On April 27, 2021 Illumina, Inc. (NASDAQ: ILMN) reported its financial results for the first quarter of fiscal year 2021 (Press release, Illumina, APR 27, 2021, View Source [SID1234578558]).
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"Illumina achieved its first billion-dollar revenue quarter in company history and delivered a very strong start to 2021, exceeding our expectations"
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First quarter results reflect record revenue:
Revenue of $1,093 million, a 27% increase compared to the prior year period
GAAP net income for the quarter of $147 million, or $1.00 per diluted share, compared to $173 million, or $1.17 per diluted share, for the prior year period
Non-GAAP net income for the quarter of $278 million, or $1.89 per diluted share, compared to $243 million, or $1.64 per diluted share, for the prior year period. Non-GAAP net income excludes acquisition-related expenses, primarily the Continuation Payments paid to GRAIL (see the "Reconciliation Between GAAP and Non-GAAP Net Income" table for a reconciliation of these GAAP and non-GAAP financial measures)
Cash flow from operations of $282 million compared to $281 million in the prior year period
Free cash flow (cash flow from operations less capital expenditures) of $240 million for the quarter compared to $241 million in the prior year period
"Illumina achieved its first billion-dollar revenue quarter in company history and delivered a very strong start to 2021, exceeding our expectations," said Francis deSouza, Chief Executive Officer. "Orders during the first quarter of 2021 reached an all-time high demonstrating strength in our core business across all regions, reflecting growth in both clinical and research customers. We are seeing tremendous progress in clinical market access and reimbursement for genomic applications increasing access to genomic testing for patients worldwide. We are proud of the significant contributions our customers, partners, and employees are making to the creation of a genomic epidemiology infrastructure to combat COVID-19, as well as monitor for future pathogen outbreaks for the benefit of global public health."
Gross margin in the first quarter of 2021 was 69.9% compared to 72.1% in the prior year period. Excluding amortization of acquired intangible assets and expenses related to COVID-19, non-GAAP gross margin was 70.5% for the first quarter of 2021 compared to 73.0% in the prior year period.
Research and development (R&D) expenses for the first quarter of 2021 were $197 million compared to $156 million in the prior year period. Non-GAAP R&D expenses as a percentage of revenue were 18.0% compared to 18.3% in the prior year period.
Selling, general and administrative (SG&A) expenses for the first quarter of 2021 were $374 million compared to $274 million in the prior year period. Excluding acquisition-related expenses and expenses and income related to COVID-19, non-GAAP SG&A expenses as a percentage of revenue were 20.4% compared to 21.1% in the prior year period.
Depreciation and amortization expenses were $48 million and capital expenditures for free cash flow purposes were $42 million during the first quarter of 2021. At the close of the quarter, the company held $4.6 billion in cash, cash equivalents and short-term investments, compared to $3.5 billion as of January 3, 2021.
Updates since our last earnings release:
Announced TSO 500 partnership with Kartos Therapeutics to advance comprehensive genomic profiling for blood cancers
Published positive economic study results in partnership with Harvard Pilgrim Health Care demonstrating the cost-effectiveness of offering non-invasive prenatal testing (NIPT) to all pregnant women
Illumina was selected among the top 100 influential global companies by Time magazine
Published our second annual Corporate Social Responsibility report that highlights our commitment to society, our employees and the environment
Completed a senior unsecured investment grade bond offering for an aggregate principal amount of $1 billion and finalized a $750 million 5-year unsecured revolving credit facility
Announced Jay Flatley will step down from the Board of Directors and John W. Thompson will be appointed as the new Chair of the Board effective May 26, 2021
Received medical device registration in Russia for NextSeq 550Dx and associated reagent kits
Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.
For fiscal 2021, the company expects year-over-year revenue growth in the range of 25% to 28%, and now expects GAAP earnings per diluted share of $4.72 to $4.97 and non-GAAP earnings per diluted share of $5.80 to $6.05. Except for acquisition-related expenses and bridge facility fees incurred during Q1 2021, this guidance excludes the potential impact from the pending acquisition of GRAIL, which we expect to close in the second half of 2021.
Conference call information
The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, April 27, 2021. Interested parties may access the live teleconference through the Investor Info section of Illumina’s website under the "Company" tab at www.illumina.com. Alternatively, individuals can access the call by dialing 1 (866) 211-4597 or 1 (647) 689-6853 outside North America, both using conference ID 4359912.
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.