Digital health company iRhythm Technologies on Thursday reported fourth-quarter revenue of $112.6 million. It surpassed William Blair analyst Margaret Kaczor's expectations by $3.6 million, and the revenue growth was driven by the opening of new accounts for the Zio XT wearable cardiac monitor watch and progress on addressing operational issues.

Shares of iRhythm rose 7% to $115.03 in morning trading on Nasdaq.

“With catalysts like the launch of its next-gen Zio monitor (broader launch in second half 2023, limited launch today), Zio watch, international expansion, clinical data around asymptomatic patients, and indication expansion on the horizon, we believe that the long term remains intact, and we see the risk/reward at this valuation as quite favorable,” Kaczor wrote in a research note.

“With another record of new Zio XT account openings in the fourth quarter, the issuance of the CMS Final Rule, and tangible progress made towards our pillars for long-term growth, I could not be more pleased with the ability of our entire organization to advance our mission to transform healthcare," iRhythm CEO Quentin Blackford said in a statement.

Forecast:

The company said it expects revenue for full-year 2023 to grow about 16% to 18% compared to prior year results, ranging from $475 million to $485 million. Gross margin for the full year is expected to range from 69% to 70%, and adjusted operating expenses are expected to range between $415 million and $425 million.

Adjusted EBITDA margin for the full year is expected to range from about negative 0.5% to 0.5% of revenues, iRhythm said.