Q1 2025 Illumina Inc Earnings Call

May 8, 2025

In listen only mode.

After the speaker's presentation, there will be a question and answer session. Please.

Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to Brian Blanch at the interim head of Investor Relations.

Jacob Tyson: Hello, everyone and welcome to aluminum first quarter 2025 earnings call today, We will review our financial results released after market close and provide commentary before opening for Q&A. Our earnings release is available in the Investor Relations section of Illumina Dot Com speaking today are Jacob Tyson, Chief Executive Officer, and <unk> Chief financial.

<unk> Officer <unk> <unk>.

Speaker Change: Jacob will provide an update on aluminum business, followed by <unk> review of the company's financials.

All financial information shared on this call relates to core Luna.

Speaker Change: <unk> historical consolidated financials, please refer to our earnings release and SEC filings.

Speaker Change: Please note that all revenue growth rates discussed during the prepared remarks are presented on a constant currency basis to exclude the impact of foreign exchange fluctuations. We encourage you to review the GAAP reconciliation of our non-GAAP measures, which can be found in today's release and in the supplementary data available on our website. This call is being recorded and the audio will be archived.

Speaker Change: In our investors section of our website. It is our intent that all forward looking statements regarding the financial results and commercial activity made during today's call will be protected under the private Securities Litigation Reform Act of 1095 to better understand the risks and uncertainties that could cause actual results to differ we refer.

Speaker Change: For you to the documents that Illumina files with the Securities and Exchange Commission, including our most recent forms 10-Q, and 10-K with that I'll now turn the call over to Jacob Thank.

Jacob: Thank you, Brian and good afternoon, everyone.

Unknown Executive: At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Speaker Change: Before we begin I want to take a moment to recognize our former chair of the board of directors, Steve Macmillan for his leadership and strengthening enormous precision and genomics innovation.

Unknown Executive: Illumina Earnings Conference Call At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. Please be advised that today's conference is being recorded.

Paul.

Speaker Change: At this time all participants are in a listen only mode.

Speaker Change: After the speaker's presentation, there will be a question and answer session.

Unknown Executive: Please be advised that today's conference is being recorded.

Speaker Change: His contributions have positioned us well for the significant opportunities ahead.

Brian Blanchett: I would now like to hand the conference over to Brian Blanchett, the Interim Head of Investor Relations. Hello, everyone, and welcome to Illumina's first quarter 2025 earnings call. Today, we will review our financial results released after market close, and provide commentary before opening for Q&A. Our earnings release is available in the investor relations section of Illumina.com.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to Brian Blanch at the interim head of Investor Relations.

Speaker Change: I look forward to working closely with our new chair Scott Gottlieb as we advance our mission execute our strategy and progress the omics ecosystem.

Speaker Change: I'm also pleased to welcome Keith Meister to the board.

Brian Blanchett: Our earnings release is available in the investor relations section of Illumina.com.

Brian Blanchett: Speaking today are Jacob Thyssen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will provide an update on Illumina's business, followed by Ankur's review of the company's financials. All financial information shared on this call relates to Core Illumina.

Speaker Change: His deep investment experience in genomics and strong track record of driving shareholder value will be invaluable as we build our momentum and deliver on our strategic priorities.

Brian Blanchett: Speaking today are Jacob Thyssen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer.

Brian Blanchett: Jacob will provide an update on Illumina's business, followed by Ankur's review of the company's financials. All financial information shared on this call relates to Core Illumina. For historical consolidated financials, please refer to our earnings release and SEC filing. Please note that all revenue growth rates discussed during the prepared remarks are presented on a constant currency basis to exclude the impact of forward exchange fluctuations. We encourage you to review the gap reconciliation of our non-gap measures, which can be found in today's release and in the supplementary data available on our website.

Speaker Change: <unk> Officer <unk> <unk>.

Speaker Change: Jacob will provide an update on aluminum business, followed by <unk> review of the company's financials.

Speaker Change: The macroeconomic challenges we have faced over the past few months, we have a good start to the year.

Brian Blanchett: For historical consolidated financials, please refer to our earnings release and SEC filing. Please note that all revenue growth rates discussed during the prepared remarks are presented on a constant currency basis to exclude the impact of forward exchange fluctuations. We encourage you to review the gap reconciliation of our non-gap measures, which can be found in today's release and in the supplementary data available on our website.

Speaker Change: All financial information shared on this call relates to core alumina.

Speaker Change: For historical consolidated financials, please refer to our earnings release and SEC filings.

Speaker Change: To the alumina team's continued focus on execution and operational excellence, we delivered Q1 revenue and EPS at the upper end of our guidance range.

Speaker Change: Illumina is a resilient franchise with multiple drivers of near and long term growth and there is a lot to be encouraged by this quarter.

Brian Blanchett: This call is being recorded and the audio will be archived in our investor section of our website.

Our <unk> X instruments continued to perform well exceeding our expectations with another quarter of over 60 placements in Q1 following more than 90 placements in Q4.

Brian Blanchett: This call is being recorded and the audio will be archived in our investor section of our website.

Brian Blanchett: It is our intent that all forward-looking statements regarding the financial results and commercial activity made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Illumina files with the Securities and Exchange Commission, including our most recent forms 10-Q and 10-K.

Speaker Change: This call is being recorded and the audio will be archived and our investors section of our website. It is our intent that all forward looking statements regarding the financial results and commercial activity made during today's call will be protected under the private Securities Litigation Reform Act of 1095 to better understand the risks and uncertainties that could cause actual results to differ we refer.

X transition continues to progress well, particularly among clinical customers reaffirming both the value we provide and the resilience of the clinical markets.

Jacob Tyson: Are you to the documents that Illumina files with the Securities and Exchange Commission, including our most recent forms 10-Q, and 10-K with that I'll now turn the call over to Jacob.

Jacob Thyssen: With that, I now turn the call over to Jacob. Thank you, Brian, and good afternoon, everyone.

We also saw a sequential increase in X and overall high throughput consumables, a clear indicator that this key growth driver continues to gain traction and demonstrate a necessity.

Jacob Thaysen: With that, I now turn the call over to Jacob. Thank you, Brian, and good afternoon, everyone.

Jacob Thyssen: Before we begin, I want to take a moment to recognize our former Chair of the Board of Directors, Steve McMillan, for his leadership in strengthening Illumina's position in genomics innovation. His contributions have positioned us well for the significant opportunities ahead. I look forward to working closely with our new chair, Scott Gottlieb, as we advance our mission, execute our strategy, and progress the Omics ecosystem. I'm also pleased to welcome Keith Meister to the board. His deep investor experience in genomics and strong track record of driving shareholder value will be invaluable as we build our momentum and deliver on our strategic priorities.

Jacob Tyson: Thank you, Brian and good afternoon, everyone.

Jacob Thaysen: Before we begin, I want to take a moment to recognize our former Chair of the Board of Directors, Steve McMillan, for his leadership in strengthening Illumina's position in genomics innovation. His contributions have positioned us well for the significant opportunities ahead. I look forward to working closely with our new chair, Scott Gottlieb, as we advance our mission, execute our strategy, and progress the Omics ecosystem. I'm also pleased to welcome Keith Meister to the board. His deep investor experience in genomics and strong track record of driving shareholder value will be invaluable as we build our momentum and deliver on our strategic priorities.

Jacob Tyson: Before we begin I want to take a moment to recognize our former chair of the board of directors, Steve Macmillan for its leadership and strengthening enormous precision and genomics innovation.

Our innovation pipeline remains unmatched, we advancing the multi omics ecosystem and everyday our technologies enabled customers to generate insights that were previously not possible.

Jacob Tyson: His contributions have positioned us well for the significant opportunities ahead.

With this foundation, we are focused on achieving our long term financing goes we continue to execute on our strategy to deliver high single digit revenue growth and 500 basis point margin expenses by 2027.

Speaker Change: I look forward to working closely with our new chair Scott Gottlieb as we advance our mission execute our strategy and progress the omics ecosystem.

Speaker Change: I'm also pleased to welcome Keith Meister to the board. He has deep investment experience in genomics and strong track record of driving shareholder value will be invaluable as we build our momentum and deliver on our strategic priorities.

Excluding our greater China region, which has been affected by the recent regulatory developments.

At the same time, we are navigating a dynamic environment with discipline and urgency.

Jacob Thyssen: Despite the macroeconomic challenges we have faced over the past few months, we have a good start to the year. Thanks to the Illumina team's continued focus on execution and operation excellence, we delivered Q1 revenue and EPS at the upper end of our guidance range. Illumina is a resilient franchise with multiple drivers of near and long-term growth, and there is a lot to be encouraged by this quarter. Our NovoSeq X instruments continue to perform well, exceeding our expectations with another quarter of over 60 placements in Q1, following more than 90 placements in Q4. The X transition continues to progress well, particularly among clinical customers, reaffirming both the value we provide and the resilience of the clinical market.

Elements around China U S funding uncertainty and global trade dynamics have introduced new pressures spell customers.

Jacob Thaysen: Despite the macroeconomic challenges we have faced over the past few months, we have a good start to the year. Thanks to the Illumina team's continued focus on execution and operational excellence, we delivered Q1 revenue and EPS at the upper end of our guidance range. Illumina is a resilient franchise with multiple drivers of near and long-term growth, and there is a lot to be encouraged by this quarter. Our NovaSeq-X instruments continue to perform well, exceeding our expectations with another quarter of over 60 placements in Q1, following more than 90 placements in Q4. The X transition continues to progress well, particularly among clinical customers, reaffirming both the value we provide and the resilience of the clinical market.

Speaker Change: The macroeconomic challenges we have faced over the past few months, we have a good start to the year.

These are important concerns and we have taken clear actions to address them.

Thanks to the alumina team's continued focus on execution and operational excellence, we delivered Q1 revenue and EPS at the upper end of our guidance range.

But these are transitory genesis that will not define illumina as long term success, all our leadership in advancing the genomics Revolution and.

Speaker Change: Illumina is a resilient franchise with multiple drivers of near and long term growth and there is a lot to be encouraged by this quarter.

In light of this we are.

We are revising our guidance to reflect both the headwinds and the proactive steps we are taking to protect earnings I'll now walk through each of these factors and anchor will provide more details in his remarks shortly.

Speaker Change: Our <unk> X instruments continue to perform well exceeding our expectations with another quarter of over 60 placements in Q1 following more than 90 placements in Q4.

In China, our ability to export sequencing instruments has been restricted.

Speaker Change: X transition continues to progress well, particularly among clinical customers reaffirming both the value we provide and the resilience of the clinical markets.

anchor: We now expect lower revenue from the region in 2025, driven by minimal instrument placements.

Jacob Thyssen: We also saw sequential increase in X and overall high throughput consumables, a clear indicator that this key growth driver continues to gain traction and demonstrate elasticity.

To provide greater clarity on the fundamentals of our global business.

Jacob Thaysen: We also saw sequential increase in X and overall high throughput consumables, a clear indicator that this key growth driver continues to gain traction and demonstrate elasticity. Our innovation pipeline remains unmatched. We are advancing the multi-omics ecosystem, and every day our technologies enable customers to generate insights that were previously not possible. With this foundation, we focused on achieving our long-term financial goals. We continue to execute on our strategy to deliver high single-digit revenue growth and 500 basis point margin expansions by 2027, excluding our Greater China region, which has been affected by the recent regulatory developments. At the same time, we are navigating a dynamic environment with discipline and urgency.

Speaker Change: We also saw sequential increase in X and overall high throughput consumables, a clear indicator that this key growth driver continues to gain traction and demonstrate a necessity.

anchor: Issue distinct guidance for the greater China region, and the rest of the world until the situation is resolved.

Jacob Thyssen: Our innovation pipeline remains unmatched. We are advancing the multi-omics ecosystem. And every day, our technologies enable customers to generate insights that were previously not possible. With this foundation, we focused on achieving our long-term financial goals. We continue to execute on our strategy to deliver high single-digit revenue growth and 500 basis point margin expansions by 2027, excluding our greater China region, which has been affected by the recent regulatory development. At the same time, we are navigating a dynamic environment with discipline and urgency. Developments around China, U.S. funding uncertainty, and global trade dynamics have introduced new pressures for our customers.

anchor: We continue to engage with the regulatory authorities in China and potential solutions to support our sustainable long term presence in the market and we will keep you updated on any material developments as the situation evolves in the U S ongoing uncertainty in research funding is weighing.

Speaker Change: Our innovation pipeline remains unmatched.

Speaker Change: Advancing the multi omics ecosystem and everyday our technology has enabled customers to generate insights that were previously not possible.

Speaker Change: With this foundation, we are focused on achieving our long term financing goes we continue to execute on our strategy to deliver high single digit revenue growth and 500 basis point margin expenses by 2027, excluding our greater China region, which has been affected by the recent regulatory developments.

anchor: On our customers and affecting purchasing timelines we.

anchor: We are working closely with our customers to help them navigate this environment.

anchor: Offering flexible solutions to sustain their research projects and drive continued genomic innovation.

anchor: In March we took decisive actions to address the impact of China, and the resets environment by executing a global incremental $100 million cost reduction program.

Speaker Change: At the same time, we are navigating a dynamic environment with discipline and urgency.

Jacob Thaysen: Developments around China, U.S. funding uncertainty, and global trade dynamics have introduced new pressures for our customers. These are important concerns, and we are taking clear actions to address them. But these are transitory challenges that will not define Illumina's long-term success or our leadership in advancing the genomics revolution.

Speaker Change: Developments around China U S funding uncertainty and global trade dynamics have introduced new pressures spell customers.

Jacob Thyssen: These are important concerns, and we are taking clear actions to address them.

anchor: As of this call we have already implemented the necessary actions to realize the full savings in 2025, reinforcing our disciplined approach to operational execution.

Speaker Change: These are important concerns and we have taken clear actions to address them.

Jacob Thyssen: But these are transitory challenges that will not define Illumina's long-term success or our leadership in advancing the genomics revolution. In light of this, we are revising our guidance to reflect both the headwinds and the proactive steps we are taking to protect earnings. I will now walk through each of these factors and Ankur will provide more details in his remark shortly. In China, our ability to export sequencing instruments has been restricted. We now expect lower revenue from the region in 2025, driven by minimal instrument placement. To provide greater clarity on the fundamentals of our global business, we will issue distinct guidance for the greater China region and the rest of the world until the situation is resolved.

Speaker Change: These are transitory Genesis that will not define illumina as long term success, all our leadership in advancing the genomics Revolution.

anchor: Since our last update the U S government enacted a baseline and Paul terrorists or 10% with significantly higher rates for certain countries. These tariffs increasing cost for alumina.

Jacob Thaysen: In light of this, we are revising our guidance to reflect both the headwinds and the proactive steps we are taking to protect earnings. I will now walk through each of these factors and Ankur will provide more details in his remark shortly. In China, our ability to export sequencing instruments has been restricted. We now expect lower revenue from the region in 2025, driven by minimal instrument placement. To provide greater clarity on the fundamentals of our global business, we will issue distinct guidance for the greater China region and the rest of the world until the situation is resolved.

Speaker Change: In light of this we are revising our guidance to reflect both the headwinds and the proactive steps. We are taking to protect earnings I'll now walk through each of these factors and anchor will provide more details in his remarks shortly.

anchor: To address this.

anchor: Our teams are actively working to minimize the impact through supply chain optimization cost measures and pricing actions with these actions underway, we expect to partially offset the impact in 2025 and our current level. Our aim is to more fully mitigate the impact in 2026.

Speaker Change: In China, our ability to export sequencing instruments has been restricted.

Speaker Change: We now expect lower revenue from the region in 2025, driven by minimal instrument placements.

anchor: The Illumina team is navigating these external pressures carefully and strategically ensuring that our core business and our commitment to our customers and to advancing innovation remains strong and unaffected we have made significant progress in delivering competitively differentiated.

Speaker Change: To provide greater clarity on the fundamentals of our global business, we will issue a distinct guidance for the greater China region and the rest of the world until the situation is resolved.

Jacob Thyssen: We continue to engage with the regulatory authorities in China on potential solutions to support a sustainable, long-term presence in the market. And we will keep you updated on any material developments as the situation evolves.

Jacob Thaysen: We continue to engage with the regulatory authorities in China on potential solutions to support a sustainable, long-term presence in the market. And we will keep you updated on any material developments as the situation evolves. In the US, ongoing uncertainty in research funding is weighing on our customers and affecting purchasing timelines. We are working closely with our customers to help them navigate this environment, offering flexible solutions to sustain their research projects and drive continued genomic innovation. In March, we took decisive actions to address the impact of China and the research environment by executing a global incremental $100 million cost reduction program.

Speaker Change: We continue to engage with the regulatory authorities in China and potential solutions to support our sustainable long term presence in the market and we will keep you updated.

anchor: Patients that keep our customers at the forefront of discovery.

Jacob Thyssen: In the US, ongoing uncertainty in research funding is weighing on our customers and affecting purchasing timelines. We are working closely with our customers to help them navigate this environment, offering flexible solutions to sustain their research projects and drive continued genomic innovation.

Speaker Change: On any material developments as the situation evolves in the U S ongoing uncertainty and research funding is weighing on our customers and affecting purchasing timelines. We are working closely with our customers to help them navigate this environment.

anchor: Multi omics roadmap, a growing portfolio of Omics and sequencing applications is key to advancing the ecosystem and in helping us achieve our long term targets.

anchor: I will share a few examples.

anchor: In February we announced our new special offering featuring a significantly larger capture area higher resolution and greater sensitivity and existing technologies.

Speaker Change: Offering flexible solutions to sustain their research projects and drive continued genomic innovation.

Jacob Thyssen: In March, we took decisive actions to address the impact of China and the research environment by executing a global incremental $100 million cost reduction program. As of this call, we've already implemented the necessary actions to realize the full savings in 2025, reinforcing our disciplined approach to operational execution. Since our last update, the US government enacted a baseline import tariff of 10% with significantly higher rates for certain countries. These tariffs are increasing costs for Illumina. To address this, our teams are actively working to minimize the impact through supply chain optimization, cost measures, and pricing action. With these actions underway, we expect to partially offset the impact in 2025, and at current level, our aim is to more fully mitigate the impact in 2026.

Speaker Change: In March we took decisive actions to address the impact of China, and the resets environment by executing a global incremental $100 million cost.

anchor: This powerful solution will enable researchers to analyze millions of cells per experiments, increasing the likelihood of identifying rare cell populations. These advancements open new possibilities for research applications that were previously unattainable.

Speaker Change: <unk> program.

Jacob Thaysen: As of this call, we've already implemented the necessary actions to realize the full savings in 2025, reinforcing our disciplined approach to operational execution. Since our last update, the U.S. government enacted a baseline import tariff of 10% with significantly higher rates for certain countries. These tariffs are increasing cost for Illumina. To address this, our teams are actively working to minimize the impact through supply chain optimization, cost measures, and pricing action. With these actions underway, we expect to partially offset the impact in 2025, and at current level, our aim is to more fully mitigate the impact in 2026.

Speaker Change: As of this call we have already implemented the necessary actions to realize the full savings in 2025, reinforcing our disciplined approach to operational execution.

anchor: This offering will integrate seamlessly into illuminate end to end workflows and connect with Illumina connected multi omics, our new territory analysis solution powered by politics intuitive data visualization technology.

Speaker Change: Since our last update the U S government enacted a baseline and Paul terrorists up 10% with significantly high rates for certain countries. These tariffs are increasing costs for illumina.

anchor: We have begun early axis and early customer feedback has been very positive emphasizing our spatial solutions accessibility without the need for special equipment purchases and how it streamlines, our previously complex analysis and interpretation process.

Speaker Change: To address this.

Speaker Change: Our teams are actively working to minimize the impact through supply chain optimization cost measures and pricing actions with these actions underway, we expect to partially offset the impact in 2025 and our current level. Our aim is to more fully mitigate the impact in 2026.

anchor: Plan to release, our new special offering in 2026 also tied to our multi omics strategy, We recently announced a new single cell offering for CRISPR research with applications in oncology immunology and drug target discovery.

Jacob Thyssen: The Illumina team is navigating these external pressures carefully and strategically, ensuring that our core business and our commitment to our customers and to advancing innovation remain strong and unaffected. We have made significant progress in delivering competitively differentiated innovations that keep our customers at the forefront of discovery. Our multi-omics roadmap, a growing portfolio of omics and sequencing applications, is key to advancing the ecosystem and in helping us achieve our long-term targets.

Jacob Thaysen: The Illumina team is navigating these external pressures carefully and strategically, ensuring that our core business and our commitment to our customers and to advancing innovation remain strong and unaffected. We have made significant progress in delivering competitively differentiated innovations that keep our customers at the forefront of discovery. Our multi-omics roadmap, a growing portfolio of omics and sequencing applications, is key to advancing the ecosystem and in helping us achieve our long-term targets.

Speaker Change: The Illumina team is navigating these external pressures carefully and strategically ensuring that our core business and our commitment to our customers and to advancing innovation remains strong and unaffected.

anchor: Our new <unk> solution will allow researchers to study how genetic changes affect single cells at scale accelerating drug discovery and advancing our understanding of complex diseases.

Speaker Change: We have made significant progress in delivering competitively differentiated innovations that keep our customers at the forefront of discovery.

anchor: This is the next evolution of Fluence Pip seek technology, which we acquired last year by capturing both CRISPR Guide RNA and messenger RNA transcript from the same sell our solution will enable researchers to perform genome wide crisper screens at market, leading cost providing deeper insights with greater efficiency.

Speaker Change: Multi omics roadmap, a growing portfolio of Omics and sequencing applications is key to advancing the ecosystem and in helping us achieve our long term targets.

Jacob Thyssen: I will share a few examples. In February, we announced our new spatial offering, featuring a significantly larger capture area, higher resolution and greater sensitivity than existing technologies. This powerful solution will enable researchers to analyze millions of cells per experiment, increasing the likelihood of identifying rare cell populations. These advancements open new possibilities for research applications that were previously unattainable. This offering will integrate seamlessly into Illumina's end-to-end workflows and connect with Illumina Connected Multimix, our new tertiary analysis solution, powered by Partek's intuitive data visualization technology. We have begun early access and early customer feedback has been very positive, emphasizing our spatial solutions accessibility without the need for special equipment purchases and how it streamlines a previously complex analysis and interpretation process.

Jacob Thaysen: I will share a few examples. In February, we announced our new spatial offering, featuring a significantly larger capture area, higher resolution and greater sensitivity than existing technologies. This powerful solution will enable researchers to analyze millions of cells per experiment, increasing the likelihood of identifying rare cell populations. These advancements open new possibilities for research applications that were previously unattainable. This offering will integrate seamlessly into Illumina's end-to-end workflows and connect with Illumina Connected Multimix, our new tertiary analysis solution, powered by Partek's intuitive data visualization technology. We have begun early access, and early customer feedback has been very positive.

Speaker Change: I will share a few examples and.

Speaker Change: In February we announced our new special offering featuring a significantly larger capture area higher resolution and greater sensitivity and existing technologies.

anchor: This solution is expected to launch later this year.

anchor: Additionally, our innovation pipeline remains on track our proteomics solution developed in collaboration with stand up Biofuels is an early access and we are looking forward to our commercial launch in the first half of 2025.

Speaker Change: This powerful solution will enable researchers to analyze millions of cells per experiments, increasing the likelihood of identifying rare cell populations. These advancements open new possibilities for research applications that were previously unattainable this offering will integrate seamless.

anchor: Our constellation map reads and five based genome technologies are already in early access with full commercial launches on track for 2026 <unk>.

Speaker Change: Lee into Illuminist end to end workflows and connect with Illumina connected multi omics, our new territory analysis solution powered by politics intuitive data visualization technology we.

anchor: We are excited about these innovations with advancing mulch, all makes while empowering our customers with deeper insights than ever before the call at Illumina is strong and our growth projections ex China on track as we deliver on our strategy.

Speaker Change: We have begun early axis and early customer feedback has been very positive emphasizing our spatial solutions extensibility without the need for special equipment purchases and how it streamlines. Our previously complex analysis and interpretation process, we plan to release our.

Jacob Thaysen: Emphasizing our spatial solutions accessibility without the need for special equipment purchases, and how it streamlines a previously complex analysis and interpretation process.

Speaker Change: Ill now ask Ankur to share more details on our results and outlook for 2025, and we will go from there directly into Q&A.

Jacob Thyssen: We plan to release our new spatial offering in 2026.

Ankur: Thank you Jacob and good afternoon, everyone.

Jacob Thaysen: We plan to release our new spatial offering in 2026.

Ankur: I will give you an overview of first quarter financial results and provide more color about our revenue expenses earnings and developments on our balance sheet and then speak about our outlook going forward.

Jacob Thyssen: Also tied to our multi-armic strategy, we recently announced a new single-cell offering for CRISPR research with applications in oncology, immunology, and drug target discovery. Our new Perturb-Seq solution will allow researchers to study how genetic changes affect single cells at scale, accelerating drug discovery, and advancing our understanding of complex diseases. This is the next evolution of Fluence PEP-Seq technology, which we acquired last year. By capturing both CRISPR, guide RNA, and messenger RNA transcripts from the same cell, our solution will enable researchers to perform genome-wide CRISPR screens at market-leading costs, providing deeper insights with greater efficiency. The solution is expected to launch later this year.

Speaker Change: New special offering in 2026 also tied to our multi omics strategy and recently announced a new single cell offering for CRISPR research with applications in oncology immunology and drug target discovery.

Jacob Thaysen: Also tied to our multi-army strategy, we recently announced a new single-cell offering for CRISPR research, with applications in oncology, immunology, and drug target discovery. Our new Perturb-Seq solution will allow researchers to study how genetic changes affect single cells at scale, accelerating drug discovery, and advancing our understanding of complex diseases. This is the next evolution of Fluence PEP-Seq technology, which we acquired last year. By capturing both CRISPR, guide RNA, and messenger RNA transcripts from the same cell, our solution will enable researchers to perform genome-wide CRISPR screens at market-leading costs, providing deeper insights with greater efficiency. The solution is expected to launch later this year.

Ankur: Before I get into the details of our financial performance, Let me provide a high level view of how the first quarter played out relative to our expectations.

Speaker Change: Our new <unk> solution will allow researchers to study how genetic changes affect single cells at scale accelerating drug discovery and advancing our understanding of complex diseases.

Ankur: In Q1, despite the dynamic environment team Illumina delivered a quarter of excellent execution.

Speaker Change: This is the next evolution of Fluence Pip seek technology, which we acquired last year by capturing both CRISPR Guide RNA and messenger RNA transcript from the same sell our solution will enable researchers to perform genome wide crisper screens at market, leading cost providing deeper insights with greater efficiency.

Ankur: <unk> us to deliver financial results towards the high end of our guidance.

Ankur: Revenue was flat year over year.

Ankur: At top end of our guidance and EPS at 97 cents was also towards the top end of the range.

Ankur: Now let me provide you with details of the financial performance.

Jacob Thyssen: Additionally, our innovation pipeline remains on track. Our proteomics solution, developed in collaboration with Standard Biotools, is in early access and we are looking forward to our commercial launch in the first half of 2025. Our constellation map reads and five-phase genome technologies are already in early access, with full commercial launches on track for 2026. We are excited about these innovations, which are advancing multi-omics while empowering our customers with deeper insights than ever before. The core of Illumina is strong, and our growth projections xChina are on track as we deliver on our strategy.

Speaker Change: The solution is expected to launch later this year.

Ankur: First quarter revenue of $1 4 billion was down one 4% year over year on an as reported basis.

Jacob Thaysen: Additionally, our innovation pipeline remains on track. Our proteomics solution, developed in collaboration with Standard Biotools, is in early access, and we are looking forward to our commercial launch in the first half of 2025. Our constellation map reads and five base genome technologies are already in early access, with full commercial launches on track for 2026. We are excited about these innovations, which are advancing multi-omics while empowering our customers with deeper insights than ever before. The core of Illumina is strong, and our growth projections xChina are on track as we deliver on our strategy.

Speaker Change: Additionally, our innovation pipeline remains on track our proteomics solution developed in collaboration with stand up Biofuels is an early access and we are looking forward to our commercial launch in the first half of 2025.

Ankur: This included one two points of headwind from foreign exchange and constant currency revenue was roughly flat.

Speaker Change: Our constellation Matt breeds and five based genome technologies are already in early access with full commercial launches on track for 2026.

Ankur: Excluding China revenue was slightly up year over year on a constant currency basis.

Ankur: Sequencing consumables revenue of $696 million grew approximately 1% year over year.

Speaker Change: We are excited about these innovations with advanced multi omics, while empowering our customers with deeper insights than ever before the core of Illumina is strong and our growth projections ex China on track as we deliver on our strategy.

Ankur: Driven by strength in high throughput consumables.

Ankur: And the continued transition of high throughput sequencing to X.

Ankur Dhingra: I'll now ask Ankur to share more details on our results and outlook for 2025, and we'll go from there directly into Q&A. Thank you, Jacob. And good afternoon, everyone. I will give you an overview of first quarter financial results, and provide more color about our revenue, expenses, earnings, and developments on our balance sheet, and then speak about our outlook going forward. Before I get into the details of the financial performance, let me provide a high-level view of how the first quarter played out relative to our expectations. In Q1, despite the dynamic environment, Team Illumina delivered a quarter of excellent execution, enabling us to deliver financial results towards the high end of our guidance.

Ankur: During the second half of the quarter and.

Ankur: And correlated with uncertainty around NIH and other research funding levels, we started to see our customers, especially in research and academia.

Ankur Dhingra: I'll now ask Ankur to share more details on our results and outlook for 2025, and we'll go from there directly into Q&A. Thank you, Jacob. And good afternoon, everyone.

Speaker Change: I'll now ask Ankur to share more details on our results and outlook for 2025, and we will go from there directly into Q&A.

Ankur: Slightly more conservative in consumables potatoes.

Ankur: Thank you Jacob and good afternoon, everyone.

Ankur Dhingra: I will give you an overview of first quarter financial results, and provide more color about our revenue, expenses, earnings, and developments on our balance sheet, and then speak about our outlook going forward. Before I get into the details of the financial performance, let me provide a high-level view of how the first quarter played out relative to our expectations. In Q1, despite the dynamic environment, Team Illumina delivered a quarter of excellent execution, enabling us to deliver financial results towards the high end of our guidance. Revenue was flat year over year at top end of our guidance and EPS at 97 cents was also towards the top end of the range.

Ankur: We estimate this phenomenon impacted consumables growth by approximately one point year over year.

Ankur: Despite this the sequencing activity on the connected instruments remain strong.

Ankur: Before I get into the details of the financial performance, let me provide a high level view of how the first quarter played out relative to our expectations.

Ankur: We typically see a seasonal increase in ordering activity in Q1, including long range, but sales commitments leading to building a backlog.

Ankur: We report that as performance obligations in our 10-Q.

Ankur: In Q1, despite a dynamic environment team illumina delivered a quarter of excellent execution.

Ankur: And this auditing activity was stronger than the last couple of years and encouraging sign for the rest of the year.

Ankur: Enabling us to deliver financial results <unk>.

Ankur Dhingra: Revenue was flat year over year at top end of our guidance and EPS at 97 cents was also towards the top end of the range. Now let me provide you with details of the financial performance. First quarter revenue of $1.04 billion was down 1.4% year over year on an as reported basis. This included 1.2 points of headwind from foreign exchange and constant currency revenue was roughly flat. excluding China, revenue was slightly up year over year on a constant currency basis. Sequencing consumables revenue of $696 million grew approximately 1% year over year, driven by strength in high-throughput consumables and the continued transition of high-throughput sequencing to AI.

Ankur: The high end of our guidance.

Ankur: Now about the X transition, which.

Revenue was flat year over year at top end of our guidance and EPS at <unk> 97 was also towards the top end of the range.

Ankur: Which continues to progress well.

Ankur: In Q1, roughly 68% of high throughput gigabases shipped and approximately 43% of high throughput consumables revenue was on the <unk> E X series.

Ankur Dhingra: Now, let me provide you with details of the financial performance. First quarter revenue of $1.04 billion was down 1.4% year over year on an as reported basis. This included 1.2 points of headwind from foreign exchange and constant currency revenue was roughly flat. Excluding China, revenue was slightly up year over year on a constant currency basis. Sequencing consumables revenue of $696 million grew approximately 1% year-over-year, driven by strength in high-throughput consumables and the continued transition of high-throughput sequencing to AI. During the second half of the quarter, and correlated with uncertainty around NIH and other research funding levels, we started to see our customers, especially in research and academia, be slightly more conservative in consumables purchases.

Ankur: Now let me provide you with details of the financial performance.

Ankur: First quarter revenue of $1 4 billion was down one 4% year over year.

Ankur: Greater than 80% of high throughput gigabit say shipped to our customers and research markets is already on <unk> X series.

Ankur: On an as reported basis.

Ankur: And now over 50% of clinical volumes are also on X.

Ankur: This included one two points of headwind from foreign exchange and constant currency revenue was roughly flat.

anchor: We continue to make progress in the framework, we previously disclosed.

anchor: That in the second half of 2025.

Ankur: Excluding China revenue was slightly up year over year on a constant currency basis.

anchor: Approximately 50% of high throughput revenue and approximately 75% of GB ship will be on Lenovo X series.

Ankur: Sequencing consumables revenue of $696 million grew approximately 1% year over year driven.

anchor: With continued strong underlying sequencing volume growth and stronger adoption of X <unk>.

Ankur: Driven by strength in high throughput consumables and the continued transition of high throughput sequencing to X.

anchor: Over time, the price effect of lower mix of 6K consumables fades away.

Ankur Dhingra: During the second half of the quarter, and correlated with uncertainty around NIH and other research funding levels, we started to see our customers, especially in research and academia, be slightly more conservative in consumables purchases. re-estimate this phenomena impacted consumables growth by approximately one point year over year. Despite this, the sequencing activity on the connected instruments remains strong. We typically see a seasonal increase in ordering activity in Q1, including long range purchase commitments leading to building of backlog. We report that as performance obligations in our 10Q. And this ordering activity was stronger than the last couple of years and encouraging sign for the rest of the year.

Ankur: During the second half of the quarter.

anchor: Much larger part of high GP growth translates to revenue growth.

Ankur: And correlated with uncertainty around NIH and other research funding levels, we started to see our customers, especially in research and academia to be slightly more conservative in consumables potatoes.

anchor: About sequencing activity.

anchor: Total sequencing GB output on a connected high and mid throughput instruments grew at a rate of more than 30% year over year.

Ankur Dhingra: We estimate this phenomena impacted consumables growth by approximately one point year over year. Despite this, the sequencing activity on the connected instruments remains strong. We typically see a seasonal increase in ordering activity in Q1, including long-range purchase commitments, leading to building of backlogs. We report that as performance obligations in our 10Q. And this ordering activity was stronger than the last couple of years and encouraging sign for the rest of the year.

Ankur: We estimate this phenomena impacted consumables growth by approximately one point year over year.

anchor: With robust growth from both clinical and research customers.

anchor: Sequencing instrument revenue of $109 million was approximately flat year over year in Q1, we had a higher than expected number of ex Cds instruments shipped and high throughput.

Ankur: Despite this the sequencing activity on the connected instruments remain strong.

Ankur: We typically see a seasonal increase in ordering activity in Q1, including long range purchase commitments, leading to building up backlog.

anchor: And the successful launch of the Hiseq I 100 in our low throughput portfolio.

Ankur: We will report that as performance obligations in our 10-Q.

anchor: Okay.

Ankur: And this auditing activity was stronger than the last couple of years and encouraging sign for the rest of the year.

anchor: Okay.

anchor: 50% of excess placed in Q1 were to clinical customers.

Ankur Dhingra: Now about the X transition, which continues to progress well. In Q1, roughly 68% of high throughput gigabases shipped and approximately 43% of high throughput consumables revenue was on the NovaX series. Greater than 80% of high-throughput gigabases shipped to our customers in research markets is already on NovaSeq X-Series. And now over 50% of clinical volumes are also on X. We continue to make progress in the framework we previously disclosed. that in the second half of 2025, approximately 50% of high throughput revenue and approximately 75% of GB shipped will be on the NovaSeq X series. with continued strong underlying sequencing volume growth and strong adoption of X.

Ankur Dhingra: Now about the X transition, which continues to progress well. In Q1, roughly 68% of high-throughput gigabases shipped and approximately 43% of high-throughput consumables revenue was on the NovaX series. greater than 80% of high throughput gigabases shipped to our customers in research markets is already on NovaSeq X-Series. And now over 50% of clinical volumes are also on X. We continue to make progress in the framework we previously disclosed. that in the second half of 2025, approximately 50% of high throughput revenue and approximately 75% of GB shipped will be on the NovaSeq X series. with continued strong underlying sequencing volume growth and strong adoption of X.

Ankur: Now about the X transition, which continues to progress well.

anchor: As you know that lean March our ability to export instruments into China was restricted.

Ankur: In Q1, roughly 68% of high throughput gigabases shipped and approximately 43% of high throughput consumables revenue was on the <unk> E X series.

anchor: We had an in country inventory to ship our instrument orders in Q1.

anchor: Sequencing service and other revenue of $142 million was down approximately 5% year over year in line with expectations, mainly due to the timing of certain strategic partnership revenues last year related to the <unk> consortium, excluding those our core services and <unk>.

Ankur: Greater than 80% of high throughput gigabit say shipped to our customers and research markets is already on <unk> X series.

Ankur: And now over 50% of clinical volumes are also on X.

Ankur: We continue to make progress in the framework, we previously disclosed.

anchor: Informatics business grew in the mid single digits.

Ankur: That in the second half of 2025.

anchor: Moving to the rest of Illumina P&L.

Ankur: Proximately, 50% of high throughput revenue and approximately 75% of GB ship will be on the <unk> X series.

anchor: non-GAAP gross margin of 67, 4% for the first quarter.

anchor: Increased 30 basis points year over year.

anchor: Margins were slightly lower than anticipated as we saw a higher mix of instruments business.

Ankur: With continued strong underlying sequencing volume growth and stronger adoption of X overtime, the price effect of lower mix of 6K consumables fades away and a much larger part of high GB growth translates to revenue growth.

Ankur Dhingra: Over time, the price effect of lower mix of 6K consumables fades away and a much larger part of high GB growth translates to revenue growth. About sequencing activity, total sequencing GD output on our connected high and mid throughput instruments grew at a rate of more than 30% year over year, with robust growth from both clinical and research customers. Sequencing instruments revenue of $109 million was approximately flat year-over-year in Q1 with a higher-than-expected number of X-series instruments shipped in high throughput and the successful launch of the MiSeq i100 in our low-throughput portfolio.

Ankur Dhingra: Over time, the price effect of lower mix of 6K consumables fades away and a much larger part of high GB growth translates to revenue growth. About sequencing activity, total sequencing GV output on our connected high and mid throughput instruments grew at a rate of more than 30% year over year, with robust growth from both clinical and research customers. Sequencing instruments revenue of $109 million was approximately flat year over year in Q1 with a higher than expected number of X-series instruments shipped in high throughput and the successful launch of the MiSeq i100 in our low throughput portfolio.

anchor: In addition, within the process of rolling out software upgrades for our high throughput instruments, which is improving their performance.

anchor: As part of this upgrade we had also pulling forward some of the routine instruments service, which has had a higher cost impact than we had assumed.

Ankur: About sequencing activity.

Ankur: Total sequencing GB output on a connected high end mid throughput instruments grew at a rate of more than 30% year over year.

anchor: The vast majority of the upgrades should be completed by Q2.

anchor: Our manufacturing cost actions continue to make good progress.

Ankur: With robust growth from both clinical and research customers.

Ankur: Sequencing instrument revenue of $109 million was approximately flat year over year in Q1, we had a higher than expected number of ex Cds instruments shipped and high throughput.

anchor: non-GAAP operating expenses were $489 million.

anchor: This reflects our ongoing focus on cost optimization and prioritizing key growth investments during.

anchor: During the quarter, we initiated additional actions to reduce our full year expenses by $100 million.

Ankur: And the successful launch of the <unk> hundred in our low throughput portfolio.

Ankur Dhingra: Thank you for your participation. We look forward to seeing you next. Approximately 60% of X's placed in Q1 were to clinical customers. As you know, early in March, our ability to export instruments into China was restricted. We had in-country inventory to ship our instrument orders in Q1. Sequencing service and other revenue of $142 million was down approximately 5% year over year, in line with expectations, mainly due to the timing of certain strategic partnership revenues last year related to the AGD consortium. Excluding those, our core services and informatics business grew in the mid-single digits.

Ankur Dhingra: Clinical transition to NovaSeq X continues, as approximately 60% of Xs placed in Q1 were to clinical customers. As you know, early in March, our ability to export instruments into China was restricted. We had in-country inventory to ship our instrument orders in Q1. Sequencing service and other revenue of $142 million was down approximately 5% year-over-year, in line with expectations, mainly due to the timing of certain strategic partnership revenues last year related to the EGD consortium. Excluding those, our core services and informatics business grew in the mid-singleton.

Ankur: Clinical transition to Nova seek ex continues as approximately 60% of excess placed in Q1 were to clinical customers.

anchor: And realized a partial benefit in Q1.

anchor: Given these cost reduction initiatives, we do not expect the typical seasonal rise in Opex that occurs post Q1 to repeat in 2025 and expect the opex to be flat to slightly down for the remainder of the year.

Ankur: As you know at lean March our ability to export instruments into China was restricted we had incomplete inventory.

Ankur: Our instrument orders in Q1.

anchor: The $100 million and cost actions to be realized in 2025 are inclusive of certain stock based compensation changes and represent over $225 million in corporate run rate reductions when fully annualized over the next four years.

Ankur: Sequencing service and other revenue of $142 million was down approximately 5% year over year in line with expectations, mainly due to the timing of certain strategic partnership revenues last year related to the <unk> consortium.

Ankur: Excluding those our core services and informatics business grew in the mid single digits.

anchor: non-GAAP operating margin was 24% in Q1.

Ankur Dhingra: Moving to the rest of Illumina TNL. Non-Gap Gross Margin of 67.4% for the first quarter increased 30 basis points year-over-year. margins were slightly lower than anticipated as we saw a higher mix of instruments present. In addition, we're in the process of rolling out software upgrades for our high throughput instruments, which is improving their performance. As part of this upgrade, we're also pulling forward some of the routine instrument service, which has had a higher cost impact than we had assumed. The vast majority of the upgrades should be completed by Q2. Our manufacturing cost actions continue to make good progress.

Ankur Dhingra: Moving to the rest of Illumina PNL. Non-Gap Gross Margin of 67.4% for the first quarter increased 30 basis points year-over-year. Margins were slightly lower than anticipated as we saw a higher mix of instruments present. In addition, we're in the process of rolling out software upgrades for our high throughput instruments, which is improving their performance. As part of this upgrade, we're also pulling forward some of the routine instrument service, which has had a higher cost impact than we had assumed. The vast majority of the upgrades should be completed by Q2. Our manufacturing cost actions continue to make good progress.

Ankur: Moving to the rest of Illumina P&L.

anchor: Looking at our results below the line non-GAAP other expense, which is largely comprised of net interest expense was $15 million.

Ankur: non-GAAP gross margin of 67, 4% for the first quarter increased 30 basis points year over year.

anchor: non-GAAP tax rate was 22%.

Ankur: Margins were slightly lower than anticipated as we saw a higher mix of instruments business in.

anchor: And our average diluted shares with approximately $159 million.

Ankur: In addition, within the process of rolling out software upgrades for our high throughput instruments, which is improving their performance as part of this upgrade will also pulling forward some of the routine instruments service, which has had a higher cost impact than we had assumed.

anchor: $1 million lower than last quarter, driven by share repurchases net of dilution from employee equity awards.

anchor: Altogether non-GAAP EPS of <unk> 97 per diluted share came in at the high end of our guidance range.

anchor: Moving to cash flow and balance sheet items for the quarter.

Ankur: The vast majority of the upgrades should be completed by Q2.

anchor: Cash flow provided by operations was a robust $240 million.

Ankur: Our manufacturing cost actions continue to make good progress.

Ankur Dhingra: Non-GAAP operating expenses were $489 million. This reflects our ongoing focus on cost optimization and prioritizing key growth investments. During the quarter, we initiated additional actions to reduce our full year expenses by $100 million and realized a partial benefit in Q1. Given these cost reduction initiatives, we do not expect the typical seasonal rise in OPEX that occurs post Q1 to repeat in 2025 and expect OPEX to be flat to slightly down for the remainder of the year. $100 million in cost actions to be realized in 2025 are inclusive of certain stock based compensation changes and represent over $225 million in total run rate reductions when fully annualized over the next four years.

Ankur Dhingra: Non-GAAP operating expenses were $489 million. This reflects our ongoing focus on cost optimization and prioritizing key growth investments. During the quarter, we initiated additional actions to reduce our full year expenses by $100 million and realized a partial benefit in Q1. Given these cost reduction initiatives, we do not expect the typical seasonal rise in OPEX that occurs post Q1 to repeat in 2025 and expect OPEX to be flat to slightly down for the remainder of the year. $100 million in cost actions to be realized in 2025 are inclusive of certain stock-based compensation changes and represent over $225 million in total run rate reductions when fully annualized over the next four years.

Ankur: non-GAAP operating expenses were $489 million.

anchor: As a reminder, our annual cash bonus is paid out in Q1.

Ankur: This reflects our ongoing focus on cost optimization and prioritizing key growth investments.

anchor: Capital expenditures were $32 million.

anchor: And free cash flow was $208 million.

Ankur: During the quarter, we initiated additional actions to reduce our full year expenses by $100 million.

anchor: In Q1, we repurchased approximately 173 million shares of Illumina stock for $200 million at an average price of $115.74 per share.

Ankur: And realized a partial benefit in Q1.

Ankur: Given these cost reduction initiatives, we do not expect the typical seasonal rise in Opex that occurs post Q1 to repeat in 2025 and expect opex to be flat to slightly down for the remainder of the year.

anchor: These repurchases were completed in February.

anchor: We ended the quarter with approximately one point to $4 billion in cash cash equivalents and short term investments.

Ankur: The $100 million and cost actions to be realized in 2025 are inclusive of certain stock based compensation changes and represent over $225 million in corporate run rate reductions when fully annualized over the next four years.

anchor: And gross leverage of approximately one apex gross debt to last 12 months EBITDA.

anchor: Now moving to guidance for the year of 2025.

anchor: As you may have seen in the press release, we are updating our guidance to reflect the impact of recent changes in the geopolitical environment.

Ankur Dhingra: non-GAP operating margin was 20.4% in Q1. Looking at our results below the line, non-GAAP other expense, which is largely comprised of net interest expense, was $15 million, and non-GAAP tax rate was 22%. And our average diluted shares were approximately $159 million, $1 million lower than last quarter, driven by share repurchases, net of dilution from employee equity awards. All together, non-gap EPS of $0.97 per diluted share came in at the high end of our guidance rate.

Ankur Dhingra: Non-GAAP operating margin was 20.4% in Q1. Looking at our results below the line, non-GAAP other expense, which is largely comprised of net interest expense, was $15 million, and non-GAAP tax rate was 22%. And our average diluted shares were approximately $159 million, $1 million lower than last quarter, driven by share repurchases, net of dilution from employee equity awards. All together, non-GAP EPS of $0.97 per diluted share came in at the high end of our guidance range.

Ankur: non-GAAP operating margin was 24% in Q1.

anchor: We remain confident in the continued strong position of our business and underlying growth in sequencing demand.

Ankur: Looking at our results below the line non-GAAP other expense, which is largely comprised of net interest expense was $15 million and non-GAAP tax rate was 22%.

anchor: However, the overall environment remains dynamic and we are providing estimates of known changes as of today and reflecting these impacts in our guidance.

Ankur: And our average diluted shares with approximately $159 million.

anchor: As it relates to our business in China, we will now be providing guidance separately for greater China region.

Ankur: $1 million lower than last quarter, driven by share repurchases net of dilution from employee equity awards.

anchor: This will allow for visibility into the evolution of our business in China as well as the over 95% of our business in 2025 outside greater China is making significant progress towards our long term financial targets.

Ankur: Altogether non-GAAP EPS of <unk> 97 per diluted share came in at the high end of our guidance range.

Ankur Dhingra: Moving to cash flow and balance sheet items for the quarter. Cash flow provided by operations was a robust $240 million. As a reminder, our annual cash bonus is paid out in Q1. Capital expenditures were $32 million and cash flow was $208 million. In Q1, we repurchased approximately 1.73 million shares of Illumina stock for $200 million at an average price of $115.74 per share. These repurchases were completed in February. We ended the quarter with approximately $1.24 billion in cash, cash equivalents and short-term investments. and gross leverage of approximately 1.8x gross debt to last 12 months EBITDA.

Ankur: Moving to cash flow and balance sheet items for the quarter.

anchor: Starting with revenue.

Ankur: Cash flow provided by operations was a robust $240 million.

anchor: We are reducing our revenue guidance for greater China by $125 million at the midpoint in connection with export restrictions on instruments.

Ankur: As a reminder, our annual cash bonus is paid out in Q1.

Ankur: Capital expenditures were $32 million and free cash flow was $208 million.

anchor: And the projected impact on the remainder of our China business.

anchor: For rest of the world, we're lowering our revenue guidance to reflect the effect of two items first reducing revenue by 2% to 4% quarterly.

Ankur: In Q1, we repurchased approximately 173 million shares of Illumina stock for $200 million at an average price of $115 74 per share.

anchor: Did more towards our research customers due to a constrained funding environment.

anchor: Partially offset by second proximately, 1% of additional quarterly growth driven by clinical customers as we've seen strong instrument placements over the last couple of quarters.

Ankur: These repurchases were completed in February.

Ankur: We ended the quarter with approximately one point to $4 billion in cash cash equivalents and short term investments.

anchor: The net impact of these two items is approximately $60 million over the next few quarters.

Ankur: And gross leverage of approximately one apex gross debt to last 12 months EBITDA.

Ankur Dhingra: Now moving to guidance for the year 2025. As you may have seen in the press release, we are updating our guidance to reflect the impact of recent changes in the geopolitical environment. We remain confident in the continued strong position of our business and underlying growth in sequencing demand. However, the overall environment remains dynamic and we are providing estimates of known changes as of today and reflecting these impacts in our guidance. As it relates to our business in China, we will now be providing guidance separately for greater China region. This will allow for visibility into the evolution of our business in China, as well as that the over 95% of our business in 2025 outside Greater China is making significant progress towards our long term financial targets.

Ankur: Now moving to guidance for the year 2025.

anchor: In addition.

anchor: <unk>, we're taking pricing actions that provide incremental revenue benefit primarily in the back half of the year.

Ankur: As you may have seen in the press release, we are updating our guidance to reflect the impact of recent changes in the geopolitical environment.

anchor: FX favorability relative to our previous guidance.

anchor: About $25 million to our projected reported revenue.

Ankur: We remain confident in the continued strong position of our business and underlying growth in sequencing demand. However, the overall environment remains dynamic and we are providing estimates of known changes as of today and reflecting these impacts in our guidance.

anchor: All put together for rest of the World. This represents revenue growth of 1% at the midpoint.

anchor: More about China.

anchor: We are in active dialogue with the regulatory authorities for our long term resolution.

Ankur Dhingra: As it relates to our business in China, we will now be providing guidance separately for greater China region. This will allow for visibility into the evolution of our business in China, as well as that the over 95% of our business in 2025 outside Greater China is making significant progress towards our long term financial target. Starting with revenue, we are reducing our revenue guidance for Greater China by $125 million at the midpoint, in connection with export restrictions on instruments and the projected impact on the remainder of our China business. For the rest of the world, we're loading our revenue guidance to reflect the effect of two items. First, reducing revenue by 2% to 4% quarterly.

Ankur: As it relates to our business in China, we will now be providing guidance separately for greater China region.

anchor: We're taking a pragmatic view in our guidance and have taken expense actions to offset the impact on our earnings both for this year and on accumulative basis going forward.

Ankur: This will allow for visibility into the evolution of our business in China as well as that the over 95% of our business in 2025 outside greater China is making significant progress towards our long term financial targets.

anchor: The guide assumes $165 million to $185 million in full year revenue in the greater China region.

Ankur Dhingra: Starting with revenue, we are reducing our revenue guidance for Greater China by $125 million at the midpoint, in connection with export restrictions on instruments and the projected impact on the remainder of our China business. For the rest of the world, we're loading our revenue guidance to reflect the effect of two items. First, reducing revenue by 2% to 4% quarterly. weighted more towards our research customers due to a constrained funding environment. partially offset by second, approximately 1% of additional quarterly growth driven by clinical customers, as we've seen strong instrument placements over the last couple quarters. The net impact of these two items is approximately $60 million over the next three quarters.

Ankur: Starting with revenue.

anchor: Of which $72 million was recognized in Q1 and $60 million is projected for Q2 of 'twenty five.

Ankur: We are reducing our revenue guidance for greater China by $125 million at the midpoint in connection with export restrictions on instruments.

anchor: And only $43 million of contribution at midpoint in the second half of the year.

Ankur: And the projected impact on the remainder of our China business.

Ankur: For rest of the World, we are lowering our revenue guidance to reflect the effect of two items first reducing revenue by 2% to 4% quarterly.

anchor: To the extent there is a positive resolution in China.

anchor: Represent additional upside to this guidance.

anchor: Now shifting into a product assumptions, excluding the greater China region.

Ankur Dhingra: weighted more towards our research customers due to a constrained funding environment. partially offset by second, approximately 1% of additional quarterly growth driven by clinical customers, as we've seen strong instrument placements over the last couple quarters. The net impact of these two items is approximately $60 million over the next three quarters. In addition, we're taking pricing actions that provide incremental revenue benefit primarily in the back half of the year. FX favorability relative to our previous guidance adds about $25 million to our projected reported revenue. All put together for the rest of the world, this represents revenue growth of 1% at the midpoint.

Ankur: Weighted more towards our research customers due to a constrained funding environment.

anchor: We expect sequencing consumables growth.

anchor: Flat and 2% driven by strong sequencing activity, especially with our clinical customers.

Ankur: Actually offset by second proximately, 1% of additional quarterly growth driven by clinical customers as we've seen strong instrument placements over the last couple of quarters.

anchor: For sequencing instruments, we are assuming that our customers will continue to manage their capital investments closely.

Ankur: Net impact of these two items.

anchor: We expect demand for Nova seek X instruments to remain relatively constant.

Ankur: Proximately $60 million over the next few quarters.

Ankur Dhingra: In addition, we're taking pricing actions that provide incremental revenue benefit primarily in the back half of the year. FX favorability relative to our previous guidance adds about $25 million to our projected reported revenue. All put together for the rest of the world, this represents revenue growth of 1% at the midpoint.

anchor: And low throughput growth.

Ankur: In addition, we're taking pricing actions that provide incremental revenue benefit.

anchor: By placement of the might seek I 100, which is being received very well.

Ankur: Primarily in the back half of the year.

anchor: We expect sequencing instruments, excluding greater China to be roughly flat year over year.

Ankur: FX favorability relative to our previous guidance adds about $25 million to a projected reported revenue.

anchor: Now moving to Etfs.

anchor: As you May recall, our revised EPS guidance in March.

Ankur: All put together for rest of the World. This represents revenue growth of 1% at the midpoint.

anchor: Which maintained EPS of approximately $4 52.

Ankur Dhingra: More about China. We are in active dialogue with the regulatory authorities for a long-term resolution. We're taking a pragmatic view in our guidance and have taken expense actions to offset the impact on our earnings, both for this year and on a cumulative basis going forward. The guide assumes $165 to $185 million in full-year revenue in the Greater China Region, of which $72 million was recognized in Q1, and $60 million is projected for Q2 of 2025. and only $43 million of contribution at midpoint in the second half of the year. To the extent there is a positive resolution in China will represent additional upside to this guidance.

Ankur Dhingra: More about China. We are in active dialogue with the regulatory authorities for a long-term resolution. We're taking a pragmatic view in our guidance and have taken expense actions to offset the impact on our earnings, both for this year and on a cumulative basis going forward. The guide assumes $165 to $185 million dollars in full year revenue in the Greater China region of which $72 million dollars was recognized in Q1 and $60 million dollars is projected for Q2 of 2025. and only $43 million of contribution at midpoint in the second half of the year. To the extent there is a positive resolution in China will represent additional upside to this guidance.

Ankur: More about China.

anchor: Took into consideration the reduction in greater China region revenue.

Ankur: We are in active dialogue with the regulatory authorities for our long term resolution.

anchor: And the impact from a more constrained funding environment as well as new actions we initiated.

Ankur: We're taking a pragmatic view in our guidance and have taken expense actions to offset the impact on our earnings both with this year and on accumulative basis going forward.

anchor: To help protect our earnings growth.

anchor: Our new EPS guidance. Additionally takes into consideration the development thereafter.

Ankur: The guide assumes $165 million to $185 million in full year revenue in the greater China region.

anchor: And the primary factor loading that guidance is the new tariff environment.

anchor: Illumina the estimated glass cost of tariffs towards 2025 is approximately $85 million.

Ankur: Of which $72 million was recognized in Q1.

Ankur: And $60 million is projected for Q2 of 'twenty five.

anchor: The largest part of this relates to good ship from one manufacturing facility in Singapore to the U S.

Ankur: And only $43 million of contribution at midpoint in the second half of the year too.

anchor: The remainder relates to parts and sub assemblies imported throughout manufacturing operations in the U S. S.

Ankur: To the extent there is a positive resolution in China.

Ankur: Represent additional upside to this guidance.

anchor: As well as Illumina products sold into China.

Ankur Dhingra: Now shifting into our product design. Excluding the Greater China region, we expect sequencing consumables growth between flat and 2% driven by strong sequencing activity, especially with our clinical customers. For sequencing instruments, we are assuming that our customers will continue to manage their capital investments closely. We expect demand for NovaSeq-X instruments to remain relatively constant and low throughput growth driven by placements of the MySeq i100, which is being received very well. We expect sequencing instruments, excluding Greater China, to be roughly flat year over year.

Ankur Dhingra: Now shifting into our product example. Excluding the greater China region, we expect sequencing consumables growth between flat and 2% driven by strong sequencing activity, especially with our clinical customers. For sequencing instruments, we are assuming that our customers will continue to manage their capital investments closely. We expect demand for NovaSeq-X instruments to remain relatively constant and low throughput growth driven by placements of the MiSeq i100, which is being received very well. We expect sequencing instruments, excluding Greater China, to be roughly flat year over year.

Now shifting into our product assumptions, excluding the greater China region.

anchor: For Q2, given the inventory effects, we will see a partial period impact.

Ankur: We expect sequencing consumables growth between flat and 2% driven by strong sequencing activity, especially with our clinical customers.

anchor: And a $30 million to $35 million impact in the following quarters.

anchor: Our current guidance does not assume any incremental tariffs, including any counter tariffs from the EU or other countries.

Ankur: For sequencing instruments, we are assuming that our customers will continue to manage that capital investments closely.

anchor: We're taking several actions across supply chain optimization pricing and enacting other expense measures to fully mitigate the impact of these tenants.

Ankur: We expect demand for Nova seek X instruments to remain relatively constant and.

Ankur: And low throughput growth driven by placements of the <unk> hundred which is being received very well.

anchor: These actions take time, and we will realize an incremental benefit from these actions in 2026.

Ankur: We expect sequencing instruments, excluding greater China to be roughly flat year over year.

anchor: For 2025, we are expecting to mitigate roughly half of this type of impact and hence reducing the EPS at the midpoint by 25 cents from the revised guidance provided in early March.

Ankur Dhingra: Now moving to EPS. As you may recall, our devised EPS guidance in MARD which maintained EPS of approximately $4.50 took into consideration the reduction in Greater China Region revenue and the impact from our more constrained funding environment as well as new actions we initiate to help protect our earnings growth. Our new EPS guidance additionally takes into consideration the developments thereafter. and the primary factor loading our guidance is the new tariff environment. For Illumina, the estimated gross cost of tariffs for 2025 is approximately $85 million. The largest part of this relates to good ship from our manufacturing facility in Singapore to the US.

Ankur Dhingra: Now moving to EPS. As you may recall, our devised EPS guidance in March, which maintained EPS of approximately $4.50, took into consideration the reduction in Greater China Region revenue. and the impact from our more constrained funding environment as well as new actions we initiate to help protect our earnings growth. A new EPS guidance additionally takes into consideration the developments thereafter. And the primary factor loading our guidance is the new tariff enlargement. For Illumina, the estimated gross cost of tariffs for 2025 is approximately $85 million. The largest part of this relates to good ship from our manufacturing facility in Singapore to the U.S.

Ankur: Now moving to EPS.

Ankur: As you May recall, our revised EPS guidance in March which maintained EPS of approximately $4 50.

anchor: In addition to our ongoing focus on reducing costs. We also plan to continue to repurchase shares under our previously approved share repurchase authorization, which has $1 $2 billion of remaining at the end of the quarter.

Ankur: Took into consideration the reduction in greater China region revenue.

Ankur: And the impact from a more constrained funding environment as well as new actions we initiated.

Ankur: To help protect our earnings growth.

anchor: These repurchases should provide a small in ear accretive benefit to EPS.

Ankur: Our new EPS guidance. Additionally takes into consideration development thereafter.

anchor: Embedded in our FY 'twenty five EPS guidance is a contribution from greater China of approximately 35 cents.

Ankur: And the primary factor loading our guidance is the new tariff environment.

Ankur: For Illumina the estimated glass cost of tariffs for 2025 is approximately $85 million.

anchor: For comparison in FY 'twenty, four we estimate greater China EPS to be approximately 76 cents.

Ankur: The largest part of this relates to goods shipped from our manufacturing facility in Singapore to the U S.

anchor: Our rest of the World EPS this year at the midpoint of guidance would be $3 90.

Ankur Dhingra: The remainder relates to parts and subassemblies imported to our manufacturing operations in the US, as well as Illumina products sold into China. For Q2, given the inventory effects, we will see a partial period impact. and a $30 to $35 million impact in the following quarter. Our current guidance does not assume any incremental tariffs, including any counter-tariffs from the EU or other countries. We're taking several actions across supply chain optimization, pricing, and enacting other expense measures to fully mitigate the impact of these tariffs. These actions take time and we will realize an incremental benefit from these actions in 2026.

Ankur: The remainder relates to parts and sub assemblies imported to add manufacturing operations in the U S.

anchor: Growing at a rate of 15% over similar compared to last year.

Ankur: As well as Illumina product sold into China.

anchor: As I mentioned before the expense actions, we triggered in March we'll give us incremental benefit going forward.

Ankur: For Q2, given the inventory effects, we will see a partial period impact.

anchor: And drive earnings growth irrespective of the outcome in China.

Ankur: And a $30 million to $35 million impact in the following quarters.

anchor: Bringing it altogether, our updated guidance for the year reflects revenue in the range of $4, one $8 billion to $4 two 6 billion.

Ankur: Our current guidance does not assume any incremental tariffs, including any counter tariffs from the EU or other countries.

Ankur: We're taking several actions across supply chain optimization pricing and enacting other expense measures to fully mitigate the impact of these tariffs.

anchor: <unk> in the range of 3% to 1%.

anchor: And excluding greater China, a range of flat to 2% growth.

Ankur: These actions take time, and we will realize an incremental benefit from these actions in 2026.

anchor: We expect our non-GAAP operating margin of approximately $21, 5% to 22% an expansion of 45 basis points at the midpoint versus 2024.

Ankur Dhingra: For 2025, we are expecting to mitigate roughly half of this tariff impact and hence reducing the EPS at midpoint by 25 cents from the revised guidance provided in early March. In addition to our ongoing focus on reducing costs, we also plan to continue to repurchase shares under our previously approved share repurchase authorization, which has 1.2 billion dollars remaining at the end of the quarter. These repurchases should provide a small in-ear accretive benefit to EPS. Embedded in our FY25 EPS guidance is a contribution from Greater China of approximately $0.35. For comparison, in FY24, we estimate Greater China EPS to be approximately 76 cents.

Ankur Dhingra: For 2025, we are expecting to mitigate roughly half of this tariff impact and hence reducing the EPS at midpoint by 25 cents from the revised guidance provided in early March. In addition to our ongoing focus on reducing costs, we also plan to continue to repurchase shares under our previously approved share repurchase authorization, which has 1.2 billion dollars remaining at the end of the quarter. These repurchases should provide a small in-ear accretive benefit to EPS. Embedded in our FY25 EPS guidance is a contribution from Greater China of approximately 35 cents. For comparison, in FY24, we estimate Greater China ETS to be approximately 76 cents.

Ankur: For 2025, we are expecting to mitigate roughly half of this type of impact and hence reducing the EPS at the midpoint by 25 cents from the revised guidance provided in early March.

anchor: The net impact of tariff related items is a reduction of 125 basis points and operating margin.

anchor: We are also lowering our non-GAAP tax rate, which is now expected to be approximately 22%.

Ankur: In addition to our ongoing focus on reducing costs. We also plan to continue to repurchase shares under our previously approved share repurchase authorization.

anchor: This results in an EPS guidance range of $4 20.

anchor: To $4 30.

Ankur: It has $1 $2 billion of remaining at the end of the quarter.

anchor: Now moving to the second quarter of 2025.

Ankur: These repurchases should provide a small in ear accretive benefit to EPS.

anchor: For the second quarter, we expect total revenue range between.

anchor: $1.04 billion to $1.06 billion.

Ankur: Embedded in our FY 'twenty five EPS guidance is a contribution from greater China of approximately 35 cents.

anchor: This includes revenue in greater China region.

Ankur: For comparison in FY 'twenty, four we estimate greater China EPS to be approximately 76 cents.

anchor: $55 million and $65 million.

anchor: Revenue outside the greater China region in the range of $980 million to $1 billion are down between two and 3% year over year driven.

Ankur Dhingra: Our rest-of-the-world EPS this year, at midpoint of guidance, would be $3.90, growing at a rate of 15% over similar compare last year. As I mentioned before, the expense actions we triggered in March will give us incremental benefit going forward and drive earnings growth irrespective of the outcome in China.

Ankur Dhingra: Our rest-of-the-world EPS this year, at midpoint of guidance, would be $3.90, growing at a rate of 15% over similar compared last year. As I mentioned before, the expense actions we triggered in March will give us incremental benefit going forward and drive earnings growth irrespective of the outcome in China.

Ankur: Our rest of the World EPS this year at midpoint of guidance would be $3 90.

Ankur: Growing at a rate of 15% over similar compared to last year.

anchor: Driven predominantly by a decline in certain strategic partnership revenues.

Ankur: As I mentioned before.

anchor: And the research market dynamics I've spoken to.

Ankur: The expense actions, we triggered in March we'll give us incremental benefit going forward.

anchor: We are only are playing the pricing actions to new Yorkers. Therefore, there will be minimal benefit in Q2.

Ankur: And drive earnings growth irrespective of the outcome in China.

Ankur Dhingra: Bringing it all together, our updated guidance for the year reflects revenue in the range of $4.18 billion to $4.26 billion, a decline in the range of 3% to 1%. and excluding Greater China, a range of flat to 2% growth. We expect a non-gap operating margin of approximately 21.5 to 22% and expansion of 45 basis points at the midpoint versus 2024. The net impact of tariff related items is a reduction of 125 basis points in operating margin. We're also lowering our non-GAAP tax rate, which is now expected to be approximately 22%. This results in an EPS guidance range of $4.20 to $4.30.

Ankur Dhingra: Bringing it all together, our updated guidance for the year reflects revenue in the range of $4.18 billion to $4.26 billion, a decline in the range of 3% to 1%. and excluding Greater China, a range of flat to 2% growth. We expect a non-gap operating margin of approximately 21.5 to 22% and expansion of 45 basis points at the midpoint versus 2024. The net impact of tariff-related items is a reduction of 125 basis points in operating margin. We're also lowering our non-GAAP tax rate, which is now expected to be approximately 22%. This results in an EPS guidance range of $4.20 to $4.30.

Ankur: Bringing it altogether, our updated guidance for the year reflects revenue in the range of $4, one $8 billion to $4 6 billion a decline in the range of 3% to 1%.

anchor: We expect non-GAAP operating margin of approximately 21% and non-GAAP earnings per share in the range of $1 to $1.04. Both of which include the estimated $15 million indirect cost impact due to tariffs.

Ankur: And excluding greater China, a range of flat to 2% growth.

anchor: Our guide like before implies a stronger half II contribution versus half one.

Ankur: We expect our non-GAAP operating margin of approximately 20 152, 22% an expansion of 45 basis points at the midpoint versus 2024.

anchor: Which is premised on boats.

anchor: Continued improvement in consumables growth with transition of X <unk>.

anchor: And also the effect of just triggered expenses and pricing actions, whose contributions increase in half two.

Ankur: The net impact of tariff related items is a reduction of 125 basis points and operating margin.

anchor: In closing.

anchor: I would like to acknowledge the perseverance and commitment of all the illumina employees amidst an increasingly dynamic environment.

Ankur: We are also lowering our non-GAAP tax rate, which is now expected to be approximately 22%.

anchor: I remain confident in the path forward.

Ankur: This results in an EPS guidance range of $4 20.

anchor: And illumina team's ability to execute towards our near term and long term financial targets. Thank you for joining our call today I will now invite the operator to open the line for Q&A.

Ankur: To $4 30.

Ankur Dhingra: Now moving to the second quarter of 2025. For the second quarter, we expect total revenue range between $1.04 billion to $1.06 billion. This includes revenue in Greater China Region between $55 million and $65 million, and revenue outside the Greater China Region in the range of $980 million to a billion dollars, or down between 2% and 3% year-over-year, driven predominantly by a decline in certain strategic partnership revenues and the research market dynamics I've spoken to. We are only applying the pricing actions to new orders. Therefore, there will be minimal benefit in Q2. We expect non gap operating margin of approximately 21% and non gap earnings per share in the range of $1 to $1.04.

Ankur Dhingra: Now moving to the second quarter of 2025. For the second quarter, we expect total revenue range between $1.04 billion to $1.06 billion. This includes revenue in greater China region between $55 million and $65 million. and revenue outside the Greater China Region in the range of $980 million to $1 billion or down between 2% and 3% year over year, driven predominantly by a decline in certain strategic partnership revenues and the research market dynamics I've spoken to. We are only applying the pricing actions to new orders. Therefore, there will be minimal benefit in Q2. We expect non-GAAP operating margin of approximately 21% and non-GAAP earnings per share in the range of $1 to $1.04, both of which include the estimated $15 million in direct cost impact due to TEP.

Ankur: Now moving to the second quarter of 2025.

Ankur: For the second quarter, we expect total revenue range.

anchor: Thank you.

Ankur: <unk>.

Ankur: $1.04 billion to $1.06 billion.

Speaker Change: At this time, if you would like to ask a question. Please click on the right hand button, which can be found on the black bar at the bottom of your screen.

Ankur: This includes revenue in greater China region between $55 million and $65 million in.

Speaker Change: To give as many analysts as possible the opportunity to ask a question. Please limit yourself to a single question.

Ankur: Revenue outside the greater China region in the range of $980 million to $1 billion are down between 2% and 3% year over year.

Speaker Change: If you have additional questions. Please raise your hand again to be put back into the queue.

Speaker Change: Please allow a few moments for the queue to film.

Ankur: Driven predominantly by a decline in certain strategic partnership revenues.

Speaker Change: Okay.

Speaker Change: Our first question will come from Doug Schenkel Atmos. Please Amit your line and ask your question.

Ankur: And the research market dynamics I've spoken to.

Ankur: We are only applying the pricing actions to new orders and therefore, there will be minimal benefit in Q2.

Doug Schenkel: Hey, guys. Good afternoon, and thank you for all the detail.

Ankur: We expect non-GAAP operating margin of approximately 21% and non-GAAP earnings per share in the range of $1 to $1.04. Both of which include the estimated $15 million in direct cost impact due to tariffs.

Speaker Change:

Speaker Change: At a simple level I think in investment in alumina here requires a belief that revenue growth will start to rebound sooner than later meeting hopefully next year.

Ankur Dhingra: Both of which include the estimated $15 million in direct cost impact due to test. Our guide, like before, implies a stronger half-two contribution versus half-one, which is premised on both. Continued improvement in consumables growth with transition of act and also the effect of just triggered expenses and pricing actions whose contributions increase and have to.

Speaker Change: And that margins will expand to something above 25%.

Ankur Dhingra: Our guide, like before, implies a stronger half-two contribution versus half-one, which is premised on both. Continued improvement in consumables growth with transition of X and also the effect of just triggered expenses and pricing actions whose contributions increase and have to.

Ankur: Our guide like before implies a stronger half two contribution versus half one.

Speaker Change: Youre doing what you can do to control cost that's been commendable I think where most of the questions reside right now are on the top line growth outlook. So you did a lot to help us with that already.

Ankur: Which is premised on boats.

Ankur: Continued improvement in consumables growth with transition of X <unk>.

Ankur: And also the effect of just triggered expenses and pricing actions, whose contributions increase in half two.

Speaker Change: I'm, hoping you might be able to help us in a few different ways. So.

Ankur Dhingra: In closing, I would like to acknowledge the perseverance and commitment of all the Illumina employees amidst an increasingly dynamic environment. I remain confident in the path forward. and Illumina team's ability to execute towards our near-term and long-term financial targets.

Ankur: In closing I'd.

Doug Schenkel: On the quarter outside of China, What was your total clinical revenue growth and what was your total research growth and then kind of building off of that as we think about guidance for the year. What are you assuming by end market. It seems like you might be assuming a double digit decline in the research end market.

Ankur: I would like to acknowledge the perseverance and commitment of all the illumina employees amidst an increasingly dynamic environment.

Ankur: I remain confident in the path forward.

Ankur: And illumina team's ability to execute towards our near term and long term financial targets. Thank you for joining our call today I will now invite the operator to open the line for Q&A.

Unknown Executive: Thank you for joining our call today.

Unknown Executive: I will now invite the operator to open the line for Q&A. Thank you. At this time if you would like to ask a question please click on the raise hand button which can be found on the black bar at the bottom of your screen. To give as many analysts as possible the opportunity to ask a question please limit yourself to a single question. If you have additional questions please raise your hand again to be put back into the queue. Please allow a few moments for the queue to form.

Unknown Executive: I will now invite the operator to open the line for Q&A. Thank you. At this time, if you would like to ask a question, please click on the raise hand button, which can be found on the black bar at the bottom of your screen.

Doug Schenkel: And still kind of mid single digit plus growth on the clinical side and then the last thing is.

Ankur: Thank you.

Doug Schenkel: In China, it's going to be down to 4% of sales based on your guide, which is down significantly from 10% two years ago.

Speaker Change: At this time, if you would like to ask a question. Please click on the right hand button, which can be found on the black bar at the bottom of your screen.

Unknown Executive: To give as many analysts as possible the opportunity to ask a question, please limit yourself to a single question. If you have additional questions, please raise your hand again to be put back into the queue. Please allow a few moments for the queue to form.

Doug Schenkel: That said you know is near 4% goes down from there next year, it's still could be a headwind in a period, where we're hoping that things start to improve.

Speaker Change: To give as many analysts as possible the opportunity to ask a question. Please limit yourself to a single question.

Speaker Change: Are there other things you are contemplating to manage that risk as we think about not just 2025, but beyond thank you.

Speaker Change: If you have additional questions. Please raise your hand again to be put back into the queue.

Speaker Change: Please allow a few moments for the queue to film.

Speaker Change: Thanks, Doc and that was certainly a few questions here. So let me let me start here and then I'm sure on current needs to help me also on remembering all the questions, but first and foremost we are we see a very resilient business I think illumina have shown over the last period of time that even in very strong headwinds, we still able to to actually have.

Doug Schenkel: Our first question will come from Doug Schenkel at WOLF. Please unmute your line and ask your question. Hey guys, good afternoon and thank you for all of the detail. At a simple level, I think an investment in Illumina here requires a belief that revenue growth will start to rebound, you know, sooner than later, you know, meaning hopefully next year, and that margins will expand to, you know, something above 25%. You're doing what you can do to control cost. That's been commendable. I think where most of the questions reside right now are on the top line growth outlook.

Speaker Change: Okay.

Doug Schenkel: Our first question will come from Doug Schenkel at Wolfe. Please unmute your line and ask your question. Hey guys, good afternoon and thank you for all of the detail. At a simple level, I think an investment in Illumina here requires a belief that revenue growth will start to rebound, you know, sooner than later, you know, meaning hopefully next year, and that margins will expand to, you know, something above 25%. You're doing what you can do to control cost. That's been commendable. I think where most of the questions reside right now are on the top line growth outlook.

Speaker Change: Our first question will come from Doug Schenkel outlook. Please Amit your line and ask your question.

Doug Schenkel: Hey, guys. Good afternoon, and thank you for all the detail.

Speaker Change:

Speaker Change: At a simple level.

Speaker Change: A lot of activities out there, there's a lot of sequencing activity with as a part of the.

Speaker Change: I think in investment in alumina here requires a belief that revenue growth will start to rebound sooner than later meeting hopefully next year.

Speaker Change: Underlying logic of going back to high single digit growth that we believe will step into over the next few years, there's nothing from that perspective outside of China.

Speaker Change: And that margins will expand so something above 25%.

Speaker Change: Seeing a significant change from a strategic perspective on what we told you already this summer with this all about transitioning to the X and with that wed be interested in something over we will see that the volume that we are in.

Speaker Change: We're doing what you can do to control cost that's been commendable I think where most of the questions reside right now are on the top line growth outlook.

Doug Schenkel: So you did a lot to help us with that already, but I'm hoping you might be able to help us in a few different ways. So on the quarter, outside of China, what was your total clinical revenue growth and what was your total research growth? And then kind of building off of that, as we think about guidance for the year, what are you assuming by end market? It seems like you might be assuming a double digit decline in the research end market and still kind of mid single digit plus growth on the clinical side. And then the last thing is.

Speaker Change: So you did a lot to help us with that already but if.

Speaker Change: Seeing in the market will translate more deeply into revenue growth and we are stepping into this in 25 here, where we have where we are on track.

Speaker Change: I'm, hoping you might be able to help us in a few different ways. So on the quarter outside of China. What was your total clinical revenue growth and what was your total research growth and then kind of building off of that as we think about guidance for the year. What are you assuming by end market. It seems like you might.

Speaker Change: <unk> should deliver at least 50% of the revenue on the X on high throughput on the X five by by the second half of this year and then we will see the revenue come after that.

Speaker Change: B, assuming a double digit decline in the research and market and still kind of mid single digit plus growth on the clinical side and then the last thing is.

Speaker Change: So so we feel still good about that.

Speaker Change: We do believe that we are still intact from the Cheesecake framework and right now, we're saying ex China, because we will see how China goes you're absolutely right that this this year and 25 would be approximately 5%. If we don't see a change in the in the current situation in China and obviously, we also expect.

Doug Schenkel: In China, it's going to be down to 4% of sales based on your guide, which is down significantly from 10% two years ago. That said, you know, if 4% goes down from there next year, it still could be a headwind in a period where we're hoping that things start to improve. Are there other things you're contemplating to manage that risk as we think about, you know, not just 2025, but beyond? Thank you. Thanks, Doc.

Speaker Change: In China, it's going to be down to 4% of sales based on your guide, which is down significantly from 10% two years ago that said.

Speaker Change: 4% goes down from there next year it still could be a headwind in a period, where we're hoping that things start to improve.

Speaker Change: Thing.

Speaker Change: It'd be further decline into 2006, if we don't see any change.

Speaker Change: It is important to.

Speaker Change: Are there other things you're contemplating to manage that risk as we think about not just 2025, but beyond thank you.

Speaker Change: State also that the costs are.

Speaker Change: Actions, we took here in in in a in a few weeks ago.

Jacob Thyssen: And that was certainly a few questions you so let me let me start here. And then I'm sure Ankur needs to help me also on remembering all the questions. But first and foremost, we, we see a very resilient business. I think Illumina have shown over the last period of time that even in very strong headwinds, we still able to, to actually have a lot of activities out there. There's a lot of sequencing activity, which is a part of the underlying logic of going back to high single digit growth that we believe will step into over the next There's nothing from that perspective, outside of China, we're not seeing a significant change from a strategic perspective on what we told you already this summer, which is all about transitioning to the X.

Jacob Thaysen: And that was certainly a few questions you so let me let me start here. And then I'm sure Ankur needs to help me also on remembering all the questions. But first and foremost, we, we see a very resilient business. I think Illumina have shown over the last period of time that even in very strong headwinds, we still able to, to actually have a lot of activities out there. There's a lot of sequencing activity, which is a part of the underlying logic of going back to high single digit growth that we believe will step into over the next There's nothing from that perspective outside of China, we're not seeing a significant change from a strategic perspective on what we told you already this summer, which is all about transitioning to the X.

Speaker Change: Thanks, Doc and that was certainly a few questions. So let me let me start here and then I'm sure on current needs to help me also on.

Speaker Change: As an impact of 100 million this year, but as <unk> also mentioned will have a total fully analyze value over the next few years of more than $200 million and thereby we are have made the actions to fully compensate fault whatever will happen in China over the next period of time. So I think that's important and that's why we also see that.

Speaker Change: Remembering all the questions, but first and foremost our mi we see a very resilient business I think illumina have shown over the last period of time that even in very strong headwinds, we still able to to actually have a lot of activities out there. There's a lot of sequencing activity with as a part of the underlying logic of <unk>.

Speaker Change: Four point of $4.25 EPS is a new base for us to grow based on our strategic framework of.

Speaker Change: Going back to high single digit growth that we believe will step into over the next few years, there's nothing from that perspective outside of China. We are not seeing a significant change from a strategic perspective on what we told you already this summer with this all about transitioning to the X and with that we'll be transitioning over we received.

Speaker Change: From double digit to teens growth. So I think I just wanted to start by <unk>.

Speaker Change: Recommitting to our to our strategy, but obviously right now.

Jacob Thyssen: And with that, when we transition over, we will see that the volume that we are seeing in the market will translate more deeply into revenue. And we are stepping into this in 25 here where we are on our track to deliver at least 50% of the revenue on the X, on high throughput on the X by the second half of this year. And then we will see the revenue come after that. So we feel still good about that. We do believe that we are still intact from the strategic framework. And right now we're saying X China because we will see how China goes.

Speaker Change: We are looking at the ex China business, which is 95% of our business. So uncle, maybe you can provide a little more insights on what we had anticipated from a growth rate perspective, yes, Doug I'll address the research versus clinical question.

Jacob Thaysen: And with that, when we transition over, we will see that the volume that we are seeing in the market will translate more deeply into revenue . And we are stepping into this in 25 here where we have, where we are on our track to deliver at least 50% of the revenue on the X on high throughput on the X by by by the second half of this year. And then we will see the revenue come after that. So, so we feel still good about that. We do believe that we are still intact from the strategic framework.

Speaker Change: The volume that we are in.

Speaker Change: Seeing in the market will translate more deeply into revenue growth and we are stepping into this and twenty-five here, where we have where we are on our <unk>.

Speaker Change: For the near term, what's contemplated in the guide et cetera.

Speaker Change: Track to deliver at least 50% of the revenue on the X on high throughput on the X by by by the second half of this year and then we will see the revenue come after that so.

Speaker Change: So as you look at Q1 and context and everyone knows that.

Speaker Change: The changes in the geopolitical environment there the when when you look at our clinical versus versus a research business in Q1, our clinical business has continued to demonstrate the strength.

Speaker Change: So we feel still good about that and we do believe that we are still intact from the strategic framework and right now, we're saying ex China, because we will see how China go through you're absolutely right that this this year and 25 would be approximately 5%. If we don't see a change in the in the.

Jacob Thaysen: And right now we're saying X China because we will see how China goes. You're absolutely right that this this year in 25 we are will be approximately 5% if we don't see a change in the in the current situation in China. And obviously, we also expecting that there will be further decline into 26 if we don't see any change. But it is important to state also that the cost actions we took here in in in in a few weeks ago has an impact of 100 million this year. But as as Ankur also mentioned, we'll have a total fully analyzed value over the next few years of more than 200 million.

Speaker Change: We've talked about very strong X placements heading over from Q4 going into Q1 as well when I look at our consumables business and clinical it grew mid single digits.

Jacob Thyssen: You're absolutely right that this year in 25 we are, will be approximately 5% if we don't see a change in the current situation in China. And obviously we also expecting that there will be further decline into 26 if we don't see any. But it is important to state also that the cost actions we took here in a few weeks ago has an impact of 100 million this year. But as Ankur also mentioned, we'll have a total fully analyzed value over the next few years of more than 200 million. And thereby we have made the actions to fully compensate for whatever will happen in China over the next period of time.

Speaker Change: And as you know from our guide detail the yard we have increased our expectations from the clinical business for the remainder of the year as well, but we continue to see very good demand.

Speaker Change: Currency choice in China, and obviously, we also expecting.

Speaker Change: It'd be further decline into 2006, if we don't see any change.

Speaker Change: It is important to state.

Speaker Change: You need to see very good adoption of the test that are on market as well as newer tests that we are anticipating would be coming into the market for the latter part of the year.

Speaker Change: State also that the cost.

Speaker Change: Actions, we took here in in a few weeks ago.

Speaker Change: Has an impact of 100 million this year, but as <unk> also mentioned will have a total fully annualized value over the next few years of more than $200 million and thereby we are have made the actions to fully compensate fault whatever will happen in China over the next period of time. So I think that's important and that's why we also see that.

Speaker Change: The research side, which has seen.

Speaker Change: More challenging times in the last few months, our research business was down I'm talking consumables in the in the high mid to high single digit range.

Jacob Thaysen: And thereby we are have made the actions to fully compensate for whatever will happen in China over the next period of time. So I think that's important. And therefore, we also see that the 4.4 dollars and 25 cents EPS is the new base for us to grow based on a strategic framework of from double digit to teens growth. So I think I just want to start by recommitting to our to our strategy. But obviously, right now, we are looking at the X China business, which is 95% of our business.

Jacob Thyssen: So I think that's important. And therefore, we also see that the $4.25 EPS is the new base for us to grow based on a strategic framework of from double digit to teens growth. So I think I just want to start by recommitting to our strategy. But obviously, right now, we are looking at the ex-China business, which is 95% of our business.

Speaker Change: And as we think about the remainder of the year given that the changes in the research environment started happening somewhere in the middle part of the quarter.

Speaker Change: Four point.

Speaker Change: $4.25 EPS is a new base for us to grow based on our strategic framework of.

Speaker Change: As we look at it going forward and as we look at the conversations that we've had with our research customers, especially in the academia and government side has more challenges.

Speaker Change: From double digit to teens growth. So I think I just want to start by Recommitting to our to our strategy, but obviously right now.

Speaker Change: Given from two factors one that they're funding environment is constrained in.

Speaker Change: We are looking at the ex China business with is 95% of our business. So uncle, maybe you can provide a little more insights on what we had anticipated from a growth rate perspective, yes, Doug I'll address the research versus clinical question.

Speaker Change: And second because of the tariffs there will be some inflationary impact coming from any direction. So that they will impact will continue through the years, we've lowered our expectations from the research market for the rest of the year. Our guide now assumes a mid double digit like close to 15 ish percent decline.

Ankur Dhingra: So Ankur, maybe you can provide a little more insights on what we have anticipated from tomorrow's growth rate.

Ankur Dhingra: So Ankur, maybe you can provide a little more insights on what we have anticipated from tomorrow's growth rate. Yeah, Doug, I'll address the research versus clinical question for the near term, what's contemplated in the guidance. So as you look at Q1 in context, everyone knows. When you look at our clinical versus our research business, in Q1, our clinical business has continued to demonstrate the strength, where we've talked about very strong X placements carrying over from Q4 going into Q1 as well. When I look at our consumables business in clinical, it grew mid-single digits, and as you know from our guide detail, we have increased our expectations from the clinical business for the remainder of the year as well, where we continue to see very good demand, we continue to see very good adoption of the tests that are on market, as well as newer tests that we are anticipating would be coming into the market for the latter.

Ankur Dhingra: Yeah, Doug, I'll address the research versus clinical question. the near term what's contemplated in the guide. So as you look at Q1 in context, everyone knows. When you look at our clinical versus our research business, in Q1, our clinical business has continued to demonstrate the strength, where we've talked about very strong X placements carrying over from Q4 going into Q1 as well. When I look at our consumables business, in clinical, it grew mid-single digits. And as you know from our guide detail, we have increased our expectations from the clinical business for the remainder of the year as well, where we continue to see very good demand.

Speaker Change: For the near term, what's contemplated in the guide et cetera.

Speaker Change: So as you look at Q1 and context, everyone knows the the changes in the geopolitical environment there.

Speaker Change: Especially in that <unk> space for the rest of the year, so more than what we've seen in Q1, both for full quarter impact as well as some of the additional impacts that that business would see stronger clinical.

Speaker Change: When you look at our clinical versus versus our research business in Q1, our clinical business has continued to demonstrate the strength.

Speaker Change: But yes research research expecting it could be weaker.

Speaker Change: We've talked about very strong X placements heading over from Q4 going into Q1 as well when I look at our consumables business and clinical it grew mid single digits.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: We'll move next to Dave western bit with Piper Sandler.

Speaker Change: And as you know from our guide detail the yard we have increased that expectations from the clinical business for the remainder of the year as well, where we continue to see very good demand. We continue to see very good adoption of the test that are on market as well as newer tests that we are anticipating would be coming into the market.

Speaker Change: These Amit your line and ask you a question.

Dave western: Alright. Thank you very much for taking the question. So I wanted to just hit on some of the consumables in mid throughput and low throughput I'm, assuming it can be one of maybe three things either switching to ask directly or indirectly through service provider or some sort of competitive headwind or maybe just kind of a lack of funding maybe there is some <unk>.

Ankur Dhingra: We continue to see very good adoption of the tests that are on market, as well as newer tests that we're anticipating would be coming into the market for the letter.

Ankur Dhingra: The research side, which has seen more challenging times in the last few months, our research business was down, I'm talking consumables, in the mid to high single-digit And as we think about the remainder of the year, given that the changes in the research environment started happening somewhere in the middle part of the quarter, as we look at it going forward, and as we look at the conversations that we've had with our research customers, especially in the academia and the government side, has more challenges given two factors. One, that their funding environment is constrained. And second, because of the tariffs, there will be some inflationary impact coming from many directions.

Speaker Change: For the latter part of the year.

Ankur Dhingra: The research side, which has seen more challenging times in the last few months, our research business was down on packing consumables in the mid to high single-digit. And as we think about the remainder of the year, given that the changes in the research environment started happening somewhere in the middle part of the quarter, as we look at it going forward, and as we look at the conversations that we've had with our research customers, especially in the academia and the government side, has more challenges, given two factors. One, that their funding environment is constrained. And second, because of the tariffs, there will be some inflationary impact coming from many directions.

Speaker Change: The research side, which has seen.

Speaker Change: Other variables, but I would assume those would be the three would you be able to kind of quantify.

Speaker Change: More challenging times in the last few months, our research business was down.

Speaker Change: On a percentage basis.

Speaker Change: I'm talking consumables in the in the high mid to high single digit range.

Speaker Change: Which is happening here is and I'm just thinking about this in terms of.

Speaker Change: And as we think about the remainder of the year given that the changes in the research environment started happening.

Speaker Change: Elasticity absorption when I'm talking about that first variable versus the second variable, which is obviously kind of worst news and the third variable, obviously shutting down which might be transitory due to kind of funding. So it would be great to hear if you could kind of quantify that and then just a real quick.

Speaker Change: We're in the middle part of the quarter.

Speaker Change: As we look at it going forward and as we look at the conversations that we've had with our research customers, especially in the academia and the government side has more challenges.

Speaker Change: About the conservatism on the guide here.

Speaker Change: Given from two factors one that they are funding environment is constrained and second because of the tariffs there will be some inflationary impact coming from many directions. So that deal will impact will continue through the years, we've lowered our expectations from the research market for the rest of the year.

Speaker Change: I believe you said that you had more commitments from customers like assay is like a contract.

Speaker Change: Commitment I just wanted to know if I understood that correctly because it.

Ankur Dhingra: So that dual impact will continue through the years. We've lowered our expectations from the research market for the rest of the year. Our guide now assumes a mid-double digit, like close to 15-ish percent decline, especially in that A&G space for the rest of the year. So more than what we've seen in Q1, both for full quarter impact, as well as some of the additional impacts of that business model. So stronger clinical, but yeah, research, research, expecting it to be.

Ankur Dhingra: So that dual impact will continue through the years. We've lowered our expectations from the research market for the rest of the year. Our guide now assumes a mid-double digit, like close to 15-ish percent decline, especially in that A&G space for the rest of the year. So more than what we've seen in Q1, both for full quarter impact, as well as some of the additional impact that that So stronger clinical, but yeah, research, research, expecting it to be.

Speaker Change: It would give us some comfort in the guide I think you said that I just want to confirm that you actually did say that thank you yeah. Yeah. Thanks, David Let me start by addressing the overall market in the mid and low throughput and first and foremost we are super excited about the <unk> hundred that we launched here in the very late last year and we are seeing continued momentum.

Speaker Change: Our guidance now assumes a mid double digit like close to 15 ish percent decline, especially in that <unk> space for the rest of the year so more than what we've seen in Q1, both for full quarter impact as well as some of the additional impacts that that business would see stronger clinical.

Speaker Change: In that market. So we are very excited about that and the <unk> 100 has been very well received and we continue to see a lot of interest coming in and we have a very strong order book on the <unk> hundred the low throughput really excited about that and a lot of momentum.

Speaker Change: Yep Research research expecting it could be weaker.

David Westenberg: We'll move next to Dave Westenberg with Piper Sandler. Please unmute your line and ask your question. Hi, thank you very much for taking the question. So I want to just hit on some of the consumables in mid-throughput and low-throughput. I'm assuming it could be one of maybe three things, either switching to X directly or indirectly through a service provider, some sort of competitive headwind, or maybe just kind of a lack of funding. Maybe there's some other variables, but I would assume those could be the three. Would you be able to kind of quantify, you know, on a kind of percentage basis, you know, which is happening here?

Speaker Change: Okay.

David Westenberg: We'll move next to Dave Westenberg with Piper Sandler. Please unmute your line and ask your question. All right. Thank you very much for taking the question. So I want to just hit on some of the consumables in mid-throughput and low-throughput. I'm assuming it could be one of maybe three things, either switching to X directly or indirectly through a service provider, some sort of competitive headwind, or maybe just kind of a lack of funding. Maybe there's some other variables, but I would assume those would be the three. Would you be able to quantify, on a percentage basis, which is happening here?

Speaker Change: Thank you.

Dave: We'll move next to Dave western bit with Piper Sandler.

Speaker Change: Currently in the in the mid throughput.

Dave: Please Amit your line and ask you a question.

Speaker Change: Talked about that over I would almost say since I came in here is that overall, we have seen that.

Amit: Alright. Thank you very much for taking the question. So I wanted to just hit on some of the consumables in mid throughput and low throughput.

Speaker Change: In difficult market conditions. This is the segment that is more challenged than the high throughput and the reason is that the mid throughput is is less so off and production environment, but more often of an environment, where you have the other our research segment or a small.

Speaker Change: Assuming it can be one of maybe three things either switching to ask directly or indirectly through a service provider or some sort of competitive headwind or maybe just kind of a lack of funding maybe theres. Some other variables, but I would assume those would be the three would you be able to kind of quantify.

Speaker Change: You can say clinical account that that might not have the volume to fill up on a high throughput and thereby it's not used to the same same level and the same rigor as you haven't done in the high school with the small end and manufacturing kind of logic. So therefore also you were seeing when the when there's constraints in the in this environment. This is the place where you might push.

Speaker Change: Kind of percentage basis.

Speaker Change: Which is happening here is and I'm just thinking about this in terms of.

David Westenberg: And I'm just thinking about this in terms of elasticity absorption, when I'm talking about that first variable versus the second variable, which is obviously kind of worse news, and the third variable, you know, obviously shutting down, which might be transitory due to kind of funding. So it would be great to hear if you could kind of quantify that.

David Westenberg: And I'm just thinking about this in terms of elasticity absorption, when I'm talking about that first variable versus the second variable, which is obviously kind of worse news, and the third variable, obviously shutting down, which might be transitory due to funding. So it would be great to hear if you could kind of quantify that.

Speaker Change: Elasticity absorption when I'm talking about that first variable versus the second variable, which is obviously kind of worst news.

Speaker Change: Out an acquisition or purchase of an additional instrument you might actually decide to shift over to end service provider, where we will still get the flow of the reagent consumables. So.

Speaker Change: And the third variable, obviously, shutting down which might be transitory due to kind of funding. So it would be great to hear if you could kind of quantify that and then just a real quick.

David Westenberg: And then just a real quick thing about the conservatism on the guide here. Ankur, I believe you said that you had more commitments from customers, like is like a contract commitment. I just want to know if I understood that correctly, because it would give us some comfort in the guide. I think you said that. I just want to confirm that you actually did say that. Thank you. Yeah. Thanks, David.

David Westenberg: And then just a real quick thing about the conservatism on the guide here. Ankur, I believe you said that you had more commitments from customers, like a contract commitment. I just want to know if I understood that correctly, because it would give us some comfort in the guide. I think you said that. I just want to confirm that you actually did say that. Thank you.

Speaker Change: Thinking about the conservatism on the guide here.

Speaker Change: Over arching signal is the same as we have said before is that that's why this market overall is more constrained than than the <unk>.

Speaker Change: I believe you said that you had more commitments from customers like assay is like a contract commitment.

Speaker Change: Don't know if I understood that correctly because it.

Speaker Change: High throughput market. Also reminder, is that we did put the exit chemistry in approximately a year ago and we are seeing a lot of grade we've seen Uh huh.

Speaker Change: It would give us some comfort in the guide I think you said that I just want to confirm that you actually did say that thank you yeah. Thanks, Devin let me start by addressing the overall market in the mid and low throughput and first and foremost we are super excited about the <unk> hundred that we launched here in the very late last year and we are seeing continued momentum.

Jacob Thaysen: Yeah, thanks, David. Let me start by addressing the overall market in that mid and low throughput. And first and foremost, we are super excited about the MiSeq i100 that we launched here very late last year, and we are seeing continued momentum in that market. So we're very excited about that, and the MiSeq i100 has been very well received, and we continue to see a lot of interest coming in, and we have a very strong order book on the MiSeq i100. The low throughput, really excited about that, and a lot of momentum. in in the in the mid throughput.

Jacob Thyssen: Let me start by addressing the overall market in that mid and low throughput. And first and foremost, we are super excited about the MySeek i100 that we launched here in the very late last year. And we are seeing continued momentum in that market. So we're very excited about that. And the MySeek i100 has been very well received and we continue to see a lot of interest coming in. And we have a very strong order book on the MySeek i100. The low throughput, really excited about that and a lot of momentum. in the mid throughput. And we've talked about that over, I would almost say since I came in here is that overall, we have seen that in difficult market conditions, this is the segment that is more challenged than the high throughput.

Speaker Change: Part of all of our customers shifting to the exits chemistry, because it is a bit of chemistry and provides more of a better price point for customers, but also importantly high quality and provide actually a higher capacity with sequencing. So of course, we also are going through and price.

Speaker Change: Our rebalancing in this space. So I think those are the two main drivers for the weakness in India in the mid throughput space granted there's also more competition here I think I mentioned that before and of course, especially in China, where we've seen strong competition, obviously with the with the situation. We haven't China that is of course, a very weak point for us.

Speaker Change: Currently in the in the mid throughput.

Jacob Thaysen: And we've talked about that over I would almost say since I came in here is that overall, we have seen that in in difficult market conditions, this is a segment that is more challenged than the high throughput. And the reason is that the throughput is is less so of an production environment, but more of an of an environment where you have other research segment or a small, you can say clinical account that that might not have the volume to build up on a high throughput, and thereby, it's not used to the same, same level and the same rigor as you have in the in the high throughput, which is more and and manufacturing kind of logic.

Speaker Change: <unk> talked about that over I would almost say since I came in here is that overall, we have seen that.

Speaker Change: Right now right now at least on the instrument placement on the other hand, I will say that from what I can see from the from.

Speaker Change: In difficult market conditions. This is the segment that is more challenged than the high throughput and the reason is that the mill throughput is less so off and production environment, but more of an environment, where you have other research segment all as small.

Speaker Change: From the research that comes out is that we have actually performed very well in China versus our closest competitor them. So so overall.

Jacob Thyssen: And the reason is that the mid throughput is less so of an production environment, but more of an environment where you have other research segment or a small, you can say clinical account that that might not have the volume to build up on a high throughput, and thereby, it's not used to the same level and the same rigor as you have in that in the high throughput with the small and manufacturing kind of logic. So therefore, also, you're seeing when there's constraints in this environment, this is the place where you might push out an acquisition or purchase of an additional instrument, you might actually decide to shift over to an service provider where we will still get the flow of the reagent or the consumables.

Speaker Change: It's a challenging environment, but I think it's much more macro than it is a competitive environment I think there was another question maybe.

Speaker Change: Can say clinical account that that might not have the volume to fill up on a high throughput and thereby it's not used to the same same level and the same rigor as you haven't done in the high throughput with the small end and manufacturing kind of logic. So therefore also youre seeing when the when there's constraints in the in this environment. This is the place where you might push.

Speaker Change: Diving more so about the performance obligations in the backlog Bill So let me contextualize that.

Speaker Change: As a seasonal item usually in Q1.

Jacob Thaysen: So therefore, also, you're seeing when the when there's constraints in the in this environment, this is the place where you might push out an acquisition or purchase of an additional instrument, you might actually decide to shift over to an service provider where we will still get the the flow of the reagent or the consumables. So the overarching signal is the same as we have said before, is that that's why this market overall is is more constrained than than the the high Also a reminder is that we did put the X-Fleet chemistry in approximately a year ago, and we are seeing a lot of great, we've seen a huge part of our customers shifting to the X-Fleet chemistry, because it is a better chemistry and provides more, a better price point for customers, but also importantly, higher quality, and provides actually a higher capacity for the sequencer.

Speaker Change: Nor does see a fairly this is the time when a lot of art long bench contract negotiations and renewals happen.

Speaker Change: Our acquisition of our purchase of an additional instrument you might actually decide to shift over to and service provider wherever you can still get the flow of the reagents consumables. So the overarching signal is the same as we have said before is that that's why this market overall is more constrained than then.

Speaker Change: And we report that number of <expletive> performance applications in our 10-Q. So you should take a look at that in my comments. There is about this year, we have seen those order bookings long range order bookings to grow.

Jacob Thyssen: So the overarching signal is the same as we said before, is that that's why this market overall is more constrained than the high throughput. Also reminder is that we did put the actual chemistry in approximately a year ago and we are seeing a lot of great we've seen a huge part of our customers shifting to the because it is a better chemistry and provides more a better price point for customers but also importantly high quality and provides actually a higher capacity for the sequencer. So of course we also going through and price rebalancing in this space.

Speaker Change: Pretty significantly actually of performance obligations are up double digits year over year and has grown much better than what we've seen in the last couple of years.

Speaker Change: The <unk> the high throughput market. Also reminder, is that we did put the X weave chemistry in approximately a year ago and we are seeing a lot of grade we've seen.

Speaker Change: Thanks for your question please.

Speaker Change: Huge part of all of our customers shifting to the exits chemistry, because it is a bit of chemistry and provides more a better price point for customers, but also importantly high quality and provide actually a higher capacity with sequencing. So of course, we're also going through and price are rebalancing in this space. So I think those are the true <unk>.

Speaker Change: Next question comes from Jack Meehan <unk>.

Speaker Change: Please mute your line and ask your question.

Speaker Change: Thank you and good afternoon.

Jacob Thaysen: So of course, we're also going through and price rebalancing in this space. So I think those are the two main drivers for the weakness in the mid-throughput space. Granted, there's also more competition here. I think I mentioned that before. And of course, especially in China, where we've seen strong competition, obviously, with the situation we have in China, that is, of course, a very weak point for us right now, at least on the instrument placement. On the other hand, I will say that, from what I can see from the research that's come out is that we have actually performed very well in China versus our closest competitors.

Speaker Change: Jack Jacob anchor I was wondering with the tariff.

Jacob Thyssen: So I think those are the two main drivers for the weakness in the in the mid throughput space. Granted, there's also more competition here. I think I mentioned that before. And of course, especially in China, where we've seen strong competition, obviously, with the situation we have in China, that is, of course, a very weak point for us right now, at least on the instrument placement. On the other hand, I will say that from what I can see from the research that's come out is that we have actually performed very well in China versus our closest competitors.

Speaker Change: The dynamics going on in the market at the moment and whether you thought that might have influenced the demand in the first quarter and then I don't know.

Speaker Change: Main drivers for the weakness in India, and then mid throughput space granted there's also more competition here I think I mentioned that before and of course, especially in China, where we've seen strong competition, obviously with the with the situation. We have in China that is of course at <unk>.

Speaker Change: If youre willing to share anything since liberation day just.

Speaker Change: How customers just from a demand perspective, whether the announced tariffs have influenced any purchasing behavior at all thank you.

Speaker Change: The weak point force wiped out right now at least on the instrument placements on the other hand, I will say that from what I can see from the from.

Speaker Change: Thanks, Jack and I would say for Q1, we haven't seen any change I mean, we didn't see any specific change in behavior from our customers related to the tariff situations and I don't think we've seen the same here in Q2, we have seen a little bit of a pull in in China I think from a concern about what could happen in China, but for the.

Speaker Change: From the research that comes out is that we have actually performed very well in China versus our closest competitor them. So so overall.

Jacob Thyssen: So overall, it's a challenging environment, but I think it's much more macro than it is a competitive environment.

Jacob Thaysen: So overall, it's a challenging environment, but I think it's much more macro than it is a competitive environment.

Speaker Change: It's a challenging environment, but I think its smartphone macro than it is a competitive environment I think there was another question maybe.

Ankur Dhingra: I think there was another question, maybe, Ankur, you can dive in more. So about the performance obligations and the backlog bill, so let me contextualize that. As a seasonal item, usually in Q1, Illumina does see a fairly, this is the time when a lot of our long-range contract negotiations and renewals happen, and we report that number as performance obligations in our 10Q, so you should take a look at that. And my comment there is about this year, we have seen those order bookings, long-range order bookings to grow pretty significantly. Actually, our performance obligations are up double digits year over year, and has grown much better than what we've seen in the last year.

Ankur Dhingra: I think there was another question, maybe Ankur can dive in more. So about the performance obligations and the backlog bill, so let me contextualize that. As a seasonal item, usually in Q1, Illumina does see a fairly, this is the time when a lot of our long-range contract negotiations and renewals happen, and we report that number as performance obligations in our 10Q, so you should take a look at that. And my comment there is about this year, we have seen those order bookings, long-range order bookings to grow pretty significantly. Actually our performance obligations are up double digits year over year and has grown much better than what we've seen in the last year.

Speaker Change: Diving more so about the performance obligations in the backlog build so let me contextualize that.

Speaker Change: Rest of the World I don't think we are we seeing anything materially. So so that has not been an impact on the quarterly progression in the quarter.

Speaker Change: As a seasonal item usually in Q1.

Speaker Change: <unk> does see a fairly this is the time when a lot of art long bench contract negotiations and renewals happen.

Speaker Change: But as you know just to add there is that the case for the rest of the year.

Speaker Change: Certainly anticipating is that as the impact of tariff becomes more better known and start showing up in the cost.

Speaker Change: And we report that number as performance applications in our 10-Q. So you should take a look at that in my comments. There is about this year, we have seen those order bookings long binge order bookings to grow.

Speaker Change: There will be some impact and have them have accordingly taken effect, though okay.

Speaker Change: Pretty significantly actually our performance obligations are up double digits year over year.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Vijay Kumar Evercore. Please mute your line and ask your question.

Speaker Change: And Hasbro and much better than what we've seen in the last couple of years.

Speaker Change: Uh huh.

Unknown Executive: Thank you.

Unknown Executive: Thanks so much.

Jack Meehan: Our next question comes from Jack Meehan at Nefren.

Vijay Kumar: Jacob Thanks for taking my question I, just want one on the revenue guidance assumptions, if you don't mind.

Speaker Change: Thank you so much and please.

Jack Meehan: Our next question comes from Jack Meehan at Neffron. Please unmute your line and ask your question. Thank you and good afternoon. Jacob Ankur, I was wondering with the tariff dynamics going on in the market at the moment, whether you thought that might have influenced the demand in the first quarter? And then, I don't know if you're willing to share anything since Liberation Day, just, you know, how customers, just from a demand perspective, whether the announced tariffs have influenced any purchasing behavior at all? Thank you.

Speaker Change: Our next question comes from Jack Meehan Nephron. Please on mute your line and ask your question.

Jack Meehan: Please unmute your line and ask your question. Thank you and good afternoon. Jacob Ankur, I was wondering with the tariff dynamics going on in the market at the moment, whether you thought that might have influenced any of the demand in the first quarter? And then, I don't know if you're willing to share anything since Liberation Day, just, you know, how customers, just from a demand perspective, whether the announced tariffs have influenced any purchasing behavior at all?

Speaker Change: The prior guidance is up low singles and I think the current guidance updated guidance is down low singles, maybe a change of 300 400 basis points, but when I look at your change in our China assumption. So feels hit almost all of it came from China.

Speaker Change: Thank you and good afternoon.

Jack: Jack Jacob anchor I was wondering with the tariff.

Jack: The dynamics going on in the market at the moment and whether you thought that might have influenced the demand in the first quarter and then I don't know if youre willing to share anything since liberation day just.

Speaker Change: Reduction so I'm not sure where the research Ankur. When you say research you resuming down 15%, how thats being baked into and be offset is clinical freely like did it change versus the prior assumption like where is the offset coming from if researched a change. Thank you.

Jack: How customers just from a demand perspective, whether the announced tariffs have influenced any purchasing behavior at all thank you.

Jack Meehan: Thank you. But as you know, just to add there is that at least for the rest of the year, we are certainly anticipating as that as the impact of tariff becomes more better known and start showing up in the cost, that there will be some impact and have have accordingly taken our guide down. Thank you.

Jack Meehan: Now, thanks, Jack. And I would say for Q1, we haven't seen any change. We didn't see any specific or change in behavior from our customers related to the tariff situations. And I don't think we've seen the same here in Q2. We have seen a little bit of pull in in China, I think from a concern about what would happen in China, but for the rest of the world, I don't think we're seeing anything materially.

Speaker Change: Yeah, Let me, let me start and have the corrigan drill deeper into the numbers here, but overall.

Speaker Change: Thanks, Jack and I would say for Q1, we haven't seen any change we didn't see any specific changes in behavior from our customers related to the tariff situations and I don't think we've seen the same here in Q2, we have seen a little bit of a pull in in China I think from a concern about what could happen in China, but for the rest.

Speaker Change: We did anticipate already when we came out with a March.

Speaker Change: Forecast have you had already expected that would both be an impact from China and from the NIH funding. So we had that already bill and so so that is that was the overall expectations in it.

Speaker Change: Of the World I don't think we're seeing anything materially. So so that has not been an impact on the quarterly.

Jack Meehan: So that has not been an impact on the quarterly progression in the quarter But as you know, just to add there is that at least for the rest of the year, we are certainly anticipating as that as the impact of tariff becomes more better known and start showing up in the cost, that there will be some impact and have have accordingly taken our guy down. Thank you.

Speaker Change: Obviously at that point of time, we said that there was various outcomes could be Phoenix.

Speaker Change: And expecting them and so now be providing the full details of this overall.

Speaker Change: Our progression in the quarter.

Speaker Change: But as you know and just to add there is that the case for the rest of the year. We are certainly anticipating is that as of the.

Speaker Change: So that's the high level direction, we are taking we feel we have a good sense for now where the academic and government is going and I suppose the anchor was mentioning at this point, we are expecting that it will continue with that.

Speaker Change: The impact of tariff becomes more better known and start showing up in the costs that are that there will be some impact and have them have accordingly taken effect, though okay.

Speaker Change: A 10% decrease and and that's the main main driver on the other hand, we see actually that our clinical customers are showing up strong again in Q1. So we anticipate them you're seeing you're seeing that in our numbers also that the clinical business is a more robust and stronger than that.

Speaker Change: Thank you.

Vijay Kumar: Our next question comes from Vijay Kumar at Evercore. Please unmute your line and ask your question. Hey, Ankur, Jacob, thanks for taking my question. I just want one on the revenue guidance assumptions, if you don't mind. The prior guidance is up low singles, and I think the current guidance, updated guidance is down low singles, maybe a change of 300, 400 basis points. When I look at your change in China assumptions, it feels like almost all of it came from China reduction. So I'm not sure where the research, Ankur, when you say research, you're resuming down 15%, how that's being baked into, and the offset, is clinical really, like, did it change versus the prior assumption?

Vijay Kumar: Our next question comes from Vijay Kumar at Evercore.

Speaker Change: Our next question comes from Vijay Kumar Evercore. Please mute your line and ask your question.

Vijay Kumar: Please unmute your line and ask your question. Hey, Ankur, Jacob, thanks for taking my question. I just want one on the revenue guidance assumptions, if you don't mind. The prior guidance is up low singles, and I think the current guidance, updated guidance is down low singles, maybe a change of 300, 400 basis points. When I look at your change in China assumptions, it feels like almost all of it came from China reduction. So I'm not sure where the research, Ankur, when you said research, you're resuming down 15%, how that's being baked into, and the offset, is clinical really, like, did it change versus the prior assumption?

Speaker Change: Uh huh.

Jacob Tyson: Jacob Thanks for taking my question.

Speaker Change: And <unk> been really pleased with that right now.

Speaker Change: Just one on <unk>.

Speaker Change: The revenue guidance assumptions, if you don't mind.

Speaker Change: At the highest levels of debt.

Speaker Change: A little bit more detail is that yes. The biggest part of the changes in China that we have separated it out for the rest of the world.

Speaker Change: The puts and takes are that the research business is down.

Speaker Change: Roughly about if you take a midpoint about three percentage points.

Speaker Change: Reduction so I'm not sure where the research encore when you say research you resuming down 15%, how thats being baked into and the opposite is clinical really like did it change versus the prior assumption like where is the offset coming from if research to change. Thank you.

Speaker Change: And all of Unpacking, what is the rest of the remainder three quarters. So the amortization will be what it will be.

Speaker Change: But about three points lower so that's roughly about $90 million so to speak on the research and patent related impact.

Vijay Kumar: Like, where is the offset coming from if research did change? Thank you.

Vijay Kumar: Like, where is the offset coming from if research did change?

Speaker Change: We are seeing clinical stronger.

Vijay Kumar: Thank you.

Jacob Thyssen: Yeah, let me start and have Ankur again debunk the numbers here, but overall, we did anticipate already when we came out with our March forecast, that we had already expected that would both be an impact from China and from the NIH funding. So we had that already built in, so that was the overall expectations in it. Obviously, at that point of time, we said that there was various outcome we could be Overall, so that's the high level direction you're taking. We feel we have a good sense for now where the academic and government is going.

Jacob Thaysen: Yeah, let me start and have Ankur again, deeper into the numbers here. But overall, we did anticipate already when we came out with our March EPA, March forecast that we had already expected that would both be an impact from China and from the NIH funding. So we had that already built in. So that was the overall expectations in it. Obviously, at that point of time, we said that there was various outcome we could be expecting. And so now we're providing the full details of this. Overall, so that's the high level direction we're taking. We feel we have a good sense for now where the academic and government is going.

Speaker Change: Yeah, Let me, let me start and have the corrigan deeper into the numbers here, but overall.

Speaker Change: In terms of our continued X placements as.

Speaker Change: As well as the units that were anticipating will come alive.

Speaker Change: We we did anticipate already when we came out with a March EPA.

Speaker Change: So clinical provides roughly about a point offset.

Speaker Change: Forecast that we had already expected that would both be an impact from China and from the NIH funding. So we had that already bill and so so that as that was the overall expectations in it.

Speaker Change: When we're talking to spoken about mitigating actions relative to tariffs and part of that includes certain pricing actions.

Speaker Change: And I'm anticipating roughly about a point of contribution from that as well.

Speaker Change: That's mostly the puts.

Speaker Change: It takes there is also a small component from FX, which relative to our last guide.

Speaker Change: Obviously at that point of time, he said that there was various outcome could be.

Speaker Change: <unk> been expecting and so now be providing the full details of this.

Speaker Change: Has become less unfavorable sky guidance now more favorable and that's adding about a half a point is it a particular not not in the constant currency, but on their borders.

Speaker Change: Overall.

Jacob Thyssen: And as was Ankur was mentioning, at this point, we are expecting that it will continue with a 15% decrease. And that's the main driver for it. On the other hand, we see actually that our clinical customers are showing up stronger here in Q1. So we anticipate and we're seeing that in our numbers also that the clinical business is more robust and stronger. And we're really pleased.

Ankur Dhingra: And as Ankur was mentioning, at this point, we are expecting that it will continue with a 15% decrease. And that's the main driver for it. On the other hand, we see actually that our clinical customers are showing up stronger here in Q1. So we anticipate and we're seeing that in our numbers also that the clinical business is more robust and stronger and we're really pleased with that. Yeah, at the highest level, Vijay, to add a little bit more detail, is that, yes, the biggest part of the changes in China that we've separated out for the rest of the world, the puts and takes are that the research business is down, we said roughly about if you take a midpoint, about three percentage And all I'm talking about is the rest of the remainder three quarters, so the annualization will be what it will be.

Speaker Change: That's helpful. Thank you guys.

Speaker Change: We'll move next to Tycho Peterson with Jefferies. Please mute your line and ask your question.

Speaker Change: A 15% decrease.

Speaker Change: And that's the main main driver on the other hand, we see actually.

Tycho Peterson: Hey, thanks.

Speaker Change: I'm, sorry, I want to stress test your kind of assumptions around price here.

Speaker Change: Our clinical customers showing up strong again in Q1, so we anticipate them you're seeing you're seeing that in our numbers also that the clinical business is.

Speaker Change: It sounds good I'm, just curious where in the portfolio. You think you can take price, obviously, you've got competitors, including one giving away free sequencing. So just talking a little bit about you know your confidence that you can actually start to push higher pricing.

Speaker Change: <unk> robust and stronger than than the and <unk> been really pleased with that right now.

Ankur Dhingra: Yeah, at the highest level, Vijay, to add a little bit more detail, is that, yes, the biggest part of the changes in China that we've separated out for the rest of the world, the puts and takes are that the research business is down, we said roughly about if you take a midpoint, about 3% And all I'm talking about is the rest of the remainder three quarters, so the annualization will be what it will be. but about three points lower. So that's roughly about $90 million, so to speak, on the research and tariff-related impact. We are seeing clinical stronger, both in terms of our continued X placements, as well as the units that we're anticipating will come live.

Speaker Change: Yes at the highest levels of debt.

Speaker Change: Yeah. So let me start there and then you can have a go into some more detail. It's also but overall I think illumina has a long history of course off a continued to drive down pricing and we will continue to of course ensure that our customers have the competitive pricing would be.

Speaker Change: A little bit more detail is that yes. The biggest part of the changes in China that we have separated it out for the rest of the world.

Speaker Change: The puts and takes are that the research business is down.

Speaker Change: The competitive pricing, but on the other hand also in these environments. You you want to also on the customer wants to work with companies that will be here in years from now and therefore, we have a prudent approach to both our pricing strategy and of course also how we can go out and offer a really innovative projects through our innovative suite.

Speaker Change: Roughly about if you take a midpoint about three percentage points.

Speaker Change: All unpacking what is the rest of the remainder three quarters. So the amortization will be what it will be.

Ankur Dhingra: But about three points lower, so that's roughly about $90 million, so to speak, on the research and tariff related impact. We are seeing clinical stronger, both in terms of our continued X placements, as well as the units that we're anticipating will come live. So clinical provides roughly about a point offset. And then we've spoken about mitigating actions relative to tariffs, and part of that includes certain pricing actions. And I'm anticipating roughly about a point of contribution from there. So that's mostly the puts and takes. There's also a small component from FX, which relative to our last guide, has become less unfavorable.

Speaker Change: But about three points lower so that's roughly about $90 million so to speak on the research and tariff related impacts.

Speaker Change: We are seeing clinical stronger.

Speaker Change: To our customers so we feel.

Speaker Change: In terms of our continued X placements as.

Speaker Change: And with this situation with the tariffs coming in obviously, we would love to.

Speaker Change: As well as the units that were anticipating will come alive.

Ankur Dhingra: So clinical provides roughly about a point offset. And then we've spoken about mitigating actions relative to tariffs, and part of that includes certain pricing actions. And I'm anticipating roughly about a point of contribution from there. So that's mostly the puts and takes. There's also a small component from FX, which relative to our last guide, has become less unfavorable. So guide to guide, it's now more favorable, and that's adding about a half a point to the... not not in the constant currency but That's helpful. Thank you guys.

Speaker Change: So clinical provides roughly about a point offset.

Speaker Change: To mitigate as much as possible and be working on mitigating as much as possible to have as little less impact to our customers, but at this point as you can see also we do have a we ought. We believed there was correct and we did a lot of analysis and seeing what the number and how much we could you could put in and obviously nobody likes a price increase I mean I don't like.

Speaker Change: And then we are talking to spoken about mitigating actions relative to tariffs and part of that includes certain pricing actions.

Speaker Change: And I'm anticipating roughly about a point of contribution from data as well.

Speaker Change: That's mostly the puts.

Speaker Change: And takes there's also a small component from FX, which relative to our last guide.

Speaker Change: That personally no cost on this is kind of like that so we recognize that this is have impacts on our customers, but we feel good about that we will be able than our customers do understand is that illumina here for the long term.

Speaker Change: Has become less unfavorable sky guidance of now more favorable and that's adding about half a point is it a particular not not in the constant currency, but on the report for today.

Ankur Dhingra: So guide to guide, it's now more favorable and that's adding about a half a point to the report.

Ankur Dhingra: not not in the constant currency but That's helpful.

Speaker Change: So if you work with us and we work through this tough time also we will get out on the other side and continue to ban driving innovations to our customers and make them successful.

Unknown Executive: Thank you guys.

Speaker Change: That's helpful. Thank you guys.

Tycho Peterson: We'll move next to Tycho Peterson at Geoffrey's. Please unmute your line and ask your question. Hey, thanks. Um, Ankur, I want to stress test your kind of assumptions around price here. You know, it sounds good. I'm just curious where in the portfolio you think you can take price. Obviously, you've got competitors, you know, including one giving away free sequencing. So just talk a little bit about, you know, your confidence that you can actually start to push higher pricing.

Tycho Peterson: We'll move next to Tycho Peterson at Geoffrey's. Please unmute your line and ask your question. Hey, thanks. Ankur, I want to stress test your kind of assumptions around price here. You know, it sounds good. I'm just curious where in the portfolio you think you can take price. Obviously, you've got competitors, you know, including one giving away free sequencing. So just talk a little bit about, you know, your confidence that you can actually start to push higher pricing.

Speaker Change: We'll move next to Tycho Peterson with Jefferies. Please on mute your line and ask your question.

Speaker Change: If you want to give you a sequencing away for free I can guarantee you don't have a business in a few quarters.

Tycho Peterson: Hey, thanks.

Tycho Peterson: I'm, sorry, I want to stress test your kind of assumptions around price here.

Speaker Change: We'll move next to comment Nomura RBC capital markets. Please on mute your line and ask your question.

Speaker Change: It sounds good I'm, just curious where in the portfolio. You think you can take price, obviously, you've got competitors, including one giving away free sequencing. So.

Speaker Change: Hey, guys. Thanks for all the.

Tycho Peterson: Talking a little bit about your confidence that you can actually start to push higher pricing.

Speaker Change: All the color on the tariff impact really appreciate that but just to expand a little bit on the competitive front are you seeing customers delay or defer equipment purchasing.

Jacob Thyssen: Yeah, so let me start there. And then we can have Ankur go into some more details also. But overall, I think Illumina has a long history, of course, of continuing to drive down pricing and will continue to, of course, ensure that our customers have competitive pricing, and we can facilitate competitive pricing. But on the other hand, also, in these environments, you want to also, and the customer wants to work with companies that will be here in years from now. And therefore, we have a prudent approach to both our pricing strategy, and of course, also how we can go out and offer really innovative projects to our innovative solutions to our customers.

Jacob Thaysen: Yeah, so let me start there. And then we can have Ankur go into some more details also. But overall, I think Illumina has a long history, of course, of continuing to drive down pricing and will continue to, of course, ensure that our customers have competitive pricing and we can facilitate competitive pricing. But on the other hand, also, in these environments, you want to also and the customer wants to work with companies that will be here in years from now. And therefore, we have a prudent approach to both our pricing strategy, and of course, also how we can go out and offer really innovative projects to our innovative solutions to our customers.

Tycho Peterson: Yeah. So let me start there and then you can have a go into some more detail. It's also but overall I think illumina have a long history of course I'll continue to drive down pricing and we will continue to of course ensure that our customers have for competitive pricing would be.

Speaker Change: Anticipation of current or future product offerings from competitors.

Speaker Change: Yes, no. That's great question, it's something we have heard a few times now also is that we continue to be in a competitive space here, we actually think we're doing really well against all competition, but but as you also know whatever number of new announcements coming out here a few weeks ago.

Speaker Change: Christine Fitbit competitive pricing, but on the other hand also in these environments.

Tycho Peterson: One also on the customer wants to work with companies that will be here.

Tycho Peterson: In years from now and therefore, we have a prudent approach to both our pricing strategy and of course also how we can go out and offer a really innovative projects to our innovative <unk>.

Speaker Change: Which I would call it technology all of you it was not a product launch.

Speaker Change: And with all technology overview, it's easy to impress it's very difficult to satisfy our customers. So I think right. Nowadays some excitement around this you can go out and make a lot of promises but again it comes down to that every day you have to deliver again and again and again and I think especially in tough times customers will go to a company that.

Jacob Thyssen: So we feel and with this situation with the tariffs coming in, obviously, we would love to mitigate as much as possible and be working on mitigating as much as possible to have as little as impact to our customers. But at this point, as you can see, also, we do have, we believe it was correct. And we did a lot of analysis and seeing what the number and how much we could we could put in. And obviously, nobody likes a price increase. I mean, I don't like that. Personally, no customers is going to like that. So we recognize that this is have impacts on our customers.

Jacob Thaysen: So we feel and with this situation with the tariffs coming in, obviously, we would love to mitigate as much as possible. And we're working on mitigating as much as possible to have as little as impact to our customers. But at this point, as you can see, also, we do have, we believe it was correct. And we did a lot of analysis and seeing what the number and how much we could we could put in. And obviously, nobody likes a price increase. I mean, I don't like that. Personally, no customers is going to like that. So we recognize that this is have impact on our customers.

Tycho Peterson: Solutions to our customers so we feel.

Tycho Peterson: And with this situation with the tariffs coming in obviously, we would love to.

Tycho Peterson: Mitigate as much as possible and be working on mitigating as much as possible to have as little less impact to our customers, but at this point as you can see also we do have.

Speaker Change: Can provide and b and we have certainty of deliverables and delivering but also that we can make sure that you can be successful in whether you are clinical customer or whether you're a research customer. So we feel really good about that but we have not seen at this point of time any.

Tycho Peterson: We believe there was correct and we did a lot of analysis and seeing what the number and how much we could you could put in and obviously nobody likes a price increase I mean, I don't like that personally no customers is kind of like that so we recognize that this is have impacts on our customers, but we feel good about that we would be able and our customers to understand is that illumina here for the.

Jacob Thyssen: But we feel good about that we will be able and our customers to understand is that Illumina is for the long term. So if you work with us, and we work through this tough time, also, we will get out on the other side and continue to be driving innovations to our customers and make them successful.

Jacob Thaysen: But we feel good about that we will be able and our customers will understand is that Illumina is for the long term. So if you work with us, and we work through this tough time, also, we will get out on the other side and continue to be driving innovations to our customers and make them successful.

Speaker Change: Option due to any any customers that we have seen have delayed decisions based on potential technology that to be Frank we don't know yet what it is and I don't think our customers know exactly what that new technology will be it's a brand new technology. It will take time to prove that our technologies have to go through the <unk>.

Tycho Peterson: Long term.

Tycho Peterson: So if you work with us and we work through this tough time also we will get out on the other side and continue to ban driving innovations to our customers and make them successful.

Jacob Thyssen: And if you want to give your sequencing away for free, I can guarantee you don't have a business in it.

Unknown Executive: If you want to give your sequencing away for free, I can guarantee you don't have a business in the future.

Tycho Peterson: You want to give you our sequencing away for free I can guarantee you don't have a business in a few quarters.

Speaker Change: C verification through the academic research space with ever go out they'll do some of that paper that would do the analysis that resets on it and it will take time, there will always Kingston technologies. This is not an easy space. This is not an end in mature market and it will take time, so we'll see how it goes but right now there's no no impact.

Jacob Thyssen: We'll move next to Conor McNamara at RBC Capital Markets. Please unmute your line and ask your question. Hey guys, thanks for all the all the color on the tariff impact, really appreciate that. But just to expand a little bit on the competitive front, are you seeing customers delay or defer equipment purchasing in anticipation of current or any future product offer offerings from competitors? Yeah, no, that's a great question. It's something we have heard a few times now also is that, you know, we continue to be in a competitive space here, we actually think we're doing really well against our competition.

Conor Mcnamara: We'll move next to Conor McNamara at RBC Capital Markets. Please unmute your line and ask your question. Hey guys, thanks for all the all the color on the tariff impact really appreciate that.

Speaker Change: We'll move next to comment Nomura RBC capital markets. Please mute your line and ask your question.

Speaker Change: Hey, guys. Thanks for all the all.

Speaker Change: All the color on the tariffs impact really appreciate that but just to expand a little bit on the competitive front are you seeing customers delay or defer equipment purchasing.

Jacob Thaysen: But just to expand a little bit on the competitive front, are you seeing customers delay or defer equipment purchasing in anticipation of current or any future product offer offerings from competitors? Yeah, no, that's a great question. It's something we have heard a few times now also is that, you know, we continue to be in a competitive space here, we actually think we're doing really well against our competition. But, but as we also know, there were a new announcement coming out here a few weeks ago, which I would call a technology overview, it was not a product launch.

Speaker Change: We will move to that color.

Mike: We'll move next to Mike <unk> Bank of America. Please mute your line and ask you a question.

Speaker Change: Anticipation of current or future product offer offerings from our competitors.

Speaker Change: Great can you guys hear me.

Speaker Change: Yes, no. That's great question, it's something we have heard a few times now also is that.

Speaker Change: Yes, we kind of like Hey, great. Thanks for taking the question.

Speaker Change: You spent a lot of the call talking about China, and what's changed in your views on China for the rest of the year, you talked about academic and government headwinds. This year, how do we think about both of those markets going into 2026, and what I mean by that is.

Speaker Change: We continue to be in a competitive space here, we actually think we're doing really well against our competition, but but as you also know that were a number of new announcements coming out here a few weeks ago.

Jacob Thyssen: But, but as we also know, there were a new announcement coming out here a few weeks ago, which I would call a technology overview, it was not a product launch. And with all technology overview, it's easy to impress, it's very difficult to satisfy our customers. So I think right now there's some excitement around this, you can go out there and make a lot of promises. But in the end, it comes down to that every day you have to deliver again and again and again. And I think especially in tough times, customers will go to a company that can provide and be and where you have certainty of deliverables, but also in delivering, but also that we can make sure that you can be successful in whether you are a clinical customer or whether you're a research So we feel really good about that.

Speaker Change: Which I would call a technology overview it was not a product launch.

Speaker Change: If youre going to be doing 15, 20 $25 million per quarter in China, and <unk> does that go to zero in 2026, or do you think thats a sustainable level from which maybe you can start to grow again and same thing on a N. G. If we look at what's happening in the U S on NIH and things like that doesn't seem like this is a temporary headwind has just taken a.

Jacob Thaysen: And with all technology overview, it's easy to impress, it's very difficult to satisfy our customers. So I think right now there's some excitement around this, you can go out there and make a lot of promises, but in the end, it comes down to that every day you have to deliver again and again and again. And I think especially in tough times, customers will go to a company that can provide and be and they have certainty of deliverables, but also in delivering, but also that we can make sure that you can be successful in whether you are a clinical customer or whether you're a research So we feel really good about that.

Speaker Change: Taking a step back and looking at next year and the year. After two pivotal markets. What do you think they go from here after the headwinds seen this year. Thanks, Yeah. Thanks, Mike and I agree with you that we are spending way too much talking about China that is at 5% of our business and we also liked talking way too much time on some headwinds in NIH, where we have very strong market.

Jacob Thyssen: But we have not seen at this point of time, any disruption due to or any customers that we have seen have delayed decisions based on potential technology that to be frank, we don't know yet what it is. And I don't think our customers know exactly what that new technology will be. It's a brand new technology. It will take time to prove that. All technologies have to go through the, you know, almost the verification through the academic research space, but they will go out, they will do some, their paper, they will do the analysis, their research on it.

Jacob Thaysen: But we have not seen at this point of time, any disruption due to or any any customers that we've seen have delayed decisions based on potential technology that, to be frank, we don't know yet what it is. And I don't think our customers know exactly what that new technology will be. It's a brand new technology. It will take time to prove that all technologies have to go through the, you know, almost the verification through the the academic research space, but they will go out, they will do some their paper, they will do the analysis, their research on it.

Speaker Change: Disruption due to any any customers that we have seen have delayed decisions based on potential technology that to be Frank we don't know yet what it is and I don't think our customers know exactly what that new technology will be a brand new technology.

Speaker Change: That continues to grow strongly, especially in the clinical market and by the way in Europe is continues to be very very strong performance for it. So I agree. We are spending all of us are spending way too much on a very small part of our business and we are a very resilient business that continues to drive.

Speaker Change: It will take time to prove that our technologies have to go through the almost the verification through the academic research space, but they ever go out they'll do some of that paper that we do the analysis that resets on it and it will take time, there will always be Kingston technologies. This is not an easy space. This is not in a mature market and it will take time, so you'll see how it goes.

Speaker Change: A lot of activity out there and generating fantastic cash flow. So, let's just start there.

Speaker Change: China we.

Jacob Thaysen: And and it will take time, there will always be kinks in technologies. This is not an easy space. This is not an immature market, and it will take time. So we'll see how it goes.

Jacob Thyssen: And it will take time. There will always be kinks in technologies. This is not an easy space. This is not an immature market and it will take time. So we'll see how it goes. But right now there is no.

Chris: I'm, Chris mentioning we are working of course with the Chinese authorities to see whether we can find a solution.

Chris: But we have taken the action right now that that indicates that that we won't be able to have a long term sustainable business in China, we will still be able to compensate that with the cluster measures you have taken and we are as you can see in our numbers. We are expecting at this point the China business too.

Mike Ryskin: But right now, there's no no We'll meet for that color. We'll move next to Mike Ryskin at Bank of America. Please unmute your line and ask your question. Great. Can you guys hear me? Yes, we can, Mike. Hi. Great. Thanks for taking the question. You know, you spent a lot of the call talking about China and what's changed and your views on China for the rest of the year. You talked about academic and government headwinds this year. How do we think about both of those markets going into 2026? And what I mean by that is, you know, if you're going to be doing 15, 20, 25 million per quarter in China in 3Q, 4Q, does that go to zero in 2026?

Speaker Change: But right now there's no no impact.

Unknown Executive: We'll meet in that color.

Speaker Change: We will meet or any color.

Mike Ryskin: We'll move next to Mike Ryskin at Bank of America. Please unmute your line and ask your question. Great. Can you guys hear me? Yes, we can, Mike, hi. Great. Thanks for taking the question. You know, you spent a lot of the call talking about China and what's changed in your views on China for the rest of the year. You talked about academic and government headwinds this year. How do we think about both of those markets going into 2026? And what I mean by that is, you know, if you're going to be doing $15, $20, $25 million per quarter in China in 3Q, 4Q, does that go to zero in 2026 or do you think that's a sustainable level from which maybe you can start to grow again?

Speaker Change: We'll move next to Mike <unk> Bank of America. Please on mute your line and ask you a question.

Speaker Change: Great can you guys hear me.

Speaker Change: Yes, we can Mike hi, great. Thanks for taking the question.

Chris: We continue to decrease in revenue over the in the second half of the year and if theres nothing that were changed in all our conversations with the regulators. There of course, they will continue to reduce in 2006, if and and but we are very still hopeful we believe China is a it's an important market and we are.

Speaker Change: You spent a lot of the call talking about China, and what's changed in your views on China for the rest of the year.

Speaker Change: Talked about academic and government headwinds this year, how do we think about both of those markets going into 2026, and what I mean by that is if you.

Speaker Change: We're going to be doing 15, 20 $25 million per quarter in China, and <unk> does that go to zero in 2026, or do you think thats a sustainable level from which maybe you can start to draw again, assuming on AMG. If when you look at what's happening in the U S on NIH and things like that does it seem like this is a temporary headwind has just taken a.

Chris: <unk> had the opportunity here.

Chris: Last week to actually spend time with some of our Chinese.

Mike Ryskin: Or do you think that's a sustainable level from which maybe you can start to grow again? And same thing on A&G. If we look at what's happening in the US on NIH and things like that, doesn't seem like this is a temporary headwind. It's just taking a, you know, taking a step back and looking at next year and the year after. These are two pivotal markets. Where do you think they go from here after the headwind seen this year? Thanks. Yeah, thanks, Mike. And I agree with you that we are spending way too much talking about China.

Chris: My colleagues and it's very clear that the Chinese customers really want us to continue in this market and we really want to help them continue to be successful. So we don't know at this point, but we're doing everything we can to rectify the situation, but if not we have taken the cost structure. So the academia and government yesterday's headwinds right now.

Mike Ryskin: And same thing on A&G. If we look at what's happening in the U.S. on NIH and things like that, it doesn't seem like this is a temporary headwind. It's just taking a, you know, taking a step back and looking at next year and the year after. These are two pivotal markets. Where do you think they go from here after the headwinds seen this year? Thanks. Yeah, thanks, Mike. And I agree with you that we are spending way too much talking about China. That is 5% of our business. And we're also likely talking way too much time on some headwinds in NIH, where we have very strong markets that continue to grow strongly, especially in the clinical market.

Speaker Change: Taking a step back and looking at next year and the year. After you had two pivotal markets. What do you think they go from here, but I haven't seen this year. Thanks, yeah, Thanks, Mike and I I I agree with you that we are spending way too much talking about China that said, 5% of our business and we also likely talking way too much time on some headwinds in NIH, where we have best from Mark.

Chris: Truly believe that everybody will all many politicians both in U S and rest of the world sees that.

Jacob Thaysen: That is 5% of our business. And we also likely talking way too much time on some headwinds in NIH, where we have very strong markets that continue to grow strongly, especially in the clinical market. And by the way, in Europe, which continues to be very, very strong performance for us. So I agree. We are spending, all of us are spending way too much on a very small part of our business. And we are a very resilient business that continues to drive a lot of activities out there and generating fantastic cash flow. So let's just start there.

Chris: The academic research is pivotal in order to drive the industry forward not only the academic research sort of cost being the funnel into pharmaceuticals and of course, the medical science overall. So I do believe this is then and as short term or temporary headwinds and we can come out on the other side stronger there.

Speaker Change: <unk> continues to grow strongly space in the clinical market and by the way in Europe is continues to be very very strong performance parts. So I agree. We are spending all of us are spending way too much on a very small part of our business and we are a very resilient business that continues to drive.

Jacob Thyssen: And by the way, in Europe, which continues to be very, very strong performance for us. So I agree. We are spending, all of us are spending way too much on a very small part of our business. And we are a very resilient business that continues to drive a lot of activities out there and generating fantastic cash flow. So let's just start there. China, we, as Ankur is mentioning, we are working, of course, with the Chinese authorities But, but we have taken the actions right now that that indicates that that we won't be able to have a long term sustainable business in China, we will still be able to compensate that with the cost measure.

Speaker Change: Lot of activity out there and generating fantastic cash flow. So, let's just start there.

Chris: Here at the 21st century will is that it isn't.

Chris: Is the century of quality and this is a hiccup and we will have strong performance going forward in this space.

Jacob Thaysen: China, as Ankur is mentioning, we are working, of course, with the Chinese authorities to see whether we can find a solution. But, but we have taken the actions right now that that indicates that that we won't be able to have a long term sustainable business in China, we will still be able to compensate that with the cost measures we have And we are, as you can see in our numbers, we are expecting the at this point, the China business to to continue to decrease in revenue over in the second half of the year. And if there's nothing that will change in in our conversations with the regulators there, of course, it will continue to reduce in 26.

Speaker Change: China, we anchor.

Speaker Change: I'm, Chris mentioning we are working of course with the Chinese authorities to see whether we can find a solution for this but but we have taken the action right now that that indicates that that we won't be able to have a long term sustainable business in China, we will still be able to compensate that with the cluster measures we have taken and we.

Speaker Change: Our next question comes from Kyle mixing Canaccord. Please mute your line and ask your question.

Speaker Change: Yeah, Hey, guys. Thanks for the question is just on the the investigation to Grill recently, it looks like you're set to close that.

Jacob Thyssen: And we are, as you can see in our numbers, we are expecting the at this point the China business to to continue to decrease in revenue over in the second half of the year. And if there's nothing that will change in our conversations with the regulators there, of course, it will continue to reduce in value. if and and but we are very still hopeful. We believe China is an important market. And we I was had the opportunity here last week to actually to spend time with some of our Chinese colleagues. And it's very clear that the Chinese customers really want us to continue in this market.

Speaker Change: It happens that can be more freedom to move into larger acquisitions or deals that involve buying clinical absolute big market.

Speaker Change: Uh huh.

Speaker Change: As you can see in our numbers we are expecting.

Speaker Change: Opportunities such as <unk>, and then taking a step back almost a year since that Dennis has actually helped you southern core illumina kind of seems like on the services line, maybe not given the performance, but you have more attention on the pipeline now so just would love to hear your thoughts on that thanks.

Speaker Change: At this point the China business to two continued premium decrease in revenue over the in the second half of the year and if there is nothing that will change and in our conversations with the regulators. There of course, it will continue to reduce in 2006.

Jacob Thaysen: If and and but we are very still hopeful. We believe China is an important market. And we I was had the opportunity here last week to actually to spend time with some of our Chinese colleagues. And it's very clear that the Chinese customers really want us to continue in this market. And we really want to help them continue to be successful. So we don't know at this point, but we are doing everything we can to rectify the situation. But if not, we have taken the cost The academia and government, yes, there's headwinds right now. And I truly believe that everybody will all many politicians, both in US and rest of the world sees that the academic research is pivotal in order to drive the industry forward.

Speaker Change: Hey, Kyle sorry, we didn't have that second part of your question.

Speaker Change: And and but we are very still hopeful we believe China is an important market and we had the opportunity here.

Speaker Change: On the <unk>.

Speaker Change: It's been a year almost since the divestiture does that actually help you accelerate core illumina.

Speaker Change: Last week to actually spend time with them our Chinese.

Speaker Change: Yeah. So let me start by the first thing is that we of course very pleased that our debt is that the FCC investigation is done and there was no findings, which we also.

Speaker Change: Colleagues and it's very clear that the Chinese customers really want us to continue in this market and we really want to help them continue to be successful. So we don't know at this point, but we're doing everything we can to rectify the situation, but if not we have taken the cost structure. So the academia and government yesterday's headwinds right now.

Jacob Thyssen: And we really want to help them continue to be successful. So we don't know at this point, but we are doing everything we can to rectify the situation. But if not, we have taken the cost. The academia and government, yes, there's headwinds right now. And I truly believe that everybody will all many politicians, both in US and rest of the world sees that the academic research is pivotal in order to drive the industry forward. Not only the academic research, but of course, being the funnel into pharmaceuticals, and of course, the medical science overall. So I do believe this is a short term or temporary headwind, and will come out on the other side of the Here, the 21st century is the century of biology, and this is a hiccup, and we will have strong performance.

Speaker Change: I expect us. So we are very pleased to have this behind us.

Speaker Change: We continue to of course look at opportunities from the from value added acquisitions bolt on acquisitions and be a b.

Speaker Change: We continue to monitor the space of that we of course are very disciplined in wherever you believe you can see opportunities, but we also are generating a lot of cash every year. So it gives us flexibility to look at different things I think I can say confidently that <unk> not like not this space.

Speaker Change: Truly believe that everybody will all many politicians both in U S and rest of the world sees that.

Speaker Change: The academic research.

Speaker Change: Pivotal in order to drive the industry forward.

Jacob Thaysen: Not only the academic research, but of course, being the funnel into pharmaceuticals and of course, the medical science overall. So I do believe this is a short term or temporary headwind, and will come out on the other side.

Speaker Change: Not only the academic research, but of course being the funnel into pharmaceuticals and of course, the medical science overall. So I do believe this is then and as short term a temporary headwind and will come out on the other side stronger.

Speaker Change: People will be looking into for the time being.

Speaker Change: Yeah. So thanks for providing that Jacob clearly very good balance sheet very pleased with what our cash flow generation has been now two quarters since since Grail generating over $1 billion of cash was also very pleased with our Q1 results where despite.

Kyle Mixon: Here, the 21st century is the century of biology and this is a hiccup and we will have strong performance. Our next question comes from Kyle Mixon at Canaccord. Please unmute your line and ask your question. Yeah, hey guys, thanks for the question. It's just on the the investigation to Grail recently, it looks like the SEC said to close that.

Speaker Change: Here at the 21st century will is a it.

Speaker Change: Is the century of quality and this is a hiccup and we will have strong performance going forward in this space.

Kyle Mixon: Our next question comes from Kyle Mixon at Canaccord. Please unmute your line and ask your question. Yeah, hey, guys, thanks for the question is just on the the investigation to grail recently, it looks like the SEC said to close that. If that were to happen, would that give you more freedom to move into larger acquisitions or deals that involve buying clinical labs with, you know, big market opportunities such as MRD? And then taking a step back, you know, it's been almost a year since that data. Sure, has that actually helped you accelerate core? But that kind of seems like on the surface, like, maybe not given the performance, but you know, you have more attention on the pipeline now.

Speaker Change: Our next question comes from Kyle mixing Canaccord. Please mute your line and ask your question.

Speaker Change: Some of the research market the way it was and despite paying out annual bonus out of the quarter, we generated over $200 million in cash as well. So very pleased puts us in a very very good position. As you know we've also bought back roughly 200 million worth of shares during the quarter, but our primary focus remains.

Kyle: Yeah, Hey, guys. Thanks for the question is just on the <unk>.

Speaker Change: The investigation to Grill recently, it looks like yes, as you said to close that.

Kyle Mixon: If that were to happen, would that give you more freedom to move into larger acquisitions or deals that involve buying clinical labs with, you know, big market opportunities such as MRD? And then taking a step back, you know, it's been almost a year since that data. Sure, has that actually helped you accelerate core Illumina? Kind of seems like on the surface, like, maybe not given the performance, but you know, you have more attention on the pipeline now. So just would love to hear your thoughts on that. Thanks. Hey, Kyle, sorry, we didn't hear that second part of your question.

Speaker Change: What happened was that it can be more freedom to move into larger acquisitions or deals that involve buying clinical absolute.

Speaker Change: On growth bolt on M&A and there are several technologies, which we think can can take advantage of our size our scale as well as a large installed base, which is where our primary focus is and and hopefully there will be some that we will be able to actually move on.

Speaker Change: Big market opportunities such as <unk>, and then taking a step back almost a year since that Dennis has actually helped you southern core illumina kind of seems like on the services line.

Speaker Change: Maybe not given the performance, but you have more attention on the pipeline now so just would love to hear your thoughts on that thanks.

Kyle Mixon: So just would love to hear your thoughts on that. Thanks.

Kyle Mixon: Hey, Kyle, sorry, we didn't hear that second part of your question. It's been a year almost since the divestiture. Has that actually helped you accelerate core Illumina?

Speaker Change: Hey, Kyle sorry, we didn't hear that second part of your question.

Kyle Mixon: on the just it's been a year almost since the divestiture has actually helped you accelerate core Illumina. Yeah, so let me start by the first thing and say we are of course very pleased that that that the SEC investigation is done and there was no findings which we also appreciate. And that's it. Thank you. We continue to, of course, look at opportunities from value-added hold-on acquisitions, and we continue to monitor the space of that. We, of course, are very disciplined in where we believe we can see opportunities, but we also are generating a lot of cash every year, so it gives us flexibility to look at different things.

Speaker Change: On the.

Speaker Change: At the same time as we've said don't intend to keep accumulating cash either.

Speaker Change: Just it's been a year almost since the divestiture does that actually help you accelerate core illumina.

Ankur Dhingra: Yeah, so let me start by the first thing I think we of course very pleased that that that the SEC investigation is done and there was no findings which we also Thank you very much. Thank you. We continue to, of course, look at opportunities from value-added hold-on acquisitions, and we continue to monitor the space of that. We, of course, are very disciplined in where we believe we can see opportunities, but we also are generating a lot of cash every year, so it gives us flexibility to look at different things.

Speaker Change: As I stated in my in my script, we will continue to for the rest of the year to keep buying back some shares opportunistically as well and let me just clarify my comment on <unk> I think that's a huge opportunity in MLD not just not from an M&A perspective from alumina sanya.

Speaker Change: Thanks, Yes, so let me start by the first thing I'm, saying, we are of course very pleased that the debt that the FCC investigation is done and there was no findings, which we also.

Speaker Change: Expect it. So we are very pleased to have this behind us.

Speaker Change: We will continue to of course look at opportunities from the from value added bolt on acquisitions and we.

Speaker Change: Yeah.

Speaker Change: And our final question.

Rachel: Rachel buttons dome with J P. Morgan. Please mute your line in your question.

Speaker Change: To monitor the space of that cost.

Speaker Change: Yeah.

Speaker Change: We're very disciplined in where we believe we can see opportunities, but we also are generating a lot of cash every year. So it gives us flexibility to look at different things I think I can say.

Rachel: Hello. Thank you for taking the question. This is my town for Rachel.

Speaker Change: And jumping on mitigation actions for terrorists you've discussed can you talk about which actions have already been implemented and which finished now.

Ankur Dhingra: I think I can say confidently that MID is not the space we will be looking into for the time being. Thanks for writing that, Jacob. Clearly very good balance sheet, very pleased with what our cash flow generation has been now three quarters since GRAIL. Generating over a billion dollars of cash. Was also very pleased with our Q1 results where despite some of the research at the market the way it was, and despite paying that annual bonus out of the quarter, we generated over $200 million in cash as well. So very pleased, puts us in a very, very good position.

Ankur Dhingra: I think I can say confidently that MID is not the space we will be looking into for the time being. Thanks for writing that, Jacob. Clearly very good balance sheet, very pleased with what our cash flow generation has been now three quarters since GRAIL, generating over a billion dollars of cash. I was also very pleased with our Q1 results, where despite some of the research set of market, the way it was, and despite paying that annual bonus out of the quarter, we generated over $200 million in cash as well. So very pleased, puts us in a very, very good position.

Speaker Change: Confidently that mid's knocked it like not the space, we will be looking into for the time being.

Speaker Change: To be implemented and then how do you expect that to impact your EPS pacing for the rest of the year.

Speaker Change: And then a quick clarifying question are you assuming any budget.

Speaker Change: Flash at this point okay.

Speaker Change: Yeah. So so from the terrorist perspective, obviously this has only been even though it feels a long time, it's only been a few weeks before we have.

Speaker Change: All of us have gotten our hands around what the tariff situation is and of course it is.

Speaker Change: Some of the recent set of market the way it was and despite paying out annual bonus out of the quarter, we generated over $200 million in cash as well. So very pleased puts us in a very very good position. As you know we've also bought back roughly 200 million worth of shares during the quarter, but our primary focus remains.

Speaker Change: Still at a movie that is playing so of course it is a flexible I'd say, it's a moving target right now, but as far from what we can see today and I think that's one of the ultimate mentioning is that our current view is that that the impact for 2025. He is gonna be approximately $85 million and be able to to offset that approximate.

Ankur Dhingra: As you know, we've also bought back roughly $200 million worth of shares during the quarter. But our primary focus remains on growth, bolt-on M&A. And there are several technologies which we think can take advantage of our size, our scale, as well as our large install base, which is where our primary focus is. And hopefully there will be some that we will be able to actually move on. At the same time, as we've said, don't intend to keep accumulating cash either. And as I stated in my script, we will continue to for the rest of the year, keep buying back some shares opportunities.

Ankur Dhingra: As you know, we've also bought back roughly 200 million worth of shares during the quarter. But our primary focus remains on growth, bolt-on M&A. And there are several technologies which we think can take advantage of our size, our scale, as well as our large install base, which is where our primary focus is. And hopefully there will be some that we will be able to actually move on. At the same time, as we've said, don't intend to keep accumulating cash either. And as I stated in my script, we will continue to, for the rest of the year, keep buying back some shares opportunistically.

Speaker Change: <unk> growth bolt on M&A and there are several technologies, which we think can can take advantage of our size our scale as well as a large installed base.

Speaker Change: Half of that.

Speaker Change: Most of them, we had both looking at changing some of our supply chain. Obviously, we're working with all of our suppliers itself, but also thinking about where heavy manufacturing we have most of our manufacturing is happening other than Singapore and U S and we actually.

Speaker Change: As we have our primary focus is and and hopefully there will be some that we will be able to actually move on.

Speaker Change: At the same time as we've said don't intend to keep accumulating cash either.

Speaker Change: So and that's set up it can be optimized but at this point we're not.

Speaker Change: And as I stated in my in my script, we will continue to for the rest of the year to keep buying back some shares opportunistically as well and let me just clarify my comment on anybody I think that's a huge opportunity in MLD.

Speaker Change: Looking to make substantial changes in that in that footprint, but.

Speaker Change: We have already been out taking actions I'm also on the pricing perspective, and so we feel good about the actions we've taken today and we will we will continue to optimize our footprint going forward and our supply chain.

Ankur Dhingra: And let me just clarify my comment on MIT. I think that's a huge opportunity in MIT.

Rachel Battensdorf: And let me just clarify my comment on MIT. I think there's a huge opportunity in MIT, not just not from an M&A perspective from And our final question comes from Rachel Battensdorf with J.P.

Marta: Not just not from an M&A perspective from from And our final question from Rachel Battensdorf with J.P. Morgan. Please unmute your line and ask your question.

Speaker Change: Just not from an M&A perspective from alumina Sanya.

Speaker Change: Yeah.

Speaker Change: And our final question from.

Rachel: Rachel <unk> with J P. Morgan please mute your line.

Rachel Battensdorf: Morgan. Please unmute your line and ask your question. Hello, thank you for taking the question. This is Marta on for Rachel.

Speaker Change: And that will conclude our Q&A session I will hand, it back to Brian <unk> for closing remarks.

Speaker Change: Your question.

Marta: Hello, thank you for taking the question. This is Marta on for Rachel.

Rachel: Hello. Thank you for taking the question. This is my town for Rachel.

Speaker Change: Great. Thank you for joining us today, a replay of this call will be available in the investors section of our website. This concludes our call and we look forward to seeing you at our upcoming events. Thank you.

Rachel Battensdorf: In terms of your mitigation actions for terrorists that you've discussed, can you talk about which actions have already been implemented and which ones still, like, are to be implemented? And then how do you expect that to impact your EPS pacing for the rest of the year? And then a quick clarifying question, are you assuming any 4Q budget slash at this point? Thank you. Yeah, so so from the terrorist perspective, obviously, this has only been even though it feels a long time, it's only been a few weeks before we have, we have all of us have have gotten our hands around what the terrorist situation is.

Marta: In terms of your mitigation actions for terrorists that you've discussed, can you talk about which actions have already been implemented and which ones still, like, are to be implemented? And then how do you expect that to impact your EPS pacing for the rest of the year? And then a quick clarifying question, are you assuming any 4Q budget slash at this point? Thank you.

Speaker Change: And just on mitigation actions for terrorists or you've discussed can you talk about which actions have already been implemented and which finished now.

Speaker Change: And again, ladies and gentlemen that will conclude today's call. We thank you for your participation you may disconnect at this time and have a great day.

Speaker Change: <unk> are to be implemented and then how do you expect that to impact your EPS P. Sand the rest of the year and then a quick clarifying question are you assuming any.

Speaker Change: A bunch of flash at this point okay.

Ankur Dhingra: Yeah, so so from the terrorist perspective, obviously, this has only been even though it feels a long time, it's only been a few weeks before we have, we have all of us have have gotten our hands around what the terrorist situation is. And of course, it's still a movie that is playing so of course it is a flexible or it's a it's a moving target right now but as far from what we can see today and I think that's what we're also mentioning is that our current view is that that the impact for Supply Chain Analysis, Sallilyn Schwartz, Conor McNamara, Jacob Thaysen, Mauricio Lopez, Sallilyn Schwartz, Conor McNamara, Jacob Thaysen, Mauricio Lopez, Steven Barnard, Illumina Inc.

Speaker Change: Yeah. So so from the tariff perspective, obviously this has only been even though it feels a long time, it's only been a few weeks before we have.

Speaker Change: All of us have gotten our hands around what the tariff situation is and of course it is.

Ankur Dhingra: And of course, still a movie that is playing so of course it is a flexible or it's a it's a moving target right now but as far from what we can see today and I think that's what we're also mentioning is that our current view is that that the impact 5 years going to be approximately 85 million and be able to to offset that approximately half of that. Most we are both looking at changing some of our supply chains. Obviously, we're working with a lot of our suppliers itself. But also thinking about where are we manufacturing, we have most of our manufacturing is happening either in Singapore and US.

Speaker Change: It's still at a movie that is playing so of course it is a flexible I'd say, it's a moving target right now, but as far from what we can see today and I think that's one of the ultimate mentioning is that our current view is that that the impact for 2025, he is going to be approximately $85 million and be able to to offset that.

Speaker Change: Approximately half of that.

Speaker Change: Most of them, we had both looking at changing some of our supply chain. Obviously, we're working with all of our suppliers itself.

Speaker Change: But also thinking about where heavy manufacturing we have our most of our manufacturing is happening other than Singapore, and U S and we actually.

Ankur Dhingra: And we actually so and that that set up, it can be optimized. But at this point, we're not looking to make substantial changes in that in that footprint. But we have already been out taking actions, also on the pricing perspective. And so we feel good about the actions we've taken today. And we will we will continue to optimize on our footprint going forward.

Speaker Change: So and that's set up it can be optimized but at this point, we're not looking to make substantial changes in that in that footprint, but.

Brian Blanchett: And that will conclude our Q&A session. I will hand it back to Brian Blanchett for closing remarks.

Speaker Change: Okay.

Unknown Executive: And that will conclude our Q&A session.

Speaker Change: And that will conclude our Q&A session I will hand, it back to Brian <unk> for closing remarks.

Brian Blanchett: I will hand it back to Brian Blanchett for closing remarks. Great, thank you for joining us today. A replay of this call will be available in the investor section of our website.

Brian Blanchett: Great, thank you for joining us today. A replay of this call will be available in the investor section of our website.

Brian Blanch: Great. Thank you for joining us today, a replay of this call will be available in the investors section of our website. This concludes our call and we look forward to seeing you at our upcoming events. Thank you.

Brian Blanchett: This concludes our call and we look forward to seeing you at our upcoming event. And again, ladies and gentlemen, that will conclude today's call. We thank you for your participation.

Unknown Executive: This concludes our call and we look forward to seeing you at our upcoming event.

Speaker Change: Yeah.

You may disconnect at this time and have a great day.

Q1 2025 Illumina Inc Earnings Call

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