Exagen Q1 2026 Earnings Call - Record Revenue Driven by ASP Expansion and Commercial Scaling

Operator: Greetings, and welcome to the Exagen first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to your host, Tina Jacobsen, Vice President of Investor Relations. Thank you. You may begin.

Tina Jacobsen, Vice President of Investor Relations, Exagen: Thanks, operator. Good morning, and thank you for joining us to discuss Exagen’s financial results for the quarter ended March 31, 2026. Today, I’m joined by John Aballi, our President and Chief Executive Officer, and Jeff Black, our Chief Financial Officer. The recording of this call, the press release announcing our financial results, and the slide presentation can be accessed on our website at www.exagen.com. Today’s call will include forward-looking statements. We encourage you to review the statements contained in today’s press release and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company’s actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today’s call. We also will discuss non-GAAP financial measures on this call.

Descriptions of these non-GAAP financial measures and the reconciliations of GAAP to non-GAAP financial measures are included in today’s press release. Now, I will turn the call over to John Aballi. John?

John Aballi, President and Chief Executive Officer, Exagen: Good morning, everyone, and thank you for joining us. We’re starting 2026 off well. Today, we reported record first quarter revenue of $17.3 million, up 12% year-over-year, with continued improvement in profitability metrics as we execute our plan. Gross margin was 59% and adjusted EBITDA loss reduced to $2.2 million, a 14% improvement versus last year. These results continue our efforts to build Exagen into a durable company that compounds value over time by prioritizing three core objectives: expanding adoption of our products, increasing ASP through disciplined revenue cycle execution, and delivering a steady cadence of innovation that meets the unmet needs of our clinicians. Q1 was another good example. We are executing and our strategy is working. At the same time, our mission remains our anchor point.

Autoimmune disease is still a category where patients often struggle to get clear answers and clinicians lack the tools to diagnose and treat with confidence in a timely manner. We exist to change that. We’ll do so by pairing better science with best-in-class execution. Our innovation efforts are on track. We believe Exagen is well-positioned to bring clarity to the complexities of autoimmune disease, ultimately improving outcomes for patients. When I look at our market opportunity, I’m incredibly energized by what’s ahead. Drawing on our knowledge of the space and third-party research, we estimate the autoimmune testing market at over $2.2 billion, growing about 5% annually. With just over 3% market share today, we believe there is significant and realistic opportunity to systematically gain share by bringing better science, more timely results, and world-class service to our underserved channel.

Driving adoption within that opportunity will be central to volume growth. In the first quarter, AVISE CTD test volume grew 10% year-over-year, which compared to a 5% market growth rate suggests we continued to earn share in the quarter. Test volume remained in the mid 30,000 quarterly run rate range. I feel very positive about that performance, especially in light of a couple-week disruption related to winter storms in late January and early February that reduced patient access and physician office days in specific U.S. regions. Demand outside of the weather-impacted weeks tracked well with our expectations. We entered Q2 focused on execution, and one month in have seen a strong start consistent with expected ordering patterns.

In fact, year-to-date, we’ve seen several weeks where testing volume has exceeded 2025 weekly highs. This is obviously just over a quarter into the year. A big part of my optimism stems from a review of our sales metrics, which continue to show a broadening of our ordering base. Ordering clinicians were up 15% year-over-year, reflecting continued penetration and engagement within our channel. Our team is executing well. The results continue to build. Now to ASP, one of the clearest indications that our operating strategy is translating into durable business improvement. We expanded trailing twelve-month ASP to $444, up $25 per test or 6% versus last year. Strength in the first quarter was driven by continued progress in revenue cycle management and favorable collections timing.

We’ve now delivered 12 consecutive quarters of increasing trailing twelve-month ASP and view this metric as the most reliable indicator of progress as it smooths the variability associated with accrual accounting and timing of collections. Overall, we’re encouraged by continued improvement in our underlying reimbursement. It reinforces that we’re investing in the right processes and the right tools to drive sustainable ASP expansion over time. In the first quarter, we continue to advance our processes around innovation and remain on track with our development priorities. We’ve been deliberately building the R&D to commercial muscle to deliver a dependable cadence for new products with the objective of launching approximately one product every 12 or so months to our clinician base. Our next key priority is an offering for myositis, our first new standalone product since 2020, currently targeted for commercialization in early 2027.

This is among the most requested diagnostic need within our channel and will fit well with our commercial reach. Myositis is an autoimmune disease that can present in many forms, but often causes chronic muscle inflammation, progressive weakness, or rapidly progressing interstitial lung disease. Left untreated, it can lead to irreversible damage that extends beyond the muscles to vital organs, and in the most severe forms, this results in complications leading to complete loss of lung function or even death. The testing dynamic for myositis is similar to connective tissue disease, where specifically with early disease, symptomatic presentation is ambiguous and the differential is broad. While roughly 100,000 patients in the U.S. are affected by the disease currently, we believe this number dramatically underrepresents the true disease prevalence given the number of patients that ultimately go undiagnosed due to inadequate tests in the market.

We believe the patient population under evaluation for myositis is many times this number. While most clinicians rely on conventional testing today, the vast majority of them lack confidence in those results. We’re developing a comprehensive offering that will bring clarity to this population that clearly needs a better solution. We are also excited about our scientific visibility to start 2026. At Autoimmunity 2026, a key autoimmune conference this month in Prague, Exagen had nine abstracts accepted, including several tied to our myositis research and continued evidence generation across the AVISE portfolio. We’ve also had two manuscripts accepted for publication related to our research in myositis and SLE. Those should be out for publication later this month as well. Our progress reflects the rigor, quality, and practicality of the work our clinical team is driving.

Looking ahead, we are reaffirming our full-year 2026 revenue guidance of $70 million-$73 million. We’re incredibly pleased with the start to 2026, while working to build successive quarters and ultimately years of profitable growth. We remain focused on our priorities in delivering consistent execution. To close, I want to thank our team. The quality of this organization continues to improve, and the solid results we’re delivering are the product of real collaboration across every function. I am grateful for the tremendous energy, the effort, and the high character that our people bring every day in service of autoimmune patients and clinicians. With that, I’ll turn it over to Jeff for additional comments on the financials.

Jeff Black, Chief Financial Officer, Exagen: Thank you, John, and good morning, everyone. 2026 is off to a solid start with first quarter results reflecting continued deliberate execution across the business. Once again, we achieved record top-line performance by growth in both testing volume and ASP. I’ll dive into the financial results starting with revenue. First quarter 2026 revenue reached $17.3 million, an increase of 12% compared to last year. Testing volume grew 10%, driven by continued momentum from the investments we made last year to upgrade and expand the commercial organization. The team’s productivity continues to ramp. In fact, even with many of our new territories less than a year old, we drove a 4% improvement in sales productivity based on trailing twelve-month volume per territory. As John mentioned, we increased the number of ordering clinicians in the first quarter by 15% year-over-year.

These are both clear indications that our commercial investments are translating into tangible performance gains. Our AVISE CTD trailing twelve-month ASP expanded 6% to $444. Execution of our revenue cycle management initiatives supported a strong in-period ASP result, including the collection of over $900 thousand in claims older than 360 days. Over time, we continue to target an ASP of at least 50% of our Medicare reimbursement, or approximately $600-$650, recognizing that the quarterly contribution from our revenue cycle initiatives can be variable. Our Pharma Services offering generated roughly $300 thousand of revenue in the quarter. Early efforts here are coming to fruition. We now have over $5 million in contract backlog value and growing that we expect to realize over the next two to three years.

Moving to gross margin, we reported 59% for the first quarter of 2026, relatively unchanged compared to first quarter 2025 and up 360 basis points sequentially. Gross margin in the quarter benefited from the strength of our in-period ASP and our continued COGS rationalization that is streamlining workflows in the lab and reducing costs across our supply chain. We remain confident that gross margin will progress to the mid-60s over time as we achieve further ASP expansion, generate scale and fixed cost leverage, and further optimize costs. Turning to operating expenses, first quarter 2026, OPEX was $13.6 million, up about 9% compared to last year. We continue to exercise expense discipline and direct incremental spend toward growth investments, including commercial and R&D initiatives.

Breaking out the components of OPEX, first quarter SG&A was just over $12 million, an increase of 8% compared to our first quarter 2025, and driven primarily by investment in commercial talent and territory expansion. Notably, revenue growth continues to consistently outpace SG&A growth, indicating sustained operating leverage in the business. R&D accounted for about $1.6 million of OPEX in the first quarter, growing over 20% compared to last year to support continued pipeline development, including preparation for the myositis product launch expected in early 2027. Our adjusted EBITDA loss, which excludes depreciation and non-cash stock comp expense, was $2.2 million in the first quarter, a 14% improvement compared to last year. Please refer to the press release we issued earlier today for a reconciliation of our net loss to adjusted EBITDA.

Turning to cash, we ended the first quarter with cash equivalents, and restricted cash of just under $22 million and ahead of our internal expectations. We continue to maximize our revenue cycle management, which includes beginning the year by holding most claims. Consistent with previous years, this temporarily increases accounts receivable and results in a higher use of cash in the first half of the year, which we expect to normalize in the second half. We continue to believe that our balance sheet provides us the runway needed to support the business’ sustainable positive free operating cash flow. Shifting to guidance, as John mentioned, we’re reaffirming full year 2026 revenue guidance of $70 million-$73 million.

The midpoint continues to assume high single-digit % volume growth and low single-digit % ASP growth relative to our Q4 2025 in-period rate of approximately $430. In closing, we remain committed to creating and sustaining shareholder value through financial and operational discipline as we deliver better care for autoimmune disease. Our financial performance reflects continued execution across top line expansion, cost management, and targeted investment to create a durable business well-positioned for self-funded growth and scale. Operator, we will now open the call for questions.

Operator: Our first question comes from the line of Kyle Mikson with Canaccord Genuity. Please proceed with your question.

Kyle Mikson, Analyst, Canaccord Genuity: Hey, guys. Thanks for the questions. Congrats on a great quarter. I wanted to talk about the in-quarter ASP for a second. It was good to see the improvement in the trailing twelve-month, but the quarterly was interesting. I, you know, it looks like maybe like $470 or high $400s, and that would obviously be a pretty big increase from the last few quarters. I bring it up because it just seems like your first quarter ASP is typically the highest of the year from the 4 quarters. As we think about the step down going forward, if that is the case, just how what’s the progression going to look like?

I know you have the ASP guidance. Maybe just talk a little bit about the seasonality, what you’re seeing with RCM and that stuff, and how we should just be thinking about it, as it kind of builds to the full year TTM ASP. Thank you.

Jeff Black, Chief Financial Officer, Exagen: Hey, Kyle. Good morning. Thanks a lot for the question. Appreciate it. When we look at this quarter, very happy with how our revenue cycle team was able to deliver, specifically related to the prior period cash collections, which drove some of that upside or outsized performance in the quarter. You know, tough for us to project that each quarter going forward or know exactly, you know, that prior period collections tends to be a little bit lumpy for us. I don’t think we’re ready to say that there’s going to be a step down in sequential quarters or characterize exactly the size of it. Our revenue cycle approach has yielded pretty decent returns as it relates to prior period collections in quarters in the past.

John Aballi, President and Chief Executive Officer, Exagen: It was great to see it happen again this quarter. Looking forward to it in future quarters as well. The exact magnitude is always difficult for us to project. Anything you would add, Jeff? Kyle, I would say, you know, you had done the calculation on in-period. Our out-of-period collections, just to put it in perspective, you know, we said about $900,000 in out-of-period greater than 12-month collections. Put that in perspective, we did about $1.5 million for the entire year last year. Tracking very nicely, and again, very hard to predict whether that becomes a run rate or otherwise. That had about a $25 impact on the in-period ASP. We are tracking, you know, ahead of that, you know, Q3 or Q4 exit rate, which is encouraging.

Jeff Black, Chief Financial Officer, Exagen: Again, I think it’s too early for us to make a call on what we expect Q2 in terms of whether it’s continued enhancement. I will say we did see a full quarter of collections for PAD4, that’s tracking right around where we expect it to be. Some of the increase is really relative to pair mix, which can, you know, change quarter to quarter. Again, very encouraged. About a $25 impact on the out-of-period collections. Hoping that we’ll continue to see that traction, not yet ready to make the call.

Kyle Mikson, Analyst, Canaccord Genuity: Okay. Yeah, John, that was helpful. Jeff, that was really cool in there as well. Thank you for that. On the ordering physicians in the quarters that increased, I think 15%, I guess, year-over-year, that’s great to see. I was wondering what were some of the reasons for that. You know, I think that might imply like a lower, you know, average test order per doctor, which is, you know, probably an extension due to that cohort of newer to-AVISE clinicians. On this note, what are some of the ordering trends of the more recent cohorts of physicians given, you know, several developments in the autoimmune field the last few years?

John Aballi, President and Chief Executive Officer, Exagen: Great question, Kyle. You’re exactly right. The ordering physician base increased 15% year-over-year to about just over 2,700 physicians here for the first quarter. A big part of that has to do with our sales expansion. Obviously, with the additional territories we added in the back half of last year, those folks are really high caliber individuals. They’ve just gotten into the field, established those relationships, and we’re seeing the traction there. As it relates to orders per physician, you’re on the mark there as well. I think part of the lower orders per physician for Q1, if you would be related to more of the weather impact, to be honest with you.

We had about two weeks in the end of January, early February, where we lost around 30% or so, a third of our volume for those two weeks, just related to that severe weather in the Northeast. That, you know, on an average basis, orders per physician would pull that number down a little bit. That’s all we’re seeing there. The weeks outside of the weather impact, we saw very robust demand on orders per physician base, and here into Q2 as well.

Kyle Mikson, Analyst, Canaccord Genuity: All right, awesome. Perfect. Finally, Jeff, you were mentioning the R&D expense this quarter was elevated, partially due to preparations that myositis launched, I guess, early next year. Just was wondering if you guys can talk about how much education or like additional marketing is gonna have to be, you know, kind of executed, I guess, this year for that test, and how much of this is maybe R&D versus like an SG&A type thought process.

Jeff Black, Chief Financial Officer, Exagen: Yeah, I’ll let John chime in on some details. Generally, this is gonna be new product, really outside of AVISE CTD, but it will be distributed through the same sales channel. The expectation is we’re adding to the bag. There will be some incremental, you know, marketing efforts, but we don’t expect to see OPEX ramp up substantially. We will continue to see investment this year on the R&D side. This is, you know, will be our first standalone product beyond of AVISE CTD really since, what, twenty-?

John Aballi, President and Chief Executive Officer, Exagen: Twenty

Jeff Black, Chief Financial Officer, Exagen: 20. Really excited about it. We don’t think it’s gonna add really incremental burn. It’s really just, you know, adding to the existing bag.

John Aballi, President and Chief Executive Officer, Exagen: The way we take a look at this, Kyle, or at least the way I think about it internally is, we have to have very strong relationships with both with our customer base, but also the other innovators in the field and the KOLs. That serves several purposes, but one of them being as you launch a new product, and you conduct studies with folks, that can serve very much as incredibly powerful marketing material related to the new product. We’ve already started that. We’ve got abstraction, actually an accepted manuscript now, related to myositis and some of the research we’re doing there. That’s all done with the existing budget.

A big part of that or credit goes to our research team for having those relationships, finding creative ways to conduct studies in a, call it economical way. We’ll continue to do that. There may be, you know, some marketing expense that is associated with the product launch, but it’ll be measured and generally consistent with our current operating profile.

Kyle Mikson, Analyst, Canaccord Genuity: Great. Helpful, guys. Thanks.

John Aballi, President and Chief Executive Officer, Exagen: Thanks, Kyle.

Operator: Thank you. Our next question comes from the line of Bill Bonello with Craig-Hallum Capital Group. Please proceed with your question.

Bill Bonello, Analyst, Craig-Hallum Capital Group: Hey, guys. Thanks a lot, and thanks for all the color. First of all, on the volume, on the weather, you talked about, you know, a couple of tough weeks. Any sense of maybe what the impact on volume growth might have been? I mean, did you, in theory, lose a day or two of productivity or how might we think about that?

John Aballi, President and Chief Executive Officer, Exagen: Hey, Bill. Good morning. Thanks so much for the question. The way we have characterized it is for those 2 weeks, we lost about a third of volume over the course of 2 solid weeks. That’s a couple thousand tests. That should, I think, give you the exact color you need.

Bill Bonello, Analyst, Craig-Hallum Capital Group: Yeah. Just to expand on that, is there anything else, you know, as we see the ASP trend moving in the right direction, is there anything different that’s happening at all on the volume front, in terms of, you know, either, you know, maybe walking away from some lower priced business or being more cautious about some of the accounts, you’re adding? Would we say that maybe differential in the growth rate and the sequential down tick would pretty much all be the weather?

John Aballi, President and Chief Executive Officer, Exagen: Great question. In the quarter, the impact to volume was pretty much weather-related. I mean, not really any other drivers there or motivators there. Then on the ASP side, really what’s driving that continues to be just the strategy we employed a few years ago, and we just continue to get better at it. Our appeals continue to get better, and these are long cycles as you know. As we learn through various successes or failures in our appeal efforts, we adjust our approach and make changes there. We’re always evaluating our Medicaid patient population is maybe one area that I would say, you know, continues to evolve and certainly on the managed Medicaid side, what level of patient responsibility the market can support there.

Those are some changes we have made here in Q1, but I don’t think those are big contributors to volume impact. They may have had some impact on the ASP side, but mostly ASP gains are due to wins on the revenue cycle side.

Bill Bonello, Analyst, Craig-Hallum Capital Group: Okay. That’s really helpful. Then maybe just a follow-up on that on the ASP side. You know, obviously, you know, having improvement on both the collections front and it sounds like on the, you know, fighting denials and all of that, can you just remind us maybe what some of the key opportunities are? I know as we, you know, were going through last year, there were some really specific opportunities you saw, where you know, for things that you could get paid for, because of some of what you had added to the product over the course of the last year. Maybe just give us a little bit of an update on how you’re feeling about that and where those opportunities stand today.

John Aballi, President and Chief Executive Officer, Exagen: Yeah, absolutely. Thanks for the chance to expand on it. From my standpoint, opportunistically, we continue to pursue prior period collections. I mean, we’ve talked about this a little bit with the new product launches and, you know, you have your initial payment or your initial ASP call it from when you perform the test. Over the course of about a 12 months, maybe even a little bit longer, 12-18 month period, you’re able to continue to work with the insurance company, with the patient in various ways, through appeals, advocacy, what have you, and drive further collections. That’s what we anticipated doing with the new product launches on the existing product, and it’s just coming to fruition.

You know, to have $900,000 in prior period collections here in Q1 when all of last year we had about $1.5 million, that’s phenomenal. We are, to be honest, so proud of the team, because it’s coming from multiple payers and through multiple initiatives. You know, it’s not just one single win that drove this, but it’s on, you know, improving some of those collections for the new product launches. It’s on the base business across multiple payers, our level of payer engagement just continues to improve as well. I mean, here in the first quarter, we had presentations to three different medical directors at various Blues plans. They continue to be engaged.

You know, these aren’t just join a conference call, they sit silent, and you present your clinical dossier, and then the call’s over. There’s high levels of engagement, lots of Q&A, follow-up requests for additional material. You know, our strategy is getting the attention of various payers. It’s yielding improvement in ASP on the individual claim level, for multiple CPT codes. We’ll just continue marching along and that’s been the strategy from day one and just continues to improve in terms of efficacy.

Bill Bonello, Analyst, Craig-Hallum Capital Group: Okay. If I could just one last follow-up on that, but that’s helpful. Just in terms of, you know, getting paid for the additional markers, and obviously that’s part of the success presumably on the prior period collections. As you look forward, are you feeling, you know, how are you feeling about consistency of payment for those additional markers? Are you thinking that’s gonna be, I hate to say easier, but as you look forward, do you expect to see maybe the rate of denials moderate or a bit given the success you’ve had with the prior period collections? Or is it too early to say on that?

John Aballi, President and Chief Executive Officer, Exagen: No, it definitely will improve the rate going forward, especially just because we’re on accrual accounting. As you have a track record of improved collections, you can actually accrue it, and then it’ll factor into the rate going forward. From that perspective, we’ll have greater certainty, we’ll have greater clarity because we’ll have firsthand experience in seeing this through full cycle. This is more specific to the new marker reimbursement. From that perspective, we’ll improve. I think the other thing I would say is we now have a 3-year track record of consistent improvement in ASP. I have a lot of confidence that our processes work and that they’ll continue to yield positive results over time as well. Yeah, all of that will be factors.

The way to really lock it in, as you know, is through in-network contracting, and then your velocity of payments will improve and you’ll I don’t know that you ever sleep soundly at night regarding this area, but at the same time, it may speed everything up a little bit.

Bill Bonello, Analyst, Craig-Hallum Capital Group: Great. Thank you so much.

Operator: Thank you. Our next question comes from the line of Dan Brennan with TD Cowen. Please proceed with your question.

Dan Brennan, Analyst, TD Cowen: Great. Thanks, thanks for the questions. Maybe guys just on pacing for the year, just Q2 streets just shy of $18 million. Can you give us some flavor about, like maybe price volumes? You guys seem okay with that number. How do we think about that?

John Aballi, President and Chief Executive Officer, Exagen: Hey, Dan. Good morning, by the way. From a guidance standpoint, you know, we are guiding quarterly. I think we feel very comfortable about our annual guide that 70-73. Obviously, you know, very nice quarter here for Q1. Some of it driven by the prior period collections that we aren’t quite ready to earmark for the rest of the year, you know, each quarter. We’re still filling it out. We’d like to get another quarter behind us before we take a look at that annual number. I think the quarterly spread is what it is on the analyst side, but I don’t think we’re too far off.

Dan Brennan, Analyst, TD Cowen: Okay. Thanks for that. Then maybe just one follow-up on the weather. You lost those couple thousand tests, I guess, in Q1. I guess presumably, do those come back in Q2 or are they gone? Does that kinda create a favorable comp into Q2?

John Aballi, President and Chief Executive Officer, Exagen: Yeah. Because the sample type that we work in is peripheral blood, it’s got a viability component to it. Really, it gets moved, those tests get moved theoretically. You know, if we were dealing with paraffin-embedded tissue or fixed tissue or something like that, you could envision a catch-up period that’s maybe a little bit more realistic. For us, in essence, those are gone. Those are clinic days that are completely gone. There’s only so many patients that a physician can see in a single day. Those are essentially gone.

Dan Brennan, Analyst, TD Cowen: Got it. Okay. Maybe can you just give us an update on the path towards an LCD? I know that’s been on file for a couple of years now. Just wondering kind of any update there, how we think about that and what kind of if in fact, you know, that were to come, how do we think about the impact that would mean on your ASP uplift?

John Aballi, President and Chief Executive Officer, Exagen: Sure. Maybe I’ll start with the impact first. Impact-wise, an LCD is very nice progress for our organization. It will memorialize the coverage with Medicare that we have, I guess in plain sight, but also allow us to leverage that for Medicare Advantage conversations and even policy discussions related to commercial lives with various plans. We’re looking forward to it. Still waiting. Continue to have very good relationship with the MolDX team, meet with them on a regular basis, you know, about every quarter just to get an update. We do have our body of evidence supporting AVISE CTD continues to expand. In fact, we had a systematic review, a very significant publication for us internally, just get accepted for publication. That’ll come out, you know, maybe in a month’s time or so.

We look forward to updating the MolDX team with that evidence as well. Where we sit right now is we’re in the queue. They are unable to tell us exactly where in the queue we are, but we remain in the queue and they have a complete understanding of our product and the clinical evidence behind it. That’s about all we can say at the moment.

Dan Brennan, Analyst, TD Cowen: Okay. Thanks for that, John. Just in terms of the Northwell Health transition, I think you guys felt pretty good that, you know, other customers weren’t looking to kinda switch from direct bill to, you know, kind of, I guess, third-party pay. Just any update there? How do you feel about that? Does that still remain the case today?

John Aballi, President and Chief Executive Officer, Exagen: Yeah. Well, it still stings. I think, from my perspective, it’s really unfortunate that we weren’t able to find a path there. As it relates to our broader client bill business, no further change. In fact, I think our relationship with our client bill customers continues to be very strong. Maybe adjusted our approach a little bit, we have a lot of senior leadership highly tuned in to our client bill accounts and just continue to foster them as we do with really any other account. No further updates, if you will.

As it relates to Northwell, we continue to find ways to serve their clinician base outside of the system itself, but see it as unlikely that a client bill arrangement comes back in the near future.

Dan Brennan, Analyst, TD Cowen: Got it. Right. You’re not really hearing, like you think it is kinda more of a one-off, I guess, is still the case, correct?

John Aballi, President and Chief Executive Officer, Exagen: Yeah. You know, that happened in July of last year. Since then, you know, we continue to have, like I said, strong relationships with our client bill business. Pretty close to the definition of one-off in my opinion.

Dan Brennan, Analyst, TD Cowen: Terrific. Okay. That’s great, John. Thanks a lot. I’ll go back in the queue.

John Aballi, President and Chief Executive Officer, Exagen: Yeah. Appreciate it, Dan.

Operator: Thank you. Our next question comes from the line of Mark Massaro with BTIG. Please proceed with your question.

Mark Massaro, Analyst, BTIG: Hey, guys. Thank you for taking the questions. It was really nice to see the 15% increase in ordering clinicians. Can you give us a sense, are these all specialists, so I presume rheumatologists? Perhaps, did you see any increase in breadth? Related to that, can you speak to any potential opportunity to market to primary care or more generalist clinicians?

John Aballi, President and Chief Executive Officer, Exagen: Yeah. Good morning, Mark. Thanks for the question. Very interesting one. From the physician-based standpoint, we still target the rheumatologists as our primary customer, that’s what we saw in terms of the expansion, continued growth, but roughly proportional to what we had previously. You know, about 2/3 devoted to the rheumatology channel, then about 1/3 of that expansion coming outside of it. When we see utilization of the test outside of rheumatology, it can come in a few different ways, general practitioners, internists. We also see it in the women’s health side, so OB-GYN, also pulmonology as well.

We don’t have targeted, we wanna keep our sales team focused, and I think you really need to take a look at what the potential is for those physicians before you start targeting and marketing to them. From our standpoint, where we’ve seen expansion outside of the rheumatology specialty work well, it’s when the rheumatologist is still involved, even if behind the scenes. You know, they know their referral network very well, and they know which physicians, for whatever geographic reason, are seeing some of these patients and they’ll help direct us in that, in that respect. That’s what we saw with this expansion as well.

Mark Massaro, Analyst, BTIG: Okay, that’s great. I think you expanded to, I believe, 45 territories. Can you just speak to how you’re feeling about the productivity of some of the newer reps? How do you think they’re ramping? If they’re not fully ramped, do you see any potential for some pickup in the back half of the year?

John Aballi, President and Chief Executive Officer, Exagen: First of all, they’re fantastic people and been really excited about how they’ve been able to come in. We’ve modified our training now a couple of times to cater, to really refine it over the last couple of years, and it’s working well. We just had our training split into 2 phases. The first is welcome to Rheumatology. You know, remove the deer in the headlights perspective. We bring them back after a couple months in the field to dive deeper into the science, but also really do more of a Q&A and tailor it to what they’re seeing and the challenges that they’re facing in their territories.

We did that here in late December, so we’ve now had a quarter with our new reps going through phase II of the training. They’re still getting their feet under them. You know, I think we typically see production consistent with our goal targets somewhere in that 6-9 month range. To truly get running, it takes a little bit longer than that. We’ve had a few of our territories land some pretty big accounts, clients, which is telling me that they understand the product, they’re able to convey the clinical utility of the product in an effective way and develop that relationship. Very happy with how pretty universally these 5 territories have gotten acclimated to rheumatology and our product, still a ways to go.

I would think you see a continued build throughout the year. We’ll also look to expand our sales organization even further once we have those folks adequately supported. Maybe that comes in the back half of the year or so, we’ll have to see.

Mark Massaro, Analyst, BTIG: Okay, fantastic. My last question, I know in prior calls, there had been more discussion around the newer biomarkers launched in 2025. I know you’ve talked about PAD-4, I think RA33, some others. Just curious how that is ramping, to what extent do you see potential upside in ASPs as we, you know, try to tune up our models? Just wondering how those are progressing relative to your internal expectations.

John Aballi, President and Chief Executive Officer, Exagen: Yeah. The new markers, I think generally inside the building, we’re very happy with the decision to pursue that research and ultimately commercialize those markers. I think part of what gives us, you know, that optimism or excitement is we’ve actually started to land pharma contracts related to testing with the new markers. We actually have two, specifically for anti-PAD4 and RA33. Our unique RA markers are not only grabbing the attention of our clinical base and being useful in that context, but we’re seeing that utility spread into our pharma partners. Obviously, as you have these new markers incorporated into various trials and subsequent publications leveraging these, it’s just gonna continue to build.

We continue to be, you know, the only group in the U.S. providing these markers, just very excited to drive that innovation into the field. Specifically as it relates to ASP, I think our revenue cycle operations continue to improve the ASP that we’re able to generate on our tests, but specifically those new markers. We’re still gaining confidence with what that looks like full cycle. I mean, PAD-four launched in September of this past year, so we’re 6 months in, we don’t guide on ASP, so I think from that standpoint, it’s gonna be tough for me to give you some direction there. We like how the first quarter shaped up related to ASP.

Some of that prior period collection was related to the new markers, and, we’ll just continue to build from here.

Mark Massaro, Analyst, BTIG: Great. Actually, John, just to clarify that, the Pharma business that you’re landing, how much of this is lupus-related versus RA or any other type of autoimmune disease?

John Aballi, President and Chief Executive Officer, Exagen: That’s an interesting question. It’s interesting, Mark, because you sign a contract for up to a certain amount of service and some of that’s dependent on trial enrollment, right? Right now, we have a pharma business, heavily focused in lupus, but actually quite a bit in RA as well. We’ve never broken it out publicly. Jeff, what would you?

Jeff Black, Chief Financial Officer, Exagen: Yeah, it’s a great question, Mark. Historically, you know, clearly lupus, you know, the expansion of the contract backlog, which has expanded from, you know, in the $4 million to $5 million range over the course of the last 90 days. A lot of that has been driven by RA.

John Aballi, President and Chief Executive Officer, Exagen: Yeah.

Jeff Black, Chief Financial Officer, Exagen: I would still say bigger percentage is lupus, but we are seeing a sort of a growing contribution from RA.

John Aballi, President and Chief Executive Officer, Exagen: Yeah, we’re doing at least a third of our biopharma business in RA. It may be higher than that, but at least a third.

Mark Massaro, Analyst, BTIG: That’s all very helpful. Thanks, guys.

Operator: Thank you. Our next question comes from the line of Matthew Parisi with KeyBanc Capital Markets. Please proceed with your question.

Matthew Parisi, Analyst, KeyBanc Capital Markets: Yes, this is Matthew Parisi on for Paul Knight over at KeyBanc Capital Markets. Thanks for taking my question, and congrats on the quarter. I believe you called on the last call, you called out that ACR was now advocating for the AVISE CTD test. Can you talk to any impact that you’re seeing as a result of said advocacy?

John Aballi, President and Chief Executive Officer, Exagen: Good morning, Matthew. Thanks for the question, you’re exactly right. Very, very happy to have found a path that ACR can play in helping us drive greater access to our test. Given that we’re at various forms of discussions with different payers, I would hesitate to call out a payer by name. It’s been a very positive impact. Anytime you have physicians advocating for your product directly to the payer, I think, you know, tough to mess that up, to be honest with you. We welcome it. We welcome the partnership. We really appreciate that they’ve recognized the role diagnostics play in the ecosystem, and that there needs to be a path for advocating greater access for patients. It just continues. It wasn’t a one-time event.

It’s a partnership that we formed with the ACR and the physicians there, and they’re committed to speaking on our behalf and advocating for their constituency related to access. I would just say it remains strong and continues.

Matthew Parisi, Analyst, KeyBanc Capital Markets: That’s great to hear. If I can squeeze in one more. You previously mentioned revenue per territory in the range of $430,000. Do you have, like, an updated revenue per territory number for the quarter? How should we really think about that as you ramp up the new territories?

Jeff Black, Chief Financial Officer, Exagen: Yeah, man, I think that the number you’re referring to is a quarterly number. The annualized number would be, you know, north of a million and a half. That continues to be what I would say our target, a million and a half plus. We’re tracking right about there, maybe, you know, moderately improved given the results of Q1.

Matthew Parisi, Analyst, KeyBanc Capital Markets: Thanks for my questions. Well, thanks for the other questions.

Operator: Thank you. Ladies and gentlemen, that concludes our question and answer session. I’ll turn the floor back to Mr. Abbate for any final comments.

John Aballi, President and Chief Executive Officer, Exagen: Thanks so much. Yeah, really appreciate everyone who joined the call today, it’s really a lot of fun to start the year off the way we have. Basically, we’re continuing our momentum from the second half of 25, reigniting our progress in ASP gains, and I don’t think anything’s more fun than that. I’m incredibly proud of our team, as I have been now for several years. They continue to deliver in transforming this organization into really the preeminent diagnostic company serving autoimmune patients. Progress at the company has come in spurs, we’ve consistently improved our trajectory, we have put ourselves in position to own the autoimmune diagnostic space. While others are focused elsewhere, we’ll continue to chip away at this opportunity and build a truly incredible autoimmune powerhouse.

We appreciate the support of all stakeholders and look forward to continuing to update on our progress. Thanks so much again.

Operator: Thank you. This concludes today’s conference. You may disconnect your lines at this time. Thank you for your participation.