Illumina, Inc. · NASDAQ:ILMN
Illumina — Q3 2016 Earnings Presentation
16 slides from Illumina's earnings presentation, Nov 1, 2016
Slide 1: Illumina Q3 2016 Financial Results
Illumina Q3 2016 Financial Results November 1, 2016 © 2016 Illumina, Inc. All rights reserved. Illumina, 24sure, BaseSpace, BeadArray, BlueFish, BlueFuse, BlueGnome, cBot, CSPro, CytoChip, DesignStudio, Epicentre, ForenSeq, Genetic Energy, GenomeStudio, GoldenGate, HiScan, HiSeq, HiSeq X, Infinium,
Slide 2: Safe Harbor Statement
Safe Harbor Statement This communication may contain statements that are forward-looking. Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected o
Slide 3: Q3 2016 Overview
Q3 2016 Overview Revenue miss driven by lower than forecasted sequencing instruments Q3’16 Q3’15 Δ Revenue1 $607 $550 10% Gross Margin2 72.5% 73.2% (70 bps) Operating Margin2 34.4% 36.0% (160 bps) EPS3 $0.97 $0.80 21% ● Revenue growth driven by sequencing consumables and microarrays ● Increased inve
Slide 4: Q3 2016 Revenue Growth Rates
Q3 2016 Revenue Growth Rates Sequencing consumables and microarrays fueled growth Q3 YoY%1 Sequencing2 Microarray2 Total Instruments (26%) N/P1 (23%) Consumables 24% 21% 23% Service and Other N/P1 N/P1 18% Total 7% >35% 10% ● Consumables accounted for 65% of total revenue ● Sequencing consumable rev
Slide 5: Q3 2016 Consolidated Non-GAAP P&L
Q3 2016 Consolidated Non-GAAP P&L Variable compensation adjustment drove earnings result $ in millions, except % and per share data Q3’16 Q3’15 Δ Revenue $607 $550 10% GM%1 72.5% 73.2% (70 bps) R&D%1 18.8% 16.4% 240 bps SG&A%1 19.3% 20.9% (160 bps) OM%1,2 34.4% 36.0% (160 bps) Stock Based Compensati
Slide 6: Balance Sheet / Cash Flow
Balance Sheet / Cash Flow Strong cash position $ in millions, except DSO Q3’16 Q2’16 Cash & Investments $1,536 $1,425 Inventory $312 $311 Accounts Receivable (DSO) $382 (57) $372 (56) Principal Amount of Convertible Notes Outstanding $1,150 $1,150 Operating Cash Flow $150 $217 Free Cash Flow $93 $14
Slide 7: 2016 Guidance
2016 Guidance4 Updated revenue and EPS guidance Q4 2016 2016 Revenue1 GAAP EPS2 Flat to slightly up sequentially $2.92 - $2.97 Non-GAAP EPS2,3 $3.27 - $3.32 1. Revenue guidance assumes constant currency rates from November 1, 2016 2. Includes $0.10 and $0.30 of dilution from Helix and GRAIL, respect
Slide 8: 2016 Non-GAAP EPS Review
2016 Non-GAAP EPS1 Review GRAIL share count impacts Illumina’s FY’16 EPS by $0.08 Quarterly breakdown Non-GAAP EPS1 GAAP EPS Q1'16 2016 $0.71 $0.60 Q2’16 $0.86 $0.82 Q3’16 $0.97 $0.87 Q4’16 Assumption2 $0.81 - $0.86 $0.71 - $0.76 2H’16 GRAIL Dilution Adjustment3 ($0.08) ($0.08) FY’16 Guidance4 $3.27
Slide 9: 2016 Non-GAAP EPS Guidance Update
2016 Non-GAAP EPS Guidance Update Updated guidance largely driven by lower FY’16 revenue $0.08 $0.35 $0.08 $0.11 $3.48 - $3.58 $3.27 - $3.32 Previous EPS 2H Revenue Opex and SBC Variable Comp Incremental GRAIL Updated EPS 1,2,3 Guidance 1,3 Reduction Savings Benefit Full Year Dilution Guidance 1. No
Slide 10: Appendix: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations 10
Slide 11: Reconciliation Between GAAP and Non-GAAP Earnings Per Share
Reconciliation Between GAAP and Non-GAAP Earnings Per Share Attributable to Illumina Stockholders: Three Months Ended Nine Months Ended October 2, September 27, October 2, September 27, 2016 2015 2016 2015 GAAP earnings per share attributable to Illumina stockholders - diluted $ 0.87 $ 0.79 $ 2.27 $
Slide 12: Footnotes to the Reconciliation Between GAAP and Non-GAAP Measures
Footnotes to the Reconciliation Between GAAP and Non- GAAP Measures: (a) Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. (b) Contingent compensation expense relates to contingent payments f
Slide 13: Reconciliation Between GAAP and Non-GAAP Results of Operations as a Percent of Revenue
Reconciliation Between GAAP and Non-GAAP Results of Operations as a Percent of Revenue: Three Months Ended Nine Months Ended October 2, September 27, October 2, September 27, 2016 2015 2016 2015 GAAP gross profit $ 426,150 70.2 % $ 387,539 70.4 % $ 1,247,009 70.1 % $ 1,138,931 69.9 % Stock-based com
Slide 14: Footnotes to the Reconciliation Between GAAP and Non-GAAP Results of Operations
Footnotes to the Reconciliation Between GAAP and Non- GAAP Results of Operations: (a) 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 the company’s product
Slide 15: Reconciliation of Non-GAAP Financial Guidance
Reconciliation of Non-GAAP Financial Guidance The company’s future performance and financial results are subject to risks and uncertainties, and actual results could differ materially from the guidance set forth below. More information on potential factors that could affect the company’s financial r
Slide 16: Footnotes to the Reconciliation of Non-GAAP Financial Guidance
Footnotes to the Reconciliation of Non-GAAP Financial Guidance: (a) Non-cash interest expense is calculated in accordance with the authoritative accounting guidance for convertible debt instruments that may be settled in cash. (b) Legal contingencies represent a reversal of previously recorded expen