01—Abstract
Summary
Summary of the 10-Q filed May 9, 2025. Cited figures are marked; the original filing is the authoritative source.
Illumina, Inc. reported first-quarter 2025 (three months ended March 30, 2025) total revenue of $1,041 milliona, down from $1,076 million in Q1 2024, with the decline attributed mainly to lower service and other revenue, including decreased revenue from strategic partnerships.
Gross margin was 65.6% versus 62.0% a year earlier, and income from operations was $164 millionb compared with a loss from operations of $(111) million in the prior year. Net income was $131 million, or $0.82 diluted EPS, compared with a net loss of $(126) million, or $(0.79) per share. The prior-year comparison was affected by the June 2024 spin-off of GRAIL, which removed GRAIL's results from the current period.
The company flagged several headwinds. Illumina was added to China's unreliable entities list in February 2025 and was notified in March 2025 that it may no longer export sequencing instruments into China; Greater China revenue was $72 millionc in Q1 2025. Management estimates the April 2025 tariffs will cost approximately $85 million under the current tariff environment, with partial mitigation expected in 2025 and a fuller aim in 2026.
To offset these pressures, the company implemented an incremental $100 milliond cost reduction program for 2025. On the balance sheet, cash, cash equivalents and short-term investments totaled $1,237 million, and term debt was $1,990 million net carrying amount.
During the quarter Illumina repurchased $200 million of common stock, and $1.184 billion remained available under its repurchase authorization. The SEC staff also informed the company on May 1, 2025 that it had concluded its investigation of Illumina and did not intend to recommend enforcement action.
02—Key points
Key Highlights
- Total revenue of $1,041 million, down from $1,076 million in Q1 2024; service and other revenue declined to $161 million from $200 million.
- Gross margin improved to 65.6% from 62.0%, driven primarily by the GRAIL spin-off in Q2 2024.
- Income from operations of $164 million, versus a loss from operations of $(111) million in Q1 2024; net income of $131 million, or $0.82 diluted EPS.
- Greater China revenue of $72 million, and Illumina was added to China's unreliable entities list, with notice that it may no longer export sequencing instruments into China.
- Estimated cost impact of April 2025 tariffs of approximately $85 million, with partial mitigation expected in 2025.
- Cash, cash equivalents and short-term investments of $1,237 million; $200 million used for share repurchases in Q1 2025, with $1.2 billion of authorization remaining.
- SEC staff concluded its investigation of Illumina on May 1, 2025 and did not intend to recommend enforcement action.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2025, Illumina kept $0.13.
- Revenue$1.04B100.0%
- Cost of revenue−$358.0M34.4%
- Gross profit$683.0M65.6%
- Operating costs−$519.0M49.9%
- Operating income$164.0M15.8%
- Interest, other & tax−$33.0M3.2%
- Net income$131.0M12.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2025filed May 9, 2025Financial Statements
Q1 FY2025 against Q1 FY2024
| Line item | Q1 FY2025Q1 FY2024 | Change |
|---|---|---|
| Revenue | $1.04B$1.08B | −3.3% |
| Cost of Revenue | $358.00M$409.00M | −12.5% |
| Gross Profit | $683.00M$667.00M | +2.4% |
| R&D Expenses | $252.00M$339.00M | −25.7% |
| SG&A Expenses | $267.00M$439.00M | −39.2% |
| Operating Expenses | $519.00M$778.00M | −33.3% |
| Operating Income | $164.00M-$111.00M | +247.7% |
| Net Income | $131.00M-$126.00M | +204.0% |
| EPS (Basic) | $0.83$-0.79 | +205.1% |
| EPS (Diluted) | $0.82$-0.79 | +203.8% |
| Shares Outstanding (Basic) | 159.00M159.00M | 0.0% |
| Shares Outstanding (Diluted) | 159.00M159.00M | 0.0% |
05—Questions
Frequently Asked Questions
Why did Illumina's operating results swing from a loss to income year over year?
Operating expense fell by $259 million, to $519 million from $778 million, mainly due to a $205 million decrease in GRAIL operating expense after the June 2024 GRAIL spin-off. Other drivers included a $27 million favorable change in the GRAIL contingent consideration liability and lower restructuring charges, which in Q1 2024 included lease impairments.
What is the impact of China's actions on Illumina?
Illumina was placed on China's List of Unreliable Entities in February 2025, and on March 4, 2025 it received notice that it is no longer permitted to export sequencing instruments into China. Greater China revenue was $72 million in Q1 2025 versus $78 million in Q1 2024. The filing states that further penalties have not been announced and their duration cannot be predicted.
How is Illumina responding to tariffs and cost pressures?
The company estimates tariffs will cost approximately $85 million under the current environment, and it expects to partially mitigate the impact in 2025 through supply chain optimization, cost measures and pricing actions, aiming to fully mitigate it in 2026. It also implemented an incremental $100 million cost reduction program for 2025, including workforce reductions.
How is Illumina returning capital to shareholders and what is its liquidity position?
Illumina repurchased 1,728 thousand shares for $201 million including excise tax during Q1 2025, and $1.2 billion remained under its $1.5 billion authorization. Cash, cash equivalents and short-term investments totaled $1,237 million, and the $750 million revolving credit facility was undrawn. Management stated it intends to repurchase incremental shares over the course of 2025.
06—Continue