On July 31, 2025 Illumina, Inc. (Nasdaq: ILMN) ("Illumina" or the "company") reported its financial results for the second quarter of fiscal year 2025 (Press release, Illumina, JUL 31, 2025, View Source [SID1234654681]).

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

"The Illumina team again delivered results that exceeded our guidance, driven by the continued ramp in X consumables, as well as accelerating growth in clinical, our largest customer segment" said Jacob Thaysen, Chief Executive Officer. "In research, we are actively helping our customers navigate a constrained funding environment. Even in these challenging conditions, the team’s focus on operational excellence helped drive margin expansion, enabling us to increase our expectations for the year."

Second quarter Core Illumina segment results

GAAP Non-GAAP (a)
Dollars in millions, except per share amounts
Q2 2025 Q2 2024 Q2 2025 Q2 2024
Revenue (b) $ 1,059 $ 1,092 $ 1,059 $ 1,092
Gross margin (c) 65.6 % 68.0 % 69.4 % 69.4 %
Research and development (R&D) expense $ 247 $ 241 $ 243 $ 241
Selling, general and administrative (SG&A) expense $ 234 $ 60 $ 241 $ 275
Operating profit
$ 214 $ 442 $ 252 $ 242
Operating margin 20.2 % 40.5 % 23.8 % 22.2 %
Tax provision $ 71 $ 35 $ 54 $ 55
Tax rate 23.4 % 35.0 % 22.2 % 24.2 %
Net income $ 235 $ 66 $ 187 $ 174
Diluted EPS $ 1.49 $ 0.41 $ 1.19 $ 1.09

1

(a)See tables in "Results of Operations – Non-GAAP" section below for GAAP and non-GAAP reconciliations.
(b)Revenue for Q2 2024 included intercompany revenue of $9 million prior to the spin-off of GRAIL.
(c)Non-GAAP gross margin remained flat primarily due to higher freight and duties costs related to tariffs and an increase in field service costs, partially offset by lower strategic partnership revenue, that is lower margin, and a more favorable product mix. The decrease in GAAP gross margin was primarily due to a $23 million impairment of an acquired intangible asset.

Capital expenditures for free cash flow purposes were $30 million for Q2 2025. Cash flow provided by operations was $234 million, compared to $243 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $204 million for the quarter, compared to $213 million in the prior year period. Depreciation and amortization expense was $68 million for Q2 2025. At the close of the quarter, the company held $1.16 billion in cash, cash equivalents and short-term investments.

Share repurchases for Q2 2025 were $380 million and the company intends to repurchase incremental shares over the course of the year as part of our approximate $800 million authorization remaining at the end of the quarter.

Key announcements since our last earnings release
•Launched TruSight Oncology 500 version 2 (TSO 500 v2), an updated version of Illumina’s comprehensive genomic profiling assay for cancer research
•TIME named Illumina to its World’s Most Sustainable Companies list for the second year in a row, and U.S. News & World Report named Illumina to its Best Companies to Work For list
•Entered into a definitive agreement with Standard BioTools under which Illumina will acquire SomaLogic and other specified assets
•Unveiled PromoterAI, a new AI algorithm that accurately deciphers pathogenic regulatory genetic variants in the noncoding regions of the human genome
•Received approval from Japan’s Ministry of Health, Labour and Welfare (MHLW) for TruSight Oncology (TSO) Comprehensive for Class III/IV Medical Device (Specially Controlled Medical Device)
•Launch of DRAGEN v4.4 software, the industry’s most comprehensive secondary analysis solution powering clinical oncology research and multiomic applications

A full list of recent announcements can be found in the company’s News Center.

Financial outlook and guidance
The company provides forward-looking guidance on a non-GAAP basis, including on a constant currency basis for revenue and revenue growth rates. 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 expenses, fair value adjustments to contingent consideration, gains and losses from strategic investments, potential future asset impairments, restructuring activities, the ultimate outcome of pending litigation, and currency exchange rate fluctuations 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, July 31, 2025. Interested parties may access the live webcast via the Investor Info section of Illumina’s website or directly through the following link – View Source 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.