Is Exagen (NASDAQ:XGN) Using Debt Sensibly?
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. As with many other companies Exagen Inc. (NASDAQ:XGN) makes use of debt. But the real question is whether this debt is making the company risky.
When Is Debt A Problem?
Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
How Much Debt Does Exagen Carry?
As you can see below, at the end of September 2025, Exagen had US$22.9m of debt, up from US$20.3m a year ago. Click the image for more detail. But on the other hand it also has US$35.7m in cash, leading to a US$12.7m net cash position.
A Look At Exagen's Liabilities
The latest balance sheet data shows that Exagen had liabilities of US$12.9m due within a year, and liabilities of US$31.8m falling due after that. On the other hand, it had cash of US$35.7m and US$11.1m worth of receivables due within a year. So it actually has US$2.06m more liquid assets than total liabilities.
This state of affairs indicates that Exagen's balance sheet looks quite solid, as its total liabilities are just about equal to its liquid assets. So it's very unlikely that the US$145.3m company is short on cash, but still worth keeping an eye on the balance sheet. Simply put, the fact that Exagen has more cash than debt is arguably a good indication that it can manage its debt safely. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Exagen can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Check out our latest analysis for Exagen
In the last year Exagen wasn't profitable at an EBIT level, but managed to grow its revenue by 14%, to US$64m. We usually like to see faster growth from unprofitable companies, but each to their own.
So How Risky Is Exagen?
Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months Exagen lost money at the earnings before interest and tax (EBIT) line. Indeed, in that time it burnt through US$11m of cash and made a loss of US$19m. But the saving grace is the US$12.7m on the balance sheet. That means it could keep spending at its current rate for more than two years. Even though its balance sheet seems sufficiently liquid, debt always makes us a little nervous if a company doesn't produce free cash flow regularly. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 3 warning signs for Exagen you should be aware of.
If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.
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