Illumina's Q1 2025: Navigating Contradictions in China Revenue, NovaSeq X Demand, and Tariff Impacts

China market impact and revenue projections, NovaSeq X placements and clinical demand, impact of tariffs on demand, and pricing impact of NovaSeq X transition are the key contradictions discussed in Illumina's latest 2025Q1 earnings call.



Revenue and Earnings Performance:
- Illumina reported revenue of $1.04 billion for Q1 2025, down 1.4% year-over-year on an as-reported basis, with flat year-over-year performance on a constant currency basis.
- Earnings per share (EPS) were $0.97, at the upper end of the guidance range.
- The performance was impacted by foreign exchange fluctuations and lower revenue from the Greater China region due to export restrictions.

Sequencing Consumables Growth:
- Sequencing consumables revenue was $696 million, growing approximately 1% year-over-year.
- Growth was driven by strength in high throughput consumables and the continued transition to NovaSeq X instruments.
- However, a 1 point decrease was observed due to research customers being more conservative in consumable purchases.

NovaSeq X Transition:
- Over 60 NovaSeq X instruments were placed in Q1, with approximately 43% of high throughput consumables revenue attributed to the NovaSeq X series.
- This transition is progressing well, especially among clinical customers.
- The increase in X placements and adoption is a key driver of revenue growth expectations.

Geopolitical Challenges:
- The company faced challenges in the Greater China region, with restricted instrument exports impacting revenue.
- The U.S. government enacted a baseline import tariff of 10%, increasing costs for Illumina.
- To address these challenges, Illumina took several cost-reduction actions and is working on supply chain optimization and pricing strategies.