Illumina, Inc. · NASDAQ:ILMN
Illumina — Q4 2023 Earnings Presentation
38 slides from Illumina's earnings presentation, Feb 8, 2024
Slide 1: Q4 2023 Earnings Presentation
Q4 2023 Earnings Presentation February 8, 2024 © 2024 Illumina, Inc. All rights reserved.
Slide 2: Presenters: Jacob Thaysen, Joydeep Goswami, Salli Schwartz
Jacob Thaysen Joydeep Goswami Salli Schwartz Chief Executive Officer Chief Financial Officer, Head of Chief Strategy & Investor Relations Corporate Development Officer 2
Slide 3: Cautionary Notes on Forward Looking Statements
Cautionary Notes on Forward Looking Statements 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:
Slide 4: Jacob Thaysen
Jacob Thaysen Chief Executive Officer 4
Slide 5: Highlights & Q4'23 Financial Results
Highlights & Q4’23 Financial Results FY’23 HIGHLIGHTS CONSOLIDATED REVENUE Began shipping NovaSeq™ X instruments, our most Delivered higher-than-expected successful high-throughput launch in history Q4’23 revenue 352 FY’23 SHIPMENTS ~$1.12B Q4'23 REVENUE Compared to 330-340 expected 5
Slide 6: Core Illumina 2023 Regional Revenue
Core Illumina 2023 Regional Revenue $576M $315M Flat YoY 17% YoY; 19% CC $82M $124M (13%) YoY; (17%) CC (1%) YoY; +2% CC Americas Europe AMEA Greater China Note: See Appendix for reconciliations of these GAAP and non-GAAP financial measures. Note: CC = Constant Currency, net of the effects of hedgin
Slide 7: Outlook for 2024
Outlook for 2024 Expect 2024 results to look Priorities to position Illumina for accelerated very similar to 2023 growth and profitability as market conditions improve 2024 Expectations 1 Drive Our Top Line Customers expected to remain cautious Encouraging macro headlines, but have not yet trans
Slide 8: Drive Our Top Line
Drive Our Top Line Grow Installed Base Accelerate Instrument Utilization 2023 2024 NOVASEQ X REAGENT KIT >400 Support installed base as customers launch larger, more sequencing-intensive projects FLOW CELL LAUNCH Anticipate additional orders from: ‒ NovaSeq™ 6000 conversions 10B Mar. 2023 FY’23
Slide 9: Deliver Operational Excellence
Deliver Operational Excellence Launched multi-year effort to deliver Taking steps to manage costs and operational excellence deliver sustained growth and margins Greater rigor throughout the P&L while Recent role reductions sustaining innovation and growth Focused on: ~12% ‒ Improving margins th
Slide 10: Resolve GRAIL as Quickly as Possible
Resolve GRAIL as Quickly as Possible Announced decision to divest GRAIL Moving with speed to divest GRAIL Divestiture Announcement Form 10 Dec. 17: Announced decision to divest GRAIL December: Confidentially filed with the U.S. SEC Transaction terms Advisors actively moving process forward on parall
Slide 11: Joydeep Goswami
Joydeep Goswami Chief Financial Officer, Chief Strategy & Corporate Development Officer 11
Slide 12: Consolidated Q4 2023 Financials
Consolidated Q4 2023 Financials REVENUE NON-GAAP TAX RATE2 $1.12B Q4'23 FY’233 +4% 55.4% 41.8% YoY Growth +4% Flat YoY Growth (CC) QoQ Revenue NON-GAAP NON-GAAP NON-GAAP WEIGHTED AVERAGE NET INCOME1 DILUTED EPS1 DILUTED SHARES $22M $0.14 ~159 Million Note: See Appendix for reconciliations of these G
Slide 13: Core Illumina Q4 2023 Financials
Core Illumina Q4 2023 Financials REVENUE CONSUMABLES REVENUE $1.10B +3% YoY Growth +3% YoY Growth (CC) $687M Flat YoY Revenue Includes ~5 percentage pts anticipated reductions YoY from: Driven by: Stronger-than-expected NovaSeq X™ consumables purchases Offset by anticipated reductions in NovaSeq
Slide 14: Core Illumina Q4 2023 Financials (Cont'd.)
Core Illumina Q4 2023 Financials (Cont’d.) OTHER CORE ILLUMINA REVENUE INSTRUMENTS HIGHLIGHTS INSTRUMENTS NovaSeq™ X $161M +10% 390 79 352 Revenue YoY Increase Orders since Q4’23 FY’23 Launch Shipments Installed Base SERVICE & OTHER NovaSeq™ 6000 $152M +16% ~1,770 ~110 Expect deactivations to Revenu
Slide 15: Installed Base for FYE 2023
Installed Base for FYE 2023 High-Throughput1 Mid-Throughput Low-Throughput As of 12/31/2023 NovaSeq™ X NovaSeq 6000 NextSeq™ 1k/2k NextSeq 500/550 MiSeq™ | MiniSeq™ | iSeq™ 100 Net Installed Base Installed Base: 352 ~1,770 ~2,180 ~4,310 ~12,785 Avg. Pull-Through2: Not Disclosed ~$870K ~$115K ~$105K
Slide 16: Core Illumina Q4 2023 Additional P&L Results
Core Illumina Q4 2023 Additional P&L Results NON-GAAP GROSS MARGIN NON-GAAP OPERATING EXPENSES 64.7% $507M 260 bps YoY $21 Million YoY Primarily driven by mix of lower margin Primarily due to continued expense reduction strategic partnership revenue, lower initiatives and lower performance-based sto
Slide 17: GRAIL Q4 2023 Financial Results
GRAIL Q4 2023 Financial Results REVENUE NON-GAAP OPERATING EXPENSES $30M $167M 30% YoY $1 Million YoY Primarily driven by adoption of Galleri® Note: See Appendix for reconciliations of these GAAP and non-GAAP financial measures. 17
Slide 18: Cash Flow & Balance Sheet Items Q4 2023
Cash Flow & Balance Sheet Items Q4 2023 CASH FLOW FROM OPERATIONS FREE CASH FLOW $224M $173M CAPITAL EXPENDITURES CASH, CASH EQUIVALENTS AND SHORT- TERM INVESTMENTS $51M ~$1.05B Note: See Appendix for reconciliations of these GAAP and non-GAAP financial measures. 18
Slide 19: Guidance for Full Year 2024
Guidance for Full Year 2024 CORE ILLUMINA Sequencing Revenue1 Revenue ~Flat ~Flat Seq. Instruments Decline High Teens Seq. Consumables Growth Low Single Digits ANNUAL PULL-THROUGH2 NON-GAAP OPERATING MARGIN ~20% NovaSeq™ 6000: $700K-$800K MiSeq™: $30K-$40K NextSeq™ 1k/2k: $80K-$130K MiniSeq™
Slide 20: Guidance for First Quarter 2024
Guidance for First Quarter 2024 CORE ILLUMINA Revenue Non-GAAP Non-GAAP Decrease1 Operating Margin Other Expense, Net (3.5%) – (4.5%) ~18% ~$12M Note: See Appendix for statement regarding use of non-GAAP financial measures. 1 Year-over-year decrease; expect revenue in the range of $1.03B to $1.04B.
Slide 21: Jacob Thaysen
Jacob Thaysen Chief Executive Officer 21
Slide 22: Success in 2024 & Years Ahead
Success in 2024 & Years Ahead Deepen Customer Relationships Drive Innovation Focused on Customer Priorities Seek greater customer collaboration and partnerships to Evolving our sequencing platforms drive adoption of NGS Delivering greater sample-to-answer solutions by Support customers as th
Slide 23: Slide 23
Slide 24: Our Mission: To improve human health by unlocking the power of the genome
Our Mission: To improve human health by unlocking the power of the genome
Slide 25: Appendix
Appendix © 2024 Illumina, Inc. All rights reserved.
Slide 26: 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, and from time to time, as applicable, lega
Slide 27: Forward-looking statements (continued)
assumptions, estimates, and judgments and (xxii) legislative, regulatory and economic developments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public confere
Slide 28: Condensed Consolidated Statements of Cash Flows
Illumina, Inc. Condensed Consolidated Statements of Cash Flows (In millions) (unaudited) Three Months Ended Year Ended December 31, January 1, December 31, January 1, 2023 2023 2023 2023 Net cash provided by operating activities $ 224 $ 147 $ 478 $ 392 Net cash used in investing activities (84) (102
Slide 29: Results of Operations - Revenue by Segment
Illumina, Inc. Results of Operations - Revenue by Segment (Dollars in millions) (unaudited) Three Months Ended Year Ended December 31, January 1, % Change December 31, January 1, % Change 2023 2023 2023 2023 Consolidated revenue $ 1,122 $ 1,083 4% $ 4,504 $ 4,584 (2)% Less: Hedge gains 10 21 18 53 C
Slide 30: Results of Operations - Revenue by Region
Illumina, Inc. Results of Operations - Revenue by Region (Dollars in millions) (unaudited) Three Months Ended Year Ended December 31, January 1, December 31, January 1, % Change % Change 2023 2023 2023 2023 AMR revenue - Core Illumina $ 576 $ 577 — $ 2,455 $ 2,448 — Less: Hedge gains 1 1 2 2 AMR rev
Slide 31: Results of Operations - Non-GAAP
Illumina, Inc. Results of Operations - Non-GAAP (In millions, except per share amounts) (unaudited) TABLE 1: CONSOLIDATED RECONCILIATION BETWEEN GAAP AND NON-GAAP DILUTED (LOSS) EARNINGS PER SHARE: Three Months Ended Year Ended December 31, January 1, December 31, January 1, 2023 2023 2023 2023 GAAP
Slide 32: Reconciliation footnotes
(b) Refer to the Itemized Reconciliations between GAAP and Non-GAAP Results of Operations for the components of these amounts. (c) Amounts represent the impact of GRAIL pre-acquisition net operating losses on GILTI and the utilization of U.S. foreign tax credits. (d) Incremental non-GAAP tax expense
Slide 33: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 3: ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Three Months Ended December 31, 2023 Core Illumina GRAIL Eliminations Consolidated GAAP gross profit
Slide 34: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 3 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Three Months Ended January 1, 2023 Core Illumina GRAIL Eliminations Consolidated GAAP gr
Slide 35: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 3 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Year Ended December 31, 2023 Core Illumina GRAIL Eliminations Consolidated GAAP gross pr
Slide 36: Results of Operations - Non-GAAP (continued)
lllumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 3 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE: Year Ended January 1, 2023 Core Illumina GRAIL Eliminations Consolidated GAAP gross prof
Slide 37: Non-GAAP footnotes
(a) Non-GAAP gross profit, included within non-GAAP operating profit (loss), is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non- GAAP operating profit (loss) and non-GAAP other (expense) income
Slide 38: Results of Operations - Non-GAAP (continued)
Illumina, Inc. Results of Operations - Non-GAAP (continued) (Dollars in millions) (unaudited) TABLE 4: CONSOLIDATED ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP TAX PROVISION (BENEFIT): Three Months Ended Year Ended December 31, December 31, 2023 2023 GAAP tax provision $ 8 (4.9)% $ 44 (3.9)% I