Exagen Q2 Revenue Jumps 14 Percent

Core Viewpoint - Exagen reported strong revenue growth driven by its AVISE CTD test, but continued to face widening net losses due to increased operating expenses and ongoing investments in sales and research efforts [1][5][7]. Financial Performance - Q2 2025 GAAP revenue reached $17.2 million, exceeding analyst expectations of $16.31 million, and representing a 14.2% increase from $15.1 million in Q2 2024 [2][5]. - GAAP EPS was $(0.21), worse than the expected $(0.15) and a decline from $(0.16) in Q2 2024, marking a 31.3% year-over-year deterioration [2][5]. - Gross margin improved slightly to 60.4%, up from 60.1% in the previous year, with management targeting mid-60% range in the long term [2][6]. - Cash and cash equivalents increased to $30.0 million, a 22.6% rise from $24.5 million in Q2 2024, bolstered by a recent equity offering [2][9]. Product and Market Dynamics - The AVISE CTD test, which accounts for approximately 90% of revenue, saw a 14% sequential increase in test volumes and a 7% year-over-year rise, reflecting growing clinical adoption [3][5]. - The average selling price (ASP) for AVISE CTD improved to $428, a $27 increase from the previous year, attributed to reimbursement progress and higher pricing on new biomarkers [5][6]. Operational Insights - Operating expenses rose due to increased hiring for sales and R&D, with R&D costs climbing to $1.5 million from $1.2 million in Q2 2024 [7]. - The net loss widened to $4.4 million from $3.0 million in Q2 2024, driven by higher spending and the need to scale revenue [7]. Reimbursement and Legal Developments - Exagen achieved a significant legal victory regarding a denied Medicare Advantage claim, which may set a precedent for future appeals [8]. - Positive policy decisions for AVISE CTD with TRICARE were secured, expanding coverage for military families after a two-year review [8]. Future Outlook - For fiscal 2025, management projects GAAP revenue between $65 million and $70 million, relying on continued momentum from AVISE CTD and reimbursement efforts [11]. - The company aims to reach break-even on adjusted EBITDA by Q4 2025, contingent on sales acceleration and expense management [11].