{ "docId": "019dd923-622c-750b-8b99-bca3fd68622d", "docSlug": "4c8fe6013c68", "documentTitle": "iRhythm Technologies, Inc. (IRTC)", "authorId": "54_Spruce_Point_Capital", "authorName": "Spruce Point Capital Management", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2025-08-18 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 73, "pageCount": 101, "prevPage": 72, "nextPage": 74, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 1, "notes": "Uses a 'before-after' style contradiction to highlight management's lack of transparency.", "elementsJson": [ "headline_text", "paragraph", "quote_block" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b99-bca3fd68622d/73", "deckHref": "/decks/019dd923-622c-750b-8b99-bca3fd68622d", "deckJsonHref": "/decks/019dd923-622c-750b-8b99-bca3fd68622d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-bca3fd68622d#slide-73", "components": [ { "bbox": null, "kind": "callout", "text": "We believe management should have disclosed this on the Company’s earnings call.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-0395-748f-956a-647dd321812c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.16, "w": 0.96, "x": 0.02, "y": 0.76 }, "kind": "paragraph", "text": "During the three and six months ended June 30, 2025, the Company recorded an impairment charge of $2.5 million associated with capitalized internal-use software in development relating to the Zio Watch with the Company's clinically integrated ZEUS system. The Company is not likely to commercially launch the Zio Watch under the Development Agreement. As of June 30, 2025, the Company is actively engaged with Verily to formally terminate the Development Collaboration Agreement dated September 3, 2019, as amended (the \"Verily Development Agreement\"), between the Company and Verily Life Sciences LLC (\"VLS\") and Verily Ireland Limited (\"VIL\", and together with VLS, \"Verily\").", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "5911b025-a9eb-4257-a113-6b3a2b8acc5c", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.21, "w": 0.96, "x": 0.02, "y": 0.17 }, "kind": "paragraph", "text": "iRhythm announced a collaboration in September 2019 with Alphabet unit Verily to develop a watch product. Over the years, iRhythm management pitched its potential, until it simply stopped talking about it. iRhythm last mentioned its Zio Watch product on September 13, 2023, when CFO Wilson told investors to expect commercialization in 2025. Subsequent 10-Ks simply stated: \"The Zio Watch has not been commercially launched.\" We believe investors held out hope that this product could counteract the threat of consumer wearables. Alas, in iRhythm's recent 10-Q filed on July 31st, the Company finally admitted defeat and disclosed it has written off the Zio Watch development. Thus, one of iRhythm's earliest efforts at a new product outside its core monitors has proven a failure. We believe management should have disclosed this on the Company's earnings call.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c1d0f551-de0d-429f-a12b-a7c84a2a4501", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.23, "w": 0.73, "x": 0.25, "y": 0.46 }, "kind": "quote", "text": "Yes, yes. So we continue to work on that product. That is a product that's in collaboration with Verily as you probably know. We've learned a lot in the years that we've been working on that watch and believe that can be potentially disruptive product long term. As any disruptive product, there may be some market development and reimbursement pathways that need to be worked through in the near term, but I remain excited about that. I expect to get into clinical studies early part of next year on our path to commercialization of the 2025 time frame. So I remain excited about that. I think we've learned a lot about our capabilities in terms of algorithms and how to leverage our clinical back end and the options kind of available to us from a strategy standpoint. So excited about where that's headed.", "attrs": null, "subkind": "pull-quote", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "447b45ee-c638-4484-86c0-4ab0200d1700", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "I expect to get into clinical studies early part of next year on our path to commercialization of the 2025 time frame. So I remain excited about that. I think we’ve learned a lot about our capabilities in terms of algorithms and how to leverage our clinical back end and the options kind of available to us from a strategy standpoint. So excited about where that’s headed. — iRhythm CFO Wilson at Morgan Stanley Conference, 9/13/23", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-0395-748f-956a-68575b485cce", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.03, "w": 0.6, "x": 0.02, "y": 0.96 }, "kind": "source-note", "text": "Source: iRhythm press release dated 9/4/2019, iRhythm 2024 10-K, Bloomberg, iRhythm Q2 2025 10-Q, Spruce Point research", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c767b521-4310-414a-9794-27877b891702", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.65, "x": 0.31, "y": 0.03 }, "kind": "title", "text": "Betting On Zio Watch? Management Failed To Mention On The Q2 Call That It's Dead", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3076003a-60aa-455a-8130-16e1327e4b62", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.96, "x": 0.02, "y": 0.41 }, "kind": "title", "text": "iRhythm's Last Commentary on the Zio Watch", "attrs": null, "subkind": "subtitle", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3072689f-5f6d-4815-aa33-db5378b11609", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.04, "w": 0.96, "x": 0.02, "y": 0.71 }, "kind": "title", "text": "iRhythm's Q2 2025 10-Q Disclosure Regarding the Discontinuation of the Zio Watch Collaboration", "attrs": null, "subkind": "subtitle", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a793de0d-cd4f-4bd4-b0e6-4635297bcccd", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "ceo-quote-contradiction", "slug": null, "matchId": "98c3c07d-3ade-42b1-bc21-00f07cd2fa74", "evidence": "Contrasts CFO quote with subsequent 10-Q disclosure", "confidence": 1 } ], "arcBeats": [ { "to": 74, "from": 58, "beatId": "5661514f-78a2-4be2-9ade-00cec8a93c0b", "arcName": "Overcoming the Monster", "arcSlug": "overcoming-monster", "beatName": "Preempt Rebuttal", "beatSlug": null, "evidence": "The document anticipates and addresses potential counterarguments.", "position": 4, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }