Exagen's Record Quarter Points to a Structural Inflection
Near-breakeven EBITDA, raised guidance, and a new AI-powered commercial layer signal the autoimmune diagnostics specialist is transitioning to profitability.
XGN · Earnings Call · 2026-08-04
The Inflection Is Here
Exagen reported its strongest quarter ever, with revenue up 16% year-over-year to $19.9M, the highest in company history. The quarter was marked by record AVISE test volume (~39,000 tests, +11% y/y), record trailing 12-month ASP of $446 (+4% y/y), and the first time quarterly pharma services revenue crossed $1M. The company also narrowed adjusted EBITDA loss to essentially breakeven ($0.1M vs. $1.7M a year ago). “The second quarter was an outstanding one at Exagen, and there's a lot to be excited about.” — John Aballi, President and Chief Executive Officer · 2026-08-04 These results are a direct validation of the multi-year strategy to rebuild the commercial engine around revenue cycle management and ASP expansion.The Drivers: RCM, Pharma, and AI
The core of the turnaround is ASP expansion. Trailing 12-month ASP has risen from $284 at end-2022 to $446 now—13 consecutive quarters of growth. Jeff Black, CFO, attributes this to disciplined revenue cycle management and prior-period collections: “First half of this year, we collected about $2.3 million in cash greater than 360 days.” — Jeffrey Black, Chief Financial Officer · 2026-08-04 This is not a one-off; it reflects systemic improvements in appeals, AI-optimized workflows, and payer engagement. Pharma services emerged as a new growth lever, with Q2 revenue of just over $1M (up >200% y/y) and backlog growing to $6M. The company is leveraging its unique data and biobank to serve pharma partners developing autoimmune therapies. John Aballi noted: “We've built deliberately over the past couple of years and the strong results are early proof that the unique data, biobank and scientific capabilities we've assembled serve not only clinicians, but also partners developing the next generation of autoimmune therapies.” — John Aballi, President and Chief Executive Officer · 2026-08-04 What's genuinely new is the investment in customer-facing AI applications. Management mentioned they are "building AI-powered commercial infrastructure" to deepen clinical engagement and embed Exagen in the rheumatologist workflow. This is an early-stage initiative, but it signals a strategic move to differentiate beyond the test itself.Guidance Raised, Profitability in Sight
The company raised full-year revenue guidance to $72–75M, up from $70–73M, reflecting confidence in H1 execution. Revenue growth has been consistent, and the latest quarter accelerated to +16% y/y. Gross margin improved to 61% in Q2, up ~90 bps y/y, and management reiterates a path to mid-60s. The company believes it can reach adjusted EBITDA breakeven at around $80M annual revenue—a threshold it is approaching quickly. This is a stark contrast to just a few years ago. On the 2025-11-04 call, John Aballi reflected on the long journey: “We're setting ourselves up very well for continued growth through 2 mechanisms, ASP and volume.” — John Aballi, President and Chief Executive Officer · 2025-11-04 He also highlighted the $500 ASP target, a goal now within reach.Looking Ahead: Myositis and the Next Wave
The company's pipeline is advancing, with the myositis test on track for commercial launch in early 2027. This will be the first new stand-alone product in years, and it's already the #1 requested test by rheumatologists. Management is cautious but optimistic:The focus remains on sustainable, disciplined execution. The stock has rallied +161% in the last 90 days, reflecting investor recognition of the inflection. The combination of record operational metrics, raised guidance, and a massive addressable market (~$2.2B autoimmune testing) makes this a name to watch. fixed cost leverage and EBITDA breakeven are no longer aspirational; they're on the near-term horizon.We don't have a significant track record of billing all of these codes. And so as we launch from a revenue standpoint, we're going to mirror very close to cash collections and then over time, establish that accrual rate.