Illumina, Inc. · NASDAQ:ILMN
Illumina — Q1 2016 Earnings Presentation
17 slides from Illumina's earnings presentation, May 3, 2016
Slide 1: Illumina Q1 2016 Financial Results
Illumina Q1 2016 Financial Results May 3, 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, iScan
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: Q1 2016: Slower start to the year than expected
Q1 2016 Slower start to the year than expected Q1’16 Q1’15 Δ Revenue1 $572 $539 6% Gross Margin2 71.7% 72.2% (50 bps) Operating Margin2 30.1% 39.3% (920 bps) EPS3 $0.71 $0.91 (22%) ● Majority of the shortfall due to orders received that did not translate to revenue (timing of order, execution, deal
Slide 4: Underlying Drivers of HiSeq Miss
Underlying Drivers of HiSeq Miss No dominant customer themes Drivers Cited by Customer What Customers are Saying (% of response) Other Waiting for internal Company 8% approvals re-organization Outsourcing Unique 8% customer situations 29% Terms delay 10% Contemplating Purchase decision lease versus
Slide 5: Utilization of High-Throughput Instruments
Utilization of High-Throughput Instruments Market capacity1 not impacting HiSeq demand Quarterly Capacity Utilization 51% 48% 47% 48% 45% 43% 38% 39% 44% 44% 35% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 Market Capacity (Gb) Capacity Utilization % Capacity Utilization % (Normalized) Normalized ca
Slide 6: Q1 2016 Revenue Growth Rates
Q1 2016 Revenue Growth Rates Sequencing consumables and services fueled revenue growth Q1 YoY % Sequencing2 Microarray2 Total Instruments (21%) N/P1 (20%) Consumables 24% (7%) 17% Service and Other N/P1 N/P1 12% Total 7% 1% 6% ● Consumables accounted for 63% of total revenue ● Sequencing consumables
Slide 7: Q1 2016 Non-GAAP P&L
Q1 2016 Non-GAAP P&L Dilution from GRAIL and Helix was $0.04 and $0.02, respectively $ in millions, except % and per share data Q1’16 Q1’15 Δ Revenue $572 $539 6% GM %1 71.7% 72.2% (50 bps) R&D %1 19.8% 14.9% 490 bps SG&A %1 21.9% 18.0% 390 bps OM %1,2 30.1% 39.3% (920 bps) Stock Based Compensation
Slide 8: Balance Sheet / Cash Flow
Balance Sheet / Cash Flow Strong cash position $ in millions, except DSO Q1’16 Q4’15 Cash & Investments $1,343 $1,386 Inventory $288 $271 Accounts Receivable (DSO) $403 (64) $386 (64) Principal Amount of Convertible Notes Outstanding $1,150 $1,226 Operating Cash Flow $40 $240 Free Cash Flow ($14) $2
Slide 9: 2016 Guidance
2016 Guidance5 Updated revenue growth of 12% YoY Q2 2016 Revenue1 Revenue1,2 $590M - $595M +12% YoY EPS3 EPS3,4 $0.72 - $0.74 $3.35 - $3.45 1. Revenue guidance assumes constant currency rates from May 3, 2016 2. The impact of foreign exchange is expected to be neutral assuming constant currency rate
Slide 10: Investing for Long-Term Growth
Investing for Long-Term Growth GRAIL and Helix account for 300 basis points of operating margin dilution ~1%2 34.5%2 ~2%2 $0.10 31.5%2 $0.20 $3.65–$3.75 $3.35–$3.45 FY'16 non-GAAP EPS GRAIL Helix FY'16 non-GAAP EPS 1,3 Guidance 1,3 Guidance Core ILMN 1. Non-GAAP attributable to Illumina stockholders
Slide 11: Appendix: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations 11
Slide 12: 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 April 3, March 29, 2016 2015 GAAP earnings per share attributable to Illumina stockholders - diluted $ 0.60 $ 0.92 Amortization of acquired intangible assets 0.09 0.09 Non-cash inter
Slide 13: 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) Legal contingencies represent charges related to patent litigati
Slide 14: 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 April 3, March 29, 2016 2015 GAAP gross profit $ 397,054 69.4 % $ 375,027 69.6 % Stock-based compensation expense 2,624 0.5 % 2,611 0.5 % Amortization of acquired intangible assets 10,496 1.8 %
Slide 15: 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 16: 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 17: Footnotes to the Reconciliation of Non-GAAP Financial Guidance
Footnotes to the Reconciliation of Non-GAAP Financial Guidance: (a) Operating margin implied at the mid-point of guidance provided for non-GAAP diluted earnings per share. (b) Legal contingencies represent charges related to patent litigation. (c) Contingent compensation expense relates to contingen