Illumina(ILMN)2024-08-06 20:20Revenue and Financial Performance - Core Illumina revenue for Q2 2024 was $1.09 billion, down 6% from Q2 2023 and up 3% from Q1 2024[2] - Total revenue for Q2 2024 was $1.112 billion, a decrease from $1.176 billion in Q2 2023[26] - Core Illumina revenue for the six months ended June 30, 2024 was $2.148 billion, a 4% decrease compared to $2.235 billion in the same period last year[33] - Consolidated revenue for the three months ended June 30, 2024 was $1.112 billion, a 5% decrease compared to $1.176 billion in the same period last year[33] - Product revenue for Q2 2024 was $927 million, a decline from $1.001 billion in Q2 2023[26] - Service and other revenue increased to $185 million in Q2 2024, up from $175 million in Q2 2023[26] - Exchange rate effects negatively impacted consolidated revenue by $5 million for the three months ended June 30, 2024[33] - Hedge gains positively impacted consolidated revenue by $4 million for the three months ended June 30, 2024[33] Operating Margins and Profitability - Core Illumina GAAP operating margin for Q2 2024 was 40.5%, with a non-GAAP operating margin of 22.2%[2] - Core Illumina non-GAAP operating margin guidance for fiscal year 2024 was raised to a range of 20.5% to 21%[2] - Core Illumina's Non-GAAP operating profit for the three months ended June 30, 2024, was $242 million, or 22.2% of revenue, while consolidated Non-GAAP operating profit was $84 million, or 7.6% of revenue[44] - Core Illumina's GAAP gross profit for the three months ended June 30, 2024, was $743 million, representing 68.0% of revenue, while Non-GAAP gross profit was $758 million, or 69.4% of revenue[44] - Core Illumina's GAAP gross profit for the three months ended July 2, 2023, was $760 million, or 65.5% of revenue, while Non-GAAP gross profit was $777 million, or 67.0% of revenue[47] - Core Illumina's GAAP gross profit is $1,436 million, representing 66.9% of revenue, while Non-GAAP gross profit is $1,466 million, or 68.3% of revenue[49] - Core Illumina's GAAP gross profit for the six months ended July 2, 2023 is $1,446 million, or 64.7% of revenue, while Non-GAAP gross profit is $1,478 million, or 66.1% of revenue[51] - Non-GAAP gross profit is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and average selling prices[52] Earnings Per Share (EPS) - Core Illumina GAAP diluted earnings per share for Q2 2024 was $0.41, and non-GAAP diluted earnings per share was $1.09[2] - Core Illumina non-GAAP diluted earnings per share guidance for fiscal year 2024 was introduced in the range of $3.80 to $3.95[2] - Non-GAAP diluted earnings per share for the three months ended June 30, 2024 was $0.36, compared to $0.32 in the same period last year[36] Net Income and Loss - Net loss for Q2 2024 was $1.988 billion, compared to a net loss of $234 million in Q2 2023[26] - GAAP net loss for the three months ended June 30, 2024 was $1.988 billion, compared to a net loss of $234 million in the same period last year[37] - Non-GAAP net income for the three months ended June 30, 2024 was $57 million, compared to $50 million in the same period last year[37] - Core Illumina GAAP net income for the six months ended June 30, 2024 was $135 million[41] - Core Illumina Non-GAAP net income for the six months ended June 30, 2024 was $329 million[41] Impairment Charges - The company recognized $1,466 million in goodwill and $420 million in intangible asset impairment related to the GRAIL segment in Q2 2024[5] - Goodwill and intangible impairment charges totaled $1.886 billion in Q2 2024, significantly impacting the operating loss[26] - Goodwill and intangible impairment charges for the three months ended June 30, 2024 were $1.886 billion[37] - GAAP goodwill and intangible impairment is $1,889 million, or 86.3% of revenue, primarily driven by a $1,466 million goodwill impairment[49] Cash Flow and Liquidity - Free cash flow for Q2 2024 was $48 million, compared to $58 million in the prior year period[6] - Free cash flow for Q2 2024 was $48 million, down from $58 million in Q2 2023[29] - Cash and cash equivalents decreased to $920 million as of June 30, 2024, from $1.048 billion at the end of 2023[22] Assets and Equity - Total assets decreased to $6.081 billion as of June 30, 2024, from $10.111 billion at the end of 2023[22] - Stockholders' equity dropped to $1.436 billion as of June 30, 2024, from $5.745 billion at the end of 2023[23] Research and Development (R&D) Expenses - Research and development expenses were $325 million in Q2 2024, down from $358 million in Q2 2023[26] - Core Illumina's GAAP R&D expense for the three months ended June 30, 2024, was $241 million, or 22.1% of revenue, while Non-GAAP R&D expense was $325 million, or 29.2% of revenue[44] - Core Illumina's GAAP R&D expense for the three months ended July 2, 2023, was $274 million, or 23.6% of revenue, while Non-GAAP R&D expense was $345 million, or 29.3% of revenue[47] - GAAP R&D expense is $660 million, or 30.2% of revenue, while Non-GAAP R&D expense is $658 million, or 30.1% of revenue[49] - GAAP R&D expense for the six months ended July 2, 2023 is $699 million, or 30.9% of revenue, while Non-GAAP R&D expense is $685 million, or 30.3% of revenue[51] Selling, General, and Administrative (SG&A) Expenses - Core Illumina's GAAP SG&A expense for the three months ended June 30, 2024, was $60 million, or 5.5% of revenue, while Non-GAAP SG&A expense was $358 million, or 32.2% of revenue[44] - Core Illumina's GAAP SG&A expense for the three months ended July 2, 2023, was $371 million, or 31.9% of revenue, while Non-GAAP SG&A expense was $355 million, or 30.2% of revenue[47] - GAAP SG&A expense is $588 million, or 26.9% of revenue, while Non-GAAP SG&A expense is $707 million, or 32.3% of revenue[49] - GAAP SG&A expense for the six months ended July 2, 2023 is $839 million, or 37.1% of revenue, while Non-GAAP SG&A expense is $697 million, or 30.8% of revenue[51] Tax Provisions - Q2 2024 GAAP tax provision was $12 million, representing a decrease of 0.6% compared to the previous period[57] - Non-GAAP tax provision for Q2 2024 was $16 million, accounting for 22.3% of the total[57] - YTD 2024 GAAP tax provision was $28 million, reflecting a decrease of 1.4%[57] - Non-GAAP tax provision for YTD 2024 was $28 million, representing 28.8% of the total[57] - Q2 2024 Core Illumina GAAP tax provision was $35 million, accounting for 35.0% of the total[60] - Non-GAAP tax provision for Core Illumina in Q2 2024 was $55 million, representing 24.2% of the total[60] - YTD 2024 Core Illumina GAAP tax provision was $80 million, accounting for 37.3% of the total[60] - Non-GAAP tax provision for Core Illumina YTD 2024 was $108 million, representing 24.9% of the total[60] - Q2 2024 included $104 million in incremental non-GAAP tax expense[57] - YTD 2024 included $117 million in incremental non-GAAP tax expense[57] Corporate Transactions - The company completed the spin-off of GRAIL into a new public company on June 24, 2024[2] - The company acquired Fluent Biosciences, developer of an emerging and highly differentiated single-cell technology[11] Operating Loss and Profit - Consolidated GAAP operating loss for the three months ended June 30, 2024, was $(1,637) million, or (147.2)% of revenue, primarily due to a goodwill and intangible impairment of $1,886 million[44] - Consolidated GAAP operating loss for the three months ended July 2, 2023, was $(88) million, or (7.5)% of revenue, while Non-GAAP operating profit was $82 million, or 7.0% of revenue[47] - Consolidated GAAP operating loss is $(1,749) million, or (79.9)% of revenue, while Non-GAAP operating profit is $117 million, or 5.4% of revenue[49] - Consolidated GAAP operating loss for the six months ended July 2, 2023 is $(152) million, or (6.7)% of revenue, while Non-GAAP operating profit is $103 million, or 4.5% of revenue[51]