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]

(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/ ...

Core Insights - Illumina has announced a definitive agreement to acquire SomaLogic for $350 million in cash, with potential additional performance-based payments of up to $75 million [1][2][5] - This acquisition aims to enhance Illumina's position in the growing proteomics market and support its multiomics strategy, which was introduced in 2024 [2][5] - The transaction is expected to close in the first half of 2026, pending regulatory approvals [6] Company Overview - Illumina is a leader in DNA sequencing and array-based technologies, focusing on innovation to improve human health [10] - SomaLogic specializes in data-driven proteomics technology and has approximately 250 employees globally [4][10] - The acquisition will integrate SomaLogic's aptamer-based affinity proteomics platform into Illumina's portfolio, enhancing its capabilities in biomarker discovery and disease profiling [2][5] Market Impact - The proteomics market is expanding, and the acquisition is expected to create a high-margin consumables revenue stream for Illumina [5] - Illumina's existing partnerships in proteomics will be maintained, while the company continues to develop its sequencing ecosystem [3][5] - The integration of SomaLogic's technology is anticipated to accelerate the development of proteomics solutions and reduce research costs [2][3]

Core Insights - Illumina Inc. has launched DRAGEN version 4.4 software, which features a 30% improvement in structural variant calling accuracy and includes new oncology applications and multiomics pipelines [1][2][13] - The software aims to simplify next-generation sequencing (NGS) analysis, enabling researchers to obtain insights faster and expand lab capabilities [2][3] Product Features - DRAGEN v4.4 offers preconfigured applications for oncology workflows, including the first commercially available heme whole-genome sequencing (WGS) application [13] - The software introduces a personalized pangenome reference capability, enhancing single nucleotide variant (SNV) and indel calling accuracy by 20% [13] - Enhanced support for multiomics assays, including Illumina Single Cell 3'RNA Prep and Illumina Protein Prep, is also part of the new features [13] Clinical Applications - The University Hospital of Tübingen in Germany is conducting a pioneering study using DRAGEN v4.4 to evaluate the clinical utility of advanced secondary analysis on whole-genome germline testing [4][5] - The study aims to compare the diagnostic yield of WGS processed with DRAGEN v4.4 against existing in-house analysis software, highlighting DRAGEN's superior accuracy in variant calling [5][6] Industry Impact - DRAGEN v4.4 is positioned as a leader in variant calling accuracy, with previous studies validating its performance against other variant calling programs [5][6] - The software's advancements are expected to deepen the understanding of insights generated from germline testing, potentially impacting various disease areas [6]

Financial Data and Key Metrics Changes - The company reported Q1 2025 revenue of $37.2 million, slightly above preliminary estimates and consistent with internal expectations, but down from $38.8 million in Q1 2024 [7][25] - Instrument revenue decreased by 42% year-over-year to $11 million, primarily due to lower REVIO system shipments [25] - Consumable revenue reached a record $20.1 million, reflecting a 26% year-over-year growth [11][26] - Non-GAAP gross profit was $15 million with a gross margin of 40%, up from 33% in the prior year [27] - Non-GAAP net loss was $44.4 million, or $0.15 per share, compared to a loss of $71.4 million, or $0.26 per share, in Q1 2024 [30] Business Line Data and Key Metrics Changes - Instrument shipments included 12 REVIO systems and 28 VEGA systems, with cumulative shipments of 282 REVIO and 35 VEGA systems [9][25] - Academic and research institutions represented the lowest percentage of instrument shipments since the REVIO launch due to funding pressures [10] - Consumable demand from academic and research customers remained stable, indicating resilience in usage-driven spending [11] Market Data and Key Metrics Changes - Americas revenue decreased by 8% to $16.3 million, impacted by government funding headwinds [26] - Asia Pacific revenue decreased by 9% to $11.6 million, although consumables showed strong growth [26] - EMEA revenue increased by 11% to approximately $9.3 million, driven by strong REVIO placements in hospitals and clinics [27] Company Strategy and Development Direction - The company is focused on expanding HiFi sequencing adoption and enhancing the REVIO platform through the rollout of Spark chemistry [39] - A restructuring plan was executed to narrow strategic focus and reduce operating costs, aiming for a non-GAAP operating expense reduction of $45 million to $50 million by year-end [13] - The company paused development of the high-throughput short-read sequencing platform to concentrate resources on long-read sequencing technologies [16][50] Management's Comments on Operating Environment and Future Outlook - The macroeconomic environment remains challenging, with uncertainties around academic funding and potential NIH budget cuts impacting revenue [12] - The company adjusted its full-year 2025 revenue guidance to a range of $150 million to $170 million, reflecting a $5 million decrease at the lower end due to tariff uncertainties [12][32] - Management expressed confidence in strategic direction, citing strong customer interest in long-read sequencing and ongoing innovation [12][39] Other Important Information - The company ended Q1 2025 with $343.1 million in unrestricted cash and investments, down from $389.9 million at the end of 2024 [30] - A licensing agreement was announced with the Chinese University of Hong Kong to enhance sequencing workflows [19] - The company achieved a Net Promoter Score of over 50, indicating strong customer satisfaction [21] Q&A Session Summary Question: Can you discuss the clinical opportunity and its potential to offset concerns around academic funding? - Management highlighted significant opportunities in clinical diagnostics, particularly with the PureTarget panel, which has seen adoption by major customers [42][44] Question: What are the expectations for REVIO and VEGA placements in 2025 guidance? - Management indicated that REVIO shipments are expected to decline year-over-year, while VEGA is anticipated to grow in unit placements [48] Question: What factors influenced the decision to pause the development of the high-throughput short-read sequencer? - The decision was based on macroeconomic conditions, competitive advantages in long-read sequencing, and significant R&D progress in that area [52][54] Question: How does the company view the demand trends in EMEA? - Management expressed confidence in the EMEA market, noting strong funnel visibility and growth potential [95]