Illumina, Inc. · NASDAQ:ILMN

Illumina — Q1 2017 Earnings Presentation

13 slides from Illumina's earnings presentation, Apr 25, 2017

1. Slide 1: Illumina Q1 2017 Financial Results

   Illumina Q1 2017 Financial Results April 25, 2017 © 2017 Illumina, Inc. All rights reserved.

2. 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

3. Slide 3: Q1 2017 Overview

   Q1 2017 Overview Revenue exceeded expectations $ in millions, except % and per share data1 Q1’17 Q1’16 Δ Revenue $598 $572 5% Gross Margin2 66.4% 71.3% (490 bps) Operating Margin2 17.5% 23.9% (640 bps) EPS3 $0.64 $0.71 (10%) ● Revenue growth driven by consumables and services ● Lower gross margin an

4. Slide 4: Q1 2017 Revenue Growth Rates

   Q1 2017 Revenue Growth Rates Consumables and services fueled growth Q1 YoY% Sequencing1 Microarray1 Total Instruments (17%) N/P2 (15%) Consumables 7% 6% 7% Service and Other N/P2 N/P2 20% Total 2% 17% 5% ● Consumables accounted for 65% of total revenue ● Sequencing consumable revenue was approximate

5. Slide 5: Q1 2017 Consolidated Non-GAAP P&L

   Q1 2017 Consolidated Non-GAAP P&L $ in millions, except % and per share data1 Q1’17 Q1’16 Δ Revenue $598 $572 5% GM%2 66.4% 71.3% (490 bps) R&D%2 23.3% 21.7% 160 bps SG&A%2 25.6% 25.7% (10 bps) OM%2,3 17.5% 23.9% (640 bps) Tax Rate 24.4% 25.5% (110 bps) Consolidated Net Income $81 $103 (21%) Add: Ne

6. Slide 6: Balance Sheet / Cash Flow

   Balance Sheet / Cash Flow Strong cash position $ in millions, except DSO Q1’17 Q4’16 Cash & Investments $1,778 $1,559 Inventory $299 $300 Accounts Receivable (DSO) $368 (56) $381 (56) Principal Amount of Convertible Notes Outstanding $1,150 $1,150 Operating Cash Flow $168 $262 Free Cash Flow $85 $18

7. Slide 7: 2017 Guidance

   2017 Guidance Double-digit revenue growth in FY’17 Q2’171 20171 Revenue2 Revenue2 ~7% YoY 10%–12% YoY GAAP EPS GAAP EPS3 $0.56 - $0.61 $5.26 - $5.36 Non-GAAP EPS4 Non-GAAP EPS3,4 $0.65 - $0.70 $3.60 - $3.70 1. Guidance given via 8-k and press release on April 25, 2017 2. Assumes constant currency ra

8. Slide 8: Appendix: Non-GAAP Reconciliations

   Appendix Non-GAAP Reconciliations 8

9. Slide 9: 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 2, April 3, 2017 2016 GAAP earnings per share attributable to Illumina stockholders - diluted $ 2.52 $ 0.60 Gain on deconsolidation of GRAIL (a) (3.07) — Impairment of acquired

10. Slide 10: Footnotes to the Reconciliation Between GAAP and Non-GAAP Measures

    Footnotes to the Reconciliation Between GAAP and Non- GAAP Measures: (a) The company sold a portion of its interest in GRAIL, resulting in the deconsolidation of GRAIL. The $150 million tax effect of the gain is included in incremental non-GAAP tax expense. Subsequent to the transaction, the company

11. Slide 11: 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 2, April 3, 2017 2016 GAAP gross profit $ 368 61.5 % $ 397 69.4 % Impairment of acquired intangible asset 18 3.0 % — — Amortization of acquired intangible asset 11 1.9 % 10 1.9 % Non-GAAP

12. Slide 12: 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

13. Slide 13: 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

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