01—Abstract
Summary
Summary of the 10-Q filed July 31, 2026. Cited figures are marked; the original filing is the authoritative source.
Illumina, Inc. reported second-quarter 2026 revenue of $1,159 milliona, up from $1,059 million in Q2 2025, with net income of $207 million (diluted EPS of $1.35) versus $235 million (diluted EPS of $1.49) a year earlier.
For the six months ended June 28, 2026, total revenue was $2,251 millionb compared with $2,100 million, income from operations was $454 million compared with $378 million, and net income was $340 million compared with $366 million. Growth was driven mainly by consumables and instruments tied to demand for the NovaSeq X, with service and other revenue boosted by the SomaLogic business acquired on January 30, 2026. Other income swung from a considerable gain on the retained GRAIL investment in the prior year to a net loss in YTD 2026.
Gross margin was 66.2% for YTD 2026 versus 65.6% a year earlier, though the filing states that excluding a $23 millionc intangible impairment recognized in Q2 2025, gross margin decreased, due to higher tariff costs, sales mix shifting toward instruments, rising memory and freight costs, and lower-margin SomaLogic revenue. Cash and cash equivalents fell to $1,040 million from $1,418 million at year-end 2025, as the company spent $417 million on acquisitions and intangible assets and $370 million on share repurchases. Total term debt was $1,991 million net carrying amount, with $500 million current, and the company stated it had no borrowings under its $750 million revolving credit facility.
Management continues to flag headwinds including tariffs (with IEEPA-related refunds being pursued but timing and amount uncertain), inclusion on China's unreliable entities list (which reduced Greater China revenue by $27 milliond in YTD 2026), reductions in NIH funding, and Middle East-related fuel and shipping costs. Shareholder derivative and securities class actions related to the GRAIL acquisition remain pending, and the company stated it intends to vigorously defend them.
02—Key points
Key Highlights
- Q2 2026 total revenue of $1,159 million, up from $1,059 million in Q2 2025; Q2 2026 net income was $207 million, or $1.35 diluted EPS, versus $235 million, or $1.49 diluted EPS, in Q2 2025.
- YTD 2026 income from operations of $454 million versus $378 million in YTD 2025, with operating margin of 20.2% compared with 18.0%.
- YTD 2026 gross margin of 66.2% versus 65.6%, with the filing noting that excluding a $23 million Q2 2025 impairment, gross margin decreased due to tariffs, product mix, memory and freight costs, and SomaLogic revenue.
- SomaLogic acquisition completed January 30, 2026 for a total purchase price of $460 million, including $382 million in cash and $81 million of estimated contingent consideration; goodwill of $171 million was recorded.
- Cash and cash equivalents of $1,040 million at June 28, 2026, down from $1,418 million at December 28, 2025; YTD 2026 share repurchases totaled $370 million, and the company has $1.5 billion available under its 2026 Repurchase Program.
- Other income (expense), net swung to a $9 million net loss in YTD 2026 from a $139 million net gain in YTD 2025, primarily reflecting the GRAIL investment.
- Greater China revenue declined $27 million in YTD 2026 primarily due to Illumina's inclusion on China's unreliable entities list.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q2 FY2026, Illumina kept $0.18.
- Revenue$1.16B100.0%
- Cost of revenue−$389.0M33.6%
- Gross profit$770.0M66.4%
- Operating costs−$525.0M45.3%
- Operating income$245.0M21.1%
- Interest, other & tax−$38.0M3.3%
- Net income$207.0M17.9%
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed July 31, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $1.16B$1.06B | +9.4% |
| Cost of Revenue | $389.00M$364.00M | +6.9% |
| Gross Profit | $770.00M$695.00M | +10.8% |
| R&D Expenses | $252.00M$247.00M | +2.0% |
| SG&A Expenses | $273.00M$234.00M | +16.7% |
| Operating Expenses | $525.00M$481.00M | +9.1% |
| Operating Income | $245.00M$214.00M | +14.5% |
| Net Income | $207.00M$235.00M | −11.9% |
| EPS (Basic) | $1.37$1.49 | −8.1% |
| EPS (Diluted) | $1.35$1.49 | −9.4% |
| Shares Outstanding (Basic) | 151.00M157.00M | −3.8% |
| Shares Outstanding (Diluted) | 153.00M157.00M | −2.5% |
05—Questions
Frequently Asked Questions
How did Illumina perform in the second quarter of 2026?
Total revenue rose to $1,159 million from $1,059 million, driven by consumables tied to NovaSeq X demand, higher instrument shipments and SomaLogic service revenue. Net income declined to $207 million from $235 million, and diluted EPS was $1.35 versus $1.49, as other income fell from a prior-year GRAIL-related gain.
What is the status of the SomaLogic acquisition and its remaining obligations?
Illumina acquired SomaLogic and certain assets from Standard BioTools on January 30, 2026. It paid a $25 million milestone for the 2025 performance period in Q2 2026 and paid $30 million on July 27, 2026 to buy out the remaining contingent consideration obligations outstanding as of June 28, 2026.
What tariff-related developments does the filing describe?
The filing states that the U.S. Supreme Court held in February 2026 that IEEPA does not authorize tariffs, and that CBP has been processing refunds in phases. Illumina has begun seeking refunds, but the timing and amount remain uncertain, and any recoveries, which to date have been immaterial, will be recognized when realized.
How is Illumina's liquidity and debt position?
The company had $1,168 million in cash, cash equivalents and short-term investments at quarter end, of which about $435 million was held by foreign subsidiaries. Term debt totaled $2.0 billion principal across four notes, with $500 million maturing in September 2026, and the $750 million revolving credit facility was undrawn. Management believes these resources are sufficient for at least the next 12 months.
What legal risks remain outstanding?
Shareholder derivative suits and securities class actions related to the GRAIL acquisition are ongoing. The securities class action in California state court was certified as a class on May 15, 2026, and Illumina filed a writ seeking interlocutory appellate review on July 28, 2026. The company states it denies the allegations and intends to vigorously defend the litigation.
06—Continue