Core Illumina revenue of $1.04 billion for Q1 2025, down 1% from Q1 2024 (flat on a constant currency basis)
GAAP operating margin of 15.8% and non-GAAP operating margin of 20.4% for Q1 2025
GAAP diluted EPS of $0.82 and non-GAAP diluted EPS of $0.97 for Q1 2025
Cash provided by operations of $240 million and free cash flow of $208 million for Q1 2025
For fiscal year 2025, we expect:
-
Core Illumina revenue to decline between (1%) and (3%) on a constant currency basis year over year, down from low single digit growth previously
Revenue outside of the Greater China region expected to grow between 0% and 2% in 2025 on a constant currency basis year over year and includes our estimate reflecting changes in the research funding environment as well as the projected benefit from pricing actions
Reported revenue from the Greater China region expected to be $165 - $185 million in 2025 (with $72 million in revenue recognized in Q1 2025)
-
$85 million in tariff related costs which after actions is an approximate 125 bps reduction in fiscal year 2025 operating margin and $0.25 of EPS
-
Non-GAAP operating margin of approximately 21.5% - 22.0%, down from approximately 23% previously; and non-GAAP diluted EPS in the range of $4.20 - $4.30, a reduction from our March guidance of approximately $4.50, primarily due to the net impact of tariffs
SAN DIEGO, May 8, 2025 /PRNewswire/ -- Illumina, Inc. (Nasdaq: ILMN) ("Illumina" or the "company") today announced its financial results for the first quarter of fiscal year 2025.
"I'm proud that the Illumina team delivered strong Q1 revenue and EPS, a good start to the year in an increasingly dynamic business environment," said Jacob Thaysen, Chief Executive Officer. "Our outlook for the year has weakened due to shifting policy and geopolitical developments and we have taken swift incremental actions to protect our earnings. Our strategic focus remains on customer collaboration, driving differentiated innovations, and delivering on our long-term financial targets of growth and profitability."
First quarter Core Illumina segment results
(a)See tables in "Results of Operations - Non-GAAP" section below for GAAP and non-GAAP reconciliations.
(b)Revenue for Q1 2024 included intercompany revenue of $7 million prior to the spin-off of GRAIL.
(c)Increase in gross margin was driven by execution of our operational excellence initiatives, that continue to deliver cost savings and improve productivity, and lower strategic partnership revenue that is lower margin, offset by lower product margins, primarily due to reduced pricing, and an increase in field service costs.
Capital expenditures for free cash flow purposes were $32 million for Q1 2025. Cash flow provided by operations was $240 million, compared to $284 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $208 million for the quarter, compared to $251 million in the prior year period. Depreciation and amortization expense was $69 million for Q1 2025. At the close of the quarter, the company held $1.24 billion in cash, cash equivalents and short-term investments.
Share repurchases for Q1 2025 were $200 million and the company intends to repurchase incremental shares over the course of the year as part of our ~$1.2 billion authorization remaining at the end of the quarter.
Key announcements since our last earnings release
-
Instituted an incremental $100 million cost reduction program to mitigate the impact of a range of potential scenarios for a reduction in revenue and related operating income from the company's Greater China business
-
Unveiled first-of-its-kind spatial transcriptomics technology; Broad Institute to collaborate on flagship project
-
Announced collaboration with Broad Clinical Labs to rapidly streamline and scale single-cell projects with cutting-edge tools and workflows
-
Unveiled a series of roadmap innovations spanning genomics, spatial transcriptomics, single cell analysis, CRISPR technologies, epigenetics, and data analytics software
-
Sequenced 250,000 whole genomes for the Alliance for Genomic Discovery (AGD) initiative
-
Announced partnership with Tempus to accelerate clinical adoption of next-generation sequencing tests through novel evidence generation
-
Dr. Scott Gottlieb elected as Board Chair, Keith Meister joined Board of Directors
-
Named for the sixth year in a row to the Dow Jones Best-in-Class World Index and the Dow Jones Best-in-Class North America Index
A full list of recent announcements can be found in the company's News Center.
Financial outlook and guidance
For fiscal year 2025, we expect:
-
Core Illumina revenue to decline between (1%) and (3%) on a constant currency basis year over year, down from low single digit growth previously
Revenue outside of the Greater China region expected to grow between 0% and 2% in 2025 on a constant currency basis year over year and includes our estimate reflecting changes in the research funding environment as well as the projected benefit from pricing actions
Reported revenue from the Greater China region expected to be $165 - $185 million in 2025 (with $72 million in revenue recognized in Q1 2025)
-
$85 million in tariff related costs which after actions is an approximate 125 bps reduction in fiscal year 2025 operating margin and $0.25 of EPS
-
Non-GAAP operating margin of approximately 21.5% - 22.0%, down from approximately 23% previously; and non-GAAP diluted EPS in the range of $4.20 - $4.30, a reduction from our March guidance of approximately $4.50, primarily due to the net impact of tariffs
The company provides forward-looking guidance on a non-GAAP basis, including on a constant currency basis for revenue and revenue growth rates. The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures because it is unable to predict with reasonable certainty the impact of items such as acquisition-related expenses, fair value adjustments to contingent consideration, gains and losses from strategic investments, potential future asset impairments, restructuring activities, the ultimate outcome of pending litigation, and currency exchange rate fluctuations without unreasonable effort. These items are uncertain, inherently difficult to predict, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the company is unable to address the significance of the unavailable information, which could be material to future results.
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted earnings per share, net income, gross margin, operating expenses, including research and development expense, selling general and administrative expense, legal contingency and settlement, and goodwill and intangible impairment, operating income, operating margin, gross profit, other income (expense), tax provision, constant currency revenue and growth, and free cash flow (on a consolidated and, as applicable, segment basis) in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company's financial measures under GAAP include substantial charges such as amortization of acquired intangible assets among others that are listed in the reconciliations of GAAP and non-GAAP financial measures included in this press release, as well as the effects of currency translation. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Non-GAAP net income, diluted earnings per share and operating margin are key components of the financial metrics utilized by the company's board of directors to measure, in part, management's performance and determine significant elements of management's compensation.
The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.
Use of forward-looking statements
This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) changes in the rate of growth in the markets we serve; (ii) the volume, timing and mix of customer orders among our products and services; (iii) our ability to adjust our operating expenses to align with our revenue expectations; (iv) uncertainty regarding the impact of our recent inclusion on the "unreliable entities list" by regulatory authorities in China and the decision by regulatory authorities in China to not permit us to export sequencing instruments into China; (v) tariffs recently imposed or threatened by the U.S. government and its trading partners, and other possible tariffs or trade protection measures and our efforts to mitigate the impact of such tariffs; (vi) our ability to manufacture robust instrumentation and consumables; (vii) the success of products and services competitive with our own; (viii) challenges inherent in developing, manufacturing, and launching new products and services, including expanding or modifying manufacturing operations and reliance on third-party suppliers for critical components; (ix) the impact of recently launched or pre-announced products and services on existing products and services; (x) our ability to modify our business strategies to accomplish our desired operational goals; (xi) our ability to realize the anticipated benefits from prior or future actions to streamline and improve our R&D processes, reduce our operating expenses and maximize our revenue growth; (xii) our ability to further develop and commercialize our instruments, consumables, and products; (xiii) to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xiv) the risk of additional litigation arising against us in connection with the GRAIL acquisition; (xv) our ability to obtain approval by third-party payors to reimburse patients for our products; (xvi) our ability to obtain regulatory clearance for our products from government agencies; (xvii) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xviii) uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth or armed conflict; (xix) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (xx) legislative, regulatory and economic developments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts' expectations, or to provide interim reports or updates on the progress of the current quarter.
About Illumina
Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as a global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical, and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture, and other emerging segments.