Illumina, Inc.: Q1 FY2026 earnings call

What management said about Q1 FY2026, from the documents filed with the SEC on 30 April 2026: press release. Guidance figures: 3 raised, 2 kept. The quarter’s numbers.

Key takeaways

Revenue rose 4.8% to $1.09 billion: Revenue was $1,091 million, against $1,041 million a year earlier, an increase of 4.8%. Source
Diluted EPS higher on both bases: Diluted EPS was $0.87 on a GAAP basis and $1.15 non-GAAP, against $0.82 and $0.97 a year earlier. Source
Full-year guidance raised on three measures: Management said it is raising full-year revenue and EPS guidance; the margin range was also raised, and the growth ranges were kept. Source
NovaSeq X demand rising in clinical: Management pointed to rising NovaSeq X demand as clinical customers move into new application areas. Source
Free cash flow rose to $251 million: Operating cash flow was $289 million, against $240 million. Capital expenditures were $38 million, leaving free cash flow of $251 million. Source
Buyback authorization of $1.5 billion: The board authorized an additional $1.5 billion of share repurchases on April 28, 2026. Source

“Illumina delivered a strong start to 2026, reflecting strength of the Illumina ecosystem and progress against our strategy”
Jacob Thaysen, Chief Executive Officer of Illumina

Guidance

Area	Period	Figure	Against last quarter
Total revenue Source	fiscal year 2026	$4.52-$4.62 billion	Raised from $4.5 billion to $4.6 billion
Reported revenue growth Source	fiscal year 2026	4%-6%	Kept
ROW organic revenue growth Source	fiscal year 2026	2%-4%	Kept
Non-GAAP operating margin Source	fiscal year 2026	23.4%-23.6%	Raised from 23.3%-23.5%
Non-GAAP diluted EPS Source	fiscal year 2026	$5.15-$5.30	Raised from $5.05-$5.20

What changed from last quarter

Guidance raised: Total revenue guidance midpoint raised by $20 million, to $4.52-$4.62 billion. Source
Guidance raised: Non-GAAP operating margin guidance raised to 23.4%-23.6% from 23.3%-23.5%. Source
Guidance raised: Non-GAAP diluted EPS guidance raised to $5.15-$5.30 from $5.05-$5.20. Source
Guidance kept: Reported revenue growth and ROW organic revenue growth ranges were not changed. Source
New: Board authorized an additional $1.5 billion of share repurchases on April 28, 2026. Source

Results and growth drivers

Revenue rose 4.8% to $1.09 billion: Revenue was $1,091 million, against $1,041 million a year earlier, an increase of 4.8%. Source
Acquisitions added, currency subtracted: Acquisitions added 1.7 points to reported growth and currency subtracted 1.9 points, leaving organic revenue growth at 1.2%. Source
Operating profit rose on both bases: GAAP operating profit was $209 million, up from $164 million. Non-GAAP operating profit was $239 million, up from $212 million. Source
Diluted EPS higher on both bases: Diluted EPS was $0.87 on a GAAP basis and $1.15 non-GAAP, against $0.82 and $0.97 a year earlier. Source
Full-year guidance raised on three measures: Management said it is raising full-year revenue and EPS guidance; the margin range was also raised, and the growth ranges were kept. Source

Regions and product mix

China weighed on organic growth: Excluding China, rest-of-world organic growth was 3.5%, against 1.2% total organic growth; the table shows a 2.3-point China impact. Source
Service revenue grew faster than product: Product revenue rose to $917 million from $880 million. Service and other revenue rose to $174 million from $161 million. Source
NovaSeq X demand rising in clinical: Management pointed to rising NovaSeq X demand as clinical customers move into new application areas. Source

“Demand for NovaSeq X is increasing as we help our clinical customers expand into new application areas.”
Jacob Thaysen, Chief Executive Officer of Illumina

Margins and costs

Gross margin rose on both bases: GAAP gross margin was 66.1%, up from 65.6%. Non-GAAP gross margin was 68.2%, up from 67.4%. Source
Operating margin rose on both bases: GAAP operating margin was 19.2%, against 15.8%. Non-GAAP operating margin was 21.9%, against 20.4%. Source
Research spending fell, selling costs rose: GAAP R&D expense fell to $240 million from $252 million. SG&A rose to $272 million from $267 million. Source
Tax provision lower than a year earlier: Provision for income taxes was $23 million, against $51 million. Net income was $134 million, against $131 million. Source

Acquisition and transformation costs

SomaLogic costs partly offset: Acquisition-related costs in operating expense included $15 million of SomaLogic legal and other expenses, offset by a $16 million contingent consideration fair value adjustment. Source
Step-up and amortization in cost of revenue: Cost of revenue included $17 million of intangible amortization and $6 million of SomaLogic inventory fair value step-up amortization. Source
ERP upgrade drove transformation costs: Transformational initiatives were $6 million at the operating line, against $30 million a year earlier, when the costs were severance. Source

Per-share results and share count

Diluted share count lower: Diluted shares used in EPS were 154 million, against 159 million a year earlier. Basic shares were 153 million, against 159 million. Source
Non-GAAP adjustments per share: Non-GAAP EPS adds back $0.15 of acquisition-related costs, $0.04 of transformational initiatives and a $0.24 strategic investment loss, and deducts a $0.15 tax effect. Source
Other expense replaced other income: Other expense, net was $52 million, against $18 million of other income a year earlier. Source

Cash flow, capital and balance sheet

Free cash flow rose to $251 million: Operating cash flow was $289 million, against $240 million. Capital expenditures were $38 million, leaving free cash flow of $251 million. Source
Buyback authorization of $1.5 billion: The board authorized an additional $1.5 billion of share repurchases on April 28, 2026. Source
Cash and investments lower in quarter: Cash, cash equivalents and short-term investments totaled $1.16 billion, down from $1.63 billion at the end of Q4 2025. Source
Goodwill and intangibles increased: Goodwill rose to $1,284 million from $1,113 million. Intangible assets, net rose to $430 million from $210 million. Source
Receivables down, inventory up: Accounts receivable fell to $738 million from $854 million. Inventory rose to $611 million from $564 million. Source

Risks management discussed

Financial: The company recorded a $0.24 per-share loss on strategic investments, against a $0.21 per-share gain a year earlier. Source
External: Currency translation reduced reported revenue growth by 1.9 points in the quarter. Source
Operational: SomaLogic acquisition-related legal and other expenses continued to be recorded in operating expense this quarter. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

Illumina Reports Financial Results for First Quarter of Fiscal Year 2026

San Diego, April 30, 2026 /PRNewswire/ -- Illumina, Inc. (Nasdaq: ILMN) (“Illumina” or the “company”) today announced its financial results for the first quarter of fiscal year 2026.

First quarter 2026 results:

Revenue of $1.09 billion for Q1 2026, up 4.8% from Q1 2025 (ROW organic revenue growth of 3.5%)
GAAP operating margin of 19.2% and non-GAAP operating margin of 21.9%
GAAP diluted EPS of $0.87 and non-GAAP diluted EPS of $1.15
On April 28, 2026, our Board of Directors authorized an additional $1.5 billion in share repurchases

“Illumina delivered a strong start to 2026, reflecting strength of the Illumina ecosystem and progress against our strategy,” said Jacob Thaysen, Chief Executive Officer of Illumina. “Demand for NovaSeq X is increasing as we help our clinical customers expand into new application areas. With our strong first quarter performance, we are raising our full-year revenue and EPS guidance.”

Fiscal year 2026 guidance:

For fiscal year 2026, we now expect:

Total revenue of $4.52-$4.62 billion, a $20 million increase at the mid-point versus our prior guidance
Reported revenue growth of 4%-6% and ROW organic revenue growth of 2%-4%, both unchanged from prior guidance
Non-GAAP operating margin of 23.4%-23.6% versus our prior guidance of 23.3%-23.5%
Non-GAAP diluted EPS of $5.15-$5.30 versus our prior guidance of $5.05-$5.20

First quarter results

	GAAP		Non-GAAP (a)
Dollars in millions, except per share amounts	Q1 2026	Q1 2025	Q1 2026	Q1 2025
Revenue	$1,091	$1,041	$1,091	$1,041
Gross margin	66.1%	65.6%	68.2%	67.4%
Operating profit	$209	$164	$239	$212
Operating margin	19.2%	15.8%	21.9%	20.4%
Diluted EPS	$0.87	$0.82	$1.15	$0.97

(a)See tables in “Results of Operations - Non-GAAP” section below for GAAP and non-GAAP reconciliations.

Capital expenditures for free cash flow purposes were $38 million for Q1 2026. Cash flow provided by operations was $289 million, compared to $240 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $251 million for the quarter, compared to $208 million in the prior year period. Depreciation and amortization expense was $69 million for Q1 2026. At the close of the quarter, the company held $1.16 billion in cash, cash equivalents and short-term investments.

ROW = rest-of-world, excluding Greater China region

Financial outlook and guidance

The company provides forward-looking guidance on a non-GAAP basis. 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 costs, fair value adjustments to contingent consideration, gains and losses from strategic investments, asset impairments, restructuring activities, and the ultimate outcome of pending litigation, among others, 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.

Conference call information

The conference call will begin at 1:30 pm Pacific Time (4:30 pm Eastern Time) on Thursday, April 30, 2026. Interested parties may access the live webcast via the Investor Info section of Illumina’s website or directly through the following link - https://illumina-earnings-call-q1-2026.open-exchange.net/. To ensure timely connection, please join at least ten minutes before the scheduled start of the call. A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.

Statement regarding use of non-GAAP financial measures

The company reports non-GAAP results for diluted earnings per share, gross margin, operating margin, and free cash flow, among others, 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. 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 operating margin and diluted earnings per share 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

Forward-looking statements notice

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, including the proteomics market; (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) our ability to successfully integrate SomaLogic, Inc. and certain other assets we acquired from Standard BioTools Inc. (the SomaLogic Business) into our existing operations and the SomaLogic Business’ technology and products into our portfolio; (v) our ability to successfully manage partner and customer relationships in the proteomics market; (vi) uncertainty regarding the impact of our inclusion on the “unreliable entities list” by regulatory authorities in China; (vii) uncertainty regarding tariffs imposed or threatened by the U.S. government and its trading partners, related court proceedings or administrative actions (including potential refund or relief programs), and other possible tariffs or trade protection measures and our efforts to mitigate the impact of such tariffs; (viii) our ability to manufacture robust instrumentation and consumables, including the SomaLogic Business’ products; (ix) the success of products and services competitive with our own; (x) 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; (xi) the impact of recently launched or pre-announced products and services on existing products and services; (xii) our ability to modify our business strategies to accomplish our desired operational goals; (xiii) 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; (xiv) our ability to further develop and commercialize our instruments, consumables, and products; (xv) to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xvi) the risk of additional litigation arising against us in connection with the GRAIL acquisition; (xvii) our ability to obtain approval by third-party payors to reimburse patients for our products; (xviii) our ability to obtain regulatory clearance for our products from government agencies; (xix) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xx) uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth or armed conflict; (xxi) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments; and (xxii) 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. To learn more, visit www.illumina.com and connect with us on X, Facebook, LinkedIn, Instagram, TikTok, and YouTube.

Condensed Consolidated Balance Sheets

(In millions)

	March 29, 2026	December 28, 2025
ASSETS	(unaudited)
Current assets:
Cash and cash equivalents	$1,089	$1,418
Short-term investments	66	215
Accounts receivable, net	738	854
Inventory, net	611	564
Prepaid expenses and other current assets	234	238
Total current assets	2,738	3,289
Property and equipment, net	755	759
Operating lease right-of-use assets	371	370
Goodwill	1,284	1,113
Intangible assets, net	430	210
Deferred tax assets, net	458	454
Other assets	523	449
Total assets	$6,559	$6,644
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$218	$240
Accrued liabilities	849	846
Term debt, current portion	499	499
Total current liabilities	1,566	1,585
Operating lease liabilities	475	486
Term debt	1,490	1,490
Other long-term liabilities	352	360
Stockholders’ equity	2,676	2,723
Total liabilities and stockholders’ equity	$6,559	$6,644

Condensed Consolidated Statements of Operations

(In millions, except per share amounts)

(unaudited)

	Three Months Ended
	March 29, 2026	March 30, 2025
Revenue:
Product revenue	$917	$880
Service and other revenue	174	161
Total revenue	1,091	1,041
Cost of revenue:
Cost of product revenue	273	253
Cost of service and other revenue	80	88
Amortization of acquired intangible assets	17	17
Total cost of revenue	370	358
Gross profit	721	683
Operating expense:
Research and development	240	252
Selling, general and administrative	272	267
Total operating expense	512	519
Income from operations	209	164
Other (expense) income, net	(52)	18
Income before income taxes	157	182
Provision for income taxes	23	51
Net income	$134	$131
Earnings per share:
Basic	$0.88	$0.83
Diluted	$0.87	$0.82
Shares used in computing earnings per share:
Basic	153	159
Diluted	154	159

Condensed Statements of Cash Flows

(In millions)

(unaudited)

	Three Months Ended
	March 29, 2026	March 30, 2025
Net cash provided by operating activities	$289	$240
Net cash used in investing activities	(366)	(63)
Net cash used in financing activities	(251)	(195)
Effect of exchange rate changes on cash and cash equivalents	(1)	4
Net decrease in cash and cash equivalents	(329)	(14)
Cash and cash equivalents, beginning of period	1,418	1,127
Cash and cash equivalents, end of period	$1,089	$1,113
Calculation of free cash flow:
Net cash provided by operating activities	$289	$240
Purchases of property and equipment	(38)	(32)
Free cash flow (a)	$251	$208

(a)Free cash flow, which is a non-GAAP financial measure, is calculated as net cash provided by operating activities reduced by purchases of property and equipment. Free cash flow is useful to management as it is one of the metrics used to evaluate our performance and to compare us with other companies in our industry. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.

Results of Operations - Non-GAAP

(unaudited)

TABLE 1: RECONCILIATION OF REVENUE GROWTH:

	Three Months Ended
	March 29, 2026
Revenue growth	4.8%
Impact of acquisitions	(1.7)%
Impact of currency exchange rates	(1.9)%
Organic revenue growth (non-GAAP) (a)	1.2%
Impact of China	2.3%
ROW organic revenue growth (non-GAAP) (a)	3.5%

TABLE 2: RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE:

	Three Months Ended
	March 29, 2026	March 30, 2025
GAAP diluted earnings per share	$0.87	$0.82
Acquisition-related costs (d)	0.15	0.09
Transformational initiatives (e)	0.04	0.19
Strategic investment loss (gain), net (f)	0.24	(0.21)
Other (g)	-	0.03
Provision for income taxes (h)	(0.15)	0.05
Non-GAAP diluted earnings per share (b)	$1.15	$0.97

TABLE 3: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:

	Three Months Ended
(Dollars in millions)	March 29, 2026		March 30, 2025
GAAP gross profit (c)	$721	66.1%	$683	65.6%
Acquisition-related costs (d)	23	2.1%	17	1.6%
Transformational initiatives (e)	-	- %	2	0.2%
Non-GAAP gross profit (b)	$744	68.2%	$702	67.4%
GAAP operating profit	$209	19.2%	$164	15.8%
Acquisition-related costs (d)	24	2.2%	13	1.2%
Transformational initiatives (e)	6	0.5%	30	3.0%
Other (g)	-	- %	5	0.4%
Non-GAAP operating profit (b)	$239	21.9%	$212	20.4%

(a)Organic revenue growth adjusts for the impact from acquisitions and currency movements, which is calculated using comparative prior period foreign exchange rates to translate current period revenue, net of the effects of hedges; Rest of World (ROW) organic revenue growth also adjusts for the impact from our China region.

(b)Non-GAAP gross profit, included within non-GAAP operating profit, is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non-GAAP diluted earnings per share and non-GAAP operating profit exclude the effects of the pro forma adjustments as detailed above. Non-GAAP operating margin and diluted earnings per share 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. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing past and future operating performance.

(c)Reconciling amounts are recorded in cost of revenue.

(d)Amounts for Q1 2026 consist primarily of $17 million for amortization of intangible assets (cost of revenue), $15 million related primarily to legal and other expenses for the SomaLogic acquisition (operating expense), and $6 million related to the amortization of an inventory fair value step-up recognized in SomaLogic purchase accounting (cost of revenue), offset by $16 million for fair value adjustments on our contingent consideration liabilities (operating expense). Amounts for Q1 2025 consist of $17 million for amortization of intangible assets (cost of revenue) and $7 million related primarily to legal expenses for the GRAIL acquisition (operating expense), offset by $11 million for fair value adjustments on our contingent consideration liabilities (operating expense).

(e)Amounts for Q1 2026 consist primarily of costs related to implementation efforts to upgrade our ERP system. Amounts for Q1 2025 consist primarily of employee severance costs related to restructuring activities.

(f)Amounts consist of realized and unrealized gains (losses) and impairments on our investments.

(g)Amount consists of $3 million for costs related to board membership changes and $2 million for legal accrual.

(h)Amounts represent the aggregate of the difference between book and tax accounting related to stock-based compensation cost and the tax impact related to non-GAAP adjustments.

Contacts
Investors:Conor McNamara+1.858.291.6421ir@illumina.com
Media:Christine Douglasspr@illumina.com