Analyst Conference Summary

conference date: July 31, 2025 @ 1:30 PM Pacific Time
for quarter ending: June 30, 2025 (second quarter, Q2 2025)

Forward-looking statements

Overview: Difficult period for Illumina.

Basic data (GAAP):

Revenue was $1.06 billion, up 2% sequentially from $1.04 billion and down 3% from $1.09 billion in the year-earlier quarter.

Net income was $235 million, up 79% sequentially from $131 million, and 256% up from $66 million year-earlier.

Diluted EPS was $1.49, up 82% sequentially from $0.82, and up 263% from $0.41 year-earlier.

Guidance:

Full year 2025 revenue decline y/y of 2.5% to 0.5%. Non GAAP EPS $4.45 to $4.55.

Conference Highlights:

Jacob Thaysen, CEO, said "The Illumina team again delivered results that exceeded our guidance, driven by the continued ramp in X consumables, as well as accelerating growth in clinical, our largest customer segment. In research, we are actively helping our customers navigate a constrained funding environment. Even in these challenging conditions, the team’s focus on operational excellence helped drive margin expansion, enabling us to increase our expectations for the year." Revenue was at high end of prior guidance. Believes fundamentals remain robust. Clinical demand is strong. But ongoing NIH uncertainty hurt demand. Still restricted in China.

In q2 2025 Illumina launched TruSight Oncology 500 version 2 (TSO 500 v2), an updated version of Illumina’s comprehensive genomic profiling assay for cancer research. Illumina entered into a definitive agreement with Standard BioTools to acquire SomaLogic. PromoterAI, a new AI algorithm that accurately deciphers pathogenic regulatory genetic variants in the noncoding regions of the human genome was introduced and launched DRAGEN v. 4.4 software for clinical oncology research.

Continuing to expand in proteomics, including the SomaLogic acquisition. Will pay $350 million in cahs and up to $75 million in near-term milestones. Should close in H1 2026. Expects profitability in 2027.

Product revenue was $912 million, services $147 million. $96 million of the product revenue was for instruments, $740 was for consumables.

Illumina shipped >50 NovaSeq X instruments in Q2 2025. [NovaSeq X is the most powerful and expensive of its sequencers.] MiSeq i100 sales were since launch are now over 500.

In 2025 will launch a new single-cell product for CRISPR. In 2026 will launch a spatial assay with larger capture area and greater resolution. The proteomics solution should launch in 1H 2025.

Non-GAAP numbers: net income $187 million, up 21% sequentially from $154 million, and up 7% from $174 million year-earlier. Diluted EPS was $1.19, up 23% sequentially from $0.97, and up 9% from $1.09 year-earlier.

Cash, equivalents and investment balance was $1.15 billion, down sequentialy from $1.24 billion. $1.5 billion term debt. Cash flow from operations was $234 million. Free cash flow was $204 million. Capital expenditures were $30 million. Cash used to repurchase stock was $380 million.

GAAP cost of revenue was $364 million, leaving gross profit of $695 million. Operating expenses were $481 million, consisting of: $247 million for research and development; $234 million for selling, general, and administration. Leaving income from operations of $214 million. Other income was $92 million. Income tax $71 million.

On June 24, 2024 Illumina divested GRAIL. Illumina retains a 14.5% stake in Grail.

Q&A selective summary:

Guidance, consumable change? Guide is up because of FX and increase in China. Increased expectations for consumables is offset decline in research seqment.

New product pipeline? We have a lot in our pipeline. Strong feedback on all three products.

Competition, Roche platform? We could do a better job engaging with customers. We continue to inovate. We are working on instrumentation for the main growth markets going forward. some are looking for fast turn around times, but that involves compromise. So an overnight run is more than reasonable, so that is where are focus is.

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