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The call presented a clear beat in Q1 with multiple key operational and financial positives: revenue and EPS outperformance, strong clinical consumables growth (~20% ex-China), robust NovaSeq X placements (80+ in the quarter), margin expansion, and an upwardly revised full-year guide. Offsetting items include continued weakness in research & applied consumables (down ~12% ex-China), a 20% decline in microarrays RoW organic, supply constraints on NovaSeq X that require scaling investments, and near-term inflationary pressures impacting Q2 margins. Management framed the negatives as transitory or manageable and emphasized product innovation, strong cash flow, and progress toward 2027 targets.
Illumina raised its 2026 outlook, increasing reported revenue to $4.52–$4.62B (up $20M), with acquired revenue expected to add 1.5–2 points and currency ~1%, and guiding Rest‑of‑World organic growth toward the high end of its prior 2–4% range. Management expects RoW organic sequencing consumables to grow low‑ to‑mid single digits (clinical double‑digit to mid‑teens; research & applied down mid‑ to‑high single digits), raised instruments guidance to flat‑to‑low‑single‑digit growth, and provided Q2 guidance of $1.12–$1.14B revenue, RoW organic +4–6%, and non‑GAAP EPS $1.20–$1.25. Profitability was lifted: full‑year non‑GAAP operating margin now 23.4–23.6% (Q2 ~22%), non‑GAAP diluted EPS $5.15–$5.30 (top and bottom raised $0.10; Q1 non‑GAAP EPS was $1.15 on $1.09B revenue), with management expecting ~350 bps margin expansion by end‑2026 excluding acquisitions (on the path to a 500 bps target by 2027). Operationally, Illumina placed >80 NovaSeq X units in Q1 (82% of volumes and 55% of revenue transitioned to X; 90% of research volume on X; 76% of clinical volume on X, targeting 80–85% by year‑end), reported sequencing GB output >30% YoY, Q1 free cash flow $251M, cash ≈$1.16B, gross leverage ≈1.5x, closed SomaLogic for ~$363M, and authorized an additional $1.5B of buybacks.
Q1 revenue of $1.09 billion, up 4.8% year-over-year (1.2% organic); came in $20 million above the midpoint of guidance. Company raised 2026 revenue guidance by $20 million to $4.52B–$4.62B and nudged EPS and margin guidance higher.
Sequencing consumables revenue of $726 million, up 4% YoY; Rest of World organic consumables growth ~5%. Clinical consumables grew ~20% ex-China for the second consecutive quarter and represented >65% of sequencing consumables revenue in Q1.
Over 80 NovaSeq X placements in Q1 (~20 more than Q1 2025). As of Q1 roughly 82% of volumes and 55% of revenue transitioned to NovaSeq X; 90% of research & applied volume and 76% of clinical volume now on X with target of 80–85% clinical on X by end of 2026.
Total sequencing GB output on connected high- and mid-throughput instruments grew >30% YoY. Sequencing instruments revenue was $118 million, up 9% YoY (Rest of World organic instrument growth ~10%).
Non‑GAAP gross margin of 68.2% (up ~80 bps YoY). Non‑GAAP operating margin 21.9% (expanding ~150 bps YoY). Non‑GAAP diluted EPS of $1.15 in Q1, up ~19% YoY and ~$0.10 above guidance midpoint. Full-year operating margin guidance raised to 23.4%–23.6%.
Cash flow from operations $289 million; free cash flow $251 million in Q1. Repurchased 2 million shares for $242 million; board authorized an additional $1.5 billion share repurchase program. Ending cash and equivalents ~$1.16 billion; gross leverage ~1.5x gross debt to LTM EBITDA.
Closed SomaLogic acquisition (net cash payment ~$363 million); business performing in line with expectations. Product and R&D progress: TruePath launch (WGS with ~10 minutes hands-on prep), spatial transcriptomics early access with planned launch later in 2026, 18‑month NovaSeq X roadmap (14B and 35B flow cells, staggered runs, Q70 improvements), and BioInsight/billion cell atlas program.
Management reiterated pathway to high single-digit revenue growth, continued margin expansion (~350 bps implied by end of 2026 ex-acquisitions) and double-digit to teens EPS growth toward 2027 targets, reflecting confidence after Q1 outperformance.
Good day, ladies and gentlemen. Welcome to the First Quarter 2026 Illumina, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, we will conduct a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the call over to Head of Investor Relations, Conor McNamara.
Hello, everyone, and welcome to Illumina, Inc.'s first quarter 2026 Earnings Call. Today, we will review our financial results released after market close and provide prepared remarks before opening the line for Q&A. Our earnings release is available in the Investor Relations section of illumina.com. Joining me today are Jacob Thaysen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will begin with an update on Illumina, Inc.'s business followed by Ankur's review of our financials. We will be discussing certain non-GAAP financial measures, and a reconciliation to GAAP can be found in today's release and in the supplementary data on our website. Unless stated otherwise, all growth rates are presented on a year-over-year reported basis. Organic growth adjusts for the impact of currency and acquisitions, and Rest of World organic growth also adjusts for the impact from our Greater China region.
A reminder: starting in January 2026, we changed the geographical reporting segments to better align with the respective commercial organizational structure, and the supplementary file on our website shows historical results with the new geographic reporting. This call is be...