Exagen 2025 Q2 Earnings Misses Targets as Net Loss Widens 49.7%

Exagen (XGN) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The company missed revenue expectations, achieving $17.2 million against the consensus estimate of $16.23 million. The net loss was deeper than anticipated, with earnings per share at -$0.21 compared to the expected -$0.15. Exagen's guidance for 2025 remains unchanged with expectations of achieving positive adjusted EBITDA by Q4, but the full-year revenue forecast of $65-$70 million aligns with previous predictions. Investors will be watching closely as the company navigates ongoing financial challenges.

Revenue
Exagen's total revenue increased by 14.2% to $17.20 million in 2025 Q2 from $15.06 million in 2024 Q2. The commercial segment contributed $8.81 billion, government contracts added $3.93 billion, direct client billing accounted for $4.37 billion, and other sources provided $94 million, culminating in a total revenue of $17.20 billion.

Earnings/Net Income
Exagen's losses widened to $0.21 per share in 2025 Q2 from $0.16 per share in 2024 Q2, representing a 31.2% increase. The net loss grew to $-4.44 million, up 49.7% from $-2.97 million in the previous year. The EPS results indicate ongoing financial struggles.

Price Action
The stock price of Exagen climbed 6.02% during the latest trading day, surged 21.76% during the most recent full trading week, and increased 20.89% month-to-date.

Post-Earnings Price Action Review
The strategy of purchasing Exagen (XGN) shares after a quarter with increased revenue and holding for 30 days has resulted in considerable underperformance. Over the past three years, this approach has registered a compound annual growth rate (CAGR) of -5.42%, with a total return of -24.19%, contrasting sharply with a benchmark return of 87.35%. While the strategy did not incur significant losses, indicated by a maximum drawdown of 0.00%, it also failed to capitalize on gains, leading to a Sharpe ratio of -0.06 and high volatility at 88.28%. These metrics highlight the strategy's inability to deliver expected returns despite avoiding major downturns.

CEO Commentary
Exagen's CEO, John Aballi, emphasized the company's strong performance in Q2 2025, highlighting a record revenue of $17.2 million, reflecting a 14% year-over-year growth driven by organic test volume growth and enhanced physician engagement. He noted that the commercial team’s effectiveness and the introduction of new biomarkers are pivotal growth drivers. Aballi expressed optimism about sustainable growth, stating, “We have a large market, and we're around just under 10% penetrated,” and underscored ongoing investments in R&D and strategic hiring as crucial to scaling the business. He conveyed confidence in the future, stating, “We’re building something special” and anticipating continued positive momentum.

Guidance
Exagen is guiding for full-year revenue between $65 million and $70 million for 2025. The company expects to achieve positive adjusted EBITDA by Q4 2025, with sustainable profitability anticipated throughout 2026. Additionally, the CEO mentioned that operating expenses are expected to remain stable for the rest of 2025 while increasing modestly over time, reflecting improved operating leverage.

Additional News
Exagen recently strengthened its executive team by appointing Dr. Michael Mahler as Chief Scientific Officer, bringing over two decades of leadership in autoimmune diagnostic research. The company also welcomed Chas McKhann, an accomplished executive with 25 years of experience in the life sciences sector, to the Board of Directors. These appointments are expected to enhance Exagen's strategic capabilities and support its growth initiatives in the competitive diagnostics industry. Additionally, Exagen completed a $20.2 million public offering of common stock and secured a new loan credit facility, bolstering its balance sheet and providing capital for future investments and operations.