Executive Summary

Strong top-line and profitability momentum: revenue grew 30.7% YoY to $192.9M on record Zio Monitor and Zio AT performance; adjusted EBITDA margin reached 11.2%, up ~300 bps sequentially, driven by volume leverage and operational efficiencies .
Clear beat vs consensus and raised FY guide: Q3 revenue beat by ~4.4% and EPS beat by ~$0.22; FY25 revenue guidance raised to $735–$740M and adjusted EBITDA margin to 8.25%–8.75% (from $720–$730M and 8.0%–8.5%) on continued core strength and sustained Zio AT demand . Values retrieved from S&P Global.*
Strategic progress: 76 of top 100 customers EHR-integrated; Epic Aura integration shows ~25% utilization uplift within six months; innovative channel partners increased to 18, with growing contribution; submitted 510(k) for next-gen Zio MCT; advancing sleep diagnostics adjacency .
Key sensitivities: tariffs remain a ~50 bps FY25 gross margin headwind; FDA remediation ongoing with communication slowed by shutdown; pricing/mix effects from higher Zio AT blend offset by scale and efficiency gains .

What Went Well and What Went Wrong

What Went Well
- Record revenue on broad-based strength: Zio Monitor and Zio AT both set records; new account onboarding was the primary driver, increasingly converting entire systems day-one with both product lines .
- Profitability inflection: adjusted EBITDA rose to $21.6M (11.2% margin) vs 8.4% in Q2, on volume leverage and operational efficiencies; company generated record free cash flow and now expects FY25 to be slightly FCF positive .
- Strategic pipeline execution: 30 systems live on Epic Aura and 65 in implementation/discussions (integrated accounts typically see ~25% volume uplift), innovative channel partners rose to 18, and 510(k) for Zio MCT submitted in September .
- CEO quote: “We achieved record free cash flow generation during the quarter and anticipate this year to be free cash flow positive on an annual basis for the first time in company history.” .
What Went Wrong
- Tariff headwinds: management still anticipates ~50 bps gross margin drag in FY25 from tariffs despite mitigation; Q3 gross margin (71.1%) benefited from scale but was partially offset by higher AT mix .
- Regulatory overhang: FDA remediation progress continues, but communication was paused during the shutdown; no clarity yet on Zio MCT approval timing; teams pursuing an independent third‑party quality audit .
- Cost/mix dynamics: higher blended cost per unit from a richer Zio AT mix remains a headwind (offset by efficiencies); adjusted net loss remained modestly negative at $(0.06) per share .

Financial Results

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Millions)	$147.538	$158.677	$186.687	$192.884
GAAP Diluted EPS ($)	$(1.48)	$(0.97)	$(0.44)	$(0.16)
Gross Margin (%)	~68.8% (implied from +230 bps YoY)	68.8%	71.2%	71.1%
Adjusted EBITDA ($USD Millions)	—	$(2.635)	$15.696	$21.559
Adjusted EBITDA Margin (%)	—	(1.7%)	8.4%	11.2%
Adjusted Operating Expenses ($USD Millions)	—	$140.437	$145.205	$141.426
Unrestricted Cash & Securities (period-end, $USD Millions)	—	$520.6	$545.5	$565.2

Notes: Q3 2024 gross margin approximated from the disclosed +230 bps YoY delta; underlying figure not explicitly disclosed in Q3 2024 materials .

Consensus vs. actual and forward context

Metric	Q3 2025 Estimate	Q3 2025 Actual	Surprise	Q4 2025 Estimate
Revenue ($USD Millions)	$184.742*	$192.884	+$8.142 / +4.4%*	$199.938*
Primary EPS ($)	$(0.282)*	$(0.06)	+$0.22*	$0.0595*
Estimates Count (Rev / EPS)	15 / 11*	—	—	14 / 10*

Values retrieved from S&P Global.*

KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
Home enrollment (% of U.S. volume)	~23%	~23%	~23% (steady)
“New store” contribution to YoY volume	~65%	~68%	~60%
EHR integration (selected indicators)	Early Aura rollouts & pipeline	>40 health systems implementing/preparing Aura	30 Aura live; +65 in implementation/discussions

Segment/Product breakdown: The company does not disclose revenue by product; management cited record performance for both Zio Monitor and Zio AT, with AT unit growth more than double corporate average YoY .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$720M–$730M (Q2 update)	$735M–$740M	Raised
Adjusted EBITDA Margin	FY 2025	8.0%–8.5% (Q2 update)	8.25%–8.75%	Raised
Gross Margin	FY 2025	Slightly exceed FY24	Slightly exceed FY24	Maintained
Free Cash Flow	FY 2025	Slightly negative; FCF+ in 2026 (Q2)	Slightly positive in 2025	Improved

Earnings Call Themes & Trends

Topic	Q1 2025 (5/1)	Q2 2025 (7/31)	Q3 2025 (10/30)	Trend
AI/data partnerships	Building predictive risk tools; upstream detection; early pilots	Lucem Health partnership to identify undiagnosed patients via predictive AI	Continued progress; pilots showing high yields in risk cohorts	Strengthening
EHR integration	Early Epic Aura rollouts; strong pipeline	>40 systems implementing/preparing	30 live; 65 in pipeline; ~25% volume uplift post-integration	Expanding
Innovative channels	Low-single-digit volume share; early innings	12 partners; growing contribution	18 partners; contribution stepped up	Scaling
Zio AT/MCT	AT outpaced corp. growth; AT share ~10–12% market	Record AT; MCT 510(k) planned Q3	Record AT; MCT 510(k) submitted; target share expansion path to 25–35% over time	Positive
Tariffs/supply chain	~50–75 bps GM headwind anticipated	~20–40 bps GM headwind updated	~50 bps FY headwind reiterated	Managed
Regulatory	On-plan remediation; above-and-beyond QMS revamp	Continuing remediation; third‑party audit planned H2	FDA comms slowed by shutdown; external audit underway	Progressing
International	UK momentum; Japan launch announced	Japan launch and EU presence growing	Japan: 13 systems live; EU/UK growth continues	Building
Sleep diagnostics	—	—	Early work on sleep diagnostics & multi-sensing pathway	Emerging

Management Commentary

“We achieved record free cash flow generation during the quarter and anticipate this year to be free cash flow positive on an annual basis for the first time in company history.” — Quentin Blackford, CEO .
“We delivered another quarter of strong, profitable growth... revenue of $192.9 million, up 30.7% year-over-year, combined with an adjusted EBITDA margin of 11.2%.” — Dan Wilson, CFO .
“Epic Aura integrated customers typically see an average increase of nearly 25% in monitoring volume within the first six months of going live.” — CEO .
“We are raising our revenue guidance for full year 2025 to $735 to $740 million... [and] raising our full year adjusted EBITDA margin guidance to 8.25% to 8.75%.” — CFO .

Q&A Highlights

Growth drivers: Record monitor and AT quarters; new account onboarding increasingly converts full systems and both modalities on day one; mix of share gains and broader market growth; innovative channel contribution rising .
Zio MCT strategy: 510(k) submitted; approval timing uncertain; expect 2026 outlook to exclude MCT until visibility improves; long-term AT/MCT share opportunity to 25–35% from ~13% today .
Innovative channels: Partners increased from 12 (Q2) to 18; sales cycles vary; contribution stepped up Q3; many programs target asymptomatic, undiagnosed comorbid populations with promising yields .
EHR impact: Epic Aura integration associated with ~25% utilization uplift and durable adoption across networks; 76 of top 100 customers now EHR-integrated .
Regulatory: FDA remediation continues; communications paused during shutdown; independent third-party quality audit underway; operational progress remains on plan .

Estimates Context

Q3 2025: Revenue beat ~$8.1M (+4.4%); EPS beat ~$0.22, reflecting operating leverage and favorable price/mix (despite higher AT unit costs) . Values retrieved from S&P Global.*
Q4 2025 setup: Street models ~$200M revenue and ~$0.06 EPS; management expects continued strong volume growth and normal seasonality; FY guide now embeds slightly higher monitor-led strength . Values retrieved from S&P Global.*

Key Takeaways for Investors

Durable growth and profitability momentum: three consecutive quarters of 20%+ YoY growth, gross margin ~71% and adjusted EBITDA margin >11% in Q3, underpinned by scale and efficiency .
Broad-based demand: record Zio Monitor and Zio AT adoption, rising innovative channel contribution, and EHR-enabled workflow advantages drive sustained volume .
Clear catalysts: FY25 guidance raised; Zio MCT 510(k) filed; ongoing Epic Aura rollouts; sleep diagnostics adjacency emerging .
Manageable headwinds: tariff drag (~50 bps) and higher AT mix costs are being offset by operational efficiencies; regulatory remediation advancing with additional external audit .
Near-term trading lens: beat-and-raise quarter with improving FCF trajectory (now FY25 positive) typically supports multiple expansion; monitor strength supports Q4 seasonality narrative; upside optionality from innovative channels .
Medium-term thesis: share gains in MCT post-approval, sustained primary care expansion, and platform leverage via EHR/AI should support revenue CAGR acceleration and margin expansion toward 2027 targets .

References

Q3 2025 press release and financials ; 8‑K and Exhibit 99.1 .
Q3 2025 earnings call transcript –.
Q2 2025 8‑K/press release and call – –.
Q1 2025 8‑K/press release and call – –.
Clinical evidence press releases (AMALFI/AVALON) –.

Estimates disclaimer: Values retrieved from S&P Global.*

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