Exagen Inc. Reports Strong Fourth Quarter and Full-Year 2023 Results
Exagen Inc. (Nasdaq: XGN) reported strong financial results for the fourth quarter and full year ended December 31, 2023, with record total revenue of $52.5 million for 2023. The company performed 137,650 AVISE® CTD tests in 2023, showing a significant increase in ASP. Despite a net loss of $23.7 million for the full year, Exagen is focused on profitability, expense reduction, and managing cash effectively.
Positive
Record total revenue of $52.5 million for full-year 2023.
Over 900,000 AVISE® CTD tests performed to date since launch.
56% gross margin for full-year 2023 and 59% for the fourth quarter.
Cash balance of $36.5 million at year-end 2023.
Guidance for full-year 2024 revenue of approximately $54 million.
Adjusted EBITDA of $(17.1) million for full-year 2023.
Negative
Net loss of $23.7 million for the full-year 2023.
Decrease in operating expenses year-over-year.
Negative adjusted EBITDA of $(3.9) million for the fourth quarter of 2023.
Exagen Inc.'s reported financial results show a significant improvement in both revenue and gross margins, indicating a positive trajectory towards operational efficiency. The increase in average selling price (ASP) for their AVISE® CTD tests suggests effective pricing strategies and potential for increased profitability per unit sold. However, the company still reports a net loss, which, although reduced compared to the previous year, highlights ongoing challenges in achieving net profitability.
The reduction in operating expenses, primarily due to lower personnel costs and R&D expenses, may signal a leaner operational model, but this could also raise questions about the company's long-term investment in innovation. The guidance for 2024 indicates cautious optimism, with a slight increase in revenue expectations and an adjusted EBITDA projected to be less negative than the previous year. Investors should monitor whether these cost reductions will affect the company's competitive edge in the dynamic healthcare sector.
Exagen's cash balance appears to provide a runway into 2026, which is reassuring for stakeholders, but it's vital to scrutinize the company's future cash burn rate and the potential need for additional capital infusions, especially if revenue growth does not accelerate as projected.
The autoimmune testing market is witnessing growth, driven by heightened awareness and advances in diagnostic technology. Exagen's record number of AVISE® CTD tests performed indicates a strong market presence and customer adoption. The company's focus on increasing the ASP is a strategic move that reflects not only on their pricing power but also on the perceived value of their offerings in the eyes of clinicians and patients.
However, the competitive landscape in the healthcare diagnostics sector is fierce, with continuous innovation being a key driver. Exagen's reduced R&D spend could be a double-edged sword—it improves short-term financial health but may limit the company's ability to stay at the forefront of technological advancements.
Investors should consider the potential market growth against Exagen's strategic decisions, such as cost management and pricing, to assess the sustainability of the company's growth. Furthermore, the guidance provided for the upcoming year suggests a moderate growth trajectory, which could impact the stock's performance depending on investor expectations for the sector.
Exagen's focus on autoimmune testing solutions places it in a niche but growing segment of the healthcare industry. The reported increase in the ASP of their AVISE® CTD tests is a positive indicator of the company's ability to command higher prices, likely due to the specialized nature of their tests and a strong value proposition to healthcare providers.
The reported gross margins reflect operational efficiencies and could be attributed to economies of scale as the number of tests performed grows. Nevertheless, the net loss indicates that the company is still in a phase of investing more than it earns, which is not uncommon in the biotech and diagnostics industries where upfront costs are high.
Long-term, the company's success will hinge on its ability to continue improving margins while expanding its market share. The healthcare industry's increasing focus on personalized medicine could serve as a tailwind for Exagen, provided they continue to invest in R&D to innovate and maintain the relevance of their testing solutions.
03/18/2024 - 08:00 AM
CARLSBAD, Calif., March 18, 2024 (GLOBE NEWSWIRE) -- Exagen Inc. (Nasdaq: XGN), a leading provider of autoimmune testing solutions, today reported financial results for the fourth quarter and full year ended December 31, 2023.
Financial Highlights:
Record total revenue of $52.5 million for the full-year 2023, and total revenue of $13.8 million for the fourth quarter of 2023. Record 137,650 AVISE® CTD tests performed for the full-year 2023, including 30,438 tests for the fourth quarter of 2023. Over 900,000 AVISE® CTD tests performed to date since launch. AVISE® CTD trailing twelve-month average selling price (ASP) of $336 , an increase of $51 over the course of the year. Delivered 56% gross margin for full-year 2023 and 59% for the fourth quarter of 2023. Net loss of $23.7 million for the full-year 2023 and $5.6 million for the fourth quarter of 2023. Adjusted EBITDA of $(17.1) million for the full-year 2023 and $(3.9) million in the fourth quarter of 2023. Cash balance of $36.5 million at year-end 2023. “I am extremely proud of our team's commitment and hard work this past year. We transformed quite a bit at Exagen and together, we are steering the company towards profitability, with a sharp focus on increasing ASP while diligently driving down expenses and responsibly managing cash. The progress we've made in the past year has significantly bolstered the health of our organization. We look forward to serving our clinicians and patients in 2024 with a renewed organization which is very much focused on reaching our operating goals. Our strategy has been validated and I’m confident that the best is yet to come for Exagen,” said John Aballi, President and Chief Executive Officer.
Fourth Quarter 2023 Financial Results
Total revenue for the fourth quarter of 2023 and 2022 was $13.8 million and $12.8 million , respectively. Total gross margin was 59.2% in the fourth quarter of 2023 compared to 50.9% in the fourth quarter of 2022. The increase in gross margin percentage was primarily driven by an increase in ASP.
Operating expenses were $18.9 million in the fourth quarter of 2023, compared to $27.3 million in the fourth quarter of 2022. The year-over-year decreases in operating expenses in the fourth quarter was primarily driven by lower selling, general and administrative expenses due to decreases in personnel costs and lower research and development expenses.
For the fourth quarter of 2023, net loss was $5.6 million , compared to a net loss of $14.4 million for the fourth quarter of 2022 (which includes a $5.5 million impairment of goodwill that we recognized in the fourth quarter of 2022).
Adjusted EBITDA was $(3.9) million for the fourth quarter of 2023 compared to $(13.4) million for the fourth quarter of 2022.
A reconciliation of non-GAAP adjusted EBITDA is provided in the financial schedules that are part of this press release. An explanation of this non-GAAP financial measures is also included below under the heading “Use of Non-GAAP Financial Measures (unaudited).”
Full-Year 2023 Financial Results
Total revenue for full-year 2023 was $52.5 million , compared with $45.6 million for full-year 2022. Total gross margin was 56.1% for the full-year 2023 compared to 46.9% in 2022.
Operating expenses were $75.4 million for the full-year 2023, compared with $91.6 million for the full-year 2022.
Net loss was $23.7 million for the full year of 2023, compared with $47.4 million for the full year of 2022.
Adjusted EBITDA was $(17.1) million for the full-year 2023 compared to $(39.8) million during the same period in 2022.
Cash and cash equivalents were approximately $36.5 million as of December 31, 2023 and our accounts receivables were $6.5 million as of December 31, 2023.
Guidance
For full-year 2024 revenue, we are providing guidance of approximately $54 million . For first quarter 2024 revenue, we are providing a guidance range of $13.0 million to $13.5 million . For full-year 2024, we believe our adjusted EBITDA will be better than negative $20 million . Given our continued improved performance, we believe our existing cash and cash equivalents are adequate to meet our anticipated cash requirements into 2026.
Conference Call
Participants are asked to join a few minutes prior to the call to register for the event. A replay of the conference call will be available until Monday, April 1, 2024 at 11:59 PM Eastern Time (8:59 PM Pacific Time). Interested parties may access the replay by dialing (201) 612-7415 (U.S.) or (877) 660-6853 (international) using passcode 13743861. A link to the replay of the webcast will also be available in the investor relations section of Exagen's website.
Use of Non-GAAP Financial Measures (UNAUDITED)
We use adjusted EBITDA internally because we believe these metrics provide useful supplemental information in assessing our operating performance reported in accordance with GAAP. We believe adjusted EBITDA may enhance an evaluation of our operating performance because it excludes the impact of prior decisions made about capital investment, financing, investing and certain expenses we believe are not indicative of our ongoing performance. However, this non-GAAP financial measure may be different from non-GAAP financial measures used by other companies, even when the same or similarly titled terms are used to identify such measures, limiting their usefulness for comparative purposes.
This non-GAAP financial measure is not meant to be considered in isolation or used as a substitute for net loss reported in accordance with GAAP, should be considered in conjunction with our financial information presented in accordance with GAAP, has no standardized meaning prescribed by GAAP, is unaudited, and is not prepared under any comprehensive set of accounting rules or principles. In addition, from time to time in the future, there may be other items that we may exclude for purposes of these non-GAAP financial measures, and we may in the future cease to exclude items that we have historically excluded for purposes of these non-GAAP financial measures. Likewise, we may determine to modify the nature of adjustments to arrive at these non-GAAP financial measures. Because of the non-standardized definitions of non-GAAP financial measures, the non-GAAP financial measure as used by us in this press release and the accompanying reconciliation table have limits in their usefulness to investors and may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Accordingly, investors should not place undue reliance on non-GAAP financial measures.
About Exagen
For more information, please visit Exagen.com or follow @ExagenInc on X (formally known as Twitter).
Forward Looking Statements
Contact: ir@exagen.com
Exagen Inc. Statements of Operations (in thousands, except share and per share data) Three Months Ended December 31, Year Ended December 31, 2023 2022 2023 2022 (Unaudited) Revenue $ 13,765 $ 12,837 $ 52,548 $ 45,563 Operating expenses: Costs of revenue 5,620 6,309 23,092 24,214 Selling, general and administrative expenses 12,216 12,812 47,428 52,018 Research and development expenses 1,076 2,701 4,865 9,876 Goodwill impairment — 5,506 — 5,506 Total operating expenses 18,912 27,328 75,385 91,614 Loss from operations (5,147 ) (14,491 ) (22,837 ) (46,051 ) Interest expense (566 ) (626 ) (2,335 ) (2,448 ) Interest income 146 481 1,516 830 Loss before income taxes (5,567 ) (14,636 ) (23,656 ) (47,669 ) Income tax (expense) benefit (6 ) 282 (33 ) 282 Net loss $ (5,573 ) $ (14,354 ) $ (23,689 ) $ (47,387 ) Net loss per share, basic and diluted $ (0.31 ) $ (0.83 ) $ (1.34 ) $ (2.77 ) Weighted-average number of shares used to compute net loss per share, basic and diluted 17,836,090 17,194,293 17,679,467 17,082,348
Exagen Inc. Condensed Balance Sheets (in thousands, except share and per share data) December 31, 2023 2022 Assets Current assets: Cash and cash equivalents $ 36,493 $ 62,391 Accounts receivable, net 6,551 6,077 Prepaid expenses and other current assets 4,797 4,143 Total current assets 47,841 72,611 Property and equipment, net 5,201 8,197 Operating lease right-of-use assets 3,286 4,885 Other assets 616 528 Total assets $ 56,944 $ 86,221 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,131 $ 3,046 Operating lease liabilities 976 1,040 Borrowings-current portion 264 190 Accrued and other current liabilities 7,531 5,347 Total current liabilities 11,902 9,623 Borrowings-non-current portion, net of discounts and debt issuance costs 19,231 28,778 Non-current operating lease liabilities 2,760 4,493 Other non-current liabilities 357 867 Total liabilities 34,250 43,761 Commitments and contingencies (Note 5) Stockholders' equity: Common stock, $0.00 1 par value; 200,000,000 shares authorized at December 31, 2023 and December 31, 2022; 17,045,954 and 16,549,984 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively 17 17 Additional paid-in capital 301,893 297,970 Accumulated deficit (279,216 ) (255,527 ) Total stockholders' equity 22,694 42,460 Total liabilities and stockholders' equity $ 56,944 $ 86,221
Exagen Inc. Reconciliation of Non-GAAP Financial Measures (UNAUDITED) The table below presents the reconciliation of adjusted EBITDA, which is a non-GAAP financial measure. See "Use of Non-GAAP Financial Measures (UNAUDITED)" above for further information regarding the Company's use of non-GAAP financial measures. Twelve Months Ended December 31, 2023 2022 (in thousands) Adjusted EBITDA Net loss $ (23,689 ) $ (47,387 ) Other (Income) Expense (1,516 ) (830 ) Interest Expense 2,335 2,448 Income tax expense (benefit) 33 (282 ) Depreciation and amortization expense 2,168 1,557 Stock-based compensation expense 3,617 4,704 Adjusted EBITDA (Non-GAAP) $ (17,052 ) $ (39,790 )
What was Exagen Inc.'s total revenue for full-year 2023?
Exagen Inc. reported total revenue of $52.5 million for full-year 2023.
How many AVISE® CTD tests were performed in 2023?
137,650 AVISE® CTD tests were performed in 2023.
What was the gross margin for the full-year 2023?
The gross margin for the full-year 2023 was 56.1%.
What was Exagen Inc.'s net loss for the full-year 2023?
Exagen Inc. reported a net loss of $23.7 million for the full-year 2023.
What is the guidance for full-year 2024 revenue?
Exagen Inc. provided guidance of approximately $54 million for full-year 2024 revenue.
