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- **Revenue Resilience**: Q3 revenue of $1.08B beat expectations, with 2% YoY growth outside China and non-GAAP operating margin of 24.5%.
- **NovaSeq X Momentum**: 55 instruments placed in Q3, 78% of volumes on X platform. Clinical consumables growth accelerates with MRD and genetic disease assays.
- **China Progress**: Local manufacturing approval marks progress, though full resolution pending. Q3 China revenue of $52M exceeded guidance.
- **Multiomics Expansion**: Launch of proteomics assay, 5-base solution, and BioInsight data services to drive long-term growth.
- **Margin Expansion**: 190bps YoY operating margin improvement, with further gains expected from cost actions and revenue recovery.

**【CEO Summary Section】**
- **Q3 Revenue Performance**: Total revenue of $1.08 billion, with 2% year-over-year growth outside China. Non-GAAP operating margin expanded to 24.5%, and diluted EPS reached $1.34, both above guidance.
- **NovaSeq X Transition**: Over 55 instruments placed in Q3, exceeding 50-60 per quarter target. 78% of high-throughput volumes and 51% of revenue now on X platform, driven by clinical adoption.
- **Clinical Growth**: Sequencing consumables revenue grew at high single-digit rate YoY, supported by new assays and MRD applications. NovaSeq X placements in clinical customers reached 64% of volumes in Q3.
- **China Progress**: Greater China revenue of $52 million, ahead of guidance despite export restrictions. Local manufacturing approval for select instruments marks a step forward, though long-term resolution remains pending.
- **Strategic Initiatives**: Launch of Illumina Protein Prep (proteomics assay), 5-base solution (genetic/methylation analysis), and BioInsight (data/AI services) to expand into multiomics and services markets.

**【CFO Financial Commentary】**
- **Revenue Breakdown**: Sequencing consumables ($747M), instruments ($107M), and services/other ($147M). Ex-China revenue grew 2% YoY, driven by clinical strength. Research and applied consumables declined due to X transition and funding uncertainty.
- **Gross Margin**: 69.2%, with tariffs impacting margins by 220bps YoY. Operating expenses down 6% YoY to $484M, reflecting cost reduction programs.
- **2025 Guidance Update**: Total revenue now expected to decline -0.5% to -1.5% (vs. prior -1% to -3%). Non-GAAP operating margin raised to 22.75-23%, and EPS to $4.65-$4.75 (up $0.20 at midpoint). Q4 China revenue projected at $33M.
- **2026 Outlook**: Clinical growth to continue with X transition, research to stabilize, and multiomics launches to contribute. Gross leverage at 1.6x, with $1.28B cash on hand.

**【Q&A Highlights】**
- **China Strategy**: Progress with local manufacturing for OEM partners, but regulatory dialogue ongoing. Q3 China performance resilient despite headwinds.
- **Competitive Landscape**: Illumina maintains end-to-end quality advantage vs. competitors focused on single dimensions. Clinical customers value NovaSeq X's throughput and workflow consistency.
- **Margin Expansion**: 190bps YoY operating margin improvement in Q3. Further expansion expected from cost actions (e.g., manufacturing optimization) and operating leverage as revenue recovers.
- **Research Market**: NovaSeq X transition complete in research, but funding uncertainty persists. NIH grants flowing but spending cautious. Multiomics launches (e.g., proteomics, spatial) position for recovery.
- **Instrument Placements**: Q3 placements of 55 instruments in line with 50-60 per quarter target. Clinical placements占50%+ of total, supporting consumables growth.


Illumina, Inc. (ILMN) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

ILMN

ILMN fundamentals

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