Illumina guides Q4 revenues above expectations

Key Takeaways:

- Illumina's Q4 revenue of $1.115 billion exceeded market expectations, with a 3% year-over-year increase.

- The company shipped 79 NovaSeq X instruments in the fourth quarter and 352 instruments for the entire fiscal year 2023.

- Illumina's GAAP operating margin for the fourth quarter was approximately (15.5%), while the GAAP operating margin for the fiscal year 2023 was approximately (24.0%).

- Investors and stakeholders will have the opportunity to gain further insights into Illumina's performance and outlook on February 8, 2024.

Illumina Inc. (ILMN), a leading provider of genetic sequencing and array-based solutions, guided for better-than-expected revenue for the fourth quarter of 2023, fueling optimism about the company's prospects. The company anticipates achieving Q4 revenues of $1.115 billion, surpassing estimates of approximately $1.07 billion.

Key to their success in the fourth quarter was the shipment of 79 NovaSeq X instruments, contributing to a totall of 352 instruments shipped throughout fiscal year 2023. This strong performance in instrument shipments demonstrates Illumina's ability to capture market demand and highlights the widespread adoption of its technologies.

Breaking down the revenue further, core Illumina revenue reached approximately $1.09 billion in Q4 2023, representing a solid 2% increase from the same period in the previous year. However, the full fiscal year core Illumina revenue of approximately $4.431 billion reflected a slight decline of 3% compared to fiscal year 2022. 

Despite the growth in revenue, the company's consolidated GAAP operating margin for the fourth quarter was approximately (15.5%), while the GAAP operating margin for the fiscal year 2023 was approximately (24.0%). These margins were negatively impacted by a one-time restructuring charge related to the company's ongoing transformation efforts.

The core Illumina business, which excludes the impact of acquisitions and divestitures, reported a GAAP operating margin of 2.4% for the fourth quarter and 12.3% for the fiscal year 2023. The non-GAAP operating margin for the core business was a strong 18.0% for the fourth quarter and 19.8% for the fiscal year 2023.

On the margin front, Illumina's non-GAAP operating margin for Q4 2023 came in at approximately 3.8%. Additionally, core Illumina's non-GAAP operating margin for the full fiscal year reached 19.8%. These figures underscore the company's commitment to long-term profitability and its ability to adapt to evolving market conditions.

Shares of ILMN were testing the 20-sma ($133) ahead of the news. The positive outlook has helped boost the stock by 5% in early trade. The December high trading range of $142-144 looms large for the stock. ILMN sets up well for a breakout candidate if healthcare can continue its hot start to  2024.

As Illumina gears up to release its full Q4 and fiscal year 2023 results on February 8, 2024, investors eagerly await additional insights into the company's financial standing, growth strategies, and outlook.

In conclusion, Illumina's impressive Q4 revenue growth, highlighted by the strong performance of its core Illumina business, reinforces the company's position as a leading player in the genetic sequencing market. With its commitment to innovation and efficient operations, Illumina demonstrates the potential for sustained growth and profitability. However, investors should carefully review the complete financial report to gain a comprehensive understanding of Illumina's overall performance and prospects.

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