The Company leases office, manufacturing, and clinical centers under non-cancelable operating leases which expire on various dates through 2033. These leases generally contain scheduled rent increases or escalation clauses and renewal options. Operating lease ROU assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. The operating lease ROU assets also include any lease payments made to the lessor at or before the commencement date as well as variable lease payments which are based on a consumer price index. The Company is also subject to variable lease payments related to janitorial services and electricity which are not included in the operating lease ROU asset as they are based on actual usage. The Company recognizes operating lease expense, generally on a straight-line basis over the lease term.

As of January 1, 2025, the Company transitioned from a fully-insured health-benefit program to a self-insurance program to cover U.S. employees and their dependent health benefits. The Company maintains stop-loss insurance that limits its exposure to large claims. The Company records its liability associated with these benefits by utilizing a third-party actuarial specialist, that includes both an estimate of claims submitted and incurred but not yet reported based upon historical claims experience. The Company's accrued health benefits liability is $3.0 million and $2.6 million as of June 30, 2026 and December 31, 2025, respectively, which is included within accrued liabilities on the Company's unaudited condensed consolidated balance sheets.

The Company is subject to various litigation, regulatory investigations, and other legal proceedings that arise in the ordinary course of its business. The Company is also subject to regulatory oversight by numerous regulatory and other governmental agencies, including at the federal and state levels and internationally. Such litigation, investigations and other legal proceedings could have an adverse impact on the Company's reputation, business, and financial condition and divert the attention of its management from the operation of its business. These matters are subject to many uncertainties and outcomes that are not predictable.

The Company reviews its lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and recognizes loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in its consolidated financial statements.

On February 6, 2024, a putative class action lawsuit was filed in the United States District Court for the Northern District of California alleging that the Company's wholly-owned subsidiary, iRhythm Technologies, Inc. ("iRhythm Technologies"), and the Company's and iRhythm Technologies' current Chief Executive Officer, Quentin Blackford, iRhythm Technologies' former Chief Financial Officer, Brice Bobzien, and its former Chief Financial Officer and former Chief Operating Officer, Douglas Devine, violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule 10b-5 promulgated thereunder, and seeking unspecified damages purportedly sustained by the class. On July 19, 2024, an amended complaint was filed, naming iRhythm Technologies, Mr. Blackford, Mr. Bobzien, Mr. Devine, the Company's and iRhythm Technologies' Chief Commercial and Product Officer Chad Patterson, iRhythm Technologies' former Chief Technology Officer Mark Day, and the Company's and iRhythm Technologies' Chief Medical Officer, Chief Scientific Officer, and Executive Vice President of Advanced Technologies, Mintu Turakhia, as defendants. On October 7, 2024, a second amended complaint was filed against the defendants to include events from U.S. Food and Drug Administration ("FDA") inspections, but otherwise included the same claims under the Exchange Act.

On June 3, 2026, iRhythm Technologies entered into a binding Stipulation and Agreement of Settlement (the “Securities Settlement Agreement”) to fully resolve the putative class action securities litigation. The Securities Settlement Agreement provides for a settlement payment of $45.0 million, inclusive of lead plaintiff’s attorneys' fees and litigation expenses in exchange for the complete dismissal with prejudice of the action and a release of all claims against the named defendants in connection with the action, without any admission of fault, liability, wrongdoing or damages by the defendants. During the three and six months ended June 30, 2026, the Company recorded a litigation settlement liability of $45.0 million within accrued liabilities on the Company's unaudited condensed consolidated balance sheet. The Company is entitled to recover approximately $40.0 million related to litigation legal fee defense costs as well as the settlement liability under applicable insurance policies, which has been recorded within prepaid expenses and other current assets on the Company's unaudited condensed consolidated balance sheet. As of June 30, 2026, the Company incurred approximately $9.0 million in litigation legal fee defense costs expected to be recovered through insurance, with a remaining amount of approximately $31.0 million in settlement costs expected to be recovered through insurance, of which the Company has received $4.1 million in insurance recoveries. As a result, during the three and six months ended June 30, 2026, the Company recorded litigation settlement expense, net of expected insurance recoveries, of approximately $14.0 million in the accompanying unaudited condensed consolidated statement of operations.

The Company's board members and certain of iRhythm Technologies' current and former executives were named as defendants in three complaints filed as stockholder derivative actions in the United States District Court for the District of Delaware, the United States District Court for the Northern District of California, and the Delaware Court of Chancery. iRhythm Technologies is named as a nominal defendant in the complaints. The cases make similar allegations to those in the securities class action complaint described above and the two federal derivative cases were stayed pending the resolution of the securities class action. The parties are negotiating a similar stay of the state derivative case.

On March 26, 2021, iRhythm Technologies received a grand jury subpoena from the U.S. Attorney’s Office for the Northern District of California requesting information related to communications with FDA and its products and services. On September 13, 2021, iRhythm Technologies received a second subpoena requesting additional information. On April 4, 2023, iRhythm Technologies received a Subpoena Duces Tecum from the Consumer Protection Branch, Civil Division of the U.S. Department of Justice (the “DOJ”), requesting production of various documents regarding iRhythm Technologies' products and services. The Company is cooperating fully on these matters.

On July 1, 2024, the DOJ filed with the United States District Court for the Northern District of California a Petition for Order to Show Cause and Application for Enforcement against iRhythm Technologies with respect to the production of certain documentary materials which iRhythm Technologies asserts are protected by legal privileges. On May 30, 2025, following a hearing on the issue, the District Court ordered iRhythm Technologies to disclose certain of the documents, finding that iRhythm Technologies had waived its asserted legal privileges. iRhythm Technologies has appealed the District Court's order to the Ninth Circuit Court of Appeals. On July 17, 2025, the Ninth Circuit Court of Appeals stayed the District Court's production order until the appeal is resolved. Briefing on the merits was completed on February 19, 2026 but oral argument has yet to be set. The Company intends to continue to defend iRhythm Technologies' privilege assertions over the documents at issue. Regardless of the outcome of the appeal or the potential disclosure of the documents at issue, it is not clear what, if any, action the DOJ may take following resolution of the dispute over legal privileges.

On December 12, 2025, iRhythm Technologies received a civil investigative demand from DOJ’s Civil Division’s Commercial Litigation Branch seeking information and documents related to Zio AT and iRhythm Technologies' associated claims for reimbursement. The Company has cooperated, and is continuing to cooperate, fully in connection with these matters.

On February 20, 2024, Welch Allyn, Inc. ("Welch Allyn"), a subsidiary of Baxter International, Inc. ("Baxter"), filed a lawsuit against iRhythm Technologies in the United States District Court for the District of Delaware, alleging that Rhythm Technologies’ Zio devices infringe certain of Welch Allyn's patents. iRhythm Technologies filed a response denying all allegations of patent infringement and asserting defenses including patent invalidity. On December 10, 2024, Bardy Diagnostics, Inc. (“BardyDx”), a subsidiary of Baxter, filed a lawsuit against iRhythm Technologies in the United States District Court for the District of Delaware, alleging that the Zio monitor infringes BardyDx's patents and iRhythm Technologies subsequently filed a response denying all allegations of patent infringement, asserting defenses including patent invalidity, and asserting patent infringement counterclaims alleging that BardyDx’s Carnation Ambulatory Monitor patch infringed iRhythm Technologies' patents. On July 31, 2026, iRhythm Technologies entered into a settlement and license agreement (the “Baxter Settlement Agreement”) with Baxter, Welch Allyn and BardyDx (collectively, the “Baxter Parties”), to resolve all outstanding patent litigation among the parties. Refer to Note 12, Subsequent Events, for further details relating to the Baxter Settlement Agreement.

In June 2026, three putative class action lawsuits were filed in the U.S. District Court for the Northern District of California, San Francisco Division, alleging claims arising out of a cybersecurity incident in which a threat actor improperly obtained certain sensitive information of the Company maintained on certain third-party-hosted business applications. Two of the actions were filed against iRhythm Holdings, Inc., and one action was filed against iRhythm Technologies, Inc. All three actions have been assigned to the same judge, and the Company anticipates that the court will consolidate the cases and appoint interim lead plaintiffs' counsel to promote judicial economy. The Company continues to evaluate the allegations, assess potential defenses, and determine the appropriate responsive pleadings. Based on the nature of the proceedings in these cases, the outcome of these matters remains uncertain and the Company cannot estimate the potential impact, if any, on its business or financial statements at this time.

On August 30, 2024, the Company entered into a Technology License Agreement (as amended, the “License Agreement”) with BioIS, pursuant to which (i) the Company will receive a perpetual fully paid up license to certain of BioIS’ intellectual property, technology and products for research, development and commercialization of potential next generation products and services in certain fields of use, including (x) an exclusive license to develop and commercialize pulse oximetry, accelerometry, and trending non-invasive blood pressure technologies for use within the Company's ambulatory cardiac monitoring products and services, and (y) a limited, non-exclusive license to develop and commercialize products and services for use in unattended, home-based diagnostic testing and assessment of central and obstructive sleep apnea, and (ii) the Company and BioIS agreed to negotiate in good faith a supply agreement for pulse oximetry hardware.

Under the terms of the License Agreement, during the third quarter of 2024 the Company paid BioIS an upfront fee of $15.0 million in cash consideration in acceptance of the initial transfer of certain licensed technologies and data following the execution of the License Agreement. In connection with the License Agreement, the Company also purchased an aggregate of $40.0 million of convertible promissory notes from BioIS (the “Convertible Notes”), of which $20.0 million of the convertible promissory notes (“Milestone Notes”) were designated for satisfaction of the Company's regulatory milestone payment obligations. The Milestone Notes, plus accrued and unpaid interest, if any, shall be cancelled, if outstanding, upon the achievement of the regulatory milestones up through December 31, 2026.

In June 2025, BioIS achieved the first of two regulatory milestones. As of June 30, 2026, BioIS and the Company are in the process of completing all required contractual conditions in order to cancel $10.0 million in Milestone Notes plus accrued and unpaid interest. During the three and six months ended June 30, 2026, the Company recognized acquired IPR&D expense of $0.3 million and $0.6 million, respectively, in the Company's unaudited condensed consolidated statements of operations. During the three and six months ended June 30, 2025, the Company recorded a charge of $1.7 million and $2.0 million, respectively.

On September 3, 2019, the Company entered into a Development Collaboration Agreement with Verily Life Sciences LLC, an Alphabet company (“VLS”) and Verily Ireland Limited (“VIL” and together with VLS, “Verily”) (such Development Collaboration Agreement, as amended by Amendment No. 1 dated April 26, 2021 and Amendment No. 2 dated January 24, 2022, the “Development Agreement”). The Development Agreement involved joint development and production of intellectual property between the Company and Verily.

In August 2025, the Company and Verily mutually terminated the Development Agreement, subject to the Company's continued rights to a license to certain intellectual property associated with a mobile app developed under the Development Agreement. 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.

In the ordinary course of business, the Company enters into agreements pursuant to which it agrees to indemnify customers, vendors, lessors, business partners, and other parties with respect to certain matters, including losses arising out of the breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. Pursuant to such agreements, the Company may indemnify, hold harmless and defend an indemnified party for losses suffered or incurred by the indemnified party. Some of the provisions will limit losses to those arising from third-party actions. In some cases, the indemnification will continue after the termination of the agreement. The maximum potential amount of future payments the Company could be required to make under these provisions is not determinable. The Company has also entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers to the fullest extent permitted by applicable law. The Company currently has directors’ and officers’ insurance. The Company has not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions, and believes that the estimated fair value of these indemnification obligations is not material and it has not accrued any amounts for these obligations.