on it, train up their existing teams on ZOAT only to have to come back a few months here and train up on Vital Connect and go through another integration of the Vital platform. What we're working on immediately as an organization here at iRhythm is to bring The Vital Connect, the Vital Patch, the Vista Center into our integrated platform so that in the future it's a single integration with our customers, which makes it very seamless, streamlined for them to have access to what we think is a best-in-class MCT portfolio with both ZOAT and what will then be the Vital Patch MCT product that Vital Connect brings. But here in the near term, what we're running into a bit of is excitement around the potential of the portfolio that we have, Excitement around the Vital Connect product itself, but not wanting to go through full-scale integrations of both systems. And, you know, that makes sense. It does take resources. It takes time on the behalf of our customer accounts. And they don't want to go through two of those instances, if you will. So they're deferring those decisions to onboard until the platform is combined, which is our focus of our team here at iRhythm and the core focus out of the gate.

Your next question comes from the line of Joanne Wunsch with Citibank. Your line is open. Please go ahead.

Good evening, and thank you so much for taking the questions. I have two short ones. Did I hear you right? You're putting off filing MCT this fall, but that you're still going to be filing it in 2027. But I wasn't sure I heard that correctly, and I wasn't sure if you gave a timeline in 2027. And then my second question has to do with adjusted EBITDA. Thank you for the 2027 commentary on revenue, but any way to think about, you know, improving profitability.

Sure. So let me talk to the MCT timeline, and then I'll let Dan hit on adjusted EBITDA. You know, if you think about MCT, it continues to be a very important product for us. It's going to be an important part of the portfolio. When we think about MCT today as an opportunity, it's a very strategic market. We have an immediate opportunity with the Vital Connect product to address an immediate growth opportunity in a market that's very strategic and we think has tremendous runway for us to take market share. So our initial focus is getting that Vital Connect and the Vital Patch integrated into our system. We are working in parallel with ZOMCT as well to get that ready for filing. And I shared in my prepared remarks, we're actually producing units off of the production floor for testing as we speak. So work continues to go there. We continue to make good progress. But our initial focus is getting the integration of Vital Connect put in place, make that a seamless opportunity for our customers to experience the full breadth of our new portfolio, and then lean back into the ZOMCT filing. Dan, I'll let you hit on the adjusted EBITDA.

Yep. So, Joanne, for 2027, we reiterated kind of our prior guidance of at least 15% adjusted EBITDA margin in 2027. Importantly, that is balancing kind of continued operating leverage across the business while also making the targeted investments that we mentioned to drive future growth, which both includes both investments in the core business as well as integrating Vital Connect. So obviously, you've seen the operating leverage we've been driving over the last couple of quarters. There's some timing related aspects there in terms of when these investments will show up, but committed to delivering at least 15% adjusted EBITDA margin in 2027. And again, we'll provide formal guidance in the early part of the year.

Your next question comes from the line of Stephanie Algazi with Bank of America. Your line is open. Please go ahead.

Hi, thanks for taking the question.

I wanted to ask on when do you expect Vital Connect to be fully integrated and broadly available? I guess just trying to understand if If this pausing dynamic in MCT that you're seeing will persist in 2027 and for how long and if the delay that you're currently seeing will be recaptured then.

Yeah, thanks Stephanie. Look, I would expect that we have the integrated capabilities under the single platform beginning to be available in the mid part of the first quarter of next year. So we're working through that through the back part of this year through the end of the year and then into the very early part of next year. I do suspect you're going to see sort of what we're experiencing in AT hang around for a quarter or two as we navigate through that, and you're going to see it start to reaccelerate then once we have the platforms combined in a single solution for the iRhythm commercial team. You know, we couldn't be more excited to drop that platform onto a commercial force of call it 200 folks versus the 30 folks that it's been coming from on the Vital Connect side. So we're excited with that, but we need to get to that integrated single platform.

Your next question comes from the line of Alan Gong with JP Morgan. Your line is open. Please go ahead.

Hi, thanks for the question. Just wanted to kind of touch on, you know, the progress you're making on, you know, XeoMonitor, right? So it's clear the momentum there has continued to be really strong. I guess when I think about, you know, the ability to kind of continue to pull forward AT in the accounts where you have Xeomonitor, is that something that's still progressing well? And how should I think about the assumption for, you know, innovative channel growth in fourth quarter that mid-teens, you've talked about, you know, kind of only accounting for the, you know, the contract that you have in place, not really accounting for any new ones. I'm just curious what's baked into that mid-teens growth for fourth quarter. Thank you.

Yeah, I'll hit the first part of that, and then Dan can hit on the second part of that. In the existing iRhythm accounts where we have Xeo Monitor being prescribed with an opportunity to introduce our MCT solution, we've had that opportunity for some time with AT, and I think we've realized a great deal of the potential that's there in terms of who's willing to utilize the AT product. What we know is that we've got a tremendous amount of our top accounts who are prescribing competitive MCT solutions alongside our Xeo Monitor product. They're incredibly excited to learn about the new Vital Connects Vital Patch, and that solution. But it's not yet on the integrated system that we can make it a simple part of their workflow. So that is where our focus is at as we speak, to get that into that simple workflow, the same integrated instance that they have, and make that Vital Patch available to them. And I do think we're going to have great success capturing the MCT opportunity in these accounts that we already have a good deal of business through XeoMonitor. I think that's going to be a very nice revenue synergy for us. But until that product is available in the integrated Thank you for joining us.

in the business as we commented on, and that's our expectation going forward. At the same time, that is a business that's still a bit early for us. It is concentrated in a smaller number of accounts versus our core business, and we still see a bit of lumpiness in that business. So for that reason, we always want to make sure we're not getting ahead of ourselves. But again, no change to overall philosophy as we're setting guidance for Q4.

Your next question comes from the line of Richard Nowitter with Truist. Your line is open. Please go ahead.

Hi, thanks for taking the question. Maybe just two quick ones. I guess the first, I just want to make sure I heard you right. Did you say that you should be on track to hit a billion dollars in organic ex-Vital Connect revenue for 27 or that you said you're going to grow in line with or a little bit above the organic rate? What is that? Is that a 14%, 15% rate? And then the second question, I guess, Quentin, it seems like the AT issue here, as a result of having Vital Connect on the platform, these are things I would imagine you would have diligence with your customers or thought about. I guess, how did this not get thought about in the diligence process, or at least to prepare investors for it? Thank you.

Yeah. Hi, Rich. I can take the first part of your question there on 2027. So you're right. We did say the organic core business on track to hit approximately a billion dollars next year. Embedded in that is ZO monitor growth kind of continuing at that mid-teens rate and then really assuming ZOAT is flat versus 2026 as we wait to see that growth potentially re-accelerated as we re-engage customers with the combined portfolio. And then we did comment that we expect Vital Connect growth off of the $65 million base run rate in 2026 to grow slightly above that organic growth rate. So call that mid to high teens is how we're thinking about it.

Yeah, Richard, on the second part of that, we certainly had contemplated that the AT business would continue to slow down and the guidance that we put out there off of the last call. So we did anticipate that. It slowed a bit further than what we expected. So we didn't see it to the degree that it did slow down. I think in part closing the deal sooner than what we anticipated certainly forced some of these folks to say, look, this is probably nearer term than what we had anticipated. We're looking at this with a more critical eye. If you're a few months away, then we're going to wait with the onboarding versus what we had anticipated originally, which could have been all the way out to the end of the year before we got to the point of a close. We did close much sooner, and we saw some of these decisions being taken a little bit earlier than what we would have expected.

Your next question comes from the line of Nathan Trebek with Wells Fargo. Your line is open. Please go ahead.

Great. Thanks. Quentin, maybe if you could just talk about how to model your overall MCT business going forward. So the ZOAT dynamics you said persist in the near term. Assuming VitalConnect is integrated under a single platform, Thank you.

Well, let me hit on the capacity for a second. We're making investments as we speak to more than double the capacity of that Vital Connect business from an inventory perspective, from an operational capacity perspective. And that will only continue to grow into the future as we continue to invest onto that platform. But our immediate investments has been to double the size of that platform and to double the size of the capability or the capacity that's in there. So we do expect great performance coming out of it. simply not going to get ahead of ourselves from a guidance perspective as we think about the combined MCT portfolio. I do think as we go into 2027, you're going to hear us talk more and more about the combined MCT portfolio versus Vital Connect versus AT. But what I do expect is that the AT product and the Vital Patch, they're going to continue to serve very distinct needs in the MCT category. When we talk to our physicians, we understand that There is a segment of that market we haven't been able to serve historically that values things like live-looking capabilities, values the 30 days of monitoring, values the four-in-one multimodality capabilities. Those are things that we haven't been able to offer historically. But there's also a segment of that market who is very keen on the simplicity of the ZOAT product. You'll hear stories a lot from physicians who will say, look, I have a patient that I'm not confident is going to consistently replace their patch every four, five, six days to get out to 30 days of wear. I'd rather have a single stick it and forget it experience with that patient and capture the data for 14 days or ultimately 21 days when we get to the new Zio MCT solution. So I think both of those products are going to be very important for us as we offer what I think will be a best in class MCT portfolio. But to talk about the mix between the two products, I think that's something that we'll get experience with as we go, but they're both going to serve a real need in the marketplace.

Your next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open. Please go ahead.

Hi, guys. Thanks for taking my question. It's Quentin. I had a question on your MCT assumptions here for 27. I heard you say AD is going to be flattish. and Wiley Connect should grow in the mid to high teens, but your Wiley Connect revenue base is smaller, right? I think that's 65 million in fiscal, 26 is a run rate, so I'm still not sure what the actual dollar number is in 26. So what are we basing that mid to high teens growth? And my sense is Wiley Connect is smaller than AT. So is this gonna be like growth dilutive Does it mean you're losing share in this category, in the cardiac telemetry category? When does it resolve? Thank you.

Yes, I think the way to think about Vital Connect is 26 revenue. Think about that as the 65 million run rate that we put out there. I think that's going to get you materially correct in terms of the size of that business and how to think about it. and to Dan's comments on the guidance, we're expecting that Vital Connect business next year to grow a bit at the overall corporate organic iRhythm growth rate, meaning it continues to be accretive to the total company growth rate. I think that's the right way to think about it for the time being. We're four weeks into having acquired the company. We're still learning quite a bit, incredibly bullish about the opportunity. I'm very excited about the MCT portfolio that we're going to have, but we're not going to get ahead of ourselves in terms of setting those expectations either. I think there's a lot of Very interesting and exciting potential with the broader commercial force, with some of the commercial synergies that are out there, the ability to bring this into some of our core accounts that historically have prescribed competitive MCT solutions. These are all things that excite us, but not a reason to get ahead of ourselves here either. So I do expect it to be accretive to the overall growth profile of the company, but I think the right way to think about that business right now is it's growing a bit above the overall organic or core iRhythm growth rate.

Your next question comes from the line of David Rescott with Baird. Your line is open. Please go ahead.

Thanks for taking the questions here. I wanted to ask, you know, as you get through or move to kind of the integration pieces or rollouts between the Vital Patch and The existing MCT, you know, kind of how we think about both that like Zio suite offering, you know, versus that live look in, you know, or back end, you know, suite offering that Vital Connect has just trying to get a sense for, you know, how or the way in which I guess you go to accounts and have both of those, you know, platforms out there integrated with an Epic and then were more broadly as well as integrating with Epic and then how you kind of, you know, I guess drive adoption across maybe what might be two separate kind of backend software systems at this point. Thank you.

Well, David, the point is to make it seamless for our customers. And that's exactly what we're working through right now as we integrate Vital Connect onto our platform. When we go into an account and we integrate through Epic or Cerner or Athena or any other EMR for that matter. We want it to be a seamless experience for our customers where they can have access to either one of those products without having to jump through different instances or iterations of an integration. We want it to be a single integration where it's very seamless and smooth in terms of the workflow for them. So we don't want them moving between platforms, if you will, or on the back end having to jump and toggle between two solutions. We want it to be available to them in a single solution. That's what the focus is of the teams today as we're working to integrate the Vital Connect capabilities onto the iRhythm platform, if you will. So in the future, that'll show up as a single platform of iRhythm solutions, and they'll have access to a ZOAT, eventually in the future, ZOMCT, or Vital Connect's products as well.

Your next question comes from the line of Michael Polark with Wolf Research. Your line is open. Please go ahead.

Hey, good afternoon. Thank you. Two-parter, is there risk Xeo monitors see some disruption from all this MCT integration activity? That's question one. And question two is for Vital Connect. My understanding is they were operating in, say, 15 or 20 states. What is the action item list to get more payer coverage for them for the rest of the states? Is that a big lift or is that an easy plug and play? Thank you.

Yeah, it's a great question. I can tell you on the monitor side, the monitor business continues to be very strong, performing very well. We commented in the third quarter, it continued to be ahead of expectations. As a matter of fact, you know, had AT sort of performed in line with our expectations, you would have seen us deliver a nice beat on the quarter, really on the back of that monitor business. So the momentum there continues to be very good. The innovative channel business continues to be very good. We added a handful of new accounts once again in the third quarter that We feel very good about and the pipeline continues to be very strong. So I feel good about that. In terms of the market access on the Vital Connect side, the teams have been hard at work at increasing access on a national basis to get access to their product on a payer by payer basis. So we're making great progress there. There continues to be work to be done, no doubt. But I feel good about the momentum that's building there and the ability to get Vital Connect onto our contracts or in some cases get Zio onto the Vital Connect

Your next question comes from the line of Mary Tippold with U.S. Bancorp BTIG. Your line is open. Please go ahead.

Good evening. Yeah, I just wanted to ask another follow-up here on Vital Connect and NZOAT. How do you view which customer is ideal for which product? And can you tell us a little bit more about kind of the primary drivers behind that growth assumption that you gave us for Vital Connect? What needs to go right and what's kind of assumed in that above corporate average growth?

Sure. So I think on the Vital Connect side, the primary drivers of growth is sort of seeing what we're seeing in that existing business over the last several months now. I think just seeing that continue on gives us confidence in the guidance that we've put out there. So it's something that we've been realizing and it's been demonstrated here for a few months. The first part of that question, what was the first part?

How you, which customer is ideal for which product?

The targeting of customers is a great question. So really when you get down to the customers and their preference, it comes down to what are the features and the functions that they're looking for in the product. And I described this a little bit earlier. There are several physicians out there Depending on the patient that they're serving, who prefer the simplicity of a stick it and forget it experience. They want a single patch that can be worn for, you know, today, 14 days with ZOAT, ultimately out to 21 days with MCT. But it takes out of question sort of the patient compliance around it. Once the patch is on, they're going to get that feedback that they want from monitoring that patient. ZOAT, ZOMCT is going to continue to be a perfect product for those folks. and then we continue to invest in the research around it that demonstrates the clinical superiority of AT relative to some of the other competitive products that are in the market. The Camelot Alert Study that I referred to demonstrated pretty clearly that our ZOAT product is superior on a head-to-head basis with other competitive offerings. So you know where those things are important to the physician customers they're going to lean in and they're going to continue to use ZOAT and ultimately what I think will be ZOMCT. For those customers who are Really mindful of the live looking capability. They want to see things sort of right there at their fingertips. They want to see that through the mobile device. They want 30 days of monitoring. They appreciate the multi-modality capabilities that they want to move from MCT down to event recorder or event monitor that Vital Connect product gives them the flexibility to do. They're going to value that product. So I think there are just very different needs within the MCT marketplace that our combined portfolio is going to be able to address.

Your next question comes from the line of Suraj Kalaya with Oppenheimer. Your line is open. Please go ahead.

Quentin, can you hear me all right?

We got you.

Perfect. Gentlemen, thank you for taking my question. Dan, forgive me, many calls going on, so if this has already been answered, I apologize for being redundant. For all the issues of ZOAT, right, and if I heard you correctly, for FY27, I heard you say about a billion dollars in revenues. And I guess where I'm landing up is if I remove Vital Connect from the equation, I'm landing at organic growth like around 10-ish percent, 9-ish, 10-ish. Is my math wrong or what am I missing in this picture? If you could just put some finer points to that, it would be greatly appreciated. Gentlemen, thank you for taking my question.

Yeah, thanks, Suraj. So to be clear, the billion in revenue is our organic business, and then Vital Connect would be, you know, on top of that billion dollars. You know, hopefully that was clear. Embedded in that billion dollars, I did mention, you know, XeoMonitor continuing to grow in that mid-teens rate, and then assumed in that is XeoAT essentially flat. We believe that's the right way to set up the year. As we get experience, as we reengage with customers with the combined portfolio, we'll reassess where we're at at that point. But to set up the year, we believe that's the right way to think about it. Mid-teens growth for Xeomonitor, AT Flat, and then Vital Connect a bit above the organic iRhythm business.

Which, Suraj, I'm not sure your math on the organic growth of 9% to 10%, but that would put Overall organic growth right in that mid-teens range, so I'm not following your 9% to 10%.

Your next question comes from the line of Mason Carrico with Stevens. Your line is open. Please go ahead.

Hey, this is Harrison. I'm from Mason. Is there an ASP opportunity with VitalPatch MCT from a hospital contracting and reimbursement? I don't see a lot of ASP opportunity.

For the most part, price is set at a code level, which we all sort of build across those same codes from a competitive perspective. For the majority of the business, there is some client-billed business where maybe that's a little bit different and unique. Your next question comes from the line of Adam Mader with Piper Sandler. Your line is open. Please go ahead.

Hi, good afternoon. Thank you for taking the question. I wanted to ask about FY27 outlook and appreciate the adjusted EVA margin commentary of at least 15%. Maybe, Dan, you could just double click a little bit more on some of the kind of key puts and takes there for the P&L and margins next year, things like Vital Connect, the third gen algorithm, direct-to-consumer, and some of the other initiatives. Thank you.

Yeah, absolutely. Thanks for the question, Adam. As we think about 27, I would say continued operating leverage throughout the P&L at the gross margin line. It's continued scale benefits. We did mention launching our next generation algorithm in the early part of next year. We'll see some initial benefit from that offset by kind of initial amortization as that goes live. But that'll be a nice source of leverage for us over the coming years. And then as we're integrating Vital Connect combined, we're looking at gross margin of at least 70%. Again, we'll give more formal guidance in the early part of next year. As you move down to P&L, really it's a balanced approach to profitability and additional investments into growth. And you touched on a couple of those. We see a real opportunity in terms of direct to patient marketing. primary care physician education, really oriented towards continuing to open up that 27 million patient opportunity that we continue to speak to. And then I would say there's other innovation-related investments that we will continue to make, not only just ZOMCT, but other innovation. And we'll speak to those as those start to be commercialized. But a lot of opportunity for growth. We want to be investing behind that while balancing additional profitability leverage. I will say and reiterate what I had said in my remarks. I wouldn't say the top priority next year is driving cost synergies in that Vital Connect business. It's really investing into that platform, making sure we have the opportunity to scale that part of the business and capture the growth that we believe is there for us. So that'll be the initial priority. But over time, there's absolutely opportunity for additional operating leverage in that side of the business as well.

Your next question comes from the line of Vijay Kumar with Evercore ISI. Your line is open. Please go ahead.

Hey, thanks for squeezing me in again. Sorry. Just back to my question on the ATE line, right? When I look at the pro forma, right, ATE plus Wiley Connect and Fiscal 26, and I look at the pro forma number 427, that feels like a growth decel, right? Like why, like after we add Weidel Connect, shouldn't the pro forma growth be similar to corporate or about, you know, if you assume 80 is flat for next year and Weidel Connect is growing slightly above corporate, still feel like it's a growth decel on a pro forma basis. Is that the right way to think about it and why would the pro forma growth decel?

Maybe Jay, it's Quentin. Just thinking about the AT business and what we're seeing in the back part of this year, I think we're going to be thoughtful about that as we come out of Q4 and into the first part of next year and have the combined portfolio of Vital Connect and ZOAT together on a single platform. And we'll keep a close eye on that. At this point, we're just not going to get ahead of ourselves with respect to the Vital Connect opportunity. We're thinking about that as that There are no further questions at this time. I will now turn the call back to Quentin for closing remarks. Well, thank you. Before we close, I just want to take an opportunity to thank our employees for the focus and the execution behind our third quarter performance. We delivered both strong growth and record profitability while continuing to invest in the priorities that can extend our reach, from expanding access to cardiac monitoring and advancing innovation to integrating VitalConnect and building a broader platform for patients and providers. As we approach our 20th anniversary as a company and 10th as a public company, I'm proud of what this team has accomplished, and I'm confident in the opportunity ahead. Thanks for joining us today. We'll see you all soon.