ILLUMINA, INC. Q2 FY2025 earnings call

• Revenue was at the high end of guidance despite YOY decline, with non-GAAP operating margin 23.8% and non-GAAP EPS $1.19.
• Ongoing adoption of NovaSeq X platform with >50 placements; strong high-throughput consumable sales, especially among NovaSeq X users. Clinical markets now ~60% of sequencing consumables, resilient in oncology, generic disease testing, and reproductive health.
• Advanced multi-omic strategy with acquisition of SomaLogic for proteomics integration, expected to close H1 2026. MiSeq i100 Plus placed over 500 instruments, with positive customer feedback on faster turnaround, ease of use, etc.

Second quarter revenue was $1.06 billion, down ~3% YOY on constant currency and reported basis. Sequencing consumables revenue was $740 million, flat YOY and up 6% sequentially, with clinical segment now accounting for roughly 60% of total sequencing consumables. Sequencing instruments revenue was $96 million, down ~18% YOY. Greater China revenue was $63 million, slightly ahead of expectations, representing a $12 million decline from Q2 2024.

• Raised 2025 revenue guidance; constant currency revenue decline expected in range of -0.5% to -2.5%, reported revenue $4.23B to $4.31B.
• Increased operating margin guidance to 22%-22.5% due to cost discipline and revenue growth. EPS guidance raised to $4.45-$4.55.
• Q3 2025 expected constant currency revenue decline 1.5%-2.5%, Q4 expected revenue growth excluding China.

• Constrained U.S. research environment due to NIH funding uncertainty, impacting research segment demand.
• Restricted instrument export to China, ongoing engagement with regulators to resolve for sustainable presence.

Q: Congrats on the quarter and execution, any details on guide change and pipeline?

A: Jacob Thaysen mentioned strong pipeline feedback from early access customers, with multiomics expected to add growth from 2026. Ankur Dhingra discussed rest of world instrumentation expectations and data services.

Q: Have you seen change in customer behavior due to competition? How preparing?

A: Jacob Thaysen emphasized focus on customers, innovation, and R&D, working on attributes like turnaround time for clinical and decentralized markets.

Q: Any pull-forward in China consumables or guidance implications?

A: Jacob Thaysen said no pull-forward seen, Ankur Dhingra noted China guidance is for current quarter, with ongoing regulator engagement.

Q: Thoughts on clinical spending and transition?

A: Jacob Thaysen said clinical segment strong, transition to NovaSeq X is gradual with no cliff, customers shifting over fluently.

Q: Instrument guidance and operating margin?

A: Jacob Thaysen discussed X instrument placements and transition pace; Ankur Dhingra said operating margin improvement from cost actions, tariff impact not significant in Q2.