[PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=5&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Illumina's unaudited interim financial statements for the quarter ended June 29, 2025, detailing financial position, performance, and cash flows, along with explanatory notes [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, total assets, liabilities, and stockholders' equity all decreased compared to year-end 2024, primarily influenced by changes in cash and treasury stock purchases Condensed Consolidated Balance Sheets (In millions) | | June 29, 2025 (Unaudited) | December 29, 2024 | | :--- | :--- | :--- | | **Total current assets** | $2,641 | $2,746 | | **Total assets** | $6,087 | $6,303 | | **Total current liabilities** | $1,461 | $1,547 | | **Total liabilities** | $3,829 | $3,930 | | **Total stockholders' equity** | $2,258 | $2,373 | | **Total liabilities and stockholders' equity** | $6,087 | $6,303 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue decreased, but the company achieved a significant net income turnaround from a prior-year loss, which was impacted by a goodwill impairment charge Q2 and Six Months Ended Financial Performance (In millions, except per share amounts) | | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | $1,059 | $1,112 | $2,100 | $2,188 | | **Gross profit** | $695 | $721 | $1,378 | $1,388 | | **Income (loss) from operations** | $214 | $(1,637) | $378 | $(1,749) | | **Net income (loss)** | $235 | $(1,988) | $366 | $(2,114) | | **Diluted EPS** | $1.49 | $(12.48) | $2.31 | $(13.28) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Total comprehensive income for Q2 2025 was $206 million, a significant improvement from a prior-year loss, primarily driven by net income offset by unrealized losses on cash flow hedges Comprehensive Income (Loss) Summary (In millions) | | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 29, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net income (loss)** | $235 | $(1,988) | $366 | $(2,114) | | **Unrealized (loss) gain on cash flow hedges, net of deferred tax** | $(29) | $2 | $(43) | $15 | | **Total comprehensive income (loss)** | $206 | $(1,986) | $323 | $(2,099) | [Condensed Consolidated Statements of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased as of June 29, 2025, primarily due to share repurchases that more than offset net income for the first six months - Key changes in stockholders' equity for the six months ended June 29, 2025 include a net income of **$366 million**, offset by share repurchases and an unrealized loss on cash flow hedges[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 29, 2025, operating cash flow significantly increased, while cash used in financing activities, primarily share repurchases, led to a net decrease in cash and cash equivalents Cash Flow Summary (Six Months Ended, In millions) | | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $474 | $157 | | **Net cash used in investing activities** | $(112) | $(89) | | **Net cash used in financing activities** | $(566) | $(191) | | **Net decrease in cash and cash equivalents** | $(193) | $(128) | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results, covering significant events like the GRAIL spin-off, pending acquisitions, and segment performance [Management's Discussion & Analysis](index=27&type=section&id=MANAGEMENT%27S%20DISCUSSION%20%26%20ANALYSIS) [Management's Overview and Outlook](index=27&type=section&id=Management%27s%20Overview%20and%20Outlook) Management discusses business trends, including macroeconomic challenges and the GRAIL spin-off, while focusing on returning to revenue growth in 2025 through cost reduction and strategic acquisitions - On June 22, 2025, Illumina agreed to acquire SomaLogic for **$350 million** in cash, plus potential royalties and up to **$75 million** in milestone payments, to expand into the proteomics market. The deal is expected to close in the first half of 2026[124](index=124&type=chunk) - The company is facing headwinds from macroeconomic factors, competitive challenges in China, and reduced NIH funding. In response, it implemented an incremental **$100 million** cost reduction program for 2025[126](index=126&type=chunk)[127](index=127&type=chunk) - For the first six months of 2025, revenue decreased **4%** to **$2.1 billion**, while income from operations was **$378 million**, a significant improvement from a loss of **$1.749 billion** in the same period of 2024, which included a **$1.886 billion** goodwill impairment for GRAIL[129](index=129&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of Illumina's financial performance, breaking down changes in revenue, gross margin, and operating expenses, attributing shifts to various business and accounting factors [Revenue](index=32&type=section&id=Revenue_MD%26A) Consolidated revenue decreased in Q2 and YTD 2025, primarily due to the GRAIL spin-off and a decline in Core Illumina instrument revenue driven by capital constraints Revenue by Segment (In millions) | | Q2 2025 | Q2 2024 | % Change | YTD 2025 | YTD 2024 | % Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Core Illumina Revenue** | $1,059 | $1,092 | (3)% | $2,100 | $2,148 | (2)% | | *Instruments* | $101 | $120 | (16)% | $213 | $234 | (9)% | | *Consumables* | $811 | $815 | —% | $1,580 | $1,584 | —% | | **GRAIL Revenue** | — | $29 | (100)% | — | $55 | (100)% | | **Total Consolidated Revenue** | $1,059 | $1,112 | (5)% | $2,100 | $2,188 | (4)% | [Gross Margin](index=32&type=section&id=Gross%20Margin_MD%26A) Consolidated gross margin increased due to the GRAIL spin-off, but Core Illumina's gross margin declined in Q2 2025 due to an intangible asset impairment, higher tariffs, and increased service costs - Core Illumina's gross margin declined in Q2 and YTD 2025 due to a **$23 million** intangible asset impairment, increased tariff-related costs, and higher field service expenses[135](index=135&type=chunk) [Operating Expense](index=33&type=section&id=Operating%20Expense_MD%26A) Total operating expenses significantly decreased in Q2 2025 primarily due to the absence of a large prior-year goodwill impairment charge related to GRAIL, despite an increase in Core Illumina's SG&A expense - The significant decrease in total operating expense YoY is due to the absence of the **$1.886 billion** goodwill and intangible impairment charge related to GRAIL that was recorded in Q2 2024[136](index=136&type=chunk)[139](index=139&type=chunk) - Core Illumina's SG&A expense increased in Q2 2025 primarily because of a smaller gain recognized on contingent consideration liabilities (**$21 million** in Q2 2025 vs. **$271 million** in Q2 2024)[137](index=137&type=chunk) [Other Income (Expense)](index=34&type=section&id=Other%20Income%20%28Expense%29_MD%26A) Total other income in Q2 2025 showed a sharp reversal from a prior-year expense, primarily driven by net gains on strategic investments compared to significant losses in Q2 2024 - The fluctuation in other income was mainly due to recognizing a **$101 million** gain on strategic investments in Q2 2025, versus a **$335 million** loss in Q2 2024. The prior year loss was primarily related to the retained investment in GRAIL[140](index=140&type=chunk) [Provision for Income Taxes](index=34&type=section&id=Provision%20for%20Income%20Taxes_MD%26A) The effective tax rate for Q2 and YTD 2025 was positive, a significant change from 2024, and was above the U.S. federal statutory rate primarily due to the tax impact of capitalizing R&D expenses - The effective tax rate for Q2 2025 was **23.4%**, higher than the U.S. statutory rate of **21%**, mainly due to the income tax expense impact of capitalizing R&D expenses for tax purposes[141](index=141&type=chunk) - The company anticipates its effective tax rate will decrease starting in Q3 2025 due to recent U.S. tax legislation that no longer requires the capitalization of U.S.-based R&D expenses[143](index=143&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 29, 2025, cash and equivalents decreased primarily due to share repurchases, with key capital commitments including the SomaLogic acquisition and ongoing share repurchase programs Cash Flow Summary (YTD 2025, In millions) | | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $474 | $157 | | **Net cash used in investing activities** | $(112) | $(89) | | **Net cash used in financing activities** | $(566) | $(191) | | **Net decrease in cash and cash equivalents** | $(193) | $(128) | - The company has a commitment to acquire SomaLogic for **$350 million** in cash, plus potential milestones. A termination fee of **$14.5 million** is payable by Illumina under certain circumstances[147](index=147&type=chunk) - A new share repurchase program of **$1.5 billion** was authorized in August 2024. As of June 29, 2025, **$804 million** remained available under this authorization[149](index=149&type=chunk) [Critical Accounting Policies and Estimates](index=36&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) There were no material changes to the company's critical accounting policies and estimates during the first half of 2025, despite ongoing macroeconomic and regulatory uncertainties - There were no material changes to the company's critical accounting policies and estimates during YTD 2025[157](index=157&type=chunk) [Recent Accounting Pronouncements](index=36&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 1 of the financial statements for a summary of recent accounting pronouncements applicable to the company - For a summary of recent accounting pronouncements, see Note 1 in the Condensed Consolidated Financial Statements section[158](index=158&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=36&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no substantial changes to its market risks during the first half of 2025 compared to the disclosures in its 2024 Annual Report on Form 10-K - There were no substantial changes to market risks in YTD 2025 compared to the disclosures in the 2024 Form 10-K[159](index=159&type=chunk) [PART II. OTHER INFORMATION](index=36&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Controls and Procedures](index=36&type=section&id=Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of the quarter-end, with no material changes in internal control over financial reporting during Q2 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures are effective to provide reasonable assurance[162](index=162&type=chunk) - No changes in internal control over financial reporting occurred in Q2 2025 that materially affected or are reasonably likely to materially affect internal controls[161](index=161&type=chunk) [Legal Proceedings](index=37&type=section&id=Legal%20Proceedings) This section refers to Note 8 for detailed legal proceedings, including ongoing shareholder lawsuits related to the GRAIL acquisition and a recent settlement with the Department of Justice - The company is involved in multiple shareholder derivative and class action lawsuits related to the GRAIL acquisition, which it intends to vigorously defend[93](index=93&type=chunk)[104](index=104&type=chunk)[106](index=106&type=chunk) - On July 22, 2025, the company settled a False Claims Act investigation with the Department of Justice for a one-time payment of **$9.8 million** plus interest, resolving allegations of misrepresenting cybersecurity compliance[107](index=107&type=chunk) [Risk Factors](index=37&type=section&id=Risk%20Factors) The company directs readers to the Risk Factors sections in its Annual Report on Form 10-K for the fiscal year ended December 29, 2024, and its Q1 2025 Form 10-Q for a description of business risks - The company's business is subject to various risks as described in its 2024 Form 10-K and Q1 2025 Form 10-Q[164](index=164&type=chunk) [Share Repurchases and Sales](index=37&type=section&id=Share%20Repurchases%20and%20Sales) The company continued its share repurchase program in Q2 2025, repurchasing 4.489 million shares for approximately $380 million, with substantial authorization remaining Share Repurchases in Q2 2025 (in thousands, except price) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining | | :--- | :--- | :--- | :--- | | March 31 - April 27, 2025 | — | $— | $1,184,405 | | April 28 - May 25, 2025 | 1,384 | $81.31 | $1,071,906 | | May 26 - June 29, 2025 | 3,105 | $86.15 | $804,406 | | **Total** | **4,489** | **$84.66** | **$804,406** | [Adoptions, Modifications or Terminations of Trading Plans](index=37&type=section&id=Adoptions%2C%20Modifications%20or%20Terminations%20of%20Trading%20Plans) During the second quarter of 2025, none of the company's directors or officers adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer adopted, modified, or terminated a trading plan during Q2 2025[167](index=167&type=chunk) [Exhibits](index=38&type=section&id=Exhibits) This section lists the exhibits filed with the Form 10-Q, including the Stock Purchase Agreement with Standard BioTools, certifications by the CEO and CFO, and XBRL data files

Core Insights - Illumina, Inc. reported better-than-expected earnings for Q2, with earnings of $1.19 per share, surpassing the analyst consensus estimate of $1.01 per share, and quarterly sales of $1.059 billion, exceeding the consensus estimate of $1.049 billion [1][2] Financial Performance - The company experienced a significant increase in its FY2025 adjusted EPS guidance, raising it from a range of $4.20-$4.30 to $4.45-$4.55, indicating positive growth expectations [2] Market Reaction - Following the earnings announcement, Illumina shares fell by 6.8%, trading at $95.76 [3] - Analysts adjusted their price targets for Illumina, with Barclays maintaining an Underweight rating and raising the target from $85 to $90, while Canaccord Genuity maintained a Hold rating and increased the target from $99 to $105 [8]

Core Insights - Illumina reported quarterly earnings of $1.19 per share, exceeding the Zacks Consensus Estimate of $1.02 per share, and showing a significant increase from $0.36 per share a year ago, resulting in an earnings surprise of +16.67% [1] - The company generated revenues of $1.06 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.11%, although this represents a slight decline from year-ago revenues of $1.11 billion [2] - Illumina has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times during the same period [2] Earnings Outlook - The future performance of Illumina's stock will largely depend on management's commentary during the earnings call and the sustainability of the stock's immediate price movement based on the recently released numbers and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.09 on revenues of $1.06 billion, while the estimate for the current fiscal year is $4.25 on revenues of $4.23 billion [7] Industry Context - The Medical - Biomedical and Genetics industry, to which Illumina belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges for stock performance compared to higher-ranked industries [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported revenue of approximately $1,060,000,000, reflecting a year-over-year decline of about 3% on both constant currency and reported basis [20][21] - Non-GAAP operating margin was 23.8%, an increase of 160 basis points year-over-year, while non-GAAP EPS was $1.19, growing 9% year-over-year [27][28] - Non-GAAP gross margin was 69.4%, stable year-over-year, with a favorable product mix contributing to improved performance [26] Business Line Data and Key Metrics Changes - Sequencing consumables revenue was approximately flat year-over-year at $740,000,000, with high throughput consumables showing over 10% sequential growth [21][22] - Clinical markets now account for roughly 60% of total sequencing consumables, driven by comprehensive genomic profiling and sequencing-intensive applications [7][21] - Sequencing instruments revenue was down approximately 18% year-over-year, primarily due to budget constraints from research customers [24] Market Data and Key Metrics Changes - Greater China revenue was $63,000,000, slightly ahead of expectations but down $12,000,000 from 2024 [21] - The clinical segment is showing resilience, while the research environment in the U.S. remains constrained due to NIH funding uncertainties [9][19] - Total sequencing gigabases output on connected instruments grew over 30% year-over-year, driven by clinical strength [23] Company Strategy and Development Direction - The company aims for high single-digit revenue growth and to expand non-GAAP operating margin to 26% by 2027, focusing on core sequencing business growth and multiomics expansion [10][31] - The acquisition of Somologic for $350,000,000 is expected to enhance the company's proteomics capabilities and integrate with existing platforms [29][12] - The company is transitioning to a model that emphasizes delivering high-quality biological insights at the lowest end-to-end cost [10] Management's Comments on Operating Environment and Future Outlook - Management expressed caution for the second half of 2025 due to ongoing funding uncertainties in the U.S. research market, despite raising guidance for total company revenue growth [17][36] - The clinical market is expected to remain a significant growth driver, with increasing adoption of NGS in therapy selection and early detection [8][79] - Management remains focused on disciplined execution and innovation, with expectations for improved performance in 2026 and beyond [62][64] Other Important Information - The company repurchased approximately 4,500,000 shares for $380,000,000, with plans to continue share repurchases throughout the year [28][29] - The company ended the quarter with approximately $1,160,000,000 in cash and equivalents, maintaining a gross leverage of approximately 1.7x [30] Q&A Session Summary Question: Guidance change and its components - Management acknowledged the guidance change was influenced by FX and increased expectations for consumables, while instrumentation expectations were reduced due to research market constraints [39][43] Question: Customer behavior in anticipation of competition - Management emphasized a focus on customer engagement and innovation to remain competitive, particularly in the clinical space [47][49] Question: Pull forward of customer orders - Management indicated no significant pull forward in orders, with a normal quarter observed, and noted increased backlog for the NovaSeq X transition [53][55] Question: Clinical customer spending patterns - Management highlighted strong opportunities in the clinical market, with customers expanding tests rather than just reducing costs during the transition to NovaSeq X [80][82] Question: Instrument guidance and X placements - Management expects continued placements of NovaSeq X instruments, with a gradual transition rather than a sudden shift [88][90]

Financial Data and Key Metrics Changes - In Q2 2025, the company reported revenue of approximately $1,060 million, reflecting a year-over-year decline of about 3% on both constant currency and reported basis [20][21] - Non-GAAP operating margin was 23.8%, an increase of 160 basis points year-over-year, while non-GAAP EPS was $1.19, growing 9% year-over-year and exceeding guidance [5][28][29] - Non-GAAP gross margin was 69.4%, stable year-over-year, with a favorable product mix contributing to improved performance [27] Business Line Data and Key Metrics Changes - Sequencing consumables revenue was approximately flat year-over-year at $740 million, with high throughput consumables showing over 10% sequential growth [21][22] - The transition to the NovaSeq X platform is progressing, with over 80% of sequencing volumes for research customers already transitioned, and clinical customers at approximately 55% [22] - Sequencing instruments revenue was down approximately 18% year-over-year, primarily due to budget constraints from research customers [24] Market Data and Key Metrics Changes - Clinical markets now account for roughly 60% of total sequencing consumables, driven by comprehensive genomic profiling and sequencing-intensive applications [5][21] - Greater China revenue was $63 million, slightly ahead of expectations but down $12 million from 2024, with ongoing discussions with regulators regarding export restrictions [20][32] Company Strategy and Development Direction - The company aims for high single-digit revenue growth and to expand non-GAAP operating margin to 26% by 2027, focusing on growing the core sequencing business and expanding services [9][31] - The acquisition of Somologic for $350 million is expected to enhance the company's capabilities in proteomics, integrating it into their multiomics strategy [30][12] Management's Comments on Operating Environment and Future Outlook - Management expressed caution for the second half of 2025 due to ongoing funding uncertainties in the U.S. research market, despite raising guidance for total company revenue growth [16][17] - The clinical segment is expected to continue driving growth, with significant opportunities in oncology and genetic disease testing [80] Other Important Information - The company repurchased approximately 4.5 million shares for $380 million, with plans to continue share repurchases throughout the year [29][30] - The company ended the quarter with approximately $1,160 million in cash and equivalents, maintaining a gross leverage of approximately 1.7x [30] Q&A Session Summary Question: Guidance change and its components - The guidance increase was attributed to FX and increased expectations for consumables, while instrumentation expectations were reduced due to research market constraints [40][44] Question: Customer behavior in anticipation of competition - The company focuses on customer engagement and innovation to remain competitive, with ongoing efforts to understand customer needs [48][50] Question: Pull forward in customer orders - No significant pull forward was observed in Q2, with a normal quarter reported; however, increased backlog was noted for future orders [56][57] Question: Clinical customer spending patterns - Clinical customers are expected to continue investing in expanding their portfolios, with a gradual transition to the NovaSeq X platform [78][82] Question: Trajectory of X placements - The company anticipates continued placements of NovaSeq X instruments, with expectations of 50-60 placements per quarter [90]

Q2 2025 Financial Performance - Illumina's Q2 2025 revenue reached $1.06 billion, a decrease of 3% year-over-year (YoY) on both a constant currency (CC) and reported basis[7] - The non-GAAP operating margin for Q2 2025 was 23.8%[7] - Non-GAAP diluted earnings per share (EPS) for Q2 2025 stood at $1.19[7] Regional Revenue Performance - Americas region generated $586 million in revenue, a decrease of 5% YoY CC and 6% YoY reported[7] - Europe's revenue was $310 million, an increase of 6% YoY CC and 7% YoY reported[7] - Asia Pacific, Middle East, and Africa (AMEA) region contributed $100 million, a decrease of 14% YoY CC and 15% YoY reported[7] - Greater China's revenue was $63 million, a decrease of 14% YoY CC and 15% YoY reported[7] NovaSeq X Transition - NovaSeq X accounted for over 50% of high-throughput (HT) revenue and over 75% of HT Gigabases (Gb) shipped in Q2 2025[22] - NovaSeq X consumables revenue is targeted to represent approximately 50% of HT revenue by the end of 2025[22] - NovaSeq X is targeted to represent approximately 75% of HT Gb shipped towards the end of 2025[22] Acquisition of SomaLogic - Illumina announced the acquisition of SomaLogic for $350 million in cash, payable at closing, with up to $75 million in near-term revenue performance-based milestones and potential performance-based royalties[15] - The acquisition is projected to close in the first half of 2026, pending regulatory clearance[14] - SomaLogic is expected to become profitable in 2027 on a non-GAAP operating income basis, with non-GAAP operating margins aligning with Illumina's in 2028[15] Financial Guidance - Illumina's FY25 revenue guidance indicates a growth of 0% to 2%, with an FX benefit of approximately 20 bps for the rest of the world, and a revenue between $190 million and $210 million for Greater China[35] - Q3 2025 revenue guidance indicates a decline of 2.5% to 1.5%, with an FX benefit of approximately 60 bps, implying a reported revenue of $1.06 billion to $1.07 billion[35]

[Financial Highlights and Outlook](index=1&type=section&id=Financial%20Highlights%20and%20Outlook) Illumina reports strong Q2 2025 results exceeding guidance and raises its full-year 2025 financial outlook [Second Quarter 2025 Performance](index=1&type=section&id=Second%20Quarter%202025%20Performance) Illumina reported second-quarter 2025 results that exceeded guidance, despite a 3% year-over-year revenue decline to $1.06 billion, driven by strong X consumables sales and clinical segment growth, achieving GAAP operating margin of 20.2% and non-GAAP operating margin of 23.8% - CEO Jacob Thaysen highlighted that results exceeded guidance, driven by the ramp in X consumables and accelerating growth in the clinical customer segment, with a focus on operational excellence leading to margin expansion[3](index=3&type=chunk) Core Illumina Q2 2025 Financial Results (GAAP vs. Non-GAAP) | Dollars in millions, except per share amounts | Q2 2025 (GAAP) | Q2 2024 (GAAP) | Q2 2025 (Non-GAAP) | Q2 2024 (Non-GAAP) | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $1,059 | $1,092 | $1,059 | $1,092 | | **Gross Margin** | 65.6% | 68.0% | 69.4% | 69.4% | | **Operating Profit** | $214 | $442 | $252 | $242 | | **Operating Margin** | 20.2% | 40.5% | 23.8% | 22.2% | | **Net Income** | $235 | $66 | $187 | $174 | | **Diluted EPS** | $1.49 | $0.41 | $1.19 | $1.09 | - Total revenue for Q2 2025 was **$1.06 billion**, representing a **3% decrease** from Q2 2024 on both a reported and constant currency basis[5](index=5&type=chunk) Q2 2025 Cash Flow Summary | Metric | Amount (in millions) | | :--- | :--- | | Cash provided by operations | $234 | | Capital expenditures | $30 | | Free cash flow | $204 | [Fiscal Year 2025 Outlook](index=1&type=section&id=Fiscal%20Year%202025%20Outlook) The company raised its full-year 2025 guidance, now expecting a constant currency revenue decline between 0.5% and 2.5%, with non-GAAP operating margin projected at 22% to 22.5% and non-GAAP diluted EPS forecasted in the range of $4.45 to $4.55 Updated Fiscal Year 2025 Guidance | Metric | Previous Guidance | Updated Guidance | | :--- | :--- | :--- | | Total company constant currency revenue decline | (3%) to (1%) | (2.5%) to (0.5%) | | Non-GAAP operating margin | 21.5% - 22.0% | 22.0% - 22.5% | | Non-GAAP diluted EPS | $4.20 - $4.30 | $4.45 - $4.55 | - The increase in the non-GAAP diluted EPS forecast includes an approximate **$0.10 benefit** from recent legislation allowing U.S.-based R&D spending to be tax-deductible[5](index=5&type=chunk) [Capital Allocation and Strategic Initiatives](index=1&type=section&id=Capital%20Allocation%20and%20Strategic%20Initiatives) The company executed significant share repurchases and advanced strategic growth through a key acquisition and new product launches [Capital Allocation](index=1&type=section&id=Capital%20Allocation) During the second quarter, Illumina repurchased 4.5 million shares for $380 million, with approximately $800 million remaining under its current share repurchase authorization, and plans to continue repurchases throughout the year - In Q2 2025, the company repurchased approximately **4.5 million shares** of its stock for **$380 million**, at an average price of **$84.66 per share**[5](index=5&type=chunk)[7](index=7&type=chunk) - The company has approximately **$800 million remaining** in its share repurchase authorization at the end of the quarter and intends to repurchase more shares over the course of the year[7](index=7&type=chunk) [Strategic and Operational Highlights](index=1&type=section&id=Strategic%20and%20Operational%20Highlights) Key strategic developments include entering a definitive agreement to acquire SomaLogic, expected to close in the first half of 2026, alongside launching new products like TruSight Oncology 500 v2, PromoterAI, and DRAGEN v4.4 software, and receiving regulatory approval in Japan for its TSO Comprehensive assay - Entered into a definitive agreement to acquire SomaLogic from Standard BioTools, with the transaction expected to close in the **first half of 2026**, pending regulatory approval[5](index=5&type=chunk)[13](index=13&type=chunk) - Recent product and technology launches include: - TruSight Oncology 500 version 2 (TSO 500 v2) for cancer research - PromoterAI, a new AI algorithm for deciphering pathogenic genetic variants - DRAGEN™ v4.4 software for secondary analysis in oncology and multiomics[13](index=13&type=chunk) - Received approval from Japan's Ministry of Health, Labour and Welfare (MHLW) for TruSight™ Oncology (TSO) Comprehensive as a Class III/IV Medical Device[13](index=13&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's condensed consolidated balance sheets, statements of operations, and cash flows for the reported periods [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 29, 2025, Illumina's total assets were $6.09 billion, a decrease from $6.30 billion at the end of fiscal 2024, primarily due to reduced cash and cash equivalents, while total liabilities decreased to $3.83 billion and stockholders' equity fell to $2.26 billion Condensed Consolidated Balance Sheets (in millions) | | June 29, 2025 | December 29, 2024 | | :--- | :--- | :--- | | **Total current assets** | $2,641 | $2,746 | | **Total assets** | $6,087 | $6,303 | | **Total current liabilities** | $1,461 | $1,547 | | **Total liabilities** | $3,829 | $3,930 | | **Stockholders' equity** | $2,258 | $2,373 | | **Total liabilities and stockholders' equity** | $6,087 | $6,303 | - Cash and cash equivalents decreased from **$1.127 billion** at the end of 2024 to **$934 million** at the end of Q2 2025[19](index=19&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 29, 2025, Illumina reported total revenue of $1.06 billion and a net income of $235 million, or $1.49 per diluted share, a significant turnaround from a $1.99 billion net loss in the prior-year period primarily due to a large goodwill and intangible impairment charge related to GRAIL Condensed Consolidated Statements of Operations (in millions, except per share amounts) | | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Total revenue** | $1,059 | $1,112 | | **Gross profit** | $695 | $721 | | **Income (loss) from operations** | $214 | $(1,637) | | **Net income (loss)** | $235 | $(1,988) | | **Diluted earnings (loss) per share** | $1.49 | $(12.48) | - The results for Q2 2024 and YTD 2024 included the results for GRAIL, which was spun off on June 24, 2024, with Q2 2024 results heavily impacted by a **$1.886 billion goodwill and intangible impairment charge**[21](index=21&type=chunk) [Condensed Statements of Cash Flows](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) In Q2 2025, net cash provided by operating activities was $234 million, a significant increase from $80 million in the prior-year period, resulting in $204 million in free cash flow after capital expenditures, while net cash used in financing activities was $371 million, largely due to share repurchases Consolidated Statements of Cash Flows and Free Cash Flow (in millions) | | Three Months Ended June 29, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $234 | $80 | | **Net cash used in investing activities** | $(49) | $(41) | | **Net cash used in financing activities** | $(371) | $(225) | | **Net decrease in cash and cash equivalents** | $(179) | $(188) | | **Free cash flow** | $204 | $48 | - Core Illumina's free cash flow was **$204 million** in Q2 2025, compared to **$213 million** in the prior year period, showing more stability when excluding the impact of GRAIL in the prior year[25](index=25&type=chunk) [Supplemental Financial Information (Non-GAAP)](index=8&type=section&id=Supplemental%20Financial%20Information%20(Non-GAAP)) This section provides supplemental non-GAAP financial measures, including constant currency revenue and reconciliations to GAAP results [Constant Currency Revenue](index=8&type=section&id=Constant%20Currency%20Revenue) On a constant currency basis, Core Illumina's revenue for Q2 2025 was $1.054 billion, representing a 3% decline compared to the prior year, with six-month constant currency revenue at $2.104 billion, a 2% year-over-year decline, adjusting for foreign exchange rate fluctuations and hedging Core Illumina - Constant Currency Revenue (in millions) | | Three Months Ended | % Change | Six Months Ended | % Change | | :--- | :--- | :--- | :--- | :--- | | **Reported Revenue (Q2 2025 vs Q2 2024)** | $1,059 vs $1,092 | (3)% | $2,100 vs $2,148 | (2)% | | **Constant Currency Revenue (Q2 2025 vs Q2 2024)** | $1,054 vs $1,088 | (3)% | $2,104 vs $2,141 | (2)% | [Reconciliation of GAAP to Non-GAAP Measures](index=9&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) The company provides detailed reconciliations of its GAAP to non-GAAP results, with Q2 2025 non-GAAP diluted EPS at $1.19 compared to GAAP diluted EPS of $1.49, primarily adjusted for acquisition-related costs, intangible impairments, and strategic investment gains, resulting in non-GAAP operating profit of $252 million Q2 2025 Reconciliation of GAAP and Non-GAAP Diluted EPS | | Amount per share | | :--- | :--- | | **GAAP diluted earnings per share** | $1.49 | | Cost of revenue adjustments | $0.25 | | R&D expense adjustments | $0.03 | | SG&A expense adjustments | $(0.04) | | Other (income) expense, net adjustments | $(0.65) | | Provision for income taxes adjustments | $0.11 | | **Non-GAAP diluted earnings per share** | $1.19 | Q2 2025 Reconciliation of GAAP and Non-GAAP Operating Profit (in millions) | | Amount | | :--- | :--- | | **GAAP operating profit** | $214 | | Cost of revenue adjustments | $40 | | R&D costs adjustments | $4 | | SG&A costs adjustments | $(6) | | **Non-GAAP operating profit** | $252 | - Key adjustments between GAAP and Non-GAAP results for Q2 2025 include **$16 million** for amortization of intangible assets, a **$23 million intangible asset impairment**, and a **$102 million net gain** on strategic investments[34](index=34&type=chunk)[39](index=39&type=chunk) [Disclosures](index=3&type=section&id=Disclosures) This section outlines the company's use of non-GAAP financial measures and provides forward-looking statements with associated risk factors [Use of Non-GAAP Financial Measures](index=3&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company explains its use of non-GAAP financial measures as supplementary to GAAP, believing these metrics, which exclude items like amortization of acquired intangibles and currency effects, help investors better assess operating performance and are used by the board to evaluate management performance and determine compensation - Management excludes certain items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance[14](index=14&type=chunk) - Non-GAAP metrics are key components used by the company's board of directors to measure management's performance and determine significant elements of their compensation[14](index=14&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section contains a standard safe harbor statement, warning that actual results could differ materially from forward-looking statements due to various risk factors, including market growth changes, the ability to complete and integrate the SomaLogic acquisition, regulatory uncertainty in China, potential tariffs, and challenges in launching new products - Key risks that could cause actual results to differ from projections include: - The ability to complete and integrate the proposed acquisition of SomaLogic - Uncertainty regarding the impact of being on China's "unreliable entities list" and export restrictions - Tariffs and other trade protection measures - Challenges inherent in developing and launching new products and services[16](index=16&type=chunk)

(b) Revenue for Q2 2024 included intercompany revenue of $9 million prior to the spin-off of GRAIL. Non-GAAP gross margin remained flat primarily due to higher freight and duties costs related to tariffs and an (c) increase in field service costs, partially offset by lower strategic partnership revenue, that is lower margin, and a more favorable product mix. The decrease in GAAP gross margin was primarily due to a $23 million impairment of an acquired intangible asset. SAN DIEGO, July 31, 2025 /PRNewswire/ ...

That said, let's delve into the average estimates of some Illumina metrics that Wall Street analysts commonly model and monitor. Analysts forecast 'Revenue- Core Illumina- Consumables' to reach $792.14 million. The estimate points to a change of -2.8% from the year-ago quarter. The consensus among analysts is that 'Revenue- Product revenue- Consumable' will reach $788.41 million. The estimate indicates a change of -3.3% from the prior-year quarter. It is projected by analysts that the 'Revenue- Service and ...

Early-access customer Weiyi Chen, PhD, HCLD (ABB), technical director, Molecular Diagnostics at siParadigm Diagnostic Informatics, noted the assay's distinct advantages. "We are very excited about the launch of TSO 500 v2. We found improved accuracy of data results with TSO 500 v2 compared to our current solution from a different vendor," said Chen. "The new workflow is fast and streamlined with HRD included. Turnaround time is very important to our lab so we can quickly access results. The solution will al ...