01—Abstract
Summary
Summary of the 10-Q filed May 4, 2026. Cited figures are marked; the original filing is the authoritative source.
Illumina, Inc. reported first-quarter 2026 revenue of $1,091 milliona, up 5% from $1,041 million in the prior-year quarter, driven mainly by sequencing consumables and NovaSeq X instrument shipments.
Service and other revenue rose primarily due to revenue attributable to SomaLogic, which Illumina acquired on January 30, 2026 for a total purchase price of $460 millionb. Income from operations increased to $209 million from $164 million, and operating margin rose to 19.2% from 15.8%. Net income was $134 million, compared with $131 million, and diluted earnings per share were $0.87, compared with $0.82.
Below the operating line, other expense, net was $39 millionc, versus other income of $32 million a year earlier. The filing attributes this swing primarily to a net loss on strategic investments, primarily the retained GRAIL investment. The effective tax rate was 14.8%, compared with 27.9%, which the company attributes mainly to prior-year tax return adjustments.
Greater China revenue fell to $52 milliond from $72 million, and the filing attributes a $20 million decrease in total revenue to the company's inclusion on China's unreliable entities list. At quarter end, Illumina held cash and cash equivalents of $1,089 million and short-term investments of $66 million, against term debt with a net carrying amount of $1,989 million and an undrawn $750 million revolving credit facility.
The company repurchased $242 million of common stock in the quarter and, on April 28, 2026, its board authorized a new $1.5 billion repurchase program in addition to the existing 2024 program. The filing also states that the U.S. Supreme Court held in February 2026 that IEEPA does not authorize tariffs, but the timing and amount of any refunds remain uncertain, and the company will recognize recoveries when realized.
02—Key points
Key Highlights
- Revenue rose 5% to $1,091 million, led by sequencing consumables and NovaSeq X instrument demand, with service and other revenue increasing due to SomaLogic.
- Income from operations increased to $209 million from $164 million, and operating margin improved to 19.2% from 15.8%.
- Gross margin was 66.1% versus 65.6%, aided by lower field service and warranty costs and higher product margins, partly offset by lower-margin SomaLogic revenue and higher tariff costs.
- Other expense, net of $39 million reflected a net loss on strategic investments, compared with other income of $32 million a year earlier, which pulled pre-tax income to $157 million from $182 million.
- The SomaLogic acquisition (total purchase price $460 million, including $81 million of contingent consideration) added $171 million of goodwill and $186 million of intangible assets.
- Cash, cash equivalents and short-term investments totaled $1,155 million, with $554 million held by foreign subsidiaries; the $750 million revolver remained undrawn.
- Share repurchases totaled $242 million in Q1, with a further $90 million repurchased through May 1, 2026, and a new $1.5 billion authorization approved on April 28, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, Illumina kept $0.12.
- Revenue$1.09B100.0%
- Cost of revenue−$370.0M33.9%
- Gross profit$721.0M66.1%
- Operating costs−$512.0M46.9%
- Operating income$209.0M19.2%
- Interest, other & tax−$75.0M6.9%
- Net income$134.0M12.3%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 4, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $1.09B$1.04B | +4.8% |
| Cost of Revenue | $370.00M$358.00M | +3.4% |
| Gross Profit | $721.00M$683.00M | +5.6% |
| R&D Expenses | $240.00M$252.00M | −4.8% |
| SG&A Expenses | $272.00M$267.00M | +1.9% |
| Operating Expenses | $512.00M$519.00M | −1.3% |
| Operating Income | $209.00M$164.00M | +27.4% |
| Net Income | $134.00M$131.00M | +2.3% |
| EPS (Basic) | $0.88$0.83 | +6.0% |
| EPS (Diluted) | $0.87$0.82 | +6.1% |
| Shares Outstanding (Basic) | 153.00M159.00M | −3.8% |
| Shares Outstanding (Diluted) | 154.00M159.00M | −3.1% |
05—Questions
Frequently Asked Questions
What drove the increase in Illumina's first-quarter 2026 revenue?
Total revenue increased 5% to $1,091 million. The filing attributes the increase primarily to higher sequencing consumables and instrument revenue tied to demand for the NovaSeq X, and to service and other revenue from SomaLogic. Greater China revenue declined by $20 million, which the company attributes to its inclusion on China's unreliable entities list.
Why did other income turn into an expense in the quarter?
Other expense, net was $39 million, compared with other income of $32 million in Q1 2025. The filing attributes this mainly to a net loss recognized on strategic investments in Q1 2026, consisting of realized and unrealized activity, compared with a net gain in the prior-year quarter, primarily related to the retained GRAIL investment in both periods.
How much capital is Illumina returning to shareholders, and what authorization remains?
Illumina repurchased 2,005 thousand shares for $242 million in Q1 2026. Subsequent to quarter end and through May 1, 2026, it repurchased about 720,000 shares for $90 million. As of May 1, 2026, about $310 million remained under the 2024 program. On April 28, 2026, the board authorized a new $1.5 billion program, which is in addition to the 2024 program, and the company intends to continue repurchasing shares over the course of 2026.
What is the status of potential tariff refunds?
The filing states that in February 2026 the U.S. Supreme Court held that IEEPA does not authorize tariffs, and in March 2026 the U.S. Court of International Trade ordered CBP to address certain duty determinations, with the order suspended while CBP implements an administrative refund process. The company intends to seek refunds, but says the process is being implemented in phases and the timing and amount of recoveries remain uncertain. Recoveries will be recognized when realized, generally upon receipt.
What is Illumina's exposure to the pending shareholder lawsuits?
The filing describes several shareholder derivative suits and federal and state securities class actions related to the GRAIL acquisition. The company says the lawsuits are at an early stage, that it cannot predict their ultimate outcome, and that it denies the allegations and intends to defend them vigorously. The federal securities case has no hearing date set on the company's motion to dismiss, and a class certification hearing in the state case is scheduled for May 15, 2026.
06—Continue