Exagen ((XGN)) has held its Q2 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Exagen Inc. conveyed a generally positive sentiment, underscored by record revenue achievements and substantial growth in test volumes and revenue per territory. The company’s strategic expansions in sales and leadership, alongside successful biomarker launches, indicate robust operational progress. However, challenges such as increased operating expenses and net losses present hurdles to profitability, tempering some of the positive momentum.
Record Revenue Achieved
Exagen Inc. reported a record revenue of $17.2 million for Q2, marking a 14% year-over-year growth. This achievement represents the highest quarterly revenue in the company’s history, highlighting its strong market presence and successful business strategies.
Significant AVISE CTD Test Volume Growth
The AVISE CTD test volume experienced substantial growth, achieving its best quarterly volume since strategic adjustments in 2023. This growth underscores the effectiveness of the company’s strategic initiatives and its ability to meet increasing demand.
Increased Revenue Per Territory
The average revenue per territory rose to over $430,000 for the quarter, reflecting a 50% growth since the CEO’s tenure began. This increase demonstrates strong commercial leverage and the company’s ability to capitalize on market opportunities.
Successful Biomarker Launch
The launch of new T cell and RA markers in January has been a catalyst in commercial discussions, with positive clinical impacts reported. These biomarkers are enhancing the company’s product offerings and driving revenue growth.
Strategic Leadership Additions
Exagen strengthened its leadership team with the addition of Dr. Michael Mahler as Chief Scientific Officer and Chas McKhann to the Board of Directors. These appointments bring significant R&D experience and strategic oversight, bolstering the company’s growth trajectory.
Strong Financial Position
The company ended the quarter with over $30 million in cash and equivalents, approaching neutral operating cash flow. This strong financial position provides a solid foundation for future growth and operational stability.
Expansion of Sales Territories
Exagen expanded its sales force from 40 to 42 territories, with plans for further growth. This expansion reflects the company’s commitment to increasing market penetration and supporting its growth objectives.
Operating Expenses Increase
Operating expenses rose to $13 million from $11.6 million in the same quarter of 2024, driven by one-time expenses, R&D investment, and strategic team additions. This increase highlights the company’s investment in future growth, albeit at the cost of current profitability.
Net Loss Increase
The company reported a net loss of $4.4 million for the quarter, up from $3 million in the same period last year. This increase is attributed to new debt facility impacts and interest expenses, posing a challenge to the company’s profitability.
Adjusted EBITDA Loss
Exagen’s adjusted EBITDA loss was $1.7 million in Q2, slightly up from $1.6 million in the second quarter of 2024. This indicates ongoing challenges in reaching profitability, despite the company’s strong revenue growth.
Forward-Looking Guidance
Exagen provided a full-year revenue guidance range of $65 million to $70 million, with expectations of achieving positive adjusted EBITDA by Q4 2025. The company anticipates continued growth in AVISE CTD test volumes and revenue per territory, supported by the successful launch of new biomarkers. Gross margins are expected to remain slightly over 60%, with a focus on maintaining a path to neutral operating cash flow.
In summary, Exagen’s earnings call reflects a positive outlook, driven by record revenue and strategic growth initiatives. While challenges such as increased operating expenses and net losses remain, the company’s strong financial position and forward-looking guidance suggest a promising future. Investors and stakeholders can look forward to continued growth and potential profitability in the coming quarters.