Exagen (XGN) 5 Aug 24 2024 Q2 Earnings call transcript
AInvestMonday, Aug 5, 2024 11:07 pm ET
2min read
XGN --

Exagen Inc. recently held its second quarter 2024 earnings call, revealing a record $15.1 million in revenue, a 6.6% increase from the same period last year. The company's progress towards achieving profitability is particularly noteworthy, with a $1.6 million adjusted EBITDA loss in Q2 2024 marking a 53% improvement year-over-year and the best quarterly financial performance in Exagen's history.

Management's Confidence in Financial Health and Growth Prospects

John Aballi, President and CEO, highlighted the company's impressive strides, stating that they are on pace to achieve profitability while expanding the business. The company's gross margins have expanded by 13 points, reaching a remarkable 60% and above, and revenues are expected to reach $57 million by the end of the year. These figures represent a significant improvement from 2022 when Exagen reported a $40 million adjusted EBITDA loss and $45.6 million in revenue.

Strategic Focus on Revenue Growth and Operational Efficiency

Exagen's focus on revenue growth is evident in its increased volume of testing and higher average selling prices. The company has grown testing volume by 8% sequentially, with a total quarterly volume since adjustments to the ordering process last summer. Furthermore, the average selling price for AVISE CTD has exceeded $400 for the first time as a public company. This achievement underscores the company's strategic efforts to enhance its product offerings and cater to the rheumatology community, positioning itself as a leader in the immunology ecosystem.

Investing in Future Growth Opportunities

Exagen's strategic focus extends beyond its core AVISE CTD business. The company is investing in new product enhancements, such as the addition of markers to improve sensitivity for SLE diagnosis and better capture patients with rheumatoid arthritis. These enhancements are expected to launch by the end of the year, further solidifying Exagen's competitive advantage and increasing its potential market reach. Additionally, Exagen has signed its first substantial biopharma contracts since joining the public market, reflecting the company's untapped potential in serving the biopharma sector.

Looking Ahead

As Exagen moves towards profitability, its focus on operational efficiency and strategic growth initiatives is evident. The company is expected to achieve cash flow positivity within a year of launching the new markers, positioning it for a sustainable future. With a clear focus on revenue growth, operational efficiency, and strategic expansion, Exagen is well-positioned to continue its momentum and deliver value to its stakeholders.

Investor and Analyst Perspectives

During the earnings call, investors and analysts questioned Exagen's management about its growth trajectory, product enhancements, and financial performance. These interactions provided valuable insights into the market's perception of Exagen's strategic direction and its potential to capitalize on growth opportunities in the immunology sector.

Overall, Exagen's Q2 2024 earnings call underscores its commitment to driving profitable growth and enhancing its product offerings. With a clear focus on revenue growth, operational efficiency, and strategic expansion, Exagen is well-positioned to continue its momentum and deliver value to its stakeholders.

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