• Revenue: $1.1 billion in Q4, up 1% year over year.
• Sequencing Consumables Revenue: $698 million, grew approximately 2% year over year.
• Sequencing Instruments Revenue: $155 million, declined 3% year over year.
• Non-GAAP Gross Margin: 67.4%, increased 270 basis points year over year.
• Non-GAAP Operating Margin: 19.7% in Q4, up 120 basis points from last year.
• Non-GAAP Net Income: $152 million.
• Non-GAAP EPS: $0.95 per diluted share.
• Cash Flow from Operations: $364 million in Q4.
• Free Cash Flow: $322 million in Q4.
• Cash and Investments: $1.22 billion at year-end.
• 2025 Revenue Guidance: Low single-digit percentage growth on a constant currency basis.
• 2025 Non-GAAP Operating Margin Guidance: Approximately 23%.
• 2025 Non-GAAP EPS Guidance: $4.50 to $4.65.

• Warning! GuruFocus has detected 5 Warning Signs with ILMN.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Illumina Inc (NASDAQ:ILMN) delivered Q4 revenue of $1.1 billion, exceeding expectations and reflecting approximately 1% growth from the prior year.
• The company made significant progress with the NovaSeq X transition, with 91 instruments placed during the quarter, bringing the installed base to 630.
• Illumina Inc (NASDAQ:ILMN) achieved more than $100 million in cost savings across 2024 through operational excellence initiatives.
• The company announced collaborations with NVIDIA and Truveta, enhancing its capabilities in AI and expanding its reach in genomics.
• Illumina Inc (NASDAQ:ILMN) expects a non-GAAP operating margin of approximately 23% for 2025, a 170 basis points improvement from 2024.

Negative Points

• The recent announcement from the Chinese Ministry of Commerce poses potential risks, as China represents approximately 7% of Illumina Inc (NASDAQ:ILMN)'s global revenue.
• Sequencing instruments revenue declined 3% year over year in Q4, driven by a decline in mid-throughput shipments due to capital purchase and cash flow constraints.
• The company is facing competitive pressures, with emerging competitors gaining traction in key markets.
• Illumina Inc (NASDAQ:ILMN) anticipates a low single-digit decline in sequencing instrument revenues for 2025 due to customers managing their capital investments closely.
• The company is closely monitoring the evolving circumstances in Washington, particularly as it relates to research funding, which could impact future growth.

Q & A Highlights

Q: Can you update us on the recent announcement from China and its potential impact on Illumina's revenue? A: Jacob Thaysen, CEO: The announcement from China is very recent, and we are actively seeking a resolution. China represents approximately 7% of our global revenue. We are not providing detailed financial breakdowns for China at this time. Our guidance does not include potential disruptions from this announcement.

Q: What are the expectations for revenue growth and the transition to NovaSeq X in 2025? A: Ankur Dhingra, CFO: We expect revenue growth to be in the low single-digit percentage range, with growth skewed towards the second half of the year due to the NovaSeq X transition. We anticipate approximately 75% of high throughput gigabases to transition to the X series by mid-2025.

Q: Can you provide insights into the volume growth and pull-through assumptions for NovaSeq X? A: Jacob Thaysen, CEO: We are seeing significant volume growth as customers transition to NovaSeq X, with volume growth expected to remain above the mid-20% range. Ankur Dhingra, CFO: We have provided detailed pull-through assumptions, and we are pleased with the ramp-up of NovaSeq X.

Q: How is Illumina addressing the competitive landscape and pricing dynamics, especially with emerging competitors? A: Jacob Thaysen, CEO: We take competition seriously and believe in our leading technology and innovation pipeline. We are engaging in application-specific pricing discussions with customers to support higher sequencing volumes for specific tests.

Q: What are the strategic priorities for Illumina in terms of R&D and operational efficiency? A: Ankur Dhingra, CFO: We are focusing on optimizing our cost structure, including consolidating manufacturing and R&D capabilities in Singapore. We have also established an office in India to expand capabilities. Jacob Thaysen, CEO: We continue to invest in R&D to drive innovation and growth, aiming for high single-digit revenue growth by 2027.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.