What Exagen (XGN) Said on Its Q3 Earnings Call

Key Points

• Third-quarter revenue rose 7% to $18.4 million, while adjusted EBITDA loss held at $1.9 million. Exagen reaffirmed its 2026 revenue forecast of $72 million to $75 million.
• AVISE CTD revenue reached $16.4 million; test volume increased 2% year over year and average selling price rose to $451, its 14th consecutive quarterly increase. Exagen plans to launch a standalone myositis test in early 2027.
• Pharma Services revenue grew nearly 85% year to date to $2.2 million, with a backlog of about $5.5 million. Exagen ended the quarter with more than $28 million in cash and reiterated its goal of adjusted EBITDA break-even at an $80 million annual revenue run rate.

Exagen NASDAQ: XGN reported third-quarter revenue of $18.4 million, up 7% from a year earlier, as higher test volume and pricing helped the autoimmune diagnostics company post what management described as its strongest third quarter on record.

The company reiterated its 2026 revenue forecast of $72 million to $75 million. Chief Financial Officer Jeff Black said the outlook assumes high-single-digit growth in test volume and mid-single-digit average selling price growth compared with the fourth-quarter 2025 exit rate.

Exagen reported an adjusted EBITDA loss of $1.9 million for the quarter, unchanged from a year earlier. For the first nine months of 2026, revenue grew more than 11% and adjusted EBITDA improved by more than 30%, management said.

Test volume and pricing advance

Revenue from Exagen’s AVISE CTD test was $16.4 million in the third quarter, Black said. Test volume rose 2% from a year earlier, while the number of ordering physicians increased 5%.

Asked about the slower year-over-year volume growth, Black pointed to a tougher comparison with the third quarter of 2025, when the company saw a significant increase in average quarterly volume. He also cited fewer clinic days during summer vacations and said the company expects seasonal effects to continue through the holidays.

Exagen expanded from 42 to 45 sales territories over the past year. Trailing 12-month AVISE CTD revenue per territory rose nearly 6%, while volume per territory remained stable as newer sales representatives continued to ramp up, Black said.

The test’s trailing 12-month average selling price reached $451, up $10 from a year earlier and marking its 14th consecutive quarter of improvement. The company collected about $800,000 during the quarter from claims more than 360 days old. Black cautioned that such collections can vary substantially from quarter to quarter.

Over time, Exagen is targeting an average selling price of at least 50% of Medicare reimbursement, or approximately $600 to $650 per test, Black said.

Myositis test planned for early 2027

Exagen is preparing to launch a standalone myositis test in early 2027 through its existing sales team. President and CEO John Aballi said the company completed clinical and analytical validation and expects to submit a validation package to the New York State Department of Health by the end of January. He later said the validation work wrapped up in October.

Aballi said the planned test will include 17 markers and is intended primarily to aid diagnosis. He said some markers could also provide prognostic information, and the company is validating quantitative results that may help physicians monitor patients over time.

The company expects a turnaround time of about one week, compared with four to six weeks or longer for current alternatives, according to Aballi. Exagen has not disclosed revenue projections for the launch. Aballi said the company would initially focus on rheumatologists but sees potential opportunities in pulmonology.

Exagen plans to discuss the myositis offering and other pipeline projects at a webcast on December 15.

Pharma Services grows; reimbursement questions remain

Pharma Services generated more than $900,000 in third-quarter revenue, bringing its year-to-date total to $2.2 million, up nearly 85% from a year earlier. Black said the business had a contract backlog of approximately $5.5 million, although revenue recognition can fluctuate from quarter to quarter.

During the quarter, Exagen also acquired an AI-enabled workflow optimization platform for rheumatology practices. Aballi described the acquisition as opportunistic and said the company is still determining how the platform will evolve.

On reimbursement, Aballi said the company’s Medicare rate for its unique PLA code remains at $840. If changes under the Protecting Access to Medicare Act are implemented, lower rates for generic billing codes could create a low-single-digit impact on the blended rate, he said. Aballi added that Exagen expects its revenue-cycle efforts to offset that pressure over time.

Aballi said a systematic review of Exagen’s evidence had helped open discussions with payers and produced progress with one Blues plan. He said there was no update on a local coverage determination for AVISE CTD.

Cash position and profitability target

Exagen ended the third quarter with more than $28 million in cash and equivalents, up $3.5 million during the period. The company raised about $6.5 million through its at-the-market equity program and, after the quarter ended, drew $5 million under its Perceptive debt facility.

Black said the company has sufficient runway to support its business until it achieves sustainably positive adjusted EBITDA and operating cash flow. He also reaffirmed that Exagen expects to reach adjusted EBITDA break-even at an annual revenue run rate of $80 million and a gross margin of about 60%.

About Exagen (NASDAQ:XGN)

Exagen Inc. is a commercial-stage diagnostic company focused on improving the diagnosis and management of autoimmune and rheumatic diseases. The company develops and commercializes blood tests that help physicians identify autoimmune disease, distinguish among related conditions and monitor disease activity over time. Its principal product family is AVISE, which includes the AVISE CTD and AVISE Lupus tests, as well as monitoring and specialty tests used in the evaluation of systemic lupus erythematosus and other connective-tissue diseases.

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