Come on. Come on. He says you're on. Come on now. There we go. All right. Thanks, everyone, for joining us. I'm David Rescott, Senior Med Tech Analyst here at Baird. Excited to have Quentin Blackford, CEO of iRhythm, to join us for this fireside chat here. I wanted to start off asking a little bit about the progress you've had so far this year. I think the past two quarters that you've delivered have probably been some of the biggest beat-and-raise quarters the company's seen, at least maybe the past five years or so ex-COVID. Stock price obviously kind of reflecting that. If you could walk us through some of those moving pieces that really have outperformed relative to what the expectations were entering the year. Yeah, I'd be happy to. Thanks for having us. I think there's clearly a lot of momentum in the business right now. We're excited about it, encouraged by what we're seeing. I think you can break it down into the core business as being one of the primary drivers. As a matter of fact, the outperformance in the second quarter was predominantly driven by the core business. When you get into the core business itself and start to piece that apart a little bit, there's two aspects. There's new accounts that are being onboarded that are coming onto our platform in a larger way. If you just look at the average volume per new account, it certainly has stepped up. I think a lot of that is driven by the fact that we can now go into these large networks and convert an entire network at a time. In the past, we didn't really have the size, the scale to be able to do that. We would approach those systems with the idea of, let's convert the first two or three accounts, then we'll go on to the next two or three accounts and the next two or three accounts. That was never super appealing to these large systems because in the midst of all of that, you're working with multiple vendors, and that's not something they want to do. We're now able to approach those large systems and say, look, we can convert your entire system at once. On day one, when we go live, your entire system is prescribing Zio. We've had a lot of success with that. We've seen what I call, I don't know if the quality of the account is the right way to think about it, but the size of the account is larger. I think when you look at those accounts that are in the pipeline that we continue to have discussions with or in the midst of integrating with, they continue to be of higher volumes, which is encouraging. I think the other thing that is really starting to have an impact both on converting new accounts, but also in our same store sales, is the impact of the clinical data that we've invested into. You look at the conversations that are happening around CAMELOT, around AVALON, that clearly articulate sort of in a head-to-head manner that Zio outperforms our competitive offerings that are in the marketplace, whether that's in a CMS data set. We've got more than 300,000 patients in the CAMELOT study that articulates this, whether it's in a commercial data set with AVALON, more than 400,000 patients that we looked at retrospectively. The data is very similar. It shows that we have a faster time to diagnosis, we have a higher diagnostic yield, and a lower cost on the healthcare resource utilization in using the product itself. That's resonating in a big way, both with our new accounts and converting those, but also in our existing accounts where we're trying to go deeper and have more of the account prescribing the Zio product. I think the last part that's important within the core accounts and the core business, and this is predominantly within same store sales, we're pushing aggressively from cardiology and EP up into primary care within the networks that we're already in. The way that we do that is we generally leverage the relationship of the cardiologist, of the electrophysiologist to bring the primary care folks within their network to the table, educate them on the ease of prescribing Zio, but also getting to a diagnosis off of Zio and off of the report. When that happens, what we find is that there's more prescribing happening at the primary care level. They're seeing more patients, so there's the opportunity to get patches on more patients. Now the cardiologist and the EP is seeing a better profiled patient. They're seeing a patient that is more likely to need their services. They've already been diagnosed with an arrhythmia. Now the procedural volumes lift at the cardiology level and the EP level, and we find that they end up monitoring post-procedure. The overall network ends up growing at a very different rate once we've implemented that strategy than before. That's quite encouraging because we believe that the Zio product is easy enough that it ought to be prescribed predominantly in the primary care channel, and ultimately it will get there. Today, about 1/3 of our prescribing is happening in primary care, which is growing faster than any other channel in the business. That's sort of the core business that really outperformed in the second quarter. I think we should hit on innovative channels. That business continues to grow. Remember, a year ago, we started from scratch. It was nascent for us. In the first quarter, it was roughly 3% of our total volumes. Second quarter continued to climb beyond that. I suspect that it will continue to climb into our future. I think ultimately that's a big part of how we address a market that we think is very different than how most folks think about our market today. Most folks think about our market as being $6.5 million ambulatory cardiac monitoring tests being performed in the U.S. every year. We think there's roughly 27 million folks who likely have cardiac arrhythmias undiagnosed and just completely unaware. Most of those are tied into comorbid disease states like Type 2 diabetes, COPD, CKD, OSA. To find those, we need to be in the primary care channel to find those, and the innovative channel partners is how we're going there. That's growing quite nicely. The last piece I would just hit on, and we can go down any of these paths, David, but Zio AT clearly is performing very well, better than what we thought it would. Quite honestly, we really felt like we needed to get Zio MCT into the market to close some of the competitive gaps. I think we've had more success than what we would have expected with Zio AT, which is a great thing. I think that bodes really well for the upcoming Zio MCT launch that we plan in the back half of next year. We just filed MCT with the FDA yesterday, so it's now in their hands, and we're excited to get that into the marketplace. Definitely a lot to go into there. I wanted to go back to, I think, 2022, 2021, when you laid out the five-year kind of CAGR, 20% top line through 2027. You had several kind of setbacks or headwinds in the business that have popped up since that time frame, but you still were able to deliver pretty much 20% growth every single year since you laid out that goal. When you think about initially setting that, what's played out since then, thinking about 2026, 2027 to get to that original 20% goal, would it be fair to assume that 20% maybe had been a conservative number and you could have delivered something on top of that? Or did some things just go better than you had assumed at the time? I think it probably reinforces why we approach setting expectations the way that we do. We try to set them in a way that we have a high degree of confidence that we can deliver on them or exceed them. We do everything we can inside our company to exceed those expectations. That's sort of how we set things up. There's no question we had some unforeseen challenges in the five-year period that we were trying to guide to, right, over that long-range plan. I'm incredibly proud of the team to find ways to overcome those, which means there's many things that went better than what we expected. Some of that in the core business that I just described, but we also thought we were going to have a best-in-class MCT product on the market for two years now. It would have been two years while we sit here today that we would have been selling that product, which would have allowed us to take a lot more market share in a market that we're relatively very small in. Today, we have maybe 12% market share in that category. Every 10 points is about $100 million of opportunity in annual revenue for us. We thought we would have that product two years ago. Obviously, we got caught up with the FDA around the warning letter and some of the 43 observations that we're remedying. Now we've fully remedied, and we've actually notified the FDA that we have completed all of our activities that we committed ourselves to. I couldn't feel better about the relationship that we've built with the FDA through the last 18 months- 24 months. I think it's 180° from what it once was and really appreciate sort of the collaborative aspect of that. It created some challenges, right? I'm proud of the fact that, yes, we'll still deliver roughly that 20%. I think that's why you set expectations the way that you do, so that when you have those headwinds, you can navigate through them, still deliver on what you said you were going to do. In the case that they don't come up, you have the opportunity to out deliver, right? That's how we think about sort of doing what we say we're going to do. Unfortunately, we had the headwinds. We navigated them. We're going to deliver it. Yeah, we could have done better had we had not some of these things go against us. That's OK. We're here to navigate through it and we have to. There's a chart that you show in your investor deck on core market versus expansion to the primary care. You touched on CAMELOT, AVALON trial or studies. You have this AI component, right, that might be helping be the reason why you're getting such positive readouts from some of these data sets. When you think about even just primary care, right, you've talked about 6 million patients core ambulatory cardiac monitoring market today. 14 million of them are out there that are maybe symptomatic, 27 million that maybe is asymptomatic. Has primary care, I guess, been a bigger upside driver, a bigger upside surprise that you've more moved into since you laid out the goal in 2022? How should we think about that overall shift in health care toward primary care, meaning that if there's 6 million patients in the core market, 14 million that are out there, could this be a 50/50 split longer term of primary care versus core? I think it will be. I think the question is, when will it happen? I think the vast majority of prescribing long term will actually come out of primary care versus cardiology or EP. The product's that easy to use. I think this move towards preventative care, proactive care versus reactive care is something that's just going to bode well for patients getting access to the device much earlier in their care journey, which is going to happen predominantly in primary care. It's why when I came into the company, I had a very strong point of view that this product needed to move aggressively into primary care for us to treat the vast majority of patients that we believed likely had arrhythmias. Unfortunately, so many folks show up in primary care that likely have arrhythmias but never get referred on to cardiology or EP. You've got to be treating them earlier in the care journey. I do think primary care is going to become a much, much bigger part of the prescribing patterns in this market itself. I think it's going to be a very big part of the mix of our business. North of 1/3 of our prescriptions now come from primary care, and it's growing faster than any other segment. You mentioned some of the AI that we've invested into. I think I'm super excited by where I think that AI is going to take us. Importantly, that AI is not contributing anything to our growth profile yet. We haven't even commercialized some of the AI opportunities just yet. We made a small investment into a company about a quarter ago that is helping us develop algorithms that specifically sit on top of an EMR and look through medical history of patients that identify markers that we've done a ton of work in identifying are likely to have arrhythmias that just have no idea they have arrhythmias. If we can find these markers in their medical history, then we can get a patch onto them and identify and diagnose the arrhythmias. What's encouraging is in the first 1,000 patient sort of pilot that we ran this in, about 920 out of the 1,000 patients that we thought had an arrhythmia that we had targeted and identified, 920 actually did have an arrhythmia. The accuracy of the algorithm was very high. We were fine-tuning that algorithm or dialing that in just a little bit differently when, after the next 1,000, more than 800 of the 1,000 had arrhythmias. Between the two, we're somewhere north of 80%, close to 90% accuracy in identifying who likely has an arrhythmia. When you get a patch on, you find out you do have an arrhythmia. I think that is yet to come. When we can start to work with payers or at-risk entities, provide this algorithm that can sit on top of their EMR and then flag patients, identify patients who they're already covering today but have no idea they have arrhythmias, help them get to a diagnosis, and then importantly, provide the ability to make sure that the downstream cost is reduced, it becomes a very compelling value proposition to these partners. That is how I think we're going to move into primary care in a much bigger way. It's why I think the 27 million patients out there is a real opportunity to go get. Back to your point, like how fast it happens, I can't tell you that. I think that's the less predictable part. Our approach is probably going to be, look, we're going to wait and see it show up in the results, and then we'll begin to guide to it and talk about it more. That's exciting because I think we're showing with a high degree of accuracy, we can find who has arrhythmias. Interestingly, you look at the Type 2 diabetic population as an example, massive population, large prevalence of arrhythmias within that population. The number one place that a Type 2 diabetic is diagnosed with an arrhythmia, if not in their physician's office, is in the emergency room. It's an incredibly costly episode of care for those payers. The same could be seen for COPD patients too. We can bend that curve. We know if we can get folks diagnosed, we can get their arrhythmia treated, we can reduce dramatically the instance of them showing up in the emergency room. I think we're in an interesting position to really bend the cost of care in a favorable way, and I think we will. I think, and I guess in the diabetes kind of angle, you've seen that shift of CGMs, or these patients being managed with the endocrinologist moving to primary care, now going to over-the-counter in some cases. In theory, that is a progression that iRhythm could be progressing along, right? Is it fair to ask whether or not over-the-counter at some point does become a part of the way in which you pull in some of these patients that are out there, even though it's not through the typical kind of asymptomatic innovative channel partner opportunity? I think over-the-counter, or maybe more importantly, direct-to-consumer absolutely will be part of our future. I see a future where we're educating the patients more directly than what we are today. Maybe it's as simple as they end up at our website and are able to get in touch with a virtual cardiologist who can prescribe a product and ultimately diagnose them. The patient's going to be in more control of that care. That will be a part of our future. I don't know. There might be a path out there in the future where it's not true diagnostic grade that you're trying to help them understand their arrhythmias, but that's probably further out. I do think in the near term, we can elevate focus in the patient community to where they're either showing up in their physician's office asking for a Zio, or they're going right to a website, able to be put in touch with a virtual telehealth, telecardiology service, get a prescription, get a device sent in the home or in the mail to their home, placed on themselves, and then sent back to us. I do think that would be part of it. You touched on innovative channel partners. You talked about this 1,000 patients, and I think 960 or so, so 96%. 920. 92% diagnostic yield. I believe in the past, you've talked about maybe an 80%- 81% kind of diagnostic yield when you use or more better target patients. 92%, of course, is a step up from 81% or so. You've been able to open the door maybe in some of these innovative channel partners so far with this 80% diagnostic yield. I guess how does the 92% maybe we'll say further that along, or is the opening of the door that you've done already with the 80+% what has really greased the wheels at this point that makes this an opportunity that should continue to expand? I think that these payers understand that when they know and when they're able to diagnose sort of what's occurring with the patient, they can begin to treat them. The single biggest cost driver for these folks is when their patients show up in the emergency room. If we can just keep them out of the emergency room, this is going to more than pay for itself, right? There are other benefits that come to it as well beyond just avoidance. I think that resonates incredibly well with folks. You know, when we dial the algorithm a little bit between 92% yield or 80% yield, the reality is when you get to an 80% yield, you're opening the aperture a bit more. You're monitoring more patients because if you want to dial it down to 92%, you might actually be throwing some patients out who have arrhythmias because you want to make sure you're completely accurate, right? We want to find the right balance of where you're going after all the patients you need to find the majority of the arrhythmias without excluding anybody. Our math would actually tell us you could dial that algorithm down to about 30% accuracy and still generate a return for that payer, if you will. I don't think anybody's going to want to go down to 30%, but we could if we wanted to, right? The question is going to be, where do you want to dial in the algorithm? How many folks do we want to test? What I like about our position in all of this is, you know, today the economics in this sort of relationship is we're going to sell you a patch. You're going to pay us the price of the patch, which is right in line with sort of our corporate average in our commercial business, $250, $300. As we build these data sets and we demonstrate that we're taking out meaningful cost of caring for the patient, and some of the early data is telling us anywhere from a 23% reduction in per member per month to $400 per member per month, depending on the partners, to every visit you save is $17,000 of cost avoided. When we can demonstrate all of that as an entire program that we're believing, I think our pricing power in those relationships is going to look very different, right, in the future. It's why today it's more than just selling a patch into these partners. It's bringing an entire program to them, which is finding the folks in their data sets on the front end through AI, providing a diagnostic tool like we have with Zio, then providing a wraparound service opportunity, which is through telecardiology, to care for that patient and make sure we get the cost down. That is resonating incredibly well with these payers or at-risk entities. I suspect it's going to open up a lot of doors for us. There's a lot of interest and discussions going on around this opportunity. There are 12 partners under contract. That's 2 million lives. You mentioned $250- $300 per patch, which is $450 million- $600 million in annual opportunity. We got 40 more in the pipeline, right, that we're in active discussions with right now that I'm confident will continue to convert. I think that it's why we think the market is very different than $6.5 million ACM tests. I just don't think that's the right market. There are so many more folks out there who are asymptomatic, who we know have these arrhythmias that are just, they're unaware of it. They're confusing it with other disease states. We got to go find them. If you just use the same math on those 12 partners we're engaged with today that we believe are about 2 million folks who likely have arrhythmias, if you take that math further on the next 40, we're now up to about 7 million folks that likely have arrhythmias that we can go find in this population that we're working to get under contract with. That alone is bigger than the current market that we serve, right? I continue to come back to, I just, I think our market is not defined appropriately, or we're redefining maybe how we should think about the market as we go forward because I just, I think there are so many more arrhythmias out there. The reality is that the prevalence of them in these comorbid disease states and the top four that I mentioned are the four that we're going after first. 7 million patients, potentially asymptomatic. That's, I think, well over $1 billion, which is, of course, twice what your goal is or the same size of what your goal in 2027 is. I know you've got, I don't know, 3% or 4% of the business today maybe is what asymptomatic or innovative health channel partners are today. When you think about 2025, 2026, 2027, how at least do you internally have visibility into what accounts are reoccurring, at least as it relates to us trying to figure out what number should I be baking into the 2027 number when I think about innovative health partners? This is our challenge, right? We're so early in this opportunity that it's hard to predict exactly what it should look like. It's one of the biggest challenges I have in leading the company: how do we make sure we're ready to catch all of this opportunity when it comes? As an example, we've invested in automation in the manufacturing lines. Today, we've got capacity that will get us to 4 million units. We've got automated lines that are coming in behind it that are going to get us to 10 million units a year. We're investing in those sort of opportunities with the belief of what's to come. The question is, how fast does it come? It's hard to say. Signify is a terrific customer of ours. It took them 18 months to go through a pilot and then begin to launch nationally and roll out to a full nationwide program. You take CenterWell, who in the second quarter we got signed up, and in a matter of 90 days, they're nationwide and they're going. They didn't run any pilot. That's just very different, customer by customer. It's hard to say exactly what to expect. I think for us, we're very bullish on where innovative channel partners will go. We're investing internally in the capacity, the infrastructure to be able to serve that market. We're probably not going to guide to it in our forward-looking expectations until we get experience with it and can feel confident in what we're guiding to. When we updated our guidance here this year, we felt very good with what we saw in the Signify business. We felt very good with what we had seen in the other channel partners. CenterWell was still ramping, so we didn't get ahead of ourselves there. That's probably the approach we're going to continue to take with these partners. Get some experience, get some history with them, and then we can begin to forecast better. It's awfully early. If it's 4% today, by the time you get to 2027 on the billion dollars, could that be double what you're seeing today from a contribution perspective? Yeah, I think it could be. I think we'd be disappointed, frankly, if it wasn't, right? I think we're shooting for something higher than that. It's growing faster than the core business. If we're at 4% today, we better be a lot higher than that in the future. MCT announced, you submitted it yesterday. Remind us on the timelines for what we should expect next on that front. Yeah, so we got submitted yesterday, which we're proud to have gotten that behind us. The team did a terrific job of getting that across the finish line. It's technically a 90-day 510 (k), right? We would expect to hear back from the agency within 90 days. I would absolutely expect they're going to have some questions that we'll then be on the clock to answer, and we'll pass it back to them and probably go back and forth for a round or two here. We haven't submitted a 510 (k) sort of in this new world that the FDA is working within where they've been a bit resource constrained. I don't know exactly what to expect there. They've been very good at meeting their timelines in all the dialogues that we've had to date, in all of the 483 remediation work that we've done and now completed. I mean, very engaged and just a very collaborative relationship. I don't know what to expect. What we've told folks is plan on a back half of 2026 launch for Zio MCT. If we can do it sooner than that, if we can do it better than that, we will do it. Plan on it being in the back half. That's the best way for us to think about it right now. We'll do all we can to speed that up. I think you talked about on the last call a new way of doing business with the FDA, either as it relates to the Zio MCT product to the warning letter remediation, just given that this is a different emerging type of category. I guess how do we think about that on a go-forward basis, whether it has anything to do with stuff on the innovative front, next-gen products beyond what you have today? How do we think about those comments more broadly? Look, it's probably one of my more proud moments of the last 18 months, 24 months is just to see the evolution of this relationship with the FDA. Two years ago, we couldn't have picked up the phone and got folks to answer and turn around a call very quickly. Today, we could do that, right? We're very engaged. There are discussions going on all the time with that team now, especially around our product roadmap and where we plan to take innovation into the future when we plan to submit certain features and functions into our product capabilities. They're very engaged in that. They know exactly what our roadmap looks like. They've helped educate us on here's what we're going to be looking for. When you're interested in submitting for a sleep application, here's the sort of testing that we're going to want to see. Here's the sort of data that we're going to need to see. Here's what the file needs to look like. Vitals is another one that we've had conversations around. Pediatrics is another one that we have conversations around. These are all active discussions that we're engaged with the FDA on. I would just say it's a very collaborative relationship today versus what it was two years ago. That's something we had to build. It took a lot of effort. It took a lot of change. We had to change a lot of our approach. We had to change a lot of leadership. We had to make a lot of investment. We're investing $25 million this year in remediation efforts and activities that give us a sustainable quality management system into the future. Now, about $15 million of that will fall out next year as the remediation activities are now behind us, which will be a nice leverage point in the P&L for us. We're still invested in just doing things differently. I think the FDA is very aware of that. They understand it very clearly. We just appreciate the collaborative nature of that relationship now. It's a far cry from what it used to be. On MCT, I think you talked about just the size of that market, 10 points a share, $80 million- $100 million. You said at about 10%- 15% share today. The XT or the monitor business is 70% share. What I guess are your goals for that, what MCT can do? Can you get there with the 21-day device versus the 30-day? How should we think about what MCT can bring about once you're in 2026? We're very excited about MCT. I mean, we would have loved to have had it two years ago. We don't, and that's fine. We've done a ton of research around sort of where period. We hear all the time up to 30 days. That's really driven by sort of CMS sort of saying for MCT, we want to see something up to 30 days. It's really the physician's discretion to determine what the wear period ends up being. We could give you data points of competitive MCT products out there that the average duration that they get worn for is 12.8 days. With Zio AT, we're going to give you 13.8 days out of 14 days. I mean, that's just what our data tells you. We know the customer feedback very clearly says you need to get north of 20 days to sort of really meet this idea of up to 30 days, right? We will launch MCT with a 21-day wear period. It's a single product, single device, which is very different. All of our competitors are about five to seven days, and you have to wear multiple patches to get out to north of 20 days or 30 days. I like sort of how the product's positioned. In our MCT submission, we also enhanced our algorithmic capability as well, which is going to provide some nice benefits for us. We've got a long list of accounts who have told us, look, until you get north of 20 days, we're not willing to entertain your AT product, but come back with MCT. We know who those are. The reality is we're selling into a lot of those folks with our monitor business today, XT/monitor business today. It's going to be a very quick opportunity to drop MCT right into that bag. How quickly they convert is what we have to see. You're right. We're probably 12% market share today. We'll probably exit the year closer to 15%. I don't think there's any reason we shouldn't get to 25%, 35% in this business. The question is, you know, how far can you go? I don't think it's realistic to think we're going to get 70% market share. Our largest competitors, this is their primary market. They're going to protect it well. I think we're going to be able to take some nice share here. I think when we saw some of the competitive disruption in the third quarter of this past year, one of the things that allowed us to get AT in there and move very quickly was just the fact that we're integrated with a lot of these accounts already. We drop AT right in there, and it goes fast, right? We're going to be able to drop MCT in very quick, and we'll see how fast it goes. I know we're just about out of time, but downgradable capabilities, an important piece to this as well, maybe helps you bring in a little bit more dollar on the operating margin side as well, capturing it. Have you thought about what that potential is? When you think about the 15% adjusted EBITDA 2027, key pieces to get in there? Yeah, look, MCT will absolutely have a downgradable capability in it. How we commercialize that is something that I think we still are wrestling with. We need to be thoughtful that we don't go cannibalize our existing business with a downgradable capability. At the same time, if we have customers who want the downgradable capability and are using us today because of it, how do we serve that customer segment? We got to work through that. What I've learned in the last 12 months here is that the downgradable aspect is really particular to a segment of that MCT market that we call the buy and build market. We don't serve the buy and build market at all today. How we decide to serve that in the future, we'll figure out. We're going to have a lot of flexibility in product and offering, but we'll figure that piece out. The path to profitability, look, we'll get to 15% at $1 billion in revenue. That's a goal we put out there back in 2022. There's no reason that this company can't get into the mid-20s. I think there's a clear path of how we can deliver 25% EBITDA margins. You look at where we're primarily out of line with most companies at our size and scale. It's in G&A in particular, not SG&A, but just pure G&A. Actually, selling and marketing, R&D, I like where we are at from a percent of revenue, but G&A sits in the mid-40s. Our peers probably run in the low 20s. There's probably 2,000 basis points there that we can get out over the next period of time to ultimately get to a 25% EBITDA margin. You're going to see the majority leverage come out of G&A. There's a little bit of gross margin improvement that we can continue to deliver, particularly if we can navigate some of the pricing headwinds. We always factor in 200 basis points- 300 basis points of price. Next year, price should probably be relatively flat. If we can do it better, great. I think we see a clear path there. Most of it's going to come in G&A. All right. With that, we're definitely out of time. Thanks so much for joining us. Appreciate it.