Financial Data and Key Metrics Changes - First quarter revenue was $1,040 million, down 1.4% year over year, with constant currency revenue roughly flat [20][19] - Non-GAAP EPS was $0.97, at the upper end of guidance [19][27] - Non-GAAP gross margin increased by 30 basis points year over year to 67.4% [25] - Non-GAAP operating margin was 20.4% in Q1 [27] Business Line Data and Key Metrics Changes - Sequencing consumables revenue was $696 million, growing approximately 1% year over year [20] - Sequencing instruments revenue was approximately flat year over year at $109 million [23] - Sequencing service and other revenue was down approximately 5% year over year to $142 million [24] Market Data and Key Metrics Changes - Clinical business showed mid single-digit growth, while research business was down in the high mid to high single-digit range [50][49] - Approximately 68% of high throughput gigabases shipped were on the NovaSeq X Series [22] - Over 50% of clinical volumes are now on the NovaSeq X Series [22] Company Strategy and Development Direction - The company aims for high single-digit revenue growth and 500 basis points margin expansion by 2027, excluding Greater China [10] - A $100 million cost reduction program was initiated to address challenges from China and research funding uncertainty [12] - The company is focusing on advancing the Multiomics ecosystem and has a strong innovation pipeline [9][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges but expressed confidence in the company's resilience and growth potential [7][10] - The company is revising guidance to reflect headwinds from China and research funding uncertainties [11][29] - Management emphasized that the challenges are transitory and will not define long-term success [10] Other Important Information - The company is engaging with regulatory authorities in China for potential solutions to support a sustainable long-term presence [11] - The impact of new tariffs is estimated to be approximately $85 million for 2025, with actions being taken to mitigate this [35][36] Q&A Session Summary Question: What is the outlook for revenue growth and margin expansion? - Management believes that revenue growth will rebound and margins will expand above 25% in the future, despite current challenges [42] Question: What are the clinical and research revenue growth rates? - Clinical revenue grew mid single digits, while research revenue declined in the high mid to high single-digit range [50][49] Question: How is the company managing risks related to China? - The company has taken actions to offset potential risks from China, including a $100 million cost reduction program [46] Question: How are tariffs impacting demand? - No significant change in customer behavior was observed in Q1 due to tariffs, but future impacts are anticipated [68][70] Question: What are the assumptions behind the revenue guidance? - The guidance reflects a 15% decline in research revenue, offset by stronger clinical performance [76][78]

Financial Data and Key Metrics Changes - Q1 2025 revenue was $1,040 million, down 1.4% year over year, with constant currency revenue roughly flat [19][30] - Non-GAAP EPS was $0.97, at the high end of guidance [18][27] - Non-GAAP gross margin increased by 30 basis points year over year to 67.4% [24] - Non-GAAP operating margin was 20.4% in Q1 [27] - Cash flow from operations was $240 million, with free cash flow at $208 million [28] Business Line Data and Key Metrics Changes - Sequencing consumables revenue was $696 million, growing approximately 1% year over year [19] - Sequencing instruments revenue was approximately flat at $109 million [22] - Sequencing service and other revenue decreased by approximately 5% year over year to $142 million [23] Market Data and Key Metrics Changes - Clinical business consumables grew mid-single digits, while research consumables were down in the high mid to high single-digit range [49] - The Greater China region is expected to contribute only $165 million to $185 million in full-year revenue, significantly down from previous levels [30][32] Company Strategy and Development Direction - The company aims for high single-digit revenue growth and 500 basis points margin expansion by 2027, excluding Greater China [8][10] - A $100 million cost reduction program was initiated to address challenges in China and the U.S. funding environment [11][25] - The company is focused on advancing its Multiomics ecosystem and has several new product launches planned for 2025 and 2026 [13][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic challenges but emphasized the resilience of the business and strong sequencing activity [6][44] - The company is actively engaging with regulatory authorities in China to find long-term solutions [10][32] - Management expressed confidence in the long-term growth trajectory despite current headwinds [9][39] Other Important Information - The company is revising its guidance to reflect geopolitical impacts, particularly in China [29] - The estimated gross cost of tariffs for 2025 is approximately $85 million, impacting margins [34][35] Q&A Session Summary Question: What is the outlook for revenue growth and margins? - Management believes revenue growth will rebound and margins will expand above 25% in the future, with a focus on cost control [41][42] Question: What are the growth rates for clinical and research segments? - Clinical revenue grew mid-single digits, while research revenue is expected to decline in the mid-double digits for the remainder of the year [49][50] Question: How are tariffs affecting demand? - No significant change in customer behavior was observed in Q1 due to tariffs, but future impacts are anticipated [66][68] Question: What is the impact of China on future revenue? - The company expects continued revenue decline from China, with proactive measures in place to mitigate risks [96]