Exagen Inc. (XGN) - Q1 2026 10-Q Summary
Business Context and Reporting Period
Exagen Inc. is a medical technology company focused on the AVISE® brand of testing products for the differential diagnosis and monitoring of rheumatic and autoimmune diseases, primarily Systemic Lupus Erythematosus (SLE) and Rheumatoid Arthritis (RA). This report covers the quarterly period ended March 31, 2026. The company operates a single segment and is classified as a non-accelerated filer and smaller reporting company.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $17.3 million | $15.5 million |
| Gross Profit | $10.2 million | $9.1 million |
| Gross Margin | 59.0% | 58.9% |
| Net Loss | $(3.97) million | $(3.75) million |
| Diluted EPS | $(0.17) | $(0.20) |
| Cash and Equivalents | $21.5 million | $22.2 million (Dec 31, 2025) |
| Operating Cash Flow | $(10.4) million | $(10.7) million |
| Total Debt (Carrying Value) | $22.9 million | $22.9 million (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 11.7% year-over-year, driven by a 10% increase in AVISE® CTD test volume and a 6% increase in trailing-twelve-month Average Selling Price (ASP) to $444 per test.
- Expense Increases: Operating expenses rose 9.0% to $13.6 million, primarily due to higher employee-related costs in SG&A and R&D. Interest expense more than doubled to $1.3 million due to the Perceptive Term Loan Facility entered in April 2025.
- Warrant Liability: A non-cash gain of $0.9 million was recorded from the change in fair value of the warrant liability, reducing the net loss impact.
- Liquidity: Cash decreased by $10.7 million during the quarter. Accounts receivable increased by $4.9 million due to the company holding claims in the first quarter to optimize revenue cycle management, a trend expected to reverse in the second half of the year.
Outlook, Risks, and Management Commentary
- Liquidity Position: Management believes existing capital resources ($21.5 million cash) are sufficient to fund operations for at least the next 12 months. The company has an additional $40.0 million available under the Perceptive Term Loan Facility subject to revenue milestones.
- Debt Covenants: The company is currently in compliance with all covenants, including a minimum unrestricted cash balance of $3.0 million and specified net revenue levels.
- Product Pipeline: Development continues on Lupus Nephritis biomarkers, SLE Disease Activity assays, and RA Disease Activity algorithms. A kidney damage biomarker panel has been deprioritized.
- Risks: Key risks include dependence on third-party payors for reimbursement (91% of revenue from AVISE® CTD), potential denial of claims, and the need for additional financing if revenue growth does not offset operating losses. The company relies on two suppliers for 98% of diagnostic testing supplies.
Investor Verification Checklist
- Reimbursement Status: Verify the status of the Local Coverage Determination (LCD) application for the AVISE® Lupus test with Noridian Healthcare Solutions, which remains pending.
- Cash Flow Timing: Monitor the reversal of the accounts receivable buildup in Q2-Q4 2026 to confirm expected cash collections.
- Debt Milestones: Track quarterly net revenue levels to ensure compliance with the Perceptive Term Loan Facility covenants required to access the remaining $40.0 million in tranches.
- Supplier Concentration: Assess the risk associated with sourcing 98% of diagnostic supplies from two suppliers, particularly regarding potential trade policy changes or tariffs.