Good afternoon, everyone. Rich Newitter, Truist Securities MedTech analyst here. Our next fireside we have iRhythm. We have Dan Wilson. Dan, welcome. Thank you. Pleasure to be here. What's that? Pleasure to be here. Thank you. Yeah. You're doubling up. Did the other panel too. A lot of ground want to cover. You guys issued a press release yesterday in the evening. Maybe we would just start there as this will, I think, be your first public opportunity to address the cybersecurity 8-K that you guys put out. I'll just let you maybe explain what happened and kind of what your views are. Yep. Happy to start there and would refer people to the 8-K that we filed yesterday afternoon. Unfortunately, did have an unfortunate incident of unauthorized access to some of our data assets. We detected this unauthorized access a few days ago. Immediately triggered our cybersecurity response plan, working with cybersecurity experts, external advisors to assess and contain the situation. We have confirmed that a threat actor did access certain data, including patient data and other proprietary data. Have been moving quickly to continue to assess and contain the situation. It is actively ongoing from an investigation standpoint. Importantly, no impact to products, no impact to operations, no impact from a patient safety standpoint as well. Really still actively investigating to kind of understand the full scope of it. Okay. I guess in the 8-K, I'm not quoting it exactly right, but I think you said a reasonable likelihood that there won't be any material impact to your financial condition or results. Can you elaborate on that a little bit, what you're specifically talking to? Is that a guidance comment? Is that a 2Q comment? Yeah. Yeah. Yep. As we sit here today, based on what we know, we do not see it having a material financial impact on the business, on our results. You could think of that as on a go-forward basis relative to guidance. I would note that it's still actively being investigated, and if there's any material updates, we'll certainly get those out to investors. I would say, we're taking this matter very seriously and have a task force kind of working around the clock to make sure we're containing the situation. Most importantly, working with our customers to make sure we're answering any questions they may have, make sure we're communicating transparently with our customers and ensuring that we can continue to win their trust each and every day. That's where our focus has been. Obviously, this is a fluid situation, working hard to contain. Then, we've received some questions from investors on this matter, just as it potentially may or may not pertain to anything with respect to your ability to secure regulatory clearances or make progress on things that are sitting with the FDA, like MCT. I guess, is there any impact from this on timelines for MCT or the way the FDA might be evaluating your package? Yep. We don't see an impact there. We believe they're very isolated. I should have also said, don't see an impact. I mentioned product, but that includes clinical and medical systems as well. Those are separate, so don't believe this has an impact on how we're approaching Zio MCT. Okay. Your confidence level, just that the agency's on the same page on that front? Yeah. Again, there was no impact to product, no impact to product safety, no impact to clinical and medical systems. Okay. Then what are the next steps within the investigation? When do you think you'll have more comprehensive view kind of how contained things are when you'll be able to say, "Look, we've investigated it and-" Yeah. We'll certainly look to provide updates. Certainly, if there's any material changes, we'll get those out in a timely manner. Certainly, by the time our Q2 earnings call comes around, we'll give an update in terms of where the situation is at that time. Again, we're moving quickly to contain it and make sure we're moving past it quickly. Okay. Maybe we'll move on past that. Wanted to talk a little bit about Zio MCT separate from any cybersecurity- Yep. Implications, which sounds like there aren't any as of right now. This is an important product for you. It's going to give you access to a portion of the market where you've kind of been fighting with one arm tied behind your back. It's a potential share gain, market expansion area for you into 2027. You reaffirmed your first half 2027 MCT timeline on your 1Q call, you mentioned there were some changes with the FDA on rolling submission versus just everything at once toward the end of the year. Maybe just remind us of what those parameters are, why you continue to have confidence in the first half 2027 approval timeline and Was there even a soft delay within the first half of 2027 with respect to the change from rolling to- Yeah, I can try to level set there. Submitted to the FDA, received initial questions back. What we submitted to the FDA was with the existing gateway that's part of our AT device today. In responding to the FDA and seeing the feedback that they had, and the commonality here based on with the first part of the discussion is there were cybersecurity questions that we received from the FDA, and the FDA has clear guidelines around cybersecurity protocols that they want to see in connected medical devices. In looking at that, we took the view it was best to move to a mobile phone gateway and away from the existing gateway that we're using with AT. That was a product that was on our roadmap. It was our intention to move to the mobile phone gateway over time as we looked at the FDA's feedback and questions, recognizing that there was some design work required to meet the FDA's questions. We took the view better to go ahead and do that on the mobile phone gateway versus the existing gateway. We're making that change. It will take time to do that design work and then do all the testing, collecting the data from that testing, and resubmitting back to the FDA. We could have given it to the FDA on a rolling basis. In discussions with the FDA, it was our view it's best to hold that data back, submit it to them all at once we have that fully completed. Our guidance remains the same as what we communicated on the Q1 call. Running that testing, getting the data, getting it back submitted to the FDA by the end of this year with that first half 2027 launch timeframe. What would you say to someone who asks, does this just mean that if the FDA has some issue or question or follow-up, and they're only getting everything all at once, that there's less time for you to respond, and you get back-ended, and that potentially pushes you further into the first half of 2027 or later into first half 2027 timeframe or potentially outside of it? Why is that a wrong interpretation? Yeah. Is that a fair interpretation? Yeah. I think it was us reading the room, to be honest. I think in fairness to the FDA, their preference is to receive a full package back and be able to efficiently review it versus having to open the file more frequently and review and respond in that manner. Don't believe it impacts overall timing. When we initially set the first half of 2027 guidance, this was a potential path contemplated when we gave that guidance, which was why we ultimately maintain that guidance. Okay. That's very clear. You also just recently got your 3rd-generation algorithm approved. Was that a week ago? It was a couple of weeks ago. Two weeks ago? Yeah. A few weeks ago. Okay. Well, congratulations on that. I guess, what should we read into that? Just with respect to your relationship and progress you're making with the FDA, that would seem like a pretty positive sign. Certainly, that the FDA- Yeah. Is working with you in no agenda, if you will. I guess, is there anything else we can read into with respect to that and the MCT process and package? I think you said it. I think it shows we can get things through the FDA. We're incredibly excited about what the next generation algorithm can mean for the business. It will have incredible scaling and efficiency benefits once we launch that algorithm, and we're really excited about it. Yeah, I think it does show things aren't stuck with the FDA in terms of on our side. We are able to get things cleared, and I think that's a positive signal. From an actual clinical standpoint, what does this algorithm do for you? Yeah. I think you've mentioned significant efficiency improvements. Can you just summarize that? What's the launch plan for this? Yeah. It's really a resourcing and prioritization decision where we're going to hold it to launch really alongside Zio MCT. Importantly, it is applicable across our entire business. It's separate from Zio MCT. It's applicable to both Zio monitor, MCT, and AT for that matter. We're excited about getting that commercially launched. We want to maintain the resourcing and prioritization on MCT, which is behind the decision to hold it for the time being. In terms of the benefits that it will deliver for the company, we're now serving nearly 3 million patients a year, we have real scale, the algorithm essentially allows us to reduce the amount of human labor time that it requires to deliver a report back to the physician. The AI is doing more of the work, allowing our cardiac technicians to be even more efficient from what they are reviewing that comes out of the AI to ultimately what is delivered back to the physician. We've seen this every iteration of our algorithm in terms of improving that efficiency. It allows us to scale very efficiently, we're excited about getting this out there. We mentioned over $100 million in savings over a five-year time period. It's a very valuable driver. Can you go a little deeper on that? What exactly are you referring to there? Savings to who and- Yeah. How did you come up with that number? Yeah. If you think about our cost of service, our cost. Think about that as roughly half device, half service, and that's the qualified technician, the service component, the qualified technician doing the review, and then ultimately finalizing that and delivering that to the physician. With the benefits of the algorithm, the amount of time it takes with the next generation algorithm, the amount of time it takes a cardiac technician to review what's initially coming out of the AI to finalizing that report, we believe will be reduced by 50%, and this is through testing of the algorithm internally. That allows us to, as we scale, rather than having to hire two more cardiac technicians, we can hire one more to meet that same level of volume. We'll scale into that benefit, and really see it over the subsequent five years. It'll be a very valuable driver for the business. Just over time, if you're 50% reduction from this third next generation algorithm, is there a fourth, fifth, sixth generation that gets you down to no time or barely any? Where are we headed? Yeah. I can confidently say yes, there's more to do in the future. I think we were asking ourselves that same question with first generation, second generation. Absolutely, I think there's opportunities to continue to develop next generation algorithms. I think there's opportunities to drive deeper insights, broader insights, as well as driving additional efficiency. Yeah, absolutely, there's opportunities that remain. Got it. Just as we think about let's get there first, but of course, then I'm going to already ask you, how's the launch going to go? Sure. How do we think about if everything goes according to plan, let's say you hit the first half 2027 timeframe for approval. How quickly can you hit the ground running and commercialize? Are we going to be looking at a limited launch initially or a full launch? Yeah. How ready to go will you be by that point in time? Yeah, I think we'll certainly give more specifics around that as we get a bit closer to it. We have commented that there will be some type of limited release, as is typical with any new product introduction. We also have talked about Zio AT and making sure we're transitioning effectively away from Zio AT. With the growth that we've had with AT, we have been building up inventory to meet the demand that we're seeing. We want to be thoughtful in terms of how we transition away from AT, but certainly very excited about the next generation MCT and want to move as quickly as we can once it comes to market. Maybe we switch gears for a minute to the innovative channel partners. This is something I get a lot of questions on. I'd like to spend a little time here just understanding maybe higher level, taking a step back. Can you just give us a sense for how many of these partners are there? How many could there potentially be to go after? What's involved in onboarding them? How do you recognize revenue? What's the pace at which that happened? Can you just give us like a 101 on- Yeah. That business? There's a bit there, but let me start and ask any follow-up questions. The innovative channel as we describe it is essentially value-based care groups. That can be ACOs, that can be a payvider that has their own provider group, as well as a, call it a Medicare Advantage plan. The common denominator being these groups own the risk of the patient through some type of value-based care, and they have the provider part of it as well. They control the decisions around how they want to manage the risk of those patients, whether or not they want to proactively monitor patients, and that's how we define innovative channel is these patients aren't necessarily symptomatic, but they have certain risk factors, and these groups want to proactively monitor these patients. I will say this has been kind of a 10-year strategy in the works. There's been a lot of effort to generate clinical evidence to show if you monitor patient populations with risk factors, you will find undiagnosed arrhythmias. Over the last two years, I'd say we've found a really good product market fit with these innovative channel partners, again, because they own the risk, and they also own the patient touchpoint because they have the provider arm as well. We've seen this turn on nicely over the last couple of years. We've talked about it being, call it low single-digit percentage of revenue, versus two years ago when it was zero. It's grown nicely. We believe it's early innings. Can I just ask on that? Has that been a pro rata increase? What was that percentage beginning of 2025? What was it exiting 2025? Yeah. Where is it in the first quarter of 2026? Yeah. It has certainly stepped up over that longer time period. Quarter-to-quarter, there can be some variations. We have been pretty open that there can be some lumpiness in this business, particularly when we're early, and a smaller number of partners. I think that is starting to smooth out a little bit as we're growing. Historically, there has been a bit of lumpiness. But again, over a longer period of time, this has grown nicely, and it is our expectation that this will continue to grow as a percentage of our business. We talked about last year it being the fastest-growing channel in our business. The guidance for this year is that it will remain the fastest channel in our business. To be honest, we see that sustaining for a period of time. We believe we're early in the effort and believe there's a big opportunity out there for us. Let me just ask on that because your growth guidance at least, relative to last year is lower than it was last year, right? Relative to what you delivered on 2025. Sure. Is that to say that the innovative channel partner segment growth forecast can sustain at 2025 levels, but maybe everything else is what's dragging down the growth incrementally year-over-year? Does the channel partner growth curve come down too with everything else? Yeah. We didn't parse it out in that level of detail, other than to say, again, last year it was the fastest growing channel, will remain the fastest growing channel this year. We are thoughtful in terms of how we set guidance, particularly around this part of our business, given some of the lumpiness that I alluded to earlier, but see a lot of momentum. Again, believe we're early and there's a big opportunity out there for us. One thing we are working on is generating economic evidence, real-world economic evidence from some of the programs that we've been running with partners for a period of time now. We do believe that can be a real catalyst in opening the market up further, and expect to see some of that data by the end of this year. I guess when you said some lumpiness, I guess that's something that's just inherent in the way that you recognize the revenue and see the revenue come in, right? That lumpiness doesn't stop you from. If you're that early in this channel adoption, shouldn't that growth still be accelerating? It's just lumpy within an accelerating growth curve. Is that the right way to think of it? Yeah, I think it's more quarter-to-quarter- Okay. Variation. Yeah. I guess I just want to make sure. Is growth accelerating in this channel for you or in this business segment? We're early in 2026. In terms of how we set guidance, again, it will remain fastest growing channel- Okay. In the business. Again, we'll reiterate, we believe we are early. There is a big opportunity out there. We've talked about 27 million patient opportunity. More recent market research suggests that number is actually even bigger than 27 million. That economic evidence that I alluded to earlier, we believe that's going to be a nice catalyst to further open the market, but- When are we expecting that? By the end of the year. I think I'd ask you, just as a percentage of revenue, do you think that that will stay at a 3%-ish of revenue because your revenue's growing, or should we expect that percentage to kind of creep up each year? That will grow over time, as it has the last two years. Naturally, if it's the fastest growing channel in the business, it's going to grow as a percentage of revenue, and that is our expectation. Sorry, just one last one. Is the lumpiness a function of you have a channel partner that comes on maybe trials or starts using it and then they pause, and then before there's a re-upping or reordering? Yeah. Just explain why is there lumpiness. Yeah. I think, again, as we're early and having a smaller number of partners, one kind of partner can sway or impact quarter-to-quarter variation. Importantly, though, every partner we have turned on to a program continues to monitor today. We haven't seen any churn or fall-off. I think that's a very critical point. Every partner we've gotten to a pilot has continued onto a commercial program, which tells you they are seeing the value proposition play through, once they make the decision to initiate a pilot. I'd say the lumpiness is more, we had a partner that was focused on an internal EHR upgrade unrelated to our program, but were applying resources to that effort for a period of time, call it three, four months. Then we saw that partner ramp back up nicely once they were through that. It's just those types of things. Again, as we're turning on more partners, as this builds a bigger base, I think we'll start to see a natural smoothing of that lumpiness. Got it. Very helpful. Wanted to ask a few other questions. A couple of regulatory and then a few on AI. Sure. On the regulatory front, just remind us where you are on warning letter resolution. Are there any timelines that you can benchmark us towards that you think- Yeah. You should have updates or engagement with the agency and- Yeah. Yeah. Yeah. We executed on the 12-month remediation plan that we outlined to the FDA, I guess that was back in August 2024. We hit every timeline and commitment that we outlined to the FDA at that time. We went above and beyond that and had an independent third-party audit firm come in over the course of late last year into Q1 this year to do an end-to-end quality management system audit. We came out of that with no material observations, so a very good outcome there, and believe we've done everything we can on our side to position us to ultimately get the warning letter cleared. Ultimately, it's FDA that controls the timing here. Certainly, we will communicate to the FDA in terms of where we are and hopefully see them back sooner rather than later. Ultimately, they control the timing. In terms of milestones, there will be another inspection. If they get through that comfortably and don't see any observations, then there would be a period of time where they would ultimately close out the warning letter. Sometimes it does require two inspections. Hopefully, we're in a solid position where we can get through it on the first inspection, but again, FDA ultimately controls the timeline. That's helpful. On the CID, anything to report there? I know these things- Yeah. Can take years before any resolution comes. I'm just curious. To be honest, it has been years, right? From the original subpoena back in 2023. We have been responsive to the DOJ in the most recent request, have turned over documents, have been providing context around those documents. I would say there's more active dialogue now than maybe there has been in the past, we are hopeful that we're working towards resolution, similar to the FDA, don't fully control the timing there. We do recognize it's been an overhang and one that we would like to get behind us, certainly going to do what we can to. When you say more active dialogue than there has been in the past, are you referring to since it was turned into a CID, or since some period before that? I would say more recently over the last weeks, months, responding to the CID, providing context around that, making sure we're available to answer any questions, that type of dialogue. Got it. Helpful. Another question we get somewhat less so now, on AI and your moats and why aren't you going to get out-moated by either a competitor or one of the AI companies. Can you give us just what's most misunderstood- Yeah. About AI as it factors into your competitive advantage and your business model and your moat? I think as we were talking about on the AI panel earlier today, I do think from pure AI standpoint, we're in a unique advantage and can compete effectively there given the data that we have accumulated over our 20-year history, over 3 billion hours of curated data. That is what has been training our AI, which is delivering the efficiencies and the values of our next generation algorithm that I mentioned earlier. I do think even from that standpoint alone, we can effectively compete. There's everything else around it as well. We deliver an end-to-end service that is enabled by AI, but it's also enabled by a wearable device that we've been innovating around for 20 years as well. That's important. Patient can wear it comfortably for 14 hours or 14 days, excuse me, can go about their daily life, shower, sleep, exercise. That's an important piece of it. How we integrate with our customers, whether it's EHR integration, other clinical workflows that we integrate with. There's been a lot of effort over our history there as well that we've been investing in. Certainly from a regulatory environment standpoint, our IDTF capabilities, our quality management system that we have been focused on continuing to evolve and develop, and then payer environment. All of the payer contracts that we've secured over a 20-year period as well, all of that is very difficult to replicate overnight. We do see AI as an enabler, but it is a piece of a much bigger picture. Maybe just to close out with a volume and a price question. Okay. We've been asking all companies on the podium today, we're hearing some noise out there. We see some signs of hospital utilization slow down. Most MedTech companies have said nothing is really changing in what they can see. I want to hear what your view is on that against that backdrop of potential headwinds that could be brewing. Specifically on volume? Just on volumes. Yeah. Yeah. We're a growth company. We're growing through that, I would say. It's hard for me to say there isn't any impact out in the market. We're not observing it, and certainly not in a material way, like the momentum in the business. You're saying if it's there. If it's there. You don't know if it's there. Correct. If it's there. Got it. Correct. Yeah. On pricing, just remind us what your guidance assumes for pricing in 2026, what it was in 2025. Yeah. How do we think of the price algorithm going forward? Yeah. We generally always try to guide to low single-digit pricing declines year-over-year. This year, a bit unique in some of the Medicare rates that were established were set up the year guiding to price being flat for the year. Q1 was a bit better than that. It's still early in the year, so don't want to necessarily get ahead of ourselves. Price is potentially tailwind and potential upside as we go through the year. Guidance for the year has been flat overall. 2027, we should probably just as a placeholder go to low single-digit declines again. Yeah. Probably right. Yeah. Okay. This is great. Dan, thank you so much for attending. Really appreciate it. Thanks for having us. Appreciate it.