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EI

EXAGEN INC. (XGN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $13.655M, gross margin reached 62.1% (+620 bps QoQ) and adjusted EBITDA loss narrowed to $2.535M, reflecting operational turnaround and ASP expansion .
  • Full-year 2024 delivered record revenue of $55.641M and trailing-12-month ASP of $411; management cited successful January 2025 biomarker launches as catalysts for margin expansion and volume recovery .
  • Guidance: Q1 2025 revenue at least $14.5M and target to be adjusted EBITDA positive in Q4 2025; long-term margin goal "mid-60s" with new markers and lab efficiencies .
  • Operational highlights: volume in 2024 was 123,000 AVISE CTD tests (down 11% YoY) amid deliberate focus on profitable volume and territory rationalization; management plans to add a handful of territories in 2025 to reaccelerate utilization .
  • Stock-reaction catalysts: successful commercialization of new RA and T-cell lupus biomarkers (January launch), explicit path to EBITDA positivity, and gross-margin trajectory to mid-60s over time .

What Went Well and What Went Wrong

What Went Well

  • Record full-year revenue ($55.6M) and continued ASP expansion to $411 TTM; Q4 gross margin 62.1% versus 59% in Q4 2023, driven by reimbursement improvements and operational discipline .
  • Successful January 2025 launch of novel biomarkers (RA33 IgA/IgG/IgM and T-cell lupus panel), with early clinical adoption and approx. $90 incremental revenue per test underpinning 2025 growth and margin accretion .
  • Management progressing toward profitability: adjusted EBITDA loss improved 40% YoY to $10.149M in 2024; Q4 was net-cash neutral, with plan for positive adjusted EBITDA in Q4 2025 and sustainable FCF positivity in 2026 .

What Went Wrong

  • Annual AVISE CTD test volumes fell 11% YoY to 123,000 due to deliberate pruning of unprofitable channels and documentation requirements for reimbursement; unique ordering providers fell ~4.5% YoY (2,400 vs. 2,500) .
  • Q3 2024 included $1.2M one-time revenue and AR reserve adjustments, temporarily depressing revenue and GM; prior-period collections are tapering as accrual accuracy improves, reducing that tailwind .
  • Gross margin sensitivity to seasonal/operational factors remains (e.g., Florida storms impacted volume late Q3 into Q4), though Q4 GM recovered strongly to 62.1% .

Financial Results

Headline P&L vs prior year and prior quarter

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$13.765 $12.507 $13.655
Gross Margin (%)59.0% 55.8% 62.1%
Loss from Operations ($USD Millions)$(5.147) $(4.663) $(3.383)
Net Loss per Share (Basic & Diluted, $USD)$(0.31) $(0.28) $(0.20)
Adjusted EBITDA ($USD Millions)$(3.876) $(4.024) $(2.535)

KPIs

KPIQ3 2023Q3 2024Q4 2024
AVISE CTD Trailing-12-Month ASP ($USD)$320 $404 $411
Balance Sheet SnapshotDec 31, 2023Sep 30, 2024Dec 31, 2024
Cash, Cash Equivalents & Restricted Cash ($USD Millions)$36.493 $22.035 $22.236
Total Stockholders’ Equity ($USD Millions)$22.694 $12.868 $9.540

Estimates Comparison

  • S&P Global Wall Street consensus data for Q4 2024 and near-term periods was unavailable at the time of this analysis; therefore, beat/miss vs. consensus cannot be assessed (consensus unavailable).

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)Q1 2025Not previously providedAt least $14.5 New
Adjusted EBITDAQ4 2025Not previously specificPositive adjusted EBITDA New
Full-Year Revenue ($USD Millions)FY 2024At least $57 (Aug 2024) $55–$56 (Nov 2024) Lowered
Gross Margin Outlook (%)Multi-year“Mid-60s over time” aspiration (Q3 commentary) “Mid-60s within reach” with markers Maintained/clarified
Sales Territories (#)FY 2025~40 at YE 2024 “Add a handful” during 2025 Raised modestly
Free Cash FlowFY 2026“Cash-flow positive within a year of launch” (Q2) Sustain FCF positivity for full-year 2026 Clarified timeline

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
ASP StrategyPushed TTM ASP >$400; goal 50% of CMS price ($525) TTM ASP $404; prior-period collections tapering TTM ASP $411; new markers add ~$90/test incremental revenue Improving
Gross Margin~60% in Q2; aiming mid-60s over time Excluding one-time, ~59.7% in Q3 62.1% in Q4; mid-60s “within reach” Improving
Volume/Ordering BaseSequential +8% in Q2; seasonal headwinds ahead Weather disruptions in FL; unique providers to be re-won 2024 volume down 11%; plan to add territories and grow in 2025 Positioned to recover
Biomarker LaunchesYear-end launch planned; NY submission Validations complete; educational plans at ACR Jan 2025 launch executed; early adoption and clinical case studies Executed, scaling
Regulatory/LegalNY State submission under new FDA rules Awaiting NY approval NY State conditional approval received Jan 2025 Completed
AR/Working CapitalHold claims early each year to optimize cycle AR reserves adjustment; prior-period collection taper AR to rise in Q1 due to claim holds, normalizing in H2 Managed
Biopharma PartnershipsFirst substantial contracts signed (>$1M) Ongoing; lumpy revenue acknowledged 4-person focused team; tailwinds anticipated Building
Capacity/OperationsLab upgrades for flow cytometry Capacity to double with night shift; licensed staff added $1.2M flow upgrades; sufficient capacity for 2025 ramp Ready to scale

Management Commentary

  • “We have continued to grow profitable revenue and expand gross margins while significantly reducing operating expenses and cash burn.” — John Aballi, CEO .
  • “We believe now with the addition of these new markers, the mid-60s is not an unreasonable expectation for margins over time.” — John Aballi .
  • “Adjusted EBITDA loss coming in at $10.1 million for 2024, an improvement of 40% over 2023… we anticipate being adjusted EBITDA positive in the fourth quarter of 2025.” — Jeff Black, CFO .
  • Case study: AVISE CTD biomarkers changed a patient diagnosis from fibromyalgia to RA, enabling methotrexate therapy and improved care confidence — illustrating clinical utility of new RA markers .
  • “We are currently operating at 40 sales territories and anticipate adding a handful of new territories during 2025… to accelerate utilization of AVISE.” — John Aballi .

Q&A Highlights

  • ASP and Margin: Management assumes ~$90 incremental revenue per AVISE CTD test from new markers in Q1 guidance; gross margin mid-60s seen as attainable over time .
  • Profitability Path: Targeting adjusted EBITDA positive in Q4 2025; adjusted EBITDA viewed as a good proxy for FCF on a full-year basis, with working capital swings early in the year due to claim holds .
  • RA Opportunity: RA prevalence ~8x lupus; new markers target seronegative RA with plan to capture 30–40% over time as second wave launches; TAM framing of ~2.5M connective tissue evaluations annually .
  • Capacity Readiness: ~$1.2M flow cytometry upgrade completed; staffing and equipment in place; ability to add night shift to nearly double capacity if needed .
  • Sales Strategy and Volume: Expect increases in number of ordering physicians, orders per physician, and overall volume in 2025; plan to add territories and reengage pruned accounts with improved workflows .

Estimates Context

  • S&P Global consensus estimates for Q4 2024 and near-term quarters were unavailable at the time of analysis. As a result, explicit beat/miss versus consensus cannot be determined for revenue, EPS, or EBITDA. Where relevant, comparisons have been made versus prior periods using company-reported results .

Key Takeaways for Investors

  • Q4 execution strengthened the margin narrative: GM at 62.1% with a credible path to mid-60s supported by monetized biomarkers and lab efficiency gains, improving earnings power even before volume recovers .
  • New biomarkers are a multi-front catalyst: early ~$90/test uplift, expanded RA utility into seronegative cohorts, and clinical validation (including publication) should enhance competitive differentiation and ASP durability .
  • Volume reacceleration in 2025 looks likely: territory expansion and reengagement of pruned physicians (with smoother documentation workflows) point to unit recovery on top of ASP tailwinds .
  • Profitability milestones are near-term: adjusted EBITDA positive targeted for Q4 2025; net neutral Q4 2024 cash burn and planned claim holds imply early-year working capital usage but normalization in H2 .
  • AR dynamics and accrual accuracy reduce prior-period collection tailwinds: expect less lumpy boosts while ASP continues to expand organically via reimbursement achievements .
  • Biopharma services add optionality: focused team and proprietary assays can deepen pharma relationships; revenue is lumpy but higher-margin and diversifying .
  • Trade setup: watch biomarker adoption, ASP realization vs ~$90 assumption, Q1 revenue delivery (≥$14.5M), and gross-margin progression; sustained momentum on these fronts likely drives estimate revisions and sentiment .