Exagen Inc. Earnings Call Highlights Record Growth

Exagen ((XGN)) has held its Q1 earnings call. Read on for the main highlights of the call.

Exagen Inc. Reports Positive Earnings Call with Record Revenue Growth and Strategic Progress

The recent earnings call for Exagen Inc. conveyed a generally positive sentiment, marked by record revenue growth and successful strategic initiatives. The company highlighted its achievements in reimbursement strategies, although it acknowledged ongoing challenges with gross margin pressures and increased operating expenses that are impacting profitability.

Record Revenue Growth

Exagen Inc. reported a record revenue of $15.5 million, marking an 8% increase compared to the first quarter of the previous year. This growth underscores the company’s robust financial performance and its ability to capitalize on market opportunities.

New Biomarker Launch

The launch of new biomarkers has been a significant driver of volume growth for Exagen, with a 6% increase over the previous quarter. The company anticipates an increase in the average selling price (ASP) by $90 by the end of the year, further boosting revenue.

Successful ALJ Hearing

Exagen achieved a significant legal victory by winning its first Administrative Law Judge hearing concerning a Medicare Advantage denial. This sets a positive precedent for future appeals and strengthens the company’s reimbursement efforts.

TRICARE Positive Medical Policy

The company secured a positive medical policy with TRICARE, which enhances reimbursement and validates the clinical utility of its offerings. This development is expected to support Exagen’s growth and market presence.

New Credit Facility

Exagen established a new credit facility with Perceptive Advisors, increasing its borrowing capacity and financial flexibility. This move positions the company well for future growth and strategic transactions.

Gross Margin Decline

Despite the positive revenue growth, Exagen experienced a slight decline in gross margin from 59.6% to 58.9%. This was attributed to transitory headwinds and the impact of partial quarter biomarker revenue.

Increased Operating Expenses

Operating expenses rose by 7.5% year-over-year, driven by increased research and development (R&D) and selling, general, and administrative (SG&A) costs. This increase reflects the company’s investment in growth and innovation.

Adjusted EBITDA Loss

Exagen reported an adjusted EBITDA loss of $2.5 million, which is higher than the $2 million loss in the first quarter of the previous year. This highlights the financial challenges the company faces despite its revenue growth.

Forward-Looking Guidance

Looking ahead, Exagen provided guidance indicating a strong start to the year with expectations of at least $65 million in full-year revenue. The company aims to achieve positive adjusted EBITDA by Q4 2025. Strategic initiatives include expanding test volume, launching new seronegative markers, and leveraging the new credit facility for growth.

In summary, Exagen Inc.’s earnings call reflected a positive outlook with record revenue growth and strategic advancements. While challenges such as gross margin pressures and increased operating expenses persist, the company’s forward-looking guidance and strategic initiatives suggest a promising trajectory for future growth.