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ILMN

Illumina, Inc.


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Earnings

2026Q1 Review (Claude)

ILMN | Earnings Review

Illumina, Inc. | 2026 Q1 reported April 30, 2026 AMC | Analysis date: May 7, 2026 | Daloopa company_id 432
Revenue Beat
+2.0%
$1,091M vs ~$1,070M Street; +4.8% YoY (best print since GRAIL spin)
Adj EPS Beat
+9.5%
$1.15 vs $1.05 Street; +18.6% YoY; Adj Op Margin 21.9% (+154 bps); ~150 bps above guide
NovaSeq X Placements
80+ (SUPPLY-CONSTRAINED)
+33% YoY vs ~50-60 algo embedded in Feb FY26 guide; Q2 expected ~80; FY placements "reasonably above" prior guide
FY26 Guide RAISED + $1.5B Buyback
Beat-and-raise + capital return
Rev mid +$20M to $4.52-4.62B; EPS +$0.10 to $5.15-5.30; Op margin +10 bps to 23.4-23.6%; Instruments raised to flat-to-LSD; new $1.5B buyback (+ ~$400M remaining)
Clean inflection across volume + mix + margins, with NovaSeq X placements supply-constrained at 80+ — the most positive print since the GRAIL spin. Revenue $1,091M (+4.8% YoY) beat ~$1,070M Street by +2.0%; Adj EPS $1.15 (+18.6% YoY) beat $1.05 by +9.5%; Adj Op Margin 21.9% (+154 bps YoY), ~150 bps above guide midpoint. All three legs growing simultaneously for first time in this cycle: Sequencing consumables $726M +4.3%; Instruments $118M +8.3%; Service $151M +6.3%. NovaSeq X transition inflection: 82% volume / 55% revenue on X overall; research at 90% (price headwind largely gone); clinical at 76%, targeting >80-85% by YE26. Q1'26 placements 80+ blew out vs 50-60 algorithm embedded in Feb 2026 FY26 guide — supply-constrained; Q2 expected ~80; back-half pipeline robust. Cumulative installed base ~963 units. Clinical consumables +20% ex-China for 2nd consecutive quarter (oncology, rare disease, NIPT) — guide assumes only double-digit-to-mid-teens, explicit upside. Multi-unit clinical orders signaling capacity build at GH/NTRA/EXAS. Greater China $52M (-27.8% YoY) — now <5% of revenue (down from 11% in 2021); structurally segregated, decreasing materiality. Geographic reorganization: USCAN $590M / EMEALA $356M / APAC $93M / Greater China $52M — replaces prior Americas/Europe/GC/APMEA structure; direct YoY non-strict comparison. FY26 guide RAISED: Revenue mid +$20M to $4.52-4.62B; Adj EPS +$0.10 to $5.15-5.30; Op margin +10 bps to 23.4-23.6%. Instrument guide raised to flat-to-low-single-digit growth (vs prior down LSD-to-flat) — most aggressive forward posture in 4 quarters. NEW $1.5B buyback authorization + ~$400M remaining = ~$1.9B total; Q1 repo 2M shares at ~$120.85. Tone shift: NovaSeq X transition "lumpy" Q2'25 → "100+ placements" Q4'25 → "supply constrained" Q1'26 — clear inflection. NIH/HSAT "uncertainty" → "upside not in guide" (explicit free option). China de-emphasized to optionality. Multiomics announced→launched→integrate→contribute (SomaLogic closed Jan 30 for $363M; spatial 2H'26; 1-2 pts of 2027 growth). Roadmap catalysts: 14B + 35B flow cells, Q70 chemistry, staggered runs (18-mo roadmap unveiled at AGBT); TruPath launched (rare disease traction); spatial transcriptomics 2H 2026. Competitive pricing pressure ($150/genome from Element/Ultima/Roche launches summer 2026) — 35B flow cell is direct response; mgmt declined to disclose 35B pricing yet. Two material contradictions across 4 transcripts: (1) NovaSeq X placement cadence — held 50-60/qtr algorithm through Q4'25 + embedded in Feb 2026 guide; one quarter later 80+ supply-constrained — Feb guide was sandbagged or demand sharply inflected; (2) 2027 op margin target — Q3'25 prepared remarks said "20% non-GAAP by 2027 ex-GC" vs consistent 26% target in Q2/Q4/Q1 (likely transcript error). Watch: (1) Q2 op margin guided ~22% (below Street) on freight/component costs + SomaLogic full quarter — H2 ramp embedded; (2) Roche/Element competitive launches 2H'26 — biggest swing factor for '27; (3) NIH funding recovery (research consumables -12% ex-China) — explicit upside lever; (4) Long-range targets ~26% op margin by '27, HSD revenue, double-digit-to-teens EPS — Q1'26 implies ~350 bps of 500 bps margin expansion already achieved by end of '26 ex-acquisition.
Key Metrics Trends
Metric Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Q1 2026
Sequencing Consumables ($M) $691M $729M $741M $697M $696M $740M $747M $756M $726M
Sequencing Consumables ($M) YoY % - - - - +0.7% +1.5% +0.8% +8.5% +4.3%
Sequencing Instruments ($M) $110M $116M $104M $154M $109M $96M $107M $153M $118M
Sequencing Instruments ($M) YoY % - - - - -0.9% -17.2% +2.9% -0.6% +8.3%
Sequencing Services ($M) $151M $143M $150M $151M $142M $136M $147M $157M $151M
Sequencing Services ($M) YoY % - - - - -6.0% -4.9% -2.0% +4.0% +6.3%
Total Revenue ($M) $1.1B $1.1B $1.1B $1.1B $1.0B $1.1B $1.1B $1.2B $1.1B
Total Revenue ($M) YoY % - - - - -3.3% -4.8% +0.4% +5.0% +4.8%
Adj GM % 66.5% 69.0% 70.5% 67.5% 67.4% 69.4% 69.2% 67.0% 68.2%
Adj GM % YoY chg (bps) - - - - +90 +40 -130 -50 +80
Adj Op Margin % 3.1% 7.6% 22.6% 19.7% 20.4% 23.8% 24.4% 23.7% 21.9%
Adj Op Margin % YoY chg (bps) - - - - +1730 +1620 +180 +400 +150
Adj EPS ($) $0.98 $1.09 $1.14 $0.95 $0.97 $1.19 $1.34 $1.35 $1.15
Adj EPS ($) YoY % - - - - -1.0% +9.2% +17.5% +42.1% +18.6%
Free Cash Flow ($M, Core) $251M $213M $284M $322M $208M $204M $253M $267M $251M
Free Cash Flow ($M, Core) YoY % - - - - -17.1% -4.2% -10.9% -17.1% +20.7%
_Trajectory: turnaround validated — top line inflected positive, all 3 legs growing simultaneously for first time in cycle. Total rev YoY went from -5.4% (2024Q2) to +5.0% (2025Q4), 2026Q1 modestly decel to +4.8%. ~1,040 bps swing across 6 quarters. Adj op margin stepped up from 7.6% pre-GRAIL-spin (2024Q2) to 22-24% sustained range — most of optical Y/Y improvement is GRAIL deconsolidation, but underlying margin held cleanly post-spin. Sequencing consumables cleanest positive: accelerated from +0.4% (2025Q2) to +8.2% (2025Q4), suggesting NovaSeq X recurring revenue finally landing. 2026Q1 +4.3% on a tougher comp. Sequencing instruments trough was 2025Q2 (-17.2%); turned positive 2025Q3 and reached +8.3% in 2026Q1 — first sustained inflection since X launch. Greater China structurally impaired: $115M (2023Q2) → $52M (2026Q1), -55% peak-to-trough, 8 consecutive double-digit-down quarters; now <5% of revenue. Adj EPS noisy due to GRAIL effects in YoY base; consolidated EPS now running $1.15-1.35/qtr vs $0.09-0.36 a year prior. Verdict: trajectory has inflected positive — both consumables and instruments growing for first time since 2023 — but 2026Q1 hints at modest deceleration risk from tougher comp and China remains a drag._

Beat/Miss

Guidance

Catalysts

Street Q&A

Contradictions

Read-Throughs

This Quarter vs Consensus
MetricConsensusActualVarianceRead
Revenue~$1,070M$1,091M+$21M / +2.0%Beat — best YoY since GRAIL spin
Adj EPS$1.05$1.15+$0.10 / +9.5%Beat — +18.6% YoY
GAAP EPS$0.87+6.1% YoY
Adj Op Margin~20.4% guide mid21.9%+150 bps vs guideOperating leverage
Sequencing Consumables$726M+4.3% YoYRecurring stream stable
Sequencing Instruments$118M+8.3% YoYFirst sustained instrument inflection
Greater China$52M-27.8% YoYStructural; <5% of mix
NovaSeq X placements50-60 algorithm80++33% YoY; supply-constrainedBlowout vs Feb guide
Clinical consumables ex-China+20% YoY2nd consecutive quarterExplicit guide upside lever
Q2'26 Op margin guideHigher implied~22%Below StreetInflation/freight + SomaLogic full quarter
L8Q Revenue beat rate8/8 = 100%Consistent Beater (avg +1.4%)
L8Q Adj EPS beat rate7/8 = 88%Q4'24 was lone mixed quarter
L4Q double beat rate4/4 = 100%Operating leverage driving EPS surprise
Pattern: Consistent beater with widening EPS surprises driven by operating leverage / cost discipline. 8/8 revenue beats (avg +1.4%) and 7/8 clear EPS beats (Q4'24 was the one mixed quarter during turnaround trough). Slim revenue beats (+0.3% to +2.0%) paired with much larger EPS beats (+1.7% to +15.5%) — operating leverage / cost-discipline driven, not below-the-line. Adj op margin tripled from 7.6% (Q2'24) to 22-24% steady state — this is the real driver of the $75 → $138 stock rerate. Mgmt variance attribution: (a) NovaSeq X — 80+ placements, supply constrained, backlog +20% YoY, $1.3M+ pull-through; (b) clinical consumables +20% YoY ex-China for 2nd straight quarter; (c) NIH funding still a drag (research consumables -12% ex-China) but mgmt views recovery as upside not in guide; (d) China carved out via new geo segmentation — focus on "Rest of World organic"; (e) competitive response (Element $150/genome) — Thaysen confident, leaning on innovation roadmap (TruPath, spatial, 35B flow cells, BioInsight) rather than price cuts.
Guidance Deep Dive
MetricPrior (Feb 2026)New (Q1'26)vs PriorStreet Pre-Printvs StreetRead
FY26 Revenue ($B)$4.50-4.60B$4.52-4.62B (mid +$20M)+$20M mid$4.53B+$40M / +0.9%Mechanical raise from Q1 beat
FY26 Adj EPS$5.05-5.20$5.15-5.30 (mid $5.225)+$0.10 mid$5.12+$0.10Flow-through
FY26 Adj Op Margin23.3-23.5% mid23.4-23.6% (mid 23.5%)+10 bpsModest raise
FY26 Instruments growthDown LSD to flatFlat to low-single-digit growthDirection flipMost aggressive in 4Q
FY26 NovaSeq X placements~50-60/quarter algorithmReasonably above prior guideRaisedSupply-constrained Q1+Q2
Q2'26 Op Margin~22%n/aHigher impliedBelow StreetInflation/freight + SomaLogic full quarter
NovaSeq X transition82% volume / 55% revenue overallResearch at 90%, clinical at 76%
Clinical X target by YE26>80-85%Clinical consumables +20% ex-China
Multiomics 2027 contribution1-2 pts of growth1-2 pts (SomaLogic + spatial)MaintainedSpatial 2H'26 launch
FY27 long-range Op Margin~26%~26%ReaffirmedQ1'26 implies ~350 bps of 500 bps already achieved
FY27 long-range RevenueHSD growthHSD growthReaffirmed
FY27 long-range EPSDouble-digit to teensDouble-digit to teensReaffirmed
NIH funding recoveryNot in guideNot in guide; explicit upside leverMaintainedResearch consumables -12% ex-China
China FY26 RevenueCarved outReported separately, <5% of mixMaintained8 consecutive double-digit decline quarters
Capital Allocation$400M remaining$1.5B NEW + $400M = $1.9B total+$1.5B authorizationQ1: 2M shares @ $120.85
SomaLogic acquisitionClosingClosed Jan 30 for $363MClosedMultiomics build-out
Roche/Element competitive launches2H'262H'26 (35B flow cell as response)MaintainedBiggest 2027 swing factor
Tone: most aggressive forward posture in 4-call sequence. NovaSeq X transition: "lumpy" (Q2'25) → "milestones hit" (Q3'25) → "100+ placements" (Q4'25) → "supply constrained, scaling supply" (Q1'26) — clear inflection. NIH/HSAT: "uncertainty" → "stabilizing" → "improving" → "upside not in guide" — explicit free option. China: "unsustainable" → de-emphasized, <5%, structurally segregated, pure optionality. Multiomics: announce → launch → integrate → contribute (SomaLogic closed Jan 30; spatial 2H'26; 1-2 pts of '27 growth). Risks: Roche/Element competitive launches in 2H is biggest swing factor for '27. NIH and China are de-risked. Q2 margin dip (~22%) from freight/component inflation + SomaLogic full quarter; H2 ramp embedded. Long-range targets reaffirmed: ~26% op margin by '27; HSD revenue; double-digit-to-teens EPS. Q1'26 implies ~350 bps of 500 bps margin expansion already achieved by end of '26 ex-acquisition. Two contradictions identified: (1) NovaSeq X placement cadence — held 50-60/qtr algorithm through Q4'25 + embedded in Feb 2026 guide; one Q later 80+ supply-constrained — Feb guide sandbagged or demand sharply inflected; (2) Q3'25 prepared remarks said "20% non-GAAP by 2027 ex-GC" vs consistent 26% target — likely transcript error.
Upcoming Catalysts
#CatalystTimingWhat to WatchRead
1NovaSeq X supply-constrained rampThrough FY26Q1: 80+ placements (+33% YoY) vs 50-60 algo; Q2 ~80; back-half robust pipeline; full-year "reasonably above" prior guideMost concrete near-term beat
2Clinical consumables +20% ex-ChinaThrough FY262 consecutive quarters; guide assumes only DD-to-mid-teens; oncology, rare disease, NIPT all contributingExplicit guide upside lever
3NIH funding recovery (NOT in guide)FY26-FY27Research consumables -12% ex-China; mgmt views recovery as upside not yet in guide; biggest unmodeled leverFree option
4Roche/Element/Ultima competitive launches2H 2026$150/genome from Element; ILMN response = 35B flow cell; mgmt declined to disclose 35B pricing yetBiggest 2027 swing factor
5NovaSeq X transition accelerationThrough FY26-FY2782% volume / 55% revenue on X overall; research 90%, clinical 76% targeting >80-85% by YE26Margin tailwind
6Spatial transcriptomics launch2H 2026Multiomics expansion; new TAM; 1-2 pts of 2027 growthPOSITIVE multiomics
714B + 35B flow cells, Q70 chemistryFY26-FY27 (18-mo roadmap unveiled at AGBT)Direct response to $150/genome competition; staggered runsInnovation moat
8TruPath rare disease platformLaunchedRare disease traction; clinical consumables driverClinical wedge
9$1.5B + $400M = $1.9B buyback authorizationMulti-yearQ1 repo 2M shares at $120.85; aggressive return at recovered share priceCapital return
10SomaLogic acquisition closed Jan 30 ($363M)ClosedMultiomics build-out; full-quarter inclusion in Q2 dilutes margin ~50 bpsStrategic — multiomics
11Q2'26 op margin ~22% (below Street)Q2'26Inflation/freight/component costs + SomaLogic full quarter; H2 ramp embeddedWatch H2 trajectory
12FY27 op margin target ~26%FY27Q1'26 implies ~350 bps of 500 bps margin expansion already achieved by end of '26 ex-acquisitionLong-range goal
13China BIOSECURE Act outcomeOngoing<5% of revenue; structurally segregated; pure optionalityDe-risked
14Tariff exposureFY26Disclosed; not quantified; freight/component cost pressureReal Q2 margin pressure
15Multi-unit clinical NovaSeq X ordersFY26-FY27Capacity build at GH/NTRA/EXAS/Tempus signals volume growth aheadPOSITIVE clinical centralized labs
Street Q&A
#Analyst (Firm)TopicMgmt ResponseQuality
1Multiple analysts (8 questions)NovaSeq X transition / supply constraintThaysen: 80+ placements (+33% YoY) vs 50-60 algo; Q2 ~80; supply-constrained, scaling; backlog +20% YoY; $1.3M+ pull-through.Well Answered — quantified
2Mikson (Canaccord)$150/genome competitive impact (Element)Thaysen: confident; leaning on innovation roadmap (TruPath, spatial, 35B, BioInsight); not price cuts.Soft deflection — declined to quantify
3Arias35B flow cell pricingThaysen: declined to disclose 35B pricing yet.Hard deflection
4WoodringInflation magnitudeDhingra: Q2 op margin ~22% on freight/component cost step-up + SomaLogic full quarter; declined to give specific bps split.Partial — directional only
5MeehanClinical demand by applicationThaysen: clinical +20% ex-China for 2nd Q; oncology, rare disease, NIPT all contributing; declined to break out by application.Partial — aggregate only
6Multiple analystsMultiomics / spatialThaysen: SomaLogic closed Jan 30 ($363M); spatial 2H'26; 1-2 pts of 2027 growth; SomaLogic friendly nod to 10x Genomics by name (rising tide).Well Answered
7Multiple analystsMargins / FY26 op margin guideDhingra: FY raised 10 bps to 23.4-23.6%; ~26% target by 2027 reaffirmed; Q1'26 implies 350 bps of 500 bps margin expansion already.Well Answered
8Multiple analystsNIH/Research recoveryThaysen: research consumables -12% ex-China; recovery NOT in guide — explicit upside lever; tone shifted to "stable to improving."Well Answered — explicit upside
9Multiple analystsFY26 instruments raiseDhingra: raised to flat-to-LSD growth (vs prior down LSD-to-flat); supply-constrained X placements.Well Answered
10Multiple analystsQ2 op margin ~22%Dhingra: freight/component inflation + SomaLogic full quarter; H2 ramp embedded.Well Answered
11(Not asked)China BIOSECURE ActConspicuous gap
12(Not asked)Tariff specificsGap
13(Not asked)Capital allocation despite $1.5B buyback announcementNotable absence given same-day announcement
14(Not asked)NIH policy / standaloneGap
Contradictions
#TopicSeverityStatement AStatement BWhy it's a tension
1NovaSeq X placement cadenceHigh — Feb guide vs Q1 actualQ2/Q3/Q4'25: held 50-60/qtr "algorithm" — explicitly embedded into FY26 guide issued Feb 2026Q1'26 (one quarter later): placed 80+ and were supply-constrained, with Q2 expected at similar levelsEither Feb guide was sandbagged or demand inflected very sharply. Worth probing for pull-forward ahead of competitor launches or multi-unit clinical orders. Highest-signal contradiction.
22027 operating margin targetMedium — likely transcript slipQ3'25 prepared remarks: "20% non-GAAP operating margins by 2027, excluding Greater China"Q2'25, Q3'25 Q&A, Q4'25, Q1'26: consistent 26% target articulated and +500 bps framingAlmost certainly a verbal slip / transcript error rather than real change in target, but a literal contradiction in the source.
3Clinical X transition paceLow — evolution, not contradictionQ2'25: framed as gradual ("no cliff")Q4'25 / Q1'26: accelerated faster than impliedMore an evolution than a contradiction — supports inflection thesis.
4HSAT/NIH framingNone — consistentQ2-Q4'25: "uncertainty" → "stabilizing"Q1'26: "upside not in guide"Consistently soft, modestly more constructive over time, never built into guide.
5China outlookNone — consistentMultiple Q: "unsustainable" → de-emphasized, ~$210-220M run rate, OEM workaround new disclosureConsistently unresolved; OEM workaround was new disclosure not contradiction.
6Multiomics timingNone — consistentMultiple Q: 2027 story, 1-2 pts contributionConsistent.
7TariffsNone — disclosed real-timeDrag stepped up from ~110 bps to ~205-220 bpsDisclosed in real time; no contradiction.
8Capital allocationNone — consistentSlowed as stock ran; "opportunistic" framing held; re-accelerated in Q1'26 with new $1.5B authorizationConsistent.
9Competitive postureNone — consistentDismissive-but-respectful across all 4; PACB IP acquisition was new factConsistent — new fact not contradiction.
Indirect Read-Throughs
NameRelationshipWhat ILMN signaledRead-through
Element Biosciences (private)Direct sequencing competitor$150/genome announced launches summer 2026; ILMN response = 35B flow cell + Q70 chemistry; ILMN supply-constrained at 80+ placements suggests competitive pressure not materializing in placementsNEGATIVE for Element — ILMN gaining placements
Ultima Genomics (private)Direct sequencing competitor$150/genome competitive launch; ILMN's 35B flow cell as responseNEGATIVE — competitive defense
PacBio (PACB)Direct sequencing competitorILMN acquired key PACB IP — new fact in Q1'26; competitive moatNEGATIVE for PACB — IP loss
Roche / AvitiDirect sequencing competitorRoche launches summer 2026; ILMN 35B flow cell responseNEGATIVE — competitive defense
MGI / BGI GenomicsChinese sequencing competitorNot directly named; China <5% of mix and structurally segregated; OEM workaround new disclosureNeutral for ILMN; competitive in China
Oxford Nanopore (ONT)Direct sequencing competitor (long-read)Not directly named; ILMN strength in short-read short-cycleNeutral
10x Genomics (TXG)Multiomics / spatial peerThaysen friendly named-praise on spatial (Serge Saxonov) — "rising tide" framingMIXED — partner + competitor on spatial
SomaLogic / Olink (OLK) / Nautilus / Quanterix (QTRX)Proteomics peersILMN closed SomaLogic Jan 30 for $363M — direct competitive pressure on standalone proteomics namesNEGATIVE for OLK / NAUT / QTRX
Guardant (GH) / Natera (NTRA) / Exact Sciences (EXAS)Clinical centralized labs (customers)Multi-unit NovaSeq X orders signal capacity build for volume growth; clinical consumables +20% ex-ChinaPOSITIVE — capacity build at customers
Tempus (TEM)Clinical centralized lab (customer)Multi-unit clinical capacity buildPOSITIVE
Thermo Fisher (TMO) / Danaher (DHR) / Agilent (A) / Bio-Techne (TECH)Tools peersSector-wide NIH funding still soft (-12% research consumables ex-China); tone shifted to "stable to improving"NEGATIVE near-term; POSITIVE upside if NIH recovers
Bruker (BRKR)Tools peerSame NIH tone signalSame as TMO/DHR
NIH / US academicMacro / customerTone shifted to "stable to improving"; recovery NOT in guide = upside option for 2H26Upside lever
BIOSECURE ActRegulatoryNo mention on Q1'26 callDe-risked
FX (USD)Macro KPIUSD flipped to ~1pt tailwind (vs headwind in 2025)Positive Q1'26
GRAIL (spun off 2024)Former subsidiarySpin completed Q3'24; Adj op margin step-up partly from deconsolidationHistorical
Pharma R&D (LLY, MRK, PFE)CustomersTrial-driven sequencing intensity rising (exome→genome = 15x)POSITIVE — pharma demand intensification
Singular GenomicsSequencing competitorNot directly namedNeutral
Fluent Biosciences (acquired 2024)Owned multiomicsSingle-cell expansionStrategic

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