ILLUMINA, INC. Q1 FY2026 earnings call

• Disciplined commercial execution with continued momentum in clinical end markets. - Product innovation and roadmap updates from R&D team, including TruePath launch, spatial transcriptomics offering, and 18-month roadmap for NovoSeq X. - Progress against long-term strategy and targets, including successful close of Summer Logic acquisition with business performing in line with expectations. - Clinical business showing strong growth with over 65% of sequencing consumables revenue, driven by expansion of sequencing-based diagnostics and increased use of data-intensive applications. - Research and academic markets facing cautious demand due to funding uncertainty but long-term opportunity remains. - Investments in R&D and product innovation, including BioInsight and Billion Cell Atlas.

Sequencing consumables revenue was $726 million, up 4% year-over-year; rest of world organic growth was 3.5%. Sequencing instruments revenue was $118 million, up 9% year over year. Sequencing service and other revenue was $151 million, up 7% year over year. Microarrays business was down 20% on a rest-of-world organic basis. Clinical made up more than 65% of sequencing consumables revenue in the quarter. Rest of world organic growth of 3.5% was driven by strength in sequencing consumables and instruments, with approximately 7% growth in rest-of-world sequencing consumables including ~20% growth in clinical. Over 80 NovoCyc X placements in the quarter, ~20 more than Q1-25.

• Raised 2026 revenue guidance to $4.52 to $4.62 billion, driven by Q1 outperformance. - Instrument guide raised to flat to low single digit growth year over year. - Operating margins expected between 23.4% to 23.6%, up 10 basis points from prior guidance. - Non-GAAP diluted EPS expected $5.15 to $5.30. - Q2 26 guidance: rest of world organic revenue growth 4% to 6%, reported revenue $1.12 to $1.14 billion, non-GAAP EPS $1.20 to $1.25, operating margins ~22%.

Q: Vijay Kumar with Evercore ISI asked about why organic for the year wasn't raised and cautiousness.

A: Jacob said they see strong momentum in clinical, have strong pipeline, and are signaling optimism by raising top and bottom line early. Ankur added they're raising revenue guidance and within the range.

Q: Puneet Souda with Lyrinc asked about mix of clinical vs research, impact of 6K pricing to Nova X, and instrumentation strength.

A: Jacob said they're pleased with placements, seeing growth in both clinical and research, and no change in pricing assumptions. Ankur added no change in pricing assumptions.

Q: Tycho Peterson with Jefferies asked about quantifying backlog and roadmap.

A: Jacob said no freezing of market, feel good about funnel and roadmap. Ankur said performance obligations up over 20% year over year, expecting Q2 placements close to Q1 levels.

Q: Doug Schenkel with Wolf Research asked about operating margin progression.

A: Jacob said on great trajectory, Ankur said Q2 has higher instrument mix, inflationary pressure, but anticipate ramp in second half.

Q: Dan Brennan with TD Cowen asked about guide on clinical side and conversion.

A: Jacob said there's distribution of customers, some laggards, but clinical business is opportunity for growth.

Q: Patrick Donnelly with Citi asked about research and applied markets and Somalogic revenue.

A: Jacob said funding may pick up but cautiousness remains, Ankur said Somalogic revenue is in micro areas.

Q: Subbu Nambi with Guggenheim asked if clinical momentum will continue beyond guide.

A: Jacob said mid-teens growth is strong, no signs of deceleration.

Q: Kyle Mixon with Canaccord Genuity asked if guidance reflects competition.

A: Jacob said confident in position, built in business development.

Q: Dan Arias with Stifel asked about cost per G of 35B flow cell.

A: Jacob said conversation about elasticity, but not ready to talk pricing yet.

Q: Catherine Schultz with Baird asked about low and mid throughput placements.

A: Jacob said strong momentum in MySeq i100, mid-throughput has challenges due to macro.

Q: Casey Woodring with JP Morgan asked about inflationary headwind offset and NovaSeq X placements.

A: Jacob said team is handling challenges, Ankur said mitigating actions in place, Q2 placements similar to Q1, back half pipeline robust.

Q: Jack Meehan with Nefron Research asked about clinical customer profile for Nova X.

A: Jacob said broad interest in oncology, rare disease, NIPT, etc.

Q: Michael Riskin with Bank of America asked about Nova X demand and pricing.

A: Jacob said focus is on driving consumables, some volume discounts.

Q: Mason Carrico with Stevens asked about Illumina's position in spatial.

A: Jacob said excited about spatial offering, sees value, and plenty of room in the market.

Q: Kyle Mixon with Canaccord Genuity asked about Novacic X transition.

A: Jacob said quarter by quarter can vary, but trend is towards transitioning clinical customers.