Exagen Q1 Earnings Call Highlights

Key Points

• Exagen posted record Q1 revenue of $17.3 million, up 12% year over year, and reaffirmed its full-year 2026 revenue guidance of $70 million to $73 million. Gross margin held at 59% while adjusted EBITDA loss improved to $2.2 million.
• Growth was driven by stronger testing volume and clinician adoption: AVISE CTD test volume rose 10% and ordering clinicians increased 15% to just over 2,700. Management said winter storms temporarily disrupted some volume, but underlying demand remained strong.
• Average selling price continued to improve, reaching $444 on a trailing 12-month basis, helped by revenue cycle management and more than $900,000 in older claims collections. The company also highlighted a growing pharma services backlog and remains on track to launch a standalone myositis product in early 2027.

Exagen NASDAQ: XGN reported record first-quarter revenue and reaffirmed its full-year outlook, as executives said growth in testing volume, improved reimbursement execution and expanding clinician adoption helped offset a weather-related disruption early in the quarter.

The autoimmune diagnostics company posted first-quarter 2026 revenue of $17.3 million, up 12% from the prior year, according to President and CEO John Aballi. Gross margin was 59%, and adjusted EBITDA loss narrowed to $2.2 million, a 14% improvement year over year.

Aballi said the quarter reflected progress against Exagen’s priorities: increasing adoption of its products, improving average selling price through revenue cycle management and advancing new product innovation for clinicians treating autoimmune disease.

“We’re starting 2026 off well,” Aballi said. “We are executing and our strategy is working.”

Testing Volume and Clinician Adoption Increased

Exagen’s AVISE CTD test volume grew 10% year over year in the first quarter, which Aballi said compared favorably with an estimated autoimmune testing market growth rate of about 5%. Test volume remained in the mid-30,000 quarterly run-rate range.

The company estimated the autoimmune testing market at more than $2.2 billion and growing about 5% annually. Aballi said Exagen currently has just over 3% market share, leaving “significant and realistic opportunity” to gain share.

Aballi said the company’s performance was affected by winter storms in late January and early February that disrupted patient access and physician office days in certain U.S. regions. In response to analyst questions, he said Exagen lost about one-third of volume over a two-week period, amounting to a couple thousand tests. Because the company works with peripheral blood samples, he said those tests were essentially lost rather than deferred into a later period.

Outside of the weather-impacted weeks, demand tracked with company expectations, Aballi said. He also said the company had seen several weeks year-to-date in which testing volume exceeded 2025 weekly highs.

Ordering clinicians increased 15% year over year to just over 2,700 physicians in the first quarter. Aballi attributed much of the expansion to sales territories added in the second half of 2025 and said the newer sales representatives were gaining traction. Rheumatologists remain the company’s primary target audience, though Aballi said about one-third of the expansion came from outside rheumatology, including general practitioners, internists, OB-GYNs and pulmonology in certain settings.

ASP Gains Driven by Revenue Cycle Management

Exagen’s trailing 12-month average selling price for AVISE CTD rose to $444, up $25 per test, or 6%, from the prior year. Aballi said the company has now delivered 12 consecutive quarters of increasing trailing 12-month ASP.

CFO Jeff Black said first-quarter ASP benefited from revenue cycle management initiatives and the collection of more than $900,000 in claims older than 360 days. For context, he said the company collected about $1.5 million from such claims during all of the prior year. Black said the out-of-period collections had about a $25 impact on in-period ASP, though he cautioned that those collections can be variable and difficult to forecast.

Black said Exagen continues to target an ASP of at least 50% of Medicare reimbursement, or roughly $600 to $650 over time. He also said the company saw a full quarter of collections for PAD4, which was tracking near expectations, and noted that payer mix can affect quarterly results.

Aballi said ASP improvement continues to be driven by the revenue cycle strategy Exagen began several years ago, including better appeals and payer engagement. He said the company presented to three medical directors at various Blue Cross Blue Shield plans during the quarter and described those discussions as highly engaged.

On the potential for a local coverage determination, or LCD, Aballi said Exagen remains “in the queue” with MolDX. He said an LCD would memorialize existing Medicare coverage and could support Medicare Advantage and commercial payer discussions, but the company has not been told where it stands in the queue.

Pharma Services Backlog Grows

Exagen’s Pharma Services offering generated about $300,000 of revenue in the first quarter. Black said the company has more than $5 million in contract backlog value, which it expects to realize over the next two to three years.

Aballi said newer markers, including anti-PAD4 and RA33, are drawing interest from both clinicians and biopharma partners. In response to an analyst question, he said Exagen has pharma contracts related to both markers. Black said the expansion in contract backlog over the past 90 days had been driven in part by rheumatoid arthritis work, while lupus remains a larger portion of the pharma business. Aballi said at least one-third of Exagen’s biopharma business is in rheumatoid arthritis.

Myositis Product Targeted for Early 2027

Aballi said Exagen remains on track with its product development priorities and is targeting commercialization of a standalone myositis offering in early 2027. He described it as the company’s first new standalone product since 2020 and one of the most requested diagnostic needs within Exagen’s clinician channel.

Myositis is an autoimmune disease that can cause chronic muscle inflammation, progressive weakness or rapidly progressing interstitial lung disease, Aballi said. He said about 100,000 patients in the U.S. are currently affected, but Exagen believes that figure underrepresents actual prevalence because many patients go undiagnosed due to inadequate testing.

Black said the myositis product is expected to be distributed through Exagen’s existing sales channel and added to the current sales bag. He said the company expects some incremental marketing effort but does not expect operating expenses to ramp substantially because of the launch.

Aballi also highlighted Exagen’s scientific activity, noting that nine abstracts were accepted at Autoimmunity 2026 in Prague, including several tied to myositis research and evidence generation across the AVISE portfolio. He said two manuscripts related to myositis and systemic lupus erythematosus had also been accepted for publication.

Guidance Reaffirmed

Exagen reaffirmed its full-year 2026 revenue guidance of $70 million to $73 million. Black said the midpoint assumes high single-digit percentage volume growth and low single-digit percentage ASP growth relative to the company’s fourth-quarter 2025 in-period rate of approximately $430.

Operating expenses in the first quarter were $13.6 million, up about 9% from the prior year. SG&A was just over $12 million, up 8%, driven primarily by commercial talent and territory expansion. R&D expense was about $1.6 million, up more than 20%, reflecting pipeline development and preparation for the expected myositis launch.

Exagen ended the quarter with cash, cash equivalents and restricted cash of just under $22 million. Black said the cash balance was ahead of internal expectations and that the company continues to believe its balance sheet provides the runway needed to support sustainable positive free operating cash flow.

“Our financial performance reflects continued execution across top line expansion, cost management, and targeted investment to create a durable business well-positioned for self-funded growth and scale,” Black said.

About Exagen NASDAQ: XGN

Exagen Inc is a molecular diagnostics company focused on improving the detection and management of autoimmune diseases. Headquartered in the United States, the company develops, manufactures and markets laboratory tests designed to help clinicians address diagnostic challenges associated with complex connective tissue disorders.

The company's flagship product portfolio, marketed under the Avise® brand, includes multi-analyte assays such as the Avise® Connective Tissue Disease (CTD) panel, Avise® Lupus panel and Avise® Sjögren's panel.

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