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EI

EXAGEN INC. (XGN)·Q2 2025 Earnings Summary

Executive Summary

  • Record Q2 2025 revenue of $17.2M, up 11% sequential and 14% year-over-year, drove a clear top-line beat versus S&P Global consensus; gross margin improved to 60.4% with continued ASP expansion and volume growth .
  • Revenue beat consensus by ~$0.9M (reported $17.20M vs $16.31M estimate); EPS missed modestly on S&P’s Primary EPS (-$0.176 actual vs -$0.153 estimate), while company-reported GAAP net loss per share was -$0.21; management cited higher interest/fair value items and loss on debt extinguishment as net loss drivers * * *.
  • Guidance raised: FY25 revenue now $65–$70M (vs “at least $65M” in Q1); at the high end, management expects positive adjusted EBITDA in Q4 2025; gross margin expected to continue expanding, with OpEx roughly stable through year-end .
  • Strategic catalysts: continued AVISE CTD adoption (volume +14% q/q; +7% y/y), TTM ASP $428 (+$27 y/y), sales territory expansion (target ~44–45 by YE), and pipeline momentum (anti-PAD4 submission Aug; lupus nephritis urine/blood programs; biopharma collaborations) .
  • Balance sheet strengthened via $20.2M equity offering and new credit facility; quarter-end cash/cash equivalents $30.0M and over $40M combined cash + AR; setup supports investment while staying on track for adjusted EBITDA positivity in Q4 .

What Went Well and What Went Wrong

What Went Well

  • Record quarterly revenue of $17.2M; AVISE CTD test volume returned to growth and TTM ASP rose to $428, reflecting effective commercial execution and reimbursement strategy .
  • Gross margin edged up to 60.4% (vs 58.9% in Q1), with management expecting further expansion primarily from ASP improvements; Q2 margin normalization followed Q1 lab investments .
  • Strengthened leadership and scientific roadmap: appointment of Dr. Michael Mahler as CSO (PAD4 commercialization track), continued advancement in lupus nephritis diagnostics, and strategic biopharma partnerships .
    • Quote: “We’re excited to report another strong quarter… record revenue… best quarterly volume since we made our strategic adjustments… driven organically by our existing commercial team and the growing clinical recognition of our differentiated science” .

What Went Wrong

  • Net loss widened to $4.4M vs $3.0M a year ago, driven by new debt facility impacts: ~$0.6M non-cash interest/fair value, $0.3M loss on extinguishment, and ~$0.4M higher cash interest expense .
  • Adjusted EBITDA loss of $1.7M slightly worse than prior-year Q2 ($1.6M), reflecting hiring, R&D and one-time expenses; path to Q4 adjusted EBITDA positivity remains execution-dependent .
  • ASP accruals prudently adjusted closer to cash collections, tempering the pace of trailing ASP uplift this quarter; management expects acceleration as revenue cycle fully reflects new biomarkers and patient deductibles max in H2 .

Financial Results

Core Metrics vs Prior Periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$15.06 $15.50 $17.20
Gross Margin (%)60.1% 58.9% 60.4%
Operating Expenses ($USD Millions)$11.64 $12.49 $13.03
Operating Loss ($USD Millions)$(2.59) $(3.37) $(2.63)
Net Loss ($USD Millions)$(2.97) $(3.75) $(4.44)
Net Loss per Share (GAAP, $)$(0.16) $(0.20) $(0.21)
Adjusted EBITDA ($USD Millions)$(1.60) $(2.51) $(1.72)
Cash & Equivalents ($USD Millions)$24.48 $11.19 $30.03

Q2 2025 Actuals vs S&P Global Consensus

MetricQ2 2025 ActualQ2 2025 ConsensusSurprise
Revenue ($USD Millions)$17.20 $16.31*+$0.89M (Beat)*
Primary EPS ($)-$0.176 (S&P actual)*-$0.153*-$0.023 (Miss)*
GAAP Net Loss per Share ($)-$0.21 N/AN/A

Values retrieved from S&P Global.*

KPIs and Operating Drivers

KPIQ2 2024Q1 2025Q2 2025
AVISE CTD Test Volume Growth (YoY)——+7%
AVISE CTD Test Volume Growth (QoQ)——+14%
AVISE CTD TTM ASP ($ per test)$401 $419 $428
Avg Revenue per Territory (Q2)——“Just over” ~$0.43M
Sales Territories (end of period)~40 ~40 42; line of sight to 44–45 YE

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY 2025At least $65M $65M–$70M Raised
Adjusted EBITDA TimingQ4 2025Positive in Q4 2025 Positive in Q4 at high end of revenue range Maintained/clarified
Gross Margin2H 2025 / LTExpect expansion into low 60% in 2H; mid-60s LT potential Expect continued expansion, driven mostly by ASP Maintained (qualitative)
Operating ExpensesFY 2025—~$13M/quarter; remain roughly at these levels in 2025 Introduced qualitative run-rate
Cash/LiquidityFY 2025Extended debt maturity; up to $50M future credit capacity Over $40M cash + AR at 6/30; up to $50M credit capacity Maintained (updated status)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q4 2024; Q-1: Q1 2025)Current Period (Q2 2025)Trend
ASP Expansion & MarginASP up to $411; targeted mid-60s GM over time TTM ASP $428; GM 60.4%; continued expansion expected Improving
Volume & Commercial ExecutionVolume fell in 2024 but stabilizing; plan territory adds Volume +14% q/q, +7% y/y; territories 42 → 44–45 YE Accelerating
Market Access & AppealsALJ strategy initiated; TRICARE positive policy Accruals adjusted nearer to cash; expect H2 ASP lift Positive, gradual
R&D Pipeline (RA seronegative, PAD4)Second wave RA markers expected YE/early ’26 PAD4 submission Aug; launch heading into 2026 On track
Lupus Nephritis (Urine/Blood) & BiopharmaCustom array; NIH cohorts; seeking partners First urine-platform biopharma collab near end; more partnerships expected Advancing

Management Commentary

  • Strategic focus: “We’re committed to building a business that scales profitably… changes we’ve made over the past 18 months… are continuing to show meaningful traction.”
  • On ASP accruals: “We adjusted our accrual rate down to align with actual cash collections… expect continued expansion in the second half as deductibles max and the revenue cycle completes.”
  • Pipeline confidence: “We plan to submit anti-PAD4… expect to hear back by year-end… on track to launch commercially heading into 2026.”
  • Balance sheet: “Ended the quarter with just over $30 million in cash… over $40 million combined cash and AR… up to an additional $50 million in available future credit capacity.”

Q&A Highlights

  • Sustainability of volume growth: Driven by team quality and new markers; salesforce expansion impact expected later in the year; market penetration ~<10% implies runway .
  • ASP trajectory and accruals: $90 per-test uplift remains the goal; accrual rates adjusted conservatively to avoid future write-downs; H2 uplift anticipated .
  • Seasonality and territories: Q2 is historically strongest; expansion expected to counter typical H2 seasonal headwinds; target ~44–45 territories by YE .
  • Biopharma revenue: ~$100–$200k per quarter, timing-lumpy but margin accretive; expanding partner pipeline .
  • Market access and awareness: Digital campaigns, KOL engagement, publications; aim to elevate payer recognition via unique markers and appeals .

Estimates Context

  • Revenue beat: Reported $17.20M vs S&P Global consensus $16.31M; strong sequential volume (+14%) and ASP lifted results above expectations *.
  • EPS miss: S&P Primary EPS actual -$0.176 vs -$0.153 consensus (company GAAP net loss/share -$0.21), with debt-related items and fair value adjustments the primary drivers of wider net loss * .
  • Forward estimates: Consensus models call for continued revenue growth into Q3–Q4 2025 ($16.90M–$17.51M) with gradual Primary EPS improvement; company reiterated Q4 adjusted EBITDA positivity at high end of guidance *.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • The revenue beat and margin uptick validate multi-lever growth (volume, ASP, revenue cycle); the raised FY guide to $65–$70M and Q4 adjusted EBITDA target frame near-term profitability catalysts .
  • Debt refinancing and $20.2M equity raise reduce financing risk and add growth optionality; quarter-end liquidity supports continued R&D and commercial expansion .
  • Expect H2 ASP acceleration as accrual adjustments normalize and patient deductibles max; watch for gross margin progression into low 60s by 2H per plan .
  • Pipeline milestones (PAD4 submission Aug; lupus nephritis urine/blood programs; additional RA seronegative markers) are potential medium-term catalysts for adoption and ASP .
  • Watch salesforce territory adds and per-territory revenue metrics (Q2 avg just over ~$430k) for sustained volume momentum despite seasonality; territory expansion should offset typical Q3/Q4 softness .
  • Near-term trading lens: Beat on revenue, guide raise, and reiterated Q4 EBITDA positivity are positive setup; modest EPS miss tied to financing/fair value items likely viewed as transitory .
  • Medium-term thesis: Unique biomarkers create defensible differentiation; improving payer frameworks (TRICARE, ALJ wins) and biopharma margin streams support durable margin/FCF trajectory .