iRhythm Holdings, Inc. (IRTC) Earnings Call Transcript & Summary

Perfect. Let's get started then. I'm Kallum Titchmarsh, med device analyst here at Morgan Stanley. Really pleased today to be joined by the iRhythm Team, Quentin Blackford, CEO; Dan Wilson, CFO. Thanks for joining us, Gents.

Thanks for having us.

So let's begin with the news release from today, the license agreements with BioIntelliSense, the term I'm saying that correctly?

Yes, you got it right.

Talk us through the technology, what the agreement entails any financial considerations from this?

Yes. This is one that excites us quite a bit. I think we've long been after the opportunity to really expand our platform beyond just cardiac monitoring and the ambulatory cardiac space itself. And this gives us the opportunity to do that. We've had organic efforts internally in the company to really find ways to bring PPG on to our sensor on the chest and really enhance the accelerometry capability. Well, BioIntelliSense does that immediately for us. So ultimately, some of the organic efforts will now shift to how do you integrate the two platforms. But when you think about BioIntelliSense in particular, with PPG on the chest, you enable things like pulse oximetry right off the chest, which opens up sleep testing for us, respiratory rate right off the chest, which also further enables that capability. So now we're that much closer to the sleep market, and you guys know that we've been piloting some efforts in and around that, but it allows us to really verticalize on that entire sleep pathway for us, ultimately gets us to a much more multi vital signs sensing capability, if you will. And I think that's where we can take the product into the future as we open up the call point that we have whether it's with cardiologists, EPs, primary care physicians. More importantly, the relationships are building with these large IDNs. We see the value to move into other channels within those IDNs, where we can add value. And I think having a multi-vital sign capability off of a single platform allows us to do that. Maybe one thing in particular that really interested us here was from a pulse oximetry perspective, we understand the space is somewhat crowded. There's a lot of IP around it. They have a very unique capability where they introduced more than just a red light, green light PPG sensing capability, they introduced a white light as well that really enhances the ability to eliminate some of the noise around monitoring the pulse oxygen levels right off of the chest, which is a big enabler for us. We don't want to find a device that you're wearing multiple sensors across the body. It's really what can we capture right off the chest, make this as seamless as we can for the patient. And I think BioIntelliSense allows us to do that. We structured this in a way that, frankly, spares the P&L in a meaningful way. There's no incremental burn from an operational spending perspective. So our guidance remains intact for the full year, excluding what will be a onetime charge related to in-process R&D costs that we will leave in our non-GAAP measure, but we'll speak very directly to it. But outside of that, we reiterated the guidance this morning, including profitability. So this won't bring a meaningful burn from a spend perspective but introduces a lot of technology capabilities for us into the future and strategically really advances our pathway in these adjacent markets.

Great. And what are the time lines on that tech integration? How does that look?

I think very importantly, the top priority for the company right now is FDA remediation. That will not sidetrack any of this. And part of that remediation quite frankly is the MCT filing by the end of this year. It's part of how we discuss the remediation with the FDA, some of the concerns that they've had in the Zio AT product historically get addressed in the new MCT submission. And so the focus of the company will be MCT first. Once we get that on file, then we'll begin to talk about how we integrate the two platforms. So that integration is something that takes place more in '25. And ultimately, you find a product further out in the market in '26 or beyond at this point in time, just depending on what the integration of the platform looks like. But I do want to be clear, it's not going to distract us from getting MCT on file and more importantly, remediating the issues with the FDA.

Got it. And so probably a good time to speak about the 483 observations. We've seen the published observations but maybe provide the group with a high-level summary of those and any key takeaways there?

Yes. And you should feel free to take us down any path that you'd like to here. I think what we want to do is be very transparent in and around these matters. This is something that, as I mentioned earlier, it is the top priority in our organization. We've actually driven quite a bit of change in and around it, which we can get to. But when you look at these 243, I think sometimes we get asked questions, well, is this part of the warning letter remediation efforts that you were down the path on or those not tracking well? And is this sort of a sidetrack to all of that? . And I want to be careful around that because there are a little bit of two different issues here, right? And if you go back 1.5 years ago, with respect to the warning letter matters, the question that the FDA had at that point in time was really around -- is your product an MCT product or not? And when it hits Max transmission levels, is it continuing to record? We've addressed those questions with the FDA. Even to the point where they created a new category code called ambulatory, mobile cardiac telemetry and have put our products into that category code. But I think it highlights a little bit that we're in a space where there's not a lot of policy around this particular area. And as it continues to grow and take share, it certainly has the attention of the FDA to write policy in and around it. It's not much different than where CMS was 2 years ago when we didn't really have a re-established and put in place. We had to work with them to get policy established there, too. So I think we have a very fast-growing market that is on the attention, scale of the FDA, and they're trying to write policy in and around it. We've clearly addressed their questions of are you an MCT product or not. And we submitted two 510(k) catch-ups, which continue to move with the 510(k) throughout this process but then that brings us to these 483 observations. And I think just for those in the room, there were two inspections in July, one at our San Francisco site, one at our Orange County facility. And out of both of those sites came a 483 observation or 3 observations in each one of the 483s that we received. Those 483s are really focused around process, process documentation, document control, how you manage your complaint handling process. And at the root of the majority of those issues is this question of the clinical technician, right? The certified clinical technician or the certified cardiac technician. And we have long held a point of view that the cardiac technician is not part of the product. You have a wearable device that generates output script. AI runs against that with the algorithms and then hands that information to a CCT who then interprets that information, signs off of it, does a quality review check and puts it in a final report. Our view has been that CCT is separate from the device. And therefore, our entire quality system up to this point in time has been designed in a way that does not contemplate the work of the CCT within it. The FDA's point of view is very different and it's very clear. Their point of view is the CCT is absolutely part of the device. And we're at the point now where it doesn't matter any longer. We acknowledge the FDA's point of view. We agree with them. We are going to remediate our entire quality system to bring the CCT into it as if it were part of the product. And now that's all about bringing up to speed documentation, changing our internal processes from a quality perspective to make sure the CCT is included evaluating complaints that include the CCTs or not. But we couldn't have been more clear with the agency and our response to them that we hear you. We see your point of view, we agree with your point of view, acknowledge it, and we are going to remediate the entire quality system to address that. And again, I would just reiterate, for us, it is a top priority. We have made several changes structurally within the quality department that we laid out to the FDA as well, including leadership of that group and now reports directly into myself, quality does directly. And frankly, I spend a lot more of my time in and around it, and we'll continue to do that for the next year or so while we work to remediate these things. But happy to go into any further detail around those matters.

So those components all went into that response on August 21, correct?

August 21, we submitted a response to each of the 483s and we drafted a separate cover letter, just articulating our commitment to sort of the culture of quality and importantly, the leadership changes in and around it for them to very clearly understand that we see their point of view, and we're committed to addressing it.

So that's back with the FDA now. Any sense on time lines. Any prior examples that you can look at and draw upon or...?

We expect a response in 30 to 60 days, and that would sort of be industry norms. That's sort of how we saw the response come from the response to initial 483 last year. So I think that's the right way to think about it. There is no firm commitment. They work on their time lines. They can respond as quickly or as long as they would like to. As part of that response, we ask for a formal meeting directly with them. I would hope to get the opportunity to sit down with them. We brought in incremental expert consultants. To be clear, we've already been working with expert consultants up to this point in time but we brought additional folks and that can really help us get the work done and expedited pace. There's not a larger commitment and priority in the company than getting this thing remediated.

Got it. And you're comfortable this could be remediated without a warning letter or consent decree?

I can't speak to where the FDA goes with issue right? I think a big part of whether it escalates on further is sort of the FDA's interpretation of is the company understanding their point of view, are they committed to change in remediation. You can't possibly read our response and not understand our commitment to it. It's that clear. So including actions that have already been taken, removal of prior folks in the organization closest to this. New leaders identified, onboarding here within the month of September reporting lines. You can't possibly look at it and know that we're not committed to it. It is very, very clear.

On those 4,000 complaints that were flagged I think the misreading of the [indiscernible] data. Is anything being done to improve the algorithm side so that it can better detect AFib, for example, I think that's one that...

Yes. I think we're always looking to enhance the algorithms. I think when you raised the point on the 4,000 sort of complaints that were identified in the observation letter, I think you have to be sure to include the denominator in that assessment as well. And so for 4,000 reports over the time frame that the FDA had identified, there was about 4 million reports that were posted. So we're talking about 0.1% of the time that we had a medical doctor, I believe they saw a different arrhythmia than ultimately what our CCT signed off on in that final report. Part of the debate we have here, and this is not a debate to be clear in terms of we will include that in our complaint analysis going forward and decide how we report or don't report. But part of what we are working with the agency right now on is what do you do with the 4,000 now? Because a medical doctor saw it different than your CCT, but the MD doesn't always make the right decision either. So maybe they were wrong. Is that really an error? Is that a miss? Or do we need to bring in some other governing bodies, some other third party to review that and assess that. And I think that's where there's this lack of clarity right now. We're committed to -- in our response. We said, look, we're committed to working with you in whatever way you'd like to remedy this. But first and foremost, we will pull those into our sort of complaint handling and analysis, but we got to figure out how do you really settle in on, well, who was right, who was wrong and what's the right outcome.

So we've had some questions on the skin irritation. Maybe give us some stats on irritation rates maybe comparing to other wearable devices, maybe during upon the Dexcom days? Just any color you can give us on that and how that's trended over time?

Yes. So our overall skin irritation rate is about 1.7%, which is well below sort of stated acceptable levels, an independent expert reports that have been published in and around wearable devices. So the issue for us is not sort of the overall level of skin irritation. The issue is when you start to see those irritation rates ebb and flow, what is your process internally to evaluate what's driving that? Rather than it increasing in the summer months where he generally will cause greater irritation, what are you doing to make sure that something didn't change in the compound of that adhesive that's driving greater irritation, right? So what are your quality controls that are in place around those sort of things. Those are the kind of questions that they're asking. At 1.7%, I can tell you that's less than half the rate of things I've seen in my past around skin irritation. Their issue is not the overall rate. It's what are you doing when you see those rates begin to fluctuate a bit. And there are controls in place around it, but one of the things that we have working in our favor here is Zio monitor has a much lower skin irritation rate than Zio XT. So one of the questions the agency asked us was how quickly are you going to move from Zio XT on the Zio monitor? Well, the in-clinic use of Zio monitor is fully converted at this point. Now it's home enrollment that will continue to move towards it. But the next question that the agency then asked was, okay. Well, your ZIO AT platform still uses the old XT platform. Once you get MCT approved, how quickly are going to move AT onto the MCT platform because they know that the new MCT platform is going to use the monitoring platform, right? So they're looking at those sort of things like how do we move on to the newer generation of the technology as quickly as possible once it's been approved. But those are the questions in and around skin irritation. It's not about the overall level of skin irritation being the most significant concern. Maybe there were some questions in there and are back and forth with them when they were on site around. We had gone to the agency with a pre-submitting around pediatrics at one point. There's questions around, do you really need to abrade pediatric patient looking to those sort of things. But most of the issue is what are you doing to investigate when you see those rates begin to fluctuate a bit.

And you're confident MCT can be on file by the end of this year?

We continue -- that continues to be the plan that we're operating to as part of our response to the agency, it was very clear that MCT is part of remediating some of their concerns, right? You think about AT, one of the concerns that they had was this MAX transmission. Well, in the new MCT has been designed in a way that you will hit that in a much, much lower likelihood, right? So you reduce that dramatically. Skin irritation comes down, which is another question they were asking us how quickly do we get from AT on to MCT. So that's part of the remediation plan. We continue to believe by the end of this year is the way to think about that. If something changes, we'll talk about it, but there's not been any indication from the FDA at this point.

And the final question before we pivot back to the base business. But on the DOJ subpoena, anything there to add there?

Yes, nothing really to add there. We continue to go back and forth with them at this point in time just in terms of producing documentation to their request. More importantly, sort of articulating the reason behind why we continue to serve attorney-client privilege around the documents that they're requesting. We posted our response. We'll have an opportunity to respond to it if they accept that. And this particular matter around the attorney-client privilege document sort of goes the bet, if not, then it could elevate to where a third party -- independent party assesses the situation.

Okay. Understood. Okay. So Q2 -- [indiscernible].

So this is -- yes. So the question is what is the FDA doing with the broader industry with respect to this question around CCT, and it's a very good question. And to be quite honest with you, up until these inspections in our response to it a lot of our discussion with the FDA was about what the entire industry sort of works this way. So how do we get our arms around the entire industry. It's clear to us in working through these observations in the July inspections, they're not worried about the entire industry right now. . And we're going to focus on iRhythm. We will get iRhythm aligned to their point of view, but then it is the question of how does the rest of the industry come into the same sort of regulated environment? Because the majority of the industry does work in a scenario where they don't even have a CCT. They don't have an IDTF, they have a device that captures the data, but then they send it to a third-party IDTF, who then does the review, we'll mark it up, change it, send it back and gets into a final report and then provide it to the customer. None of that is part of their quality systems at this point in time. So we acknowledge there is no policy in and around this right now in this space. And I think the FDA is trying to get their arms around it. They're working with the market leader, ourselves at this point in time to define that. We're going to work with them to define it, and then I think we'll see the entire industry start to come around to it. I can't say with the FDA is next. I would hope they have to catch up. I think importantly, my perspective at this point is how do we turn this into a competitive advantage for us. First to market really do this as well as anybody can do this and make the barriers to entry that much harder in this space, which I think is possible. But it is a different frame of mind than frankly, where we were at 5, 6 months ago because we were still down the path of where we're not sure that the CCT really should be part. But at this point, we're acknowledging what the FDA. It should be and it will be. And we can work with them in future iterations of product if we want to try to exclude that in some way where everything is just powered by AI, but we'll work with you agency on how we do that.

Perfect. Back to the fundamentals. Q3, we've started to receive questions already. July, August, any trends that have stood out in particular, I think consensus settled maybe $1 million down sequentially from Q2. So just any high-level thoughts on that?

Yes. Q3 is always a tricky quarter for us, to be honest with you. With the summer months, the heat in the summer months and every year is a little bit unique and different. I think importantly, Kallum, we feel really good about the full year. in particular, revenue, gross profit, profitability, we reiterated all of that this morning, right? And we did that intentionally, obviously feeling good about it. In Q3 itself, I would tell you, beginning of July got off to a really good start. Back half of July, early part of August, a little bit softer than what we normally see, and then it's come roaring back here in the last 1.5 weeks. So overall, I feel good about it. I feel good about where consensus sits. I see a path into the consensus number. I don't think you're going to see the typical $1 million, $2 million beat that you historically have seen from us on a quarterly basis, but I feel pretty good about where the consensus is sitting right now in that third quarter.

And on MCT. Of the many catalysts that you have ahead, if I guess it's on file by the end of the year, that is maybe queuing up for a Q4 '25 commercial launch early launch at least. What preparations are you doing behind the scenes for that product maybe from a manufacturing standpoint? Just kind of keen to learn about anything behind the scenes there as you ramp up?

Yes. Well, the majority of the behind the scenes right now is really -- continues to be on the development in the regulatory side of just getting the filing ready. So there's a lot of work going on right now within the company on just getting from a regulatory perspective, the submission ready to hand over. So that work continues on and continues to go. The thing that we love about MCT is that it leverages the same form factor that monitors on. And we've just automated the majority of all the monitoring -- manufacturing capabilities. So it's very easy to drop the new Zio MCT platform right into those same lines and manufacture and frankly, drive some nice operating efficiencies and leverage in that cost profile. That really excites us about the opportunity. So I would say there's not a heavy lift operationally speaking, to get ready for the MCT launch. I think what we're going to have to think through is how do we step away from AT inventory levels that are out in the field and then ramp up MCT as quickly as possible and avoid taking any meaningful inventory charges that we can. And I think that's really just product life cycle management and how we bring customers on and take customers off right to the new products. So we'll be thoughtful around it. But I think you're thinking about it the right way, back half of 2025 is the way we think about it. And it's probably one of the biggest needle movers we have in our company when you think about the upside potential of MCT. We have 7% market share of the MCT category today. The same exact device in Zio monitor, where we have 70% market share and long-term patching is prescribed by the very same customer position. It's just that our Zio AT product is not really as competitive as it needs to be. It needs to be a longer duration product, which MCT will do that. It's going to get out over 20 days, which was the feedback that our customers have given us. You need to be north of 20 days. And it has features like downgradable capabilities built into it that can be leveraged as well. And so every 10 points of MCT market share is $80 million to $100 million of incremental revenue to us on an annual basis. I don't think we ever get to 70% market share in MCT, but I don't think there's any reason why we can't get to 20%, 30% over time, which could add a couple of hundred million dollar incremental annual revenues to us.

Sure. And then Japan, that's probably the, I guess, the most important area at OUS. Is that fair for next year. Remind us of the steps needed to secure the reimbursement. It seems you're pretty close now at that point?

Yes, I think we're very close on the regulatory approval there. We've been back and forth with the regulatory agency, the questions have gotten really narrowed down to some small benign final issues. So I fully expect approval there in the not-too-distant future. And that immediately will put us into a reimbursement discussion, right, which we would expect to have sort of in the first part of next year, Q1 and then launching right into Japan right after that, even possibly launching a bit earlier in some of the key thought leaders or key opinion leader accounts, hospital accounts that we can go ahead and get into. So we're excited by Japan, second largest market in the entire world, 1.5 million ACM test being prescribed. Importantly, we have high medical needs designation associated with our product in particular, which I think will set us apart. It's not high medical needs designation for long-term cardiac monitoring. It is high medical needs, designation specific to the Zio product itself, which immediately puts it in a position with those positions of where they will look at it a bit differently and really evaluate. Does the patient need this versus a traditional Holter monitor. And we know what the data tells us versus traditional Holter monitors. So we couldn't be more excited. We've got our commercial partner identified their training up as we speak, and we'll have training in the back part of this year, getting ourselves ready for a meaningful launch next year.

Assuming reimbursement is in place, how quickly do you think the sales could inflect there, I guess, relative to what you saw in the U.S., for example?

Yes. I think Japan is an interesting market, right? It moves at a little bit of a different pace. There's a lot of loyalty in that market. But at the same time, there's a lot of excitement for technology in the market. So I think we'll wait. We'll see how it plays out. And we've got a distributor partner over there who's very, very excited about it and I think very bullish on it. But I think we'll wait and let that play out and see where it goes.

And then I saw the news on Austria, Netherlands, Switzerland and Spain. Is that just the product is now available there or reimbursement or talk us through the opportunity in those four regions maybe?

Combination of the two. So in some of those markets, reimbursements there, Switzerland established reimbursement of well over CHF 1,000 per device, which I think speaks to just the fact that they see the value of this product and the avoidance of downstream costs. We continue to work through reimbursed levels in the other three markets. I think we're getting close. All of those have very attractive rates of reimbursement for Holter monitoring codes, which gives us a high likelihood of establishing a meaningful rate for long-term cardiac patching. So we feel good about that. We're not going to wait until there's formal reimbursed rates put in place. We'll attack the private sectors in those markets where it makes sense. Product is available for sale, and we just announced that we're in those markets just last week at ESC. So excited about what that can bring to us.

Fantastic. And then on Epic or and then Signify, maybe some into the above walk us through the next steps needed across both of those partnerships? And how meaningful those both could be for '25?

Both of those excite us in a meaningful way, you should jump in at any point. Epic is a really interesting one to us. We are very focused on trying to integrate our accounts. And we've had inside the company, a very specific initiative to integrate as many accounts as possible because we know when integration happens, growth hits a whole another inflection point in a meaningful way. And so today, about 60% of our integrated accounts are Epic accounts. A small part of those are Aura, although Epic is pushing hard to push or across their entire platform. And from our own efforts of integrating accounts and from hearing other anecdotal folks who have put their product on to the Aura platform, we know that, that uplift can be 30-plus percent in existing accounts just by getting onto the Aura platform. So that excites us. Why I love about it more than anything else is, while we're coming in the front door with these accounts and articulating the value of Zio and ultimately, that's why they become a customer of ours, with Aura, we're now coming in the back door as well with our competitive accounts because if you're an Aura user and you're not a Zio user and you want to order a long-term cardiac monitor, the only option you're going to have in the Aura drop-down menu to order within the EMR is a Zio patch, I mean it's a Zio monitor. That's the only thing that's in there for them. Now they can continue to order whatever product they want. It's just going to have to be done in a workflow outside of the EMR and then upload it manually back into it. We were just up at Epic at their large customer conference, more than 15,000 people, which was amazing. But the amount of competitive interest when they announced sort of from the main stage that Zio was being integrated as the first medical device onto the Aura platform, the flow through the booth was pretty remarkable. And I think this is going to be a real door opener for us on these competitive accounts that just value workflow to such a degree, but they're willing to change cardiac monitors as a result of it. So we're excited with Epic. We'll launch our first handful of accounts here as we roll into Q4 and then we'll really look to expand that over the course of 2025. Signify has gone very, very well. We are still in pilot phase with them. I think they're targeting a broader commercial launch out in 2025, but we started in the State of Illinois. We've now expanded to three additional states, New York, New Jersey, and I think Connecticut was the third. So that's going quite well. I spent time with [ Hayman ] a few weeks back. I think this is one of the key initiatives at this point in time in terms of the return on the investments that they're making into these special programs. And so I do expect them to push this one. This one can be a meaningful contributor to us in the future. I think we want to see it play out and start to show up in revenue results before we really begin to get out in front of it, but you could take other innovative primary care channel partners. I won't name them by name, but there's at least one at this point that on a daily basis as a top five prescriber for us every single day. So primary care is opening up. There's no question in my mind. This is where the device ought to be prescribed just given its ease of use, it's accuracy. It's starting to be seen as a workflow efficiency tool in these large IDNs to where the cardiologists and the EPs are frankly pushing, prescribing patterns further up the care pathway into their primary care physician. And then the primary care doesn't want to diagnose, then frankly, the cardiologist can see that report right in Zio Suite and they can make the diagnosis digitally or through an electronic interface. And then they decide, do I need to see that patient or not. And all of a sudden, you're starting to address a lot of these workflow concerns in these large IDNs. So primary care is probably one of the most exciting places for us right now.

Great. And we have been starting to receive questions on sleep apnea as well. I think you alluded to high early position demand back on the Q2 results call. What does that market evaluation in '25 look like? Can you maybe dig into the pathway to market in sleep and what kind of uptick you're expecting once that's kind of in place?

Yes. I think the feedback early on with the sleep pilot has been very encouraging to us. There's no question, a cardiologist or an EP will prescribe a home sleep test, particularly when we can make it as easy as right through Zio Suite, on the click of a button, there's a home sleep test, being delivered to your patient. We're taking care of all the rest of it. We're ingesting the data. IDTF interprets the data and makes a diagnosis and puts it right back into Zio Suite and that cardiologist and EP now knows exactly what's going on with the patient. I think even more importantly, coming off of the EKG data in the cardiac patch that these folks are wearing, we can see signs that identify very clearly that patient is a high risk of sleep apnea. Yes, you should go ahead and prescribe a home sleep test or no, maybe we don't see those signs so you shouldn't. So it becomes a really nice lead generator for us. I think the issue that we're running into or that we're learning, and we will solve this is the cardiologist or the EP. Once they diagnose that there is sleep apnea, how do they then care for the patient. What does that care pathway look like? And there's all sorts of things that you can do to introduce to that cardiologist or EP so that they're not just simply giving a patient a diagnosis and then just stepping away. So we will continue to build out that capability, but I think we can really disrupt the space. I think '25 will be a slow role for us. Again, our priority is FDA remediation, getting that addressed behind us and then really looking to go in a bigger way out into the future.

Got it. Dan, the LRP EBITDA margin of 15%, I think, in 2027. I wanted to spend a bit more time breaking down the drivers of this. Maybe you could just touch on the key drivers to get to that point bridge from where we're at today?

Yes. Yes, good question. So I would actually start with gross margin because that obviously can positively impact adjusted EBITDA. Good Q2, as you noted earlier, nearly 70% gross margin. We do see exiting this year at that 70% level. In our LRP, we've guided to 72%, 73% for gross margin and manufacturing automation. Continued efficiencies, workflow tools with our cardiac technicians will ultimately get us -- they're giving to the single platform. Zio monitor and Zio MCT helps us get there as well. In OpEx, I think the biggest bucket is clearly G&A, and there's a tremendous amount of opportunity there. We set up our global business services center about a year ago in Philippines. We've set up a few functions there to start. There's a lot of opportunity to continue leveraging that and kind of growing more efficiently from this point. From a sales and marketing standpoint, I think we feel good about where the level of investment is there but I do believe, as Quentin was noting, driving into primary care and some of these enterprise type accounts, we do see that as a more efficient selling model, and that will naturally provide some leverage as well. I would throw in IT infrastructure and the systems. There's a lot of inefficiencies there. And iRhythm have been with the company 5 years now, so I've seen a little bit of this. It's been kind of growth at all costs and throwing people and software problems to continue that growth. I think there's a much more efficient way to do that going forward. And really thinking with the mindset of how can we scale the business in the most efficient way over the next 5 or 10 years. And really, I think it is that mindset and making sure the entire organization adopts that. And I think we have a good path to get there.

Maybe a good time and probably some of the topics as well, but new role for you, Dan, what are some core priorities for you in that CFO seat now?

I think you just touched on it. A big focus on profitability and making sure the organization sees that as well. We are, first and foremost, a growth company, and that doesn't change but we need to be really disciplined in terms of where we're allocating capital and growing the company as efficiently as we can.

Great. And so 45 seconds each. What's something that you are not asked about much by investors that you think is important to the iRhythm story?

I'll start. I think we have a very astute and focused set of investors. So a lot of good questions from us. I think primary care is something I'm incredibly excited about. I think it's a market for our taking. Our competitors are not showing up there. I think we have a unique advantage to go after that. And with the transaction this morning, another one I'm particularly excited about our business model is to deliver -- collect data and deliver insights. The amount of data we're going to be able to collect with leveraging the technology we licensed this morning sets us up really well to deliver more and more clinical insights.

And I would piggyback on that. I think it's is the platform. I think there's just so much we can do off this platform. Sometimes we get viewed as this cardiac rhythm monitoring company only. That's not how we see the future of the company. I think with adding these other capabilities off the chest, these adjacent markets are real. They're meaningful. They leverage the same call points that we're already establishing. I think it gives us a right to win in those areas. So I think the adjacent markets, a platform technology is clearly something that I think will become more apparent as we move into the future. And this morning's transaction is just a part of enabling that. So we could be more excited about that. We need to get some of the overhang removed, and we will, but the underlying foundational business is as strong as it's ever been. And I think the tailwinds that are coming together for it, maybe they took a little bit longer to get here like MCT than what we originally expected, but they're real and they're meaningful. And I think they're going to create a lot of value for us.

That's it. Well, Quinton, Dan. Thank you so much for joining and thank you, investors as well for joining. Appreciate it.

Thank you for having us.