Illumina, Inc. · NASDAQ:ILMN
Illumina — Q3 2024 Earnings Presentation
42 slides from Illumina's earnings presentation, Nov 4, 2024
Slide 1: Q3 2024 Earnings Presentation
Q3 2024 Earnings Presentation November 4, 2024 © 2024 Illumina, Inc. All rights reserved.
Slide 2: Jacob Thaysen, Ankur Dhingra, Salli Schwartz
Jacob Thaysen Ankur Dhingra Salli Schwartz Chief Executive Officer Chief Financial Officer Head of Investor Relations 2
Slide 3: Cautionary Notes
Cautionary Notes This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) changes in the rate of gr
Slide 4: Jacob Thaysen
Jacob Thaysen Chief Executive Officer 4
Slide 5: Illumina Q3'24 Results
Illumina Q3’24 Results Strong Financial Performance Revenue In-Line With Expectations ▪ Expanding margins and driving earnings ▪ Growing utilization of NovaSeq X ▪ Bringing next phase of sequencing innovation to our customers ~$1.1B Revenue 5
Slide 6: Illumina Q3'24 Regional Revenue
Illumina Q3’24 Regional Revenue $609M $291M (6%) YoY +12% YoY; +11% CC 56% 27% $1.1B Illumina Revenue $75M $105M (23%) YoY; (22%) CC 10% +7% YoY; +9% CC 7% Americas Europe AMEA Greater China Note: See Appendix for statement regarding use of non-GAAP financial measures. Note: CC = Constant Currency,
Slide 7: Q3'24 NovaSeq X Plus Updates
Q3’24 NovaSeq X Plus Updates Q3’24 Instrument Placements Cumulative NovaSeq X Revenue 527 NovaSeq X Plus Installed Base $1B+ Surpassed in Q3’24 58 Q3’24 Placements ~40% Clinical Shipments Across instruments, consumables, service & other 7
Slide 8: Illumina Q3'24 Results
Illumina Q3’24 Results Operating Margin & Diluted EPS Above Expectations 22.6% Non-GAAP Operating Margin $1.14 Non-GAAP Diluted Earnings per Share In Q3’24, we began executing on the capital allocation strategy we laid out during our August Strategy Update Note: See Appendix for statement regarding
Slide 9: FY'24 Guidance
FY’24 Guidance Current (as of November 4, 2024) Prior (August 8, 2024) Revenue Decline YoY (~3%) (2%)-(3%) Including Q4’24 ~$1.07B Non-GAAP Operating Margin 21%-21.5% 20.5%-21% Non-GAAP Diluted EPS $4.05-$4.15 $3.80-$3.95 Note: See Appendix for statement regarding use of non-GAAP financial measures.
Slide 10: Priorities to Guide Strategy Execution
Priorities to Guide Strategy Execution FY’25-FY’27 Financial Targets Summary From August 13, 2024 Strategy Update Accelerating to HSD 1 Deeper Customer Collaboration Revenue growth by 2027 Non-GAAP Operating Margin 500+ bps expansion 2 Continuous Innovation Non-GAAP Double digit to teens Diluted EPS
Slide 11: Deeper Customer Collaboration
Deeper Customer Collaboration Providing a range of targeted solutions to serve the diverse needs of our customers Shifting how we interact and collaborate with 1 customers to support their ambitions Customer Initiatives Giving customers clear line of sight to the 2 significant innovations in our pip
Slide 12: Continuous Innovation
Continuous Innovation Innovation driven and shaped by what customers tell us they need Announced MiSeq i100 Constellation Mapped Read Technology In Development ▪ Redefining the extent of information created by SBS chemistry ✓ Room-temperature shipping ▪ Eliminates standard library prep and performed
Slide 13: Operational Excellence
Operational Excellence Building a foundation that powers our long-term success, regardless of the topline Enhancing Productivity Operational Excellence We have made progress Optimizing Investment Spend building a culture where every employee contributes to operational excellence Smart Capital Alloca
Slide 14: Ankur Dhingra
Ankur Dhingra Chief Financial Officer 14
Slide 15: Core Illumina Q3'24 Financials
Core Illumina Q3’24 Financials CORE ILLUMINA REVENUE SEQUENCING CONSUMABLES REVENUE $1.08B $741M (2%) (2%) +7% YoY YoY (CC) YoY In line with expectations driven by strong Driven by continued strong uptake in growth consumables revenue offset by NovaSeq X consumables instruments revenue declining aga
Slide 16: Q3'24 NovaSeq X Transition Update
Q3’24 NovaSeq X Transition Update Acceleration in NovaSeq X Transition Pace of Continued Transition from NovaSeq 6000 Q3’24 Q3’24 >55% >35% Of total HT Gb shipped Of total HT consumables revenue attributed to the NovaSeq X Series attributed to the NovaSeq X Series By mid-2025 Almost Half Of HT seque
Slide 17: Q3'24 Total Sequencing Activity
Q3’24 Total Sequencing Activity Gigabase growth on connected high- and mid-throughput instruments >40% YoY Growth Robust growth from both clinical & research customers Note: Reflects total sequencing Gb output on connected high- and mid-throughput instruments. 17
Slide 18: Core Illumina Q3'24 Financials (cont'd.)
Core Illumina Q3’24 Financials (cont’d.) SEQUENCING INSTRUMENTS REVENUE SEQUENCING SERVICE & OTHER $104M $150M (42%) +6% YoY YoY Driven by: Driven by an increase in revenue from strategic partnerships as well as higher instrument service contract revenue on a growing ▪ Lower NovaSeq X placements, co
Slide 19: Core Illumina Q3'24 Additional P&L Results
Core Illumina Q3’24 Additional P&L Results NON-GAAP GROSS MARGIN DRIVERS Operational excellence initiatives that improve ~Half Sustainable productivity and deliver cost savings 70.5% 450 bps YoY ~Half Favorable revenue mix of Variable QoQ sequencing consumables Note: See Appendix for statement regar
Slide 20: Core Illumina Q3'24 Additional P&L Results (cont'd.)
Core Illumina Q3’24 Additional P&L Results (cont’d.) NON-GAAP OPERATING EXPENSES NON-GAAP OPERATING MARGIN1 $517M 22.6% ~Flat QoQ 10 bps YoY Includes the additional headcount and Above guidance driven by strong operational expenses resulting from our acquisition of performance across gross margin an
Slide 21: Core Illumina Q3'24 Additional P&L Results (cont'd.)
Core Illumina Q3’24 Additional P&L Results (cont’d.) NON-GAAP OTHER EXPENSE NON-GAAP TAX RATE Issued $500M debt at 4.65% coupon In Q3, received benefit of a few one- ($14M) that was used, along with cash on hand, to redeem $750M DDTL 21.0% time credits as we filed our return for last year NON-GAAP N
Slide 22: Core Illumina Cash Flow & Balance Sheet Items Q3'24
Core Illumina Cash Flow & Balance Sheet Items Q3’24 CASH FLOW CAPITAL FREE FROM OPERATIONS EXPENDITURES CASH FLOW $316M $32M $284M Note: See Appendix for statement regarding use of non-GAAP financial measures. 22
Slide 23: Capital Allocation Actions
Capital Allocation Actions Acquired Share Repurchase Program 770k $98M $127.71 Illumina Shares Total Cost Average Price per Share Debt Refinancing Cash, Cash Equivalents & Short-Term Investments Debt issuance with 4.65% coupon was used, $500M along with cash on hand, to redeem in full the higher cos
Slide 24: Summary
Summary ✓ Revenue in-line with expectations ✓ Transition of high-throughput sequencing to the NovaSeq X is going well ✓ Announced breakthrough products in low throughput ✓ Made significant progress towards stated goal of margin expansion ✓ Have been deploying our strong cash flow towards revenue gro
Slide 25: Core Illumina Guidance for FY'24
Core Illumina Guidance for FY’24 As of 11/04/2024 Revenue Total Revenue Sequencing Instruments Sequencing Consumables Down (~3%) Mid-30s % Upper end of Expect Q4 Revenue of ~$1.07 billion decline LSD % growth Non-GAAP Operating Margin Non-GAAP Tax Rate Non-GAAP EPS 21%-21.5% ~24% $4.05-$4.15 Note: S
Slide 26: Jacob Thaysen
Jacob Thaysen Chief Executive Officer 26
Slide 27: Closing Remarks
Closing Remarks Excited for the early progress and the momentum to drive the industry forward ✓ Refocused the company on our strong core business and launched our new strategy ✓ Reset leadership team and made structural changes to support our customer-first orientation ✓ Increasingly embedding opera
Slide 28: Slide 28
Slide 29: Q&A
Q&A Jacob Thaysen Ankur Dhingra 29
Slide 30: Our Mission
Our Mission: To improve human health by unlocking the power of the genome
Slide 31: Appendix
Appendix © 2024 Illumina, Inc. All rights reserved.
Slide 32: Statement regarding use of non-GAAP financial measures
Statement regarding use of non-GAAP financial measures The company reports non-GAAP results for diluted earnings per share, net income, gross margin, operating expenses, including research and development expense, selling general and administrative expense, legal contingencies and settlement, and go
Slide 33: Condensed Statements of Cash Flows
Illumina, Inc. Condensed Statements of Cash Flows (In millions) (unaudited) TABLE 1: CONSOLIDATED STATEMENTS OF CASH FLOWS AND FREE CASH FLOWS: Three Months Ended Nine Months Ended September 29, October 1, September 29, October 1, 2024 2023 2024 2023 Net cash provided by operating activities $ 316 $
Slide 34: Results of Operations - Constant Currency Revenue
Illumina, Inc. Results of Operations - Constant Currency Revenue (Dollars in millions) (unaudited) TABLE 1: CORE ILLUMINA - CONSTANT CURRENCY REVENUE: Three Months Ended Nine Months Ended September 29, October 1, % September 29, October 1, % 2024 2023 Change 2024 2023 Change Core Illumina revenue $
Slide 35: Results of Operations - Revenue by Region
Illumina, Inc. Results of Operations - Revenue by Region (Dollars in millions) (unaudited) Three Months Ended Nine Months Ended September 29, October 1, % Change September 29, October 1, % Change 2024 2023 2024 2023 AMR revenue - Core Illumina $ 609 $ 650 (6)% $ 1,812 $ 1,879 (4)% Less: Hedge gains
Slide 36: Results of Operations - Non-GAAP
Illumina, Inc. Results of Operations - Non-GAAP (In millions, except per share amounts) (unaudited) TABLE 1: CORE ILLUMINA - RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE: Three Months Ended Nine Months Ended September 29, September 29, 2024 2024 GAAP earnings per share - diluted $
Slide 37: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (In millions, except per share amounts) (unaudited) TABLE 3: CONSOLIDATED - RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE: Three Months Ended Nine Months Ended September 29, October 1, September 29, October 1, 2024 2
Slide 38: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Three Months Ended September 29, 2024 October 1, 2023 Core/Consolidated Core Illumina GRAIL Elims Consolidated GAA
Slide 39: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Nine Months Ended September 29, 2024 Core Illumina GRAIL Elims Consolidated GAAP gross profit (loss) (b) $ 2,181 6
Slide 40: Results of Operations - Non-GAAP (continued)
lllumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 5: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Nine Months Ended October 1, 2023 Core Illumina GRAIL Elims Consolidated GAAP gross profit (loss) (b) $ 2,161 64.7
Slide 41: Notes to non-GAAP tables
All amounts in tables are rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided. Percentages of revenue are calculated based on the revenue of the respective segment. (a) Non-GAAP gross profit, included within
Slide 42: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 6: CORE ILLUMINA - RECONCILIATION OF GAAP AND NON-GAAP TAX PROVISION: Three Months Ended Nine Months Ended September 29, September 29, 2024 2024 GAAP tax provision $ 77 10.8 % $ 158 16.9 % Incremental