Illumina Q4 2025 Illumina Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 Illumina Inc Earnings Call
Speaker #1: Joining us on today's call are Jacob Thaysen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will start with an update on Illumina's business, followed by Ankur's review of the company's financials.
Conor McNamara: Joining us on today's call are Jacob Thaysen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will start with an update on Illumina's business, followed by Ankur's review of the company's financials. We will be discussing certain non-GAAP financial measures on today's call, and a reconciliation to GAAP can be found in today's release and in the supplementary data available on our website. Please note that unless otherwise stated, or when referring to end markets, all year-over-year revenue growth rates discussed in our prepared remarks are presented on a constant currency basis, excluding the impact of foreign exchange fluctuations. In addition, all references to China refer to our Greater China region, which also includes Taiwan and Hong Kong. This call is being recorded, and the replay will be available in the investor section of our website.
Conor McNamara: Joining us on today's call are Jacob Thaysen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will start with an update on Illumina's business, followed by Ankur's review of the company's financials. We will be discussing certain non-GAAP financial measures on today's call, and a reconciliation to GAAP can be found in today's release and in the supplementary data available on our website. Please note that unless otherwise stated, or when referring to end markets, all year-over-year revenue growth rates discussed in our prepared remarks are presented on a constant currency basis, excluding the impact of foreign exchange fluctuations. In addition, all references to China refer to our Greater China region, which also includes Taiwan and Hong Kong. This call is being recorded, and the replay will be available in the investor section of our website.
Speaker #1: We will be discussing certain non-GAAP financial measures on today's call, and a reconciliation to GAAP can be found in today's release and in the supplementary data available on our website.
Speaker #1: Please note that unless otherwise stated or when referring to end markets, all year-over-year revenue growth rates discussed in our prepared remarks are presented on a custom currency basis excluding the impact of foreign exchange fluctuations.
Speaker #1: In addition, all references to China refer to our Greater China region, which also includes Taiwan and Hong Kong. This call is being recorded, and the replay will be available in the investor section of our website.
It is our intent that all forward-looking statements 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 SEC, including our most recent Forms 10-Q and 10-K.
Conor McNamara: It is our intent that all forward-looking statements 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 SEC, including our most recent Forms 10-Q and 10-K. With that, I will now turn the call over to Jacob.
Conor McNamara: It is our intent that all forward-looking statements 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 SEC, including our most recent Forms 10-Q and 10-K. With that, I will now turn the call over to Jacob.
Speaker #1: With that, I will now turn the call over to Jacob.
Speaker #2: Thank you, Conor. And good afternoon, everyone. I'm pleased to announce that our Q4 results exceed expectations, capped off with 20% growth in our clinical consumables revenue ex-China.
Jacob Thaysen: Thank you, Conor, and good afternoon, everyone. I'm pleased to announce that our Q4 results exceeded expectations, capped off with 20% growth in our clinical consumables revenue ex-China, reflecting execution across the organization as we closed out 2025. We made tremendous progress throughout the year, and the momentum we have built going into 2026 gives me high confidence that the strategy we put in place in 2024 to return to long-term growth is working. Highlights of our 2025 achievements include: we returned to growth in 2025, with ex-China revenue growth of 2% for the year and 7% in Q4. An acceleration in clinical consumables revenue growth throughout the year, with mid-teens growth in the second half and Q4 growth of 20% ex-China. We achieved our high throughput transition milestones we set out to achieve.
Jacob Thaysen: Thank you, Conor, and good afternoon, everyone. I'm pleased to announce that our Q4 results exceeded expectations, capped off with 20% growth in our clinical consumables revenue ex-China, reflecting execution across the organization as we closed out 2025. We made tremendous progress throughout the year, and the momentum we have built going into 2026 gives me high confidence that the strategy we put in place in 2024 to return to long-term growth is working. Highlights of our 2025 achievements include: we returned to growth in 2025, with ex-China revenue growth of 2% for the year and 7% in Q4. An acceleration in clinical consumables revenue growth throughout the year, with mid-teens growth in the second half and Q4 growth of 20% ex-China. We achieved our high throughput transition milestones we set out to achieve.
Speaker #2: Reflecting on execution across the organization as we closed out 2025, we made tremendous progress throughout the year. The momentum we have built going into 2026 gives me high confidence that the strategy we put in place in 2024 to return to long-term growth is working.
Speaker #2: Highlights of our 2025 achievements include: we returned to growth in 2025 with ex-China revenue growth of 2% for the year and 7% in Q4.
Speaker #2: An acceleration in clinical consumables revenue growth throughout the year, with mid-teens growth in the second half and Q4 growth of 20% ex-China. We achieved our high-throughput transition milestones we set out to achieve, we advanced our portfolio beyond core sequencing into multi-omics and data software and AI, and we expanded non-GAAP operating margins by 180 basis points and grew non-GAAP EPS by 16% year over year.
Jacob Thaysen: We advanced our portfolio beyond core sequencing into multi-omics and data software and AI. We expanded non-GAAP operating margins by 180 basis points and grew non-GAAP EPS by 16% year over year. We generated strong free cash flow and returned approximately $740 million to our shareholders through share repurchases. All of this was achieved in a rapidly evolving market, and our team members stayed ahead of many of the dynamic developments we saw throughout the year. Our success in 2025 is a testament to the strength of the Illumina team, and I want to recognize their ongoing commitment to our customers through innovation and execution. Now, I want to expand on our success we are seeing in our clinical business, where revenue growth accelerated throughout 2025.
Jacob Thaysen: We advanced our portfolio beyond core sequencing into multi-omics and data software and AI. We expanded non-GAAP operating margins by 180 basis points and grew non-GAAP EPS by 16% year over year. We generated strong free cash flow and returned approximately $740 million to our shareholders through share repurchases. All of this was achieved in a rapidly evolving market, and our team members stayed ahead of many of the dynamic developments we saw throughout the year. Our success in 2025 is a testament to the strength of the Illumina team, and I want to recognize their ongoing commitment to our customers through innovation and execution. Now, I want to expand on our success we are seeing in our clinical business, where revenue growth accelerated throughout 2025.
Speaker #2: We generated strong free cash flow and returned approximately $740 million to our shareholders through share repurchases. All of this was achieved in a rapidly evolving market, and our team members stayed ahead of many other dynamic developments we saw throughout the year.
Speaker #2: Our success in 2025 is a testament to the strength of the Illumina team, and I want to recognize their ongoing commitment to our customers through innovation and execution.
Speaker #2: Now, I want to expand on our success we are seeing in our clinical business, where revenue growth accelerated throughout 2025. The strength we are seeing in clinical consumables, including 20% ex-China growth in Q4, is being driven primarily by two factors: first, adoption of sequencing-based diagnostic tests is increasing, as customers launch new assays and expand reimbursement coverage in areas like minimal residual disease and early cancer detection testing.
Jacob Thaysen: The strength we are seeing in clinical consumables, including 20% ex-China growth in Q4, is being driven primarily by two factors. First, adoption of sequencing-based diagnostic tests is increasing as customers launch new assays and expand reimbursement coverage in areas like minimal residual disease and early cancer detection testing. Second, we are seeing broader demand for comprehensive genomic profiling and whole genome approaches in oncology and genetic diseases, both of which require greater sequencing intensity and benefit from the power and consistency of the NovaSeq X. As customers scale more data-intensive applications on a more powerful platform, the elasticity dynamics we've discussed in previous quarters continue to take hold. This is driving strong instrument sales. Q4 represented the second-highest quarter placement since launching the NovaSeq X in 2023, while also accelerating consumables demand, supporting durable growth in our core sequencing business.
Jacob Thaysen: The strength we are seeing in clinical consumables, including 20% ex-China growth in Q4, is being driven primarily by two factors. First, adoption of sequencing-based diagnostic tests is increasing as customers launch new assays and expand reimbursement coverage in areas like minimal residual disease and early cancer detection testing. Second, we are seeing broader demand for comprehensive genomic profiling and whole genome approaches in oncology and genetic diseases, both of which require greater sequencing intensity and benefit from the power and consistency of the NovaSeq X. As customers scale more data-intensive applications on a more powerful platform, the elasticity dynamics we've discussed in previous quarters continue to take hold. This is driving strong instrument sales. Q4 represented the second-highest quarter placement since launching the NovaSeq X in 2023, while also accelerating consumables demand, supporting durable growth in our core sequencing business.
Speaker #2: Second, we are seeing broader demand for comprehensive genomic profiling and whole genome approaches in oncology and genetic diseases, both of which require greater sequencing intensity and benefit from the power and consistency of the NovaSeq X.
Speaker #2: As customers scale more data-intensive applications on a more powerful platform, the elasticity dynamics we've discussed in previous quarters are continuing to take hold. This is driving strong instrument sales, Q4 represented the second highest quarter placement since launching the novaSeqX in 2023, while also accelerating consumables demand supporting durable growth in our core sequencing business.
Speaker #2: Next-generation sequencing remains vastly underutilized, and we are positioning our business to capitalize on growth as the market evolves. One example of this is the recent addition of Dr. Eric Green as our Chief Medical Officer.
Jacob Thaysen: Next-generation sequencing remains vastly underutilized, and we are positioning our business to capitalize on growth as the market evolves. One example of this is the recent addition of Dr. Eric Green as our Chief Medical Officer. Eric brings extensive experience in genomics and healthcare policy, most recently serving as Director of the National Human Genome Research Institute at the NIH. His leadership in the field will be a catalyst for driving continued adoption of genomics and multi-omics toward standard of care for patients. I now want to talk about how our long-term strategy is working. In 2024, we set out three strategic growth pillars: core sequencing, scaling multi-omics, and expanding our service, data, and software capabilities. Our continued execution on each of these pillars drove strong 2025 results, positioning the business for 2026 and beyond.
Jacob Thaysen: Next-generation sequencing remains vastly underutilized, and we are positioning our business to capitalize on growth as the market evolves. One example of this is the recent addition of Dr. Eric Green as our Chief Medical Officer. Eric brings extensive experience in genomics and healthcare policy, most recently serving as Director of the National Human Genome Research Institute at the NIH. His leadership in the field will be a catalyst for driving continued adoption of genomics and multi-omics toward standard of care for patients. I now want to talk about how our long-term strategy is working. In 2024, we set out three strategic growth pillars: core sequencing, scaling multi-omics, and expanding our service, data, and software capabilities. Our continued execution on each of these pillars drove strong 2025 results, positioning the business for 2026 and beyond.
Speaker #2: Eric brings extensive experience in genomics and healthcare policy, most recently serving as Director of the National Human Genome Research Institute at the NIH. His leadership in the field will be a catalyst for driving continued adoption of genomics and multi-omics toward standard of care for patients.
Speaker #2: I now want to talk about how our long-term strategy is working. In 2024, we set out three strategic growth pillars: core sequencing, scaling multi-omics, and expanding our service, data, and software capabilities.
Speaker #2: Our continued execution on each of these pillars grows strong 2025 results, positioning the business for 2026 and beyond. Let me walk through examples of our progress for each of these strategic pillars.
Jacob Thaysen: Let me walk through examples of our progress for each of these strategic pillars. Our first pillar is core sequencing, anchored by the NovaSeq X. As mentioned earlier, clinical remains our primary growth driver, and higher testing volumes with more sequencing-intensive application reinforces demand for high throughput, high-quality sequencing on the NovaSeq X. In research, conditions continue to be measured. Customers remain cautious with the purchasing decisions, though we are seeing signs of stabilization, including greater clarity around US policy and the funding environment. Longer term, we believe our research business can return to healthy growth, but for now, we assume similar end market dynamics in 2026 as we saw in 2025. Our second pillar is scaling into multi-omics, where we are building a comprehensive set of integrated solutions that extend the Illumina sequencing ecosystem.
Jacob Thaysen: Let me walk through examples of our progress for each of these strategic pillars. Our first pillar is core sequencing, anchored by the NovaSeq X. As mentioned earlier, clinical remains our primary growth driver, and higher testing volumes with more sequencing-intensive application reinforces demand for high throughput, high-quality sequencing on the NovaSeq X. In research, conditions continue to be measured. Customers remain cautious with the purchasing decisions, though we are seeing signs of stabilization, including greater clarity around US policy and the funding environment. Longer term, we believe our research business can return to healthy growth, but for now, we assume similar end market dynamics in 2026 as we saw in 2025. Our second pillar is scaling into multi-omics, where we are building a comprehensive set of integrated solutions that extend the Illumina sequencing ecosystem.
Speaker #2: Our first pillar is core sequencing. Anchored by the NovaSeq X, as mentioned earlier, clinical remains our primary growth driver, and higher testing volumes with more sequencing-intensive applications reinforce demand for high-throughput, high-quality sequencing on the NovaSeq X.
Speaker #2: In research, conditions continue to be measured. Customers remain cautious with their purchasing decisions, though we are seeing signs of stabilization, including greater clarity around US policy and the funding environment.
Speaker #2: Longer-term, we believe our research business can return to healthy growth. But for now, we assume similar end-market dynamics in 2026 as we saw in 2025.
Speaker #2: Our second pillar is scaling into multi-omics, where we are building a comprehensive set of integrated solutions that extend the Illumina sequencing ecosystem. This includes both internally developed capabilities and selective acquisitions, where we see technologies that can meaningfully expand our long-term growth opportunity.
Jacob Thaysen: This includes both internally developed capabilities and selective acquisitions, where we see technologies that can meaningfully expand our long-term growth opportunity. As an example, we recently completed the acquisition of SomaLogic, an important milestone that builds on our long-standing partnership. I want to formally welcome the SomaLogic team to Illumina, and we're excited about what we will build together as we further integrate our combined capabilities. SomaLogic's aptamer-based affinity proteomics platform allows researchers to generate significant insight with high sensitivity, high throughput, and with thousands of protein markers in a single experiment. Our combined proteomics offerings will provide deep insights into protein function, interactions, and modifications at scale, helping to accelerate understanding of complex biology and human health. Proteomics is the frontline in multi-omics, and with SomaLogic now part of Illumina, our position in this key growth market is significantly stronger.
Jacob Thaysen: This includes both internally developed capabilities and selective acquisitions, where we see technologies that can meaningfully expand our long-term growth opportunity. As an example, we recently completed the acquisition of SomaLogic, an important milestone that builds on our long-standing partnership. I want to formally welcome the SomaLogic team to Illumina, and we're excited about what we will build together as we further integrate our combined capabilities. SomaLogic's aptamer-based affinity proteomics platform allows researchers to generate significant insight with high sensitivity, high throughput, and with thousands of protein markers in a single experiment. Our combined proteomics offerings will provide deep insights into protein function, interactions, and modifications at scale, helping to accelerate understanding of complex biology and human health. Proteomics is the frontline in multi-omics, and with SomaLogic now part of Illumina, our position in this key growth market is significantly stronger.
Speaker #2: As an example, we recently completed the acquisition of SomaLogic, an important milestone that builds on our long-standing partnership. I want to formally welcome the SomaLogic team to Illumina.
Speaker #2: And we're excited about what we have built together as we further integrate our combined capabilities. Somalogic's Aptima-based affinity proteomics platform allows researchers to generate significant insight with high sensitivity, high throughput, and with thousands of protein markers in a single experiment.
Speaker #2: Our combined proteomics offerings will provide deep insights into protein function, interactions, and modifications at scale, helping to accelerate understanding of complex biology and human health.
Speaker #2: Proteomics is the frontline in multi-omics. And with SomaLogic now part of Illumina, our position in this key growth market is significantly stronger. By applying the scale of NGS to proteomics, we can accelerate innovation by reducing the time and cost of protein analysis.
Jacob Thaysen: By applying the scale of NGS to proteomics, we can accelerate innovation by reducing the time and cost of protein analysis. Across genomics, proteomics, single cell, and epigenomics, these capabilities are now being brought together through our recently launched Illumina Connected Multi-Omics. This software addresses a long-standing challenge in the field, integrating and interpreting data across different data types, by simplifying multi-omics analysis and making workflows more scalable and easier for customers to use. Looking ahead, we remain on track to introduce our spatial transcriptomics solution in the first half of 2026, along with our Constellation MAP-Read technology over the same time frame. Together, these advances extend our ability to deliver integrated, end-to-end workflows that support customer, as multi-omics moves further into both research and clinical settings. Our third strategic pillar is expanding our services, data, and software capabilities.
Jacob Thaysen: By applying the scale of NGS to proteomics, we can accelerate innovation by reducing the time and cost of protein analysis. Across genomics, proteomics, single cell, and epigenomics, these capabilities are now being brought together through our recently launched Illumina Connected Multi-Omics. This software addresses a long-standing challenge in the field, integrating and interpreting data across different data types, by simplifying multi-omics analysis and making workflows more scalable and easier for customers to use. Looking ahead, we remain on track to introduce our spatial transcriptomics solution in the first half of 2026, along with our Constellation MAP-Read technology over the same time frame. Together, these advances extend our ability to deliver integrated, end-to-end workflows that support customer, as multi-omics moves further into both research and clinical settings. Our third strategic pillar is expanding our services, data, and software capabilities.
Speaker #2: Across genomics, proteomics, single-cell, and epigenomics, these capabilities are now being brought together through our recently launched Illumina Connected Multi-omics. This software addresses a long-standing challenge in the field: integrating and interpreting data across different data types.
Speaker #2: By simplifying multi-omics analysis and making workflows more scalable and easier for customers to use. Looking ahead, we remain on track to introduce our spatial transcriptomic solution in the first half of 2026, along with our constellation map read technology over the same timeframe.
Speaker #2: Together, these advances extend our ability to deliver integrated end-to-end workflows that support customers as multi-omics moves further into both research and clinical settings. Our third strategic pillar is expanding our services: data and software capabilities.
Speaker #2: In the fourth quarter, we launched BioInsight, an important step to expand how Illumina supports discovery and drug development through data, software, and AI. For the first time, four key enabling capabilities are converging.
Jacob Thaysen: In the fourth quarter, we launched BioInsight, an important step to expand how Illumina supports discovery and drug development through data, software, and AI. For the first time, four key enabling capabilities are converging: sequencing at scale, tools to perturb biology using CRISPR at genome-wide levels, dedicated compute power to analyze it, and AI to build predictive biological models. BioInsight brings together our leading capabilities in these four areas to fundamentally change drug discovery. Instead of relying on years of iterative wet lab experiments, pharma and biotech companies can increasingly build, test, and refine biological models digitally, accelerating timelines and improving success rates. Last month, we introduced BioInsight's first data product, the Billion Cell Atlas, which will be the most comprehensive map of human biology for drug discovery. Built using single-cell approaches, CRISPR-based perturbation, and AI, the Atlas helps partners better understand disease mechanism and improve target validations.
Jacob Thaysen: In the fourth quarter, we launched BioInsight, an important step to expand how Illumina supports discovery and drug development through data, software, and AI. For the first time, four key enabling capabilities are converging: sequencing at scale, tools to perturb biology using CRISPR at genome-wide levels, dedicated compute power to analyze it, and AI to build predictive biological models. BioInsight brings together our leading capabilities in these four areas to fundamentally change drug discovery. Instead of relying on years of iterative wet lab experiments, pharma and biotech companies can increasingly build, test, and refine biological models digitally, accelerating timelines and improving success rates. Last month, we introduced BioInsight's first data product, the Billion Cell Atlas, which will be the most comprehensive map of human biology for drug discovery. Built using single-cell approaches, CRISPR-based perturbation, and AI, the Atlas helps partners better understand disease mechanism and improve target validations.
Speaker #2: Sequencing at scale, tools to perturb biology using CRISPR at genome-wide levels, dedicated compute power to analyze it, and AI to build predictive biological models.
Speaker #2: BioInsight brings together our leading capabilities in these four areas to fundamentally change drug discovery. Instead of relying on years of iterative wet lab experiments, pharma and biotech companies can increasingly build, test, and refine biological models digitally accelerating timelines and improving success rates.
Speaker #2: Last month, we introduced BioInsight's first data product, the Billion Cell Atlas, which will be the most comprehensive map of human biology for drug discovery.
Speaker #2: Built using single-cell approaches, CRISPR-based perturbation, and AI, the Atlas helps partners better understand disease mechanisms and improve target validations. This Billion Cell Atlas was met with strong interest from biopharma partners.
Jacob Thaysen: This Billion Cell Atlas was met with strong interest from biopharma partners, and we announced initial collaborations with AstraZeneca, Merck, and Eli Lilly. We continue to see growing engagement from additional partners as data-driven approaches gain traction in drug discovery. Taken together, BioInsight expands how customers generate and act on biological insight, and strengthens Illumina's position in biopharma, a growing segment of our research end market. The next opportunity for our customers to see how our strategy and innovation comes together will be later this month at AGBT. As this year's gold sponsor, we will be joined by customers and key opinion leaders, who will share how our newest platform enhancements and genomic and multi-omics assays are being applied in real-world research and clinical settings. A key theme we will showcase is the value of our complete end-to-end solutions for our customers.
Jacob Thaysen: This Billion Cell Atlas was met with strong interest from biopharma partners, and we announced initial collaborations with AstraZeneca, Merck, and Eli Lilly. We continue to see growing engagement from additional partners as data-driven approaches gain traction in drug discovery. Taken together, BioInsight expands how customers generate and act on biological insight, and strengthens Illumina's position in biopharma, a growing segment of our research end market. The next opportunity for our customers to see how our strategy and innovation comes together will be later this month at AGBT. As this year's gold sponsor, we will be joined by customers and key opinion leaders, who will share how our newest platform enhancements and genomic and multi-omics assays are being applied in real-world research and clinical settings. A key theme we will showcase is the value of our complete end-to-end solutions for our customers.
Speaker #2: And we announced initial collaborations with AstraZeneca, Merck, and LALLI. We continue to see growing engagement from additional partners as data-driven approaches gain traction in drug discovery.
Speaker #2: Taken together, BioInsight expands how customers generate and act on biological insight and strengthens Illumina's position in biopharma and growing segments of our research end market.
Speaker #2: The next opportunity for our customers to see how our strategy and innovation comes together will be later this month at AGBG. At this year's Gold Sponsor, we will be joined by customers and key opinion leaders who will share how our newest platform enhancements and genomic and multi-omics assays are being applied in real-world research and clinical settings.
Speaker #2: A key theme we will showcase is the value of our complete end-to-end solutions for our customers. The conversations we are having with customers have shifted from cost per gigabase to the total cost of workflow.
Jacob Thaysen: The conversations we are having with customers have shifted from cost per gigabase to the total cost of workflow, from sample preparations through analysis and interpretation, where integrated workflows and data quality matter most. This approach, continuing to innovate as the market evolves, gives customers confidence in the long-term durable value of our flagship sequencing instruments, while supporting them where the field is headed, including deeper adoption of genomic and multi-omics approaches. Now, let's turn to our 2026 outlook. Building on the momentum we saw in the second half of 2025, we expect organic revenue growth of 2% to 4% in 2026, excluding China, with overall demand similar to what we saw in the second half of 2025. Clinical consumables grew approximately 16% ex-China in the second half of the year, and we expect robust growth continue into 2026.
Jacob Thaysen: The conversations we are having with customers have shifted from cost per gigabase to the total cost of workflow, from sample preparations through analysis and interpretation, where integrated workflows and data quality matter most. This approach, continuing to innovate as the market evolves, gives customers confidence in the long-term durable value of our flagship sequencing instruments, while supporting them where the field is headed, including deeper adoption of genomic and multi-omics approaches. Now, let's turn to our 2026 outlook. Building on the momentum we saw in the second half of 2025, we expect organic revenue growth of 2% to 4% in 2026, excluding China, with overall demand similar to what we saw in the second half of 2025. Clinical consumables grew approximately 16% ex-China in the second half of the year, and we expect robust growth continue into 2026.
Speaker #2: From sample preparation through analysis and interpretation, integrated workflows and data quality matter most. This approach, continuing to innovate as the market evolves, gives customers confidence in the long-term durable value of our flagship sequencing instruments while supporting them where the field is headed, including deeper adoption of genomic and multi-omics approaches.
Speaker #2: Now, let's turn to our 2026 outlook. Building on the momentum, we saw in the second half of 2025, we expect organic revenue growth of 2% to 4% in 2026.
Speaker #2: Excluding China, with overall demand similar to what we saw in the second half of 2025. Clinical consumables grew approximately 16% ex-China in the second half of the year.
Speaker #2: And we expect robust growth to continue into 2026. Our outlook assumes double-digit to mid-teens clinical growth in 2026. We expect no fundamental change in the academic end markets in 2026.
Jacob Thaysen: Our outlook assumes double-digit to mid-teens clinical growth in 2026. We expect no fundamental change in the academic end markets in 2026, resulting in mid- to high single-digit revenue declines in our research and applied consumables revenue. Instruments are expected to be roughly flat to slightly down, resulting in a total company revenue of $4.5 to 4.6 billion, representing reported growth of 4% to 6%. Operating margins are expected to be 23.3% to 23.5% in 2026, up approximately 130 basis points, excluding the acquisition impact. EPS guidance is $5.05 to $5.20, including $0.18 of dilution from the SomaLogic acquisition. Excluding dilution, this represents year-over-year growth of 10%.
Jacob Thaysen: Our outlook assumes double-digit to mid-teens clinical growth in 2026. We expect no fundamental change in the academic end markets in 2026, resulting in mid- to high single-digit revenue declines in our research and applied consumables revenue. Instruments are expected to be roughly flat to slightly down, resulting in a total company revenue of $4.5 to 4.6 billion, representing reported growth of 4% to 6%. Operating margins are expected to be 23.3% to 23.5% in 2026, up approximately 130 basis points, excluding the acquisition impact. EPS guidance is $5.05 to $5.20, including $0.18 of dilution from the SomaLogic acquisition. Excluding dilution, this represents year-over-year growth of 10%.
Speaker #2: Resulting in mid to high single-digit revenue declines in our research and applied consumables revenue. Instruments are expected to be roughly flat to slightly down.
Speaker #2: Resulting in a total company revenue of $4.5 to $4.6 billion. Representing reported growth of 4% to 6%. Operating margins are expected to be 23.3% to 23.5% in 2026, up approximately 130 basis points excluding the acquisition impact.
Speaker #2: EPS guidance is $5.05 to $5.20. Including 18 cents of dilution from the zoomologic acquisition. Excluding dilution, this represents year-over-year growth of 10%. Before turning it over to Ankur for more details on our Q4 results and 2026 guidance, I just want to say that I'm confident that our long-term strategy is working, reinforced by the progress we made in 2025 and where ILLUMINA stands today.
Jacob Thaysen: Before turning it over to Ankur for more details on our Q4 results and 2026 guidance, I just want to say that I'm confident that our long-term strategy is working, reinforced by the progress we made in 2025 and where Illumina stands today. Over the past year, we have advanced the strategy we laid out in 2024 and delivered meaningful progress across the business, entering 2026 with very encouraging momentum. We proved resilience, and we are a stronger company today, and we remain on track toward achieving our long-term financial targets for 2027. I want to thank our employees for their commitment and performance this past year. I'm very proud of the Illumina team for staying focused through a dynamic year and delivering for our customers and the patients they serve.
Jacob Thaysen: Before turning it over to Ankur for more details on our Q4 results and 2026 guidance, I just want to say that I'm confident that our long-term strategy is working, reinforced by the progress we made in 2025 and where Illumina stands today. Over the past year, we have advanced the strategy we laid out in 2024 and delivered meaningful progress across the business, entering 2026 with very encouraging momentum. We proved resilience, and we are a stronger company today, and we remain on track toward achieving our long-term financial targets for 2027. I want to thank our employees for their commitment and performance this past year. I'm very proud of the Illumina team for staying focused through a dynamic year and delivering for our customers and the patients they serve.
Speaker #2: Over the past year, we have advanced the strategy we laid out in 2024 and delivered meaningful progress across the business, entering 2026 with very encouraging momentum.
Speaker #2: We proved resilience, and we are a stronger company today. And we remain on track toward achieving our long-term financial targets for 2027. I want to thank our employees for their commitment and performance this past year.
Speaker #2: I'm very proud of the Illumina team for staying focused through a dynamic year and delivering for our customers and the patients they serve. With that, I'll turn it over to Ankur to walk through the financial details before we move to Q&A.
Jacob Thaysen: With that, I'll turn it over to Ankur to walk through the financial details before we move to Q&A.
Jacob Thaysen: With that, I'll turn it over to Ankur to walk through the financial details before we move to Q&A.
Speaker #2: Thank you, Jacob. And good afternoon, everyone. I will give you an overview of our fourth quarter financial results and provide more color on revenue, expenses, earnings, and updates on our balance sheet and capital deployment.
Ankur Dhingra: Thank you, Jacob, and good afternoon, everyone. I will give you an overview of our fourth quarter financial results, provide more color on revenue, expenses, earnings, and updates on our balance sheet and capital deployment, and then discuss our outlook going forward. Before I get into the details of the financial performance, let me provide a high-level view of how the fourth quarter played out. During the fourth quarter, Illumina's revenue of $1.16 billion came in above our expectations, driven by strength in our clinical consumables revenue, better than expected NovaSeq X placements, and outperformance in China. We also saw a small benefit from some year-end budget purchasing. The higher revenue resulted in margins and EPS, both coming in ahead of our guidance, while also reflecting the benefits of the cost actions we took earlier in the year. Now, let me provide you the details.
Ankur Dhingra: Thank you, Jacob, and good afternoon, everyone. I will give you an overview of our fourth quarter financial results, provide more color on revenue, expenses, earnings, and updates on our balance sheet and capital deployment, and then discuss our outlook going forward. Before I get into the details of the financial performance, let me provide a high-level view of how the fourth quarter played out. During the fourth quarter, Illumina's revenue of $1.16 billion came in above our expectations, driven by strength in our clinical consumables revenue, better than expected NovaSeq X placements, and outperformance in China. We also saw a small benefit from some year-end budget purchasing. The higher revenue resulted in margins and EPS, both coming in ahead of our guidance, while also reflecting the benefits of the cost actions we took earlier in the year. Now, let me provide you the details.
Speaker #2: And then discuss our outlook going forward. Before I get into the details of the financial performance, let me provide a high-level view of how the fourth quarter played out.
Speaker #2: During the fourth quarter, Illumina's revenue of $1.16 billion came in above our expectations, driven by strength in our clinical consumables revenue, better-than-expected NovaSeq X placements, and outperformance in China.
Speaker #2: We also saw a small benefit from some year-end budget purchasing. The higher revenue resulted in margins and EPS both coming in ahead of our guidance, while also reflecting the benefits of the cost actions we took earlier in the year.
Speaker #2: Now, let me provide you the details. During the fourth quarter, ILLUMINA's revenue of $1.16 billion was up 5% year-over-year on a reported basis, and 4% on a constant currency basis.
Ankur Dhingra: During the fourth quarter, Illumina's revenue of $1.16 billion was up 5% year-over-year on a reported basis and 4% on a constant currency basis. Greater China revenue of $55 million was ahead of expectations and represented a $25 million decline from Q4 of 2024. Excluding Greater China, Illumina revenue was up 7% year-over-year. Sequencing consumables revenue of $755 million was up 8% year-over-year and up 11% excluding China. High-throughput volume growth drove the strength in consumables as customers across research and clinical ramped utilization of their NovaSeq X instruments.
Ankur Dhingra: During the fourth quarter, Illumina's revenue of $1.16 billion was up 5% year-over-year on a reported basis and 4% on a constant currency basis. Greater China revenue of $55 million was ahead of expectations and represented a $25 million decline from Q4 of 2024. Excluding Greater China, Illumina revenue was up 7% year-over-year. Sequencing consumables revenue of $755 million was up 8% year-over-year and up 11% excluding China. High-throughput volume growth drove the strength in consumables as customers across research and clinical ramped utilization of their NovaSeq X instruments.
Speaker #2: Greater China revenue of $55 million was ahead of expectations, and represented a 25 million decline from Q4 of 2024. Excluding Greater China, ILLUMINA revenue was up 7% year-over-year.
Speaker #2: Sequencing consumables revenue of $755 million was up 8% year-over-year, and up 11% excluding China. High-throughput volume growth drove the strength in consumables, as customers across research and clinical ramped utilization of their NovaSeq X instruments.
Speaker #2: More broadly, the clinical market maintained its momentum, growing 20% outside of China, driven by broader adoption of NGS-based testing and customers converting current assays to ones that require significantly more sequencing data, such as transitions from whole exome to whole genome sequencing in oncology and genetic disease.
Ankur Dhingra: More broadly, the clinical market maintained its momentum, growing 20% outside of China, driven by broader adoption of NGS-based testing and customers converting current assays to ones that require significantly more sequencing data, such as transitions from whole exome to whole genome sequencing in oncology and genetic disease. Consumable sales in research and applied markets were roughly flat year over year in the quarter, a notable improvement versus Q3, but still below historical levels due to continued uncertainty in the funding environment and year-over-year pricing dynamics related to conversion to the X. As of Q4, roughly 80% of the volumes and 55% of the revenue has transitioned to the NovaSeq X. The research transition is nearing its end, as now roughly 90% of the high-throughput sequencing volumes for these customers have transitioned to X.
Ankur Dhingra: More broadly, the clinical market maintained its momentum, growing 20% outside of China, driven by broader adoption of NGS-based testing and customers converting current assays to ones that require significantly more sequencing data, such as transitions from whole exome to whole genome sequencing in oncology and genetic disease. Consumable sales in research and applied markets were roughly flat year over year in the quarter, a notable improvement versus Q3, but still below historical levels due to continued uncertainty in the funding environment and year-over-year pricing dynamics related to conversion to the X. As of Q4, roughly 80% of the volumes and 55% of the revenue has transitioned to the NovaSeq X. The research transition is nearing its end, as now roughly 90% of the high-throughput sequencing volumes for these customers have transitioned to X.
Speaker #2: Consumables sales in research and applied markets were roughly flat year-over-year in the quarter. A notable improvement versus Q3. But still below historical levels due to continued uncertainty in the funding environment, and year-over-year pricing dynamics related to conversion to the X.
Speaker #2: As of Q4, roughly 80% of the volumes and 55% of the revenue have transitioned to the NovaSeq X. The research transition is nearing its end, as now roughly 90% of the high-throughput sequencing volumes for these customers have transitioned to X.
Speaker #2: As a result, we expect pricing headwinds from the transition to continue to dissipate for our research customers, especially in the second half of 2026.
Ankur Dhingra: As a result, we expect pricing headwinds from the transition to continue to dissipate for our research customers, especially in the second half of 2026. Clinical volume is now more than two-thirds converted to the X, and we believe pricing dynamics going forward will be tied more to new applications like whole genome sequencing adoption, which drives higher volumes. Given these two dynamics, near-complete conversion within research, clinical volume growth driven by X, we expect the conversion to be substantially complete by the end of 2026. On sequencing activity, total sequencing Gb output on our connected high- and mid-throughput instruments grew at a rate of more than 30% year-over-year, driven by robust strength in clinical, but more muted growth among our research customers.
Ankur Dhingra: As a result, we expect pricing headwinds from the transition to continue to dissipate for our research customers, especially in the second half of 2026. Clinical volume is now more than two-thirds converted to the X, and we believe pricing dynamics going forward will be tied more to new applications like whole genome sequencing adoption, which drives higher volumes. Given these two dynamics, near-complete conversion within research, clinical volume growth driven by X, we expect the conversion to be substantially complete by the end of 2026. On sequencing activity, total sequencing Gb output on our connected high- and mid-throughput instruments grew at a rate of more than 30% year-over-year, driven by robust strength in clinical, but more muted growth among our research customers.
Speaker #2: Clinical volume is now more than two-thirds converted to the X. And we believe pricing dynamics going forward will be tied more to new applications like whole genome sequencing adoption, which drives higher volumes.
Speaker #2: Given these two dynamics—near-complete conversion within research and clinical volume growth driven by X—we expect the conversion to be substantially complete by the end of 2026.
Speaker #2: On sequencing activity, total sequencing GB output on our connected high and mid-throughput instruments grew at a rate of more than 30% year-over-year. Driven by robust strength in clinical, but more muted growth among our research customers.
Speaker #2: Sequencing instruments revenue of $154 million was approximately flat year-over-year in Q4, and up 3% ex-China driven by strong placements of NovaSeq X and the MySeq i100.
Ankur Dhingra: Sequencing instruments revenue of $154 million was approximately flat year over year in Q4, and up 3% ex China, driven by strong placements of NovaSeq X and the MiSeq i100. Similar to our consumable mix, over 60% of X systems placed in Q4 were to clinical customers. In Greater China, our instruments business was down 55% due to export restrictions. Globally, we placed over 100 NovaSeq X's, including about 5 on rental or lease contracts, bringing our total active install base to 890 instruments. Sequencing service and other revenue of $157 million was up approximately 3% year over year, and up 4% ex China. Strategic partnerships and the timing of data deals have been lumpy in 2025, and we were pleased to see a return to growth in Q4.
Ankur Dhingra: Sequencing instruments revenue of $154 million was approximately flat year over year in Q4, and up 3% ex China, driven by strong placements of NovaSeq X and the MiSeq i100. Similar to our consumable mix, over 60% of X systems placed in Q4 were to clinical customers. In Greater China, our instruments business was down 55% due to export restrictions. Globally, we placed over 100 NovaSeq X's, including about 5 on rental or lease contracts, bringing our total active install base to 890 instruments. Sequencing service and other revenue of $157 million was up approximately 3% year over year, and up 4% ex China. Strategic partnerships and the timing of data deals have been lumpy in 2025, and we were pleased to see a return to growth in Q4.
Speaker #2: Similar to our consumable mix, over 60% of X systems placed in Q4 were to clinical customers. In Greater China, our instruments business was down 55% due to export restrictions.
Speaker #2: Globally, we placed over 100 NovaSeq Xs, including about five on rental or lease contracts, bringing our total active...
Speaker #1: Install base to 890 instruments . Sequencing service and other revenue of $157 million was up approximately 3% year over year , and up 4% .
Speaker #1: X revenue of $157 million was up approximately 3% year over year and up 4% . X Strategic partnerships and the timing of data been lumpy in 2025 , and we were pleased to see a return to growth in Q4 .
Ankur Dhingra: Moving to the rest of the PNL. Non-GAAP gross margin of 67% for Q4 was down 40 basis points year-over-year, primarily from the tariff impact of 205 basis points. Excluding tariffs, gross margins improved by 165 basis points. Sequentially, Q4 margins reflect the typical instrument-heavy quarter in Q4. Non-GAAP operating expenses were $502 million, down 5% or $24 million year-over-year, reflecting the results of the multi-year cost reduction programs and prioritization of key growth investments. Non-GAAP operating margin was 23.7% in Q4, expanding 400 basis points year-over-year. Operating profit grew approximately 26% year-over-year, reflecting increased operating leverage from the improved cost structure.
Ankur Dhingra: Moving to the rest of the PNL. Non-GAAP gross margin of 67% for Q4 was down 40 basis points year-over-year, primarily from the tariff impact of 205 basis points. Excluding tariffs, gross margins improved by 165 basis points. Sequentially, Q4 margins reflect the typical instrument-heavy quarter in Q4. Non-GAAP operating expenses were $502 million, down 5% or $24 million year-over-year, reflecting the results of the multi-year cost reduction programs and prioritization of key growth investments. Non-GAAP operating margin was 23.7% in Q4, expanding 400 basis points year-over-year. Operating profit grew approximately 26% year-over-year, reflecting increased operating leverage from the improved cost structure.
Speaker #1: Moving to the rest of the P&L, non-GAAP gross margin of 67% for the fourth quarter was down 40 basis points year over year, primarily from the impact of the 205 basis points tariffs.
Speaker #1: gross Excluding margins improved points by 165 basis sequentially . Q4 margins reflect the instruments typical quarter heavy in Q4 . non-GAAP operating expenses were $502 million , down 5% , or $24 million year over year the results of the , reflecting multi-year cost reduction programs and prioritization of key growth investments .
Speaker #1: Non-GAAP operating margin was 23.7% in Q4, expanding 400 basis points year over year. Operating profit grew approximately 26% year over year, reflecting increased operating leverage from the improved cost structure.
Ankur Dhingra: Looking at our results below the line, non-GAAP other expense, which is largely comprised of net interest expense, was $16 million, and the non-GAAP tax rate was 19.5%. We continue to assess long-term tax structure optimization to balance US R&D benefits with efficient credit utilization across jurisdictions. Our average diluted shares were approximately 154 million, 6 million lower than Q4 of 2024, reflecting share repurchases throughout the year. Altogether, non-GAAP EPS of $1.35 per diluted share grew approximately 42% year-over-year and came in above our guidance range and was higher than our initial estimate disclosed in January. Moving to cash flow, balance sheet, and capital allocation items for the quarter. Cash flow provided by operations was $321 million for the quarter and $1.1 billion for the year.
Ankur Dhingra: Looking at our results below the line, non-GAAP other expense, which is largely comprised of net interest expense, was $16 million, and the non-GAAP tax rate was 19.5%. We continue to assess long-term tax structure optimization to balance US R&D benefits with efficient credit utilization across jurisdictions. Our average diluted shares were approximately 154 million, 6 million lower than Q4 of 2024, reflecting share repurchases throughout the year. Altogether, non-GAAP EPS of $1.35 per diluted share grew approximately 42% year-over-year and came in above our guidance range and was higher than our initial estimate disclosed in January. Moving to cash flow, balance sheet, and capital allocation items for the quarter. Cash flow provided by operations was $321 million for the quarter and $1.1 billion for the year.
Speaker #1: Looking at our results below the line, non-GAAP other expense, which is largely comprised of net interest expense, was $16 million, and the non-GAAP tax rate was 19.5%.
Speaker #1: We continue to assess long term tax structure optimization to balance US R&D benefits with efficient credit utilization across jurisdictions . Our average diluted shares were approximately 154 million , 6 million lower than Q4 of 24 , reflecting share repurchases throughout the year .
Speaker #1: Altogether, non-GAAP EPS of $1.35 per diluted share grew approximately year over year, and came 42% year over year above our guidance range and was higher than our initial estimate disclosed in January.
Speaker #1: Moving to cash flow, balance sheet, and capital allocation items for the quarter. Cash flow provided by operations was $321 million for the quarter, and $1.1 billion for the year.
Ankur Dhingra: Capital expenditures were $54 million, and free cash flow was $267 million for Q4. For the year, CapEx was $148 million, and free cash flow was $931 million. In Q4, we repurchased 337,000 shares of Illumina stock for approximately $42 million at an average price of $124.12 per share. At quarter end, we had $643 million remaining on our share repurchase authorization, and we intend to continue to repurchase shares opportunistically. Subsequent to the end of Q4, we closed the acquisition of SomaLogic on 30 January for an upfront payment of $350 million, plus potential royalties and milestone payments subject to customary adjustments. We funded the upfront payment with cash on hand.
Ankur Dhingra: Capital expenditures were $54 million, and free cash flow was $267 million for Q4. For the year, CapEx was $148 million, and free cash flow was $931 million. In Q4, we repurchased 337,000 shares of Illumina stock for approximately $42 million at an average price of $124.12 per share. At quarter end, we had $643 million remaining on our share repurchase authorization, and we intend to continue to repurchase shares opportunistically. Subsequent to the end of Q4, we closed the acquisition of SomaLogic on 30 January for an upfront payment of $350 million, plus potential royalties and milestone payments subject to customary adjustments. We funded the upfront payment with cash on hand.
Speaker #1: Capital expenditures were $54 million , and free cash flow was $267 million . For Q4 . For the year , CapEx was $148 million and free cash flow was $931 million .
Speaker #1: In Q4 , we repurchased 337,000 shares of Illumina stock for proximately $42 million at an average price of $124.12 per share at quarter end , we had $643 million remaining on our share repurchase authorization , we continue intend to to and repurchase shares .
Speaker #1: Subsequent to the end of Q4 , we closed the acquisition of Somalogic on January 30th for an upfront payment of $350 million , plus potential royalties and milestone payments subject to customary adjustments .
Ankur Dhingra: We ended the quarter with approximately $1.63 billion in cash, cash equivalents, and short-term investments, and gross leverage of approximately 1.6x gross debt to last twelve months EBITDA. So recapping the full year 2025, starting with revenue, we returned to growth ex China in Q3 and grew sales about 4% in the second half of the year. I'm extremely proud of the whole Illumina team for navigating through a very dynamic year to end the year on a high note. Through disciplined execution and cost optimization, we were able to expand margins nearly 200 basis points in 2025, despite approximately 200 basis points in macro-related headwinds. And finally, we grew EPS by 16%, and our 2025 EPS of $4.84 came in above the original guidance we gave at the start of the year.
Ankur Dhingra: We ended the quarter with approximately $1.63 billion in cash, cash equivalents, and short-term investments, and gross leverage of approximately 1.6x gross debt to last twelve months EBITDA. So recapping the full year 2025, starting with revenue, we returned to growth ex China in Q3 and grew sales about 4% in the second half of the year. I'm extremely proud of the whole Illumina team for navigating through a very dynamic year to end the year on a high note. Through disciplined execution and cost optimization, we were able to expand margins nearly 200 basis points in 2025, despite approximately 200 basis points in macro-related headwinds. And finally, we grew EPS by 16%, and our 2025 EPS of $4.84 came in above the original guidance we gave at the start of the year.
Speaker #1: We funded the upfront payment with cash on hand. We ended the quarter with approximately $1.63 billion in cash, cash equivalents, and short-term investments, and gross leverage of approximately 1.6 times gross debt to last 12 months.
Speaker #1: EBITDA . So recapping the full year 2025 , starting with revenue , we return to growth ex-china in Q3 and grew sales about 4% in the year second half of the .
Speaker #1: I'm extremely proud of the whole Illumina team for navigating through a very dynamic year. To end the year on a high note, through disciplined execution and cost optimization, we were able to expand margins nearly 200 basis points in 2025.
Speaker #1: Despite approximately 200 basis points in macro related headwinds and finally , we grew EPs by 16% , and our 2025 EPs of came in $4.84 above the original guidance we gave at the start of the year .
Ankur Dhingra: The way we closed out 2025 gives me confidence about the progress we are making towards our long-range targets, and I'm excited about our momentum going into 2026.... Now moving to guidance for the year 2026. Starting with revenue, we're expecting revenue of $4.5 to 4.6 billion, representing ex-China organic growth of 2% to 4%. Organic growth excludes the impact of currency, which is expected to add roughly 1 point to our reported growth, and revenue associated with the SomaLogic acquisition, which is expected to add 1.5 to 2 points of revenue growth in 2026. China sales are expected to be a 1 point headwind to total company revenue growth. On a reported basis, overall revenue is expected to be up 4% to 6%.
Ankur Dhingra: The way we closed out 2025 gives me confidence about the progress we are making towards our long-range targets, and I'm excited about our momentum going into 2026.... Now moving to guidance for the year 2026. Starting with revenue, we're expecting revenue of $4.5 to 4.6 billion, representing ex-China organic growth of 2% to 4%. Organic growth excludes the impact of currency, which is expected to add roughly 1 point to our reported growth, and revenue associated with the SomaLogic acquisition, which is expected to add 1.5 to 2 points of revenue growth in 2026. China sales are expected to be a 1 point headwind to total company revenue growth. On a reported basis, overall revenue is expected to be up 4% to 6%.
Speaker #1: The way we closed out 2025 gives me confidence about the progress we're making towards our long-range targets, and I'm excited about our momentum going into 2026.
Speaker #1: Now moving to guidance for the year 2026 , starting with revenue , we're expecting revenue of 4.5 to $4.6 billion , representing Ex-china organic growth of 2 to 4% , organic growth excludes the impact of currency , which is expected to add roughly one our deported growth revenue and associated with the which is acquisition , Somalogic expected to add 1.5 to 2 points of revenue growth in 2026 .
Speaker #1: China sales are expected to be a one-point headwind to total company revenue growth on a reported basis. Overall, revenue is expected to be up 4% to 6% for the rest of the world.
Ankur Dhingra: For the rest of the world, organic sequencing revenue growth, we are expecting low- to mid-single-digit growth in consumables, with clinical growing double-digit to mid-teens, driven by continued strong volumes from our clinical customers. We're excited about the significant progress our customers are making with growth in their on-market tests and new sequencing-intensive whole genome approaches. We expect research declining mid- to high-single-digits. Recent NIH budget announcements are a welcome development, and as fund flow resumes, could provide a more favorable environment relative to what we are assuming in guidance. Instrument sales are expected to be down low-single-digits to flat year-over-year, and we believe our goal of placing 50 to 60 NovaSeq X instruments per quarter on average, will continue through 2026. Our pull-through assumptions by platform can be found in our earnings presentation.
Ankur Dhingra: For the rest of the world, organic sequencing revenue growth, we are expecting low- to mid-single-digit growth in consumables, with clinical growing double-digit to mid-teens, driven by continued strong volumes from our clinical customers. We're excited about the significant progress our customers are making with growth in their on-market tests and new sequencing-intensive whole genome approaches. We expect research declining mid- to high-single-digits. Recent NIH budget announcements are a welcome development, and as fund flow resumes, could provide a more favorable environment relative to what we are assuming in guidance. Instrument sales are expected to be down low-single-digits to flat year-over-year, and we believe our goal of placing 50 to 60 NovaSeq X instruments per quarter on average, will continue through 2026. Our pull-through assumptions by platform can be found in our earnings presentation.
Speaker #1: Organic sequencing revenue growth . We are expecting low to mid single digit growth in consumables clinical with growing double digit to mid-teens continued strong volumes driven by from our clinical customers .
Speaker #1: We are excited about the progress our significant customers with growth in their own market are making, tests, and new sequencing. Intensive whole genome approaches, we expect research declining mid- to high-single digits.
Speaker #1: Recent NIH budget announcements are a welcome development and as fund flow resumes provide a could more favorable environment relative to what we are assuming in guidance .
Speaker #1: Instrument sales are expected to be down single digits, or low to flat year over year, and we believe our goal of 50 to 60 NovaSeq instruments per quarter will continue through 2026.
Ankur Dhingra: In China, we expect sales of $210 to 220 million, with little or no step up in instrument sales in the first half of the year. We will revisit our assumptions as we work with the government about our ability to import instruments into the country. Moving to operating margins, excluding SomaLogic, we are guiding for operating margins to expand 130 basis points next year at midpoint. SomaLogic is expected to have a 100 basis point impact to margins, all in for 2026, expecting operating margins of between 23.3 and 23.5%. We've made significant progress in improving Illumina operating margins and remain focused on achieving our 2027 targets. Now moving to EPS. Excluding SomaLogic, we're projecting EPS to grow 10% at the midpoint.
Ankur Dhingra: In China, we expect sales of $210 to 220 million, with little or no step up in instrument sales in the first half of the year. We will revisit our assumptions as we work with the government about our ability to import instruments into the country. Moving to operating margins, excluding SomaLogic, we are guiding for operating margins to expand 130 basis points next year at midpoint. SomaLogic is expected to have a 100 basis point impact to margins, all in for 2026, expecting operating margins of between 23.3 and 23.5%. We've made significant progress in improving Illumina operating margins and remain focused on achieving our 2027 targets. Now moving to EPS. Excluding SomaLogic, we're projecting EPS to grow 10% at the midpoint.
Speaker #1: Our pull-through assumptions by platform can be found in our earnings presentation. In China, we expect sales of $210 to $220 million, with little or no step-up in instrument sales in the first half of the year.
Speaker #1: We will revisit our we work with the assumptions as government about our ability to import instruments into the country . Moving to operating margins , excluding Somalogic , we are guiding for operating margins to expand 130 basis points next year at midpoint , Somalogic is expected to have 100 basis point impact to margins All in for 2026 .
Speaker #1: Expecting operating margins of—we've made between 23.3% and 23.5%. Significant progress in improving Illumina operating margins; remain focused on and achieving our 2027 targets. Moving to EPS, excluding SomaLogic, we're projecting EPS to grow 10% at the midpoint.
Ankur Dhingra: SomaLogic is expected to be diluted by $0.18 at midpoint; hence, total Illumina 2026 EPS guidance is in the range of $5.05 to $5.20. For Q1 2026, we're expecting rest of world organic revenue growth of 1% to 3%, equating to between $1.06 and $1.08 billion. We're expecting Q1 EPS of $1.02 to $1.07, including $0.04 of deal dilution. The rest of the details of our Q1 and 2026 guidance can be found in our earnings presentation. One housekeeping item. Starting in January 2026, we changed the geographical reporting segments to better align with the respective commercial organization structure. Beginning in Q1, we will report our new geographical segments and will provide historical financial reconciliation for the new structure.
Ankur Dhingra: SomaLogic is expected to be diluted by $0.18 at midpoint; hence, total Illumina 2026 EPS guidance is in the range of $5.05 to $5.20. For Q1 2026, we're expecting rest of world organic revenue growth of 1% to 3%, equating to between $1.06 and $1.08 billion. We're expecting Q1 EPS of $1.02 to $1.07, including $0.04 of deal dilution. The rest of the details of our Q1 and 2026 guidance can be found in our earnings presentation. One housekeeping item. Starting in January 2026, we changed the geographical reporting segments to better align with the respective commercial organization structure. Beginning in Q1, we will report our new geographical segments and will provide historical financial reconciliation for the new structure.
Speaker #1: Somalogic is expected to be dilutive by $0.18 at midpoint . Hence total Illumina 2026 EPs guidance is in the range of $5.05 to $5.20 for Q1 2026 .
Speaker #1: We're expecting rest of World organic revenue growth of 1 to 3% , equating to between 1.06 and $1.08 billion . We're expecting Q1 EPs of $1.02 to $1.07 , including $0.04 of dilution .
Speaker #1: The rest of the details of our Q1 2026 guidance can be earnings in our found presentation One . housekeeping item starting in January 2026 , we changed the geographical reporting segments to better align with the respective commercial organization structure beginning in we Q1 , will report our new geographical segments and will provide historical financial reconciliation for the new structure .
Ankur Dhingra: In closing, I want to once again express my sincere appreciation to the Illumina team for their continued focus and disciplined execution throughout the quarter. We enter 2026 with a lot of momentum, and I'm extremely encouraged by the progress we've made in returning Illumina to long-term sustainable revenue and earnings growth. Thank you for joining our call today. I will now invite the operator to open the line for Q&A.
Ankur Dhingra: In closing, I want to once again express my sincere appreciation to the Illumina team for their continued focus and disciplined execution throughout the quarter. We enter 2026 with a lot of momentum, and I'm extremely encouraged by the progress we've made in returning Illumina to long-term sustainable revenue and earnings growth. Thank you for joining our call today. I will now invite the operator to open the line for Q&A.
Speaker #1: In closing, I want to once again express my sincere appreciation to the Illumina team for continuing their focus and disciplined execution throughout the quarter.
Speaker #1: We entered 2026 with a lot of momentum and am extremely encouraged by the progress we've made in returning Illumina to long-term, sustainable revenue and earnings growth.
Operator: Hi. 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 one question. If you have additional questions, please raise your hand again to be put back into the queue. We will now pause a moment to assemble the queue. Thank you. Our first question will come from Doug Schenkel with Wolfe Research. Your line is now open. Please go ahead.
Operator: Hi. 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 one question. If you have additional questions, please raise your hand again to be put back into the queue. We will now pause a moment to assemble the queue. Thank you. Our first question will come from Doug Schenkel with Wolfe Research. Your line is now open. Please go ahead.
Speaker #1: Thank you for joining our call today. I will now invite the operator to open the line for Q&A.
Speaker #2: 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 one question .
Speaker #2: If you have additional questions , please raise your hand again to be into the queue . put back will now We pause a moment to assemble the queue .
Speaker #2: Thank you. Our first question will come from Doug Schenkel with Wolfe Research. Your line is now open. Please go ahead.
Doug Schenkel: Hey, good afternoon, guys, and thank you for taking my questions. I'm just gonna ask a couple financial questions, and then I'll get back in the queue. So first, on operating margin, does guidance embed an assumption that you essentially end the year at 26 to 27% operating margin? And building off of that, is there any change to your 2027 margin target factoring in SomaLogic? And then the second topic is really on capital deployment. The balance sheet is really clean at this point. You're generating about $1 billion of free cash flow. Clearly, the business has stabilized. How are you thinking about capital deployment, and specifically, what is your M&A criteria and priorities? Thank you.
Doug Schenkel: Hey, good afternoon, guys, and thank you for taking my questions. I'm just gonna ask a couple financial questions, and then I'll get back in the queue. So first, on operating margin, does guidance embed an assumption that you essentially end the year at 26 to 27% operating margin? And building off of that, is there any change to your 2027 margin target factoring in SomaLogic? And then the second topic is really on capital deployment. The balance sheet is really clean at this point. You're generating about $1 billion of free cash flow. Clearly, the business has stabilized. How are you thinking about capital deployment, and specifically, what is your M&A criteria and priorities? Thank you.
Speaker #3: Hey , good afternoon guys , and thank you for taking my questions . I'm just going to ask a couple financial questions and then I'll get back in the queue .
Speaker #3: first on So operating margin does guidance embed an assumption that essentially you end the year operating margin at and . Margin 26 to 27% of that , is there any building off change to your 2027 margin target factoring in Somalogic ?
Speaker #3: And then the second topic is really on The deployment . capital balance sheet is this really point . You're clean at generating about $1 billion of free cash flow .
Speaker #3: business is stabilized . you thinking Clearly , the How are about is your M&A specifically what criteria and you priorities ? Thank
Ankur Dhingra: Thanks, Doug. Let me start by addressing your first question, which I believe is around our long-term targets. We feel definitely still great about those targets. Just as a step back, in 2024, we were out there presenting that we would bring the business back to high single-digit growth by 2027, and also delivering 500 basis points that should bring us to 26% operating margin. We feel really good about what we have done the last year. We have stepped ourselves into growth, and we believe we are in the right direction to deliver on the high single-digit growth in 2027 in our core business.
Jacob Thaysen: Thanks, Doug. Let me start by addressing your first question, which I believe is around our long-term targets. We feel definitely still great about those targets. Just as a step back, in 2024, we were out there presenting that we would bring the business back to high single-digit growth by 2027, and also delivering 500 basis points that should bring us to 26% operating margin. We feel really good about what we have done the last year. We have stepped ourselves into growth, and we believe we are in the right direction to deliver on the high single-digit growth in 2027 in our core business.
Speaker #3: .
Speaker #4: let . And by me start doc addressing your first question Thanks , with , I believe it's term our long around targets definitely still about , and we feel great those targets as a .
Speaker #4: back in step 24 , we Just were out presenting that we would bring the business back to high single digit growth by also 27 and delivering 500 basis points as you bring us to 26% operating margin .
Speaker #4: We feel really good done the last year about what we ourselves have into growth and we . We have believe stepped we are to direction deliver on in the right single in growth business digit .
Jacob Thaysen: ... We also are seeing that we have moved substantially on our operating margins with 200 basis points last year in really a tough environment where we had approximately 200 basis points headwinds from tariffs and other things. Now we are committing to another 130 basis points. So we are well on that trajectory. Obviously, now with the acquisition of SomaLogic, it will be, as we mentioned also, it's dilutive as a starting point. We are working through the opportunities for synergies, and we will get as close to the 26 operating margin as possible in 2027 also. But more, we will keep you updated on the way; we are doing everything we can.
Jacob Thaysen: ... We also are seeing that we have moved substantially on our operating margins with 200 basis points last year in really a tough environment where we had approximately 200 basis points headwinds from tariffs and other things. Now we are committing to another 130 basis points. So we are well on that trajectory. Obviously, now with the acquisition of SomaLogic, it will be, as we mentioned also, it's dilutive as a starting point. We are working through the opportunities for synergies, and we will get as close to the 26 operating margin as possible in 2027 also. But more, we will keep you updated on the way; we are doing everything we can.
Speaker #4: the high also 27 and our core that we seeing have are We substantially moved on our operating margins with 200 basis points last year in really a tough environment where had 200 , point we approximately 200 basis headwinds and other things , and are now we tariffs committing to another points .
Speaker #4: we are well that on on 130 basis Obviously trajectory . with with the So acquisition of now Somalogic , it will at we also is be dilutive mentioned as a working starting point .
Speaker #4: through the the We are opportunities for synergies will and and close to get as the 26 operating margin we possible in 27 also , but more .
Operator: Your next question will come-
Operator: Your next question will come-
Speaker #4: as updated . We're doing everything can keep you We will on the way we .
Ankur Dhingra: So this is Ankur. So and, Doug, your premise that next year, excluding SomaLogic, that the exit rate operating margin for 2026 is higher than the average, that's usually our cyclicality in the business. So a full year guide ex Soma is getting close to 24.5. And exit rate in Q4 generally tends to be higher than that.
Ankur Dhingra: So this is Ankur. So and, Doug, your premise that next year, excluding SomaLogic, that the exit rate operating margin for 2026 is higher than the average, that's usually our cyclicality in the business. So a full year guide ex Soma is getting close to 24.5. And exit rate in Q4 generally tends to be higher than that.
Speaker #2: next question Your come will .
Speaker #1: anchor , so and Doug , you're that next This is promise year excluding the exit rate operating Somalogic that is higher margin than the 2026 for average is .
Speaker #1: That's our cyclicality usually in the business . So our full guide year is close to is 24.5 . rate in exit And Q4 getting generally tends to be higher that .
Operator: Your next question will come from Vijay Kumar with Evercore ISI.
Operator: Your next question will come from Vijay Kumar with Evercore ISI.
Speaker #1: than
Vijay Kumar: Hey, guys. Thanks for taking my question, and congrats on a nice one here. Maybe one on guidance here, you know, Jacob or Ankur, for you guys. Organic for Q4, when you look at clinical performance ex-China, 6.5%, overall company, 3.5%. Your guidance, you know, ex-China basis for fiscal 2026, you're looking at 3%. You know, what drives that step down from 6.5% exit rate in Q4? You know, when Q4, clearly clinical was stand up, was there anything one-off about Q4, any pull forward of revenues, et cetera, that perhaps calls for some moderation in 2026 outlook? Thank you.
Vijay Kumar: Hey, guys. Thanks for taking my question, and congrats on a nice one here. Maybe one on guidance here, you know, Jacob or Ankur, for you guys. Organic for Q4, when you look at clinical performance ex-China, 6.5%, overall company, 3.5%. Your guidance, you know, ex-China basis for fiscal 2026, you're looking at 3%. You know, what drives that step down from 6.5% exit rate in Q4? You know, when Q4, clearly clinical was stand up, was there anything one-off about Q4, any pull forward of revenues, et cetera, that perhaps calls for some moderation in 2026 outlook? Thank you.
Speaker #5: . Yes
Speaker #2: next question from will come Vijay Kumar with Evercore ISI Your .
Speaker #6: guys . Thanks for taking congrats on question and here a nice spring my Maybe . one on guidance here Hey in Jacob a encore for you guys or .
Speaker #6: The organic for at clinical performance Q4 . When X you look six and a half overall company three and a half guidance , you know , , your ex-china basis for fiscal 26 , you're looking at 3% .
Speaker #6: what And drives that step down from six and a half exit rate in Q4 . You know , when Q4 clearly was clinical standout , was there anything one off about Q4 , any pull forward of revenues , etc.
Jacob Thaysen: Hey, Vijay. So thank you, first and foremost. We are super excited about how we ended out the year. Clearly, 2025 was a challenging year, so the momentum we started to build up here in second half is really encouraging. And we truly believe that momentum is continuing into 2026. As you can see, we ended out the year with very strong performance on clinical, with 20% clinical consumables growth in Q4 in 2025. And we expect that momentum overall from second half to continue. So we believe that what we're building in is that we have high- to mid-teens growth for our clinical business. But we also continue to see the challenges in the research academic environment.
Jacob Thaysen: Hey, Vijay. So thank you, first and foremost. We are super excited about how we ended out the year. Clearly, 2025 was a challenging year, so the momentum we started to build up here in second half is really encouraging. And we truly believe that momentum is continuing into 2026. As you can see, we ended out the year with very strong performance on clinical, with 20% clinical consumables growth in Q4 in 2025. And we expect that momentum overall from second half to continue. So we believe that what we're building in is that we have high- to mid-teens growth for our clinical business. But we also continue to see the challenges in the research academic environment.
Speaker #6: That, perhaps, calls for some moderation in '26 outlook? Thank you.
Speaker #4: Hey , Vijay . So thank you . First and foremost , are super excited we about how we out the ended year . Clearly 2025 was the challenging year .
Speaker #4: So the started to momentum we build up in second half is really here encouraging and we truly believe that is is momentum continuing into to 26 .
Speaker #4: As you can see , ended out the we we very year with strong performance on on on consumables clinical 20% clinical with growth in 27 .
Speaker #4: in Excuse me in Q4 in in 25 here we . And and expect that overall from second half to momentum we believe we're that continue .
Speaker #4: is that we what high So have building in mid-teens our growth for our for clinical business . But we also continue to see the in the research academic challenging environment .
Jacob Thaysen: It is definitely a good step forward that we are now seeing a line of sight to the NIH budget. But if you dig a little bit deeper, there are still a lot of uncertainties for the institutes, for how grants are being distributed, and who's getting, who's actually getting these grants. So that's why we see as there's still a muted environment, and I think during the year, we will hopefully see that come out better, which could continue the performance or improve our performance. But we're not seeing any substantial step down. We know Q4 is always a strong quarter, and therefore we feel good about how we're guiding at this point.
Jacob Thaysen: It is definitely a good step forward that we are now seeing a line of sight to the NIH budget. But if you dig a little bit deeper, there are still a lot of uncertainties for the institutes, for how grants are being distributed, and who's getting, who's actually getting these grants. So that's why we see as there's still a muted environment, and I think during the year, we will hopefully see that come out better, which could continue the performance or improve our performance. But we're not seeing any substantial step down. We know Q4 is always a strong quarter, and therefore we feel good about how we're guiding at this point.
Speaker #4: is definitely and an and good forward step It that we seeing a line of are now sight to the NIH budget . But if you take a little bit deeper , there's still a lot of the uncertainties for institutes for how grants are being distributed who's and getting who on who's actually getting these grants .
Speaker #4: So that's why we see that there's still a muted environment . And I think during the year we will hopefully see that come out better , which could could continue improve the performance or our performance .
Speaker #4: but But we're not seeing any substantial step down . We know Q4 is always a strong quarter and therefore feel good we about how we this point guiding at .
Ankur Dhingra: Vijay, let me frame the 2% to 4% ex-China. When we approach the guidance, as Jacob said, we're not seeing any change in the momentum, especially in the clinical business. Our customers continue to do very well, both from the adoption of the on-market test as well as working on bringing new tests to the market. The way we've approached the guidance is to look at the second half of 2025, as we laid out during our Q3 earnings call. Where in Q3, our growth is 2% in China, in Q4, it's up to 7%. And so we took the average for the second half to bracket our overall guidance. The Q3 of 2025 is just we're using as the low end, right?
Ankur Dhingra: Vijay, let me frame the 2% to 4% ex-China. When we approach the guidance, as Jacob said, we're not seeing any change in the momentum, especially in the clinical business. Our customers continue to do very well, both from the adoption of the on-market test as well as working on bringing new tests to the market. The way we've approached the guidance is to look at the second half of 2025, as we laid out during our Q3 earnings call. Where in Q3, our growth is 2% in China, in Q4, it's up to 7%. And so we took the average for the second half to bracket our overall guidance. The Q3 of 2025 is just we're using as the low end, right?
Speaker #1: just Let me frame the 2% to 4% ex-china . When we approach the guidance Jacob said , as not , we're seeing any change especially in momentum , in the business clinical the customers .
Speaker #1: to do Our very continue well , both from adoption of the on market as well test the as tests to bringing new the market .
Speaker #1: working on The approached way we've the guidance is to look at the have to of 2025 . As we laid out during our Q3 earnings call , but in Q3 , our growth is 2% .
Speaker #1: Next, China in Q4, it's up to 7%. And so we took the average for the second half to bracket our overall guidance.
Ankur Dhingra: Where clinical is still growing the double-digit rate. The research is dying down in the high single-digit rate, as kind of a framework towards the low end. And then, if research does improve, that certainly provides an upside. Q4, just one quarter, didn't feel like using as a base for a full-year guide, per se. But momentum's pretty good.
Ankur Dhingra: Where clinical is still growing the double-digit rate. The research is dying down in the high single-digit rate, as kind of a framework towards the low end. And then, if research does improve, that certainly provides an upside. Q4, just one quarter, didn't feel like using as a base for a full-year guide, per se. But momentum's pretty good.
Speaker #1: The Q3 of 2025 is what we're as the end low , right ? still grew in the double research was rate . clinical digit down in the in the dying high single digit rate as kind of framework towards the low end .
Speaker #1: then if we search , And improve , that's provides on does an an upside . Q4 just one quarter didn't feel like using the full as a base for guide per year se .
Operator: Your next question will come from Puneet Souda with Leerink Partners.
Operator: Your next question will come from Puneet Souda with Leerink Partners.
Speaker #1: But the momentum momentum is good .
Puneet Souda: Yeah. Hi, guys, thanks for the question. On the instrumentation, can you provide how the split was with research versus clinical? I appreciate the momentum you're seeing in the clinical side, but on the research side, can you provide a little bit of context? And, you know, how are you thinking about the overall competition, just beyond the academic pressure that we have seen in the market? How much of that is baked in, just on the research side, both on the MiSeq brand and the High Throughput brand?
Puneet Souda: Yeah. Hi, guys, thanks for the question. On the instrumentation, can you provide how the split was with research versus clinical? I appreciate the momentum you're seeing in the clinical side, but on the research side, can you provide a little bit of context? And, you know, how are you thinking about the overall competition, just beyond the academic pressure that we have seen in the market? How much of that is baked in, just on the research side, both on the MiSeq brand and the High Throughput brand?
Speaker #2: Your next question will come Puneet from Leerink Sudha with Partners
Speaker #7: guys . Thanks for the question
Speaker #7: on the instrumentation . . Yeah . Hi Can you provide how the was was split research versus clinical ? I appreciate the momentum you're seeing in the clinical side , but on the research on the research side , can you a little bit provide context and you you thinking know , how are about the overall competition .
Speaker #7: Just beyond the academic pressure that we have the seen in market , how much of that is in just on the research on the side , both on the then the throughput and throughput end high ?
Jacob Thaysen: Yeah, Puneet, thank you. And we were very pleased with the performance we had in Q4, with more than 100 instruments placed on the X instruments. And as expected, more than 60% of those placements were related to clinical. And we expect that to be the case, that the dynamic to continue into 2026, where clinical will be the majority of the placements of instruments.
Jacob Thaysen: Yeah, Puneet, thank you. And we were very pleased with the performance we had in Q4, with more than 100 instruments placed on the X instruments. And as expected, more than 60% of those placements were related to clinical. And we expect that to be the case, that the dynamic to continue into 2026, where clinical will be the majority of the placements of instruments.
Speaker #4: Yeah . Thank you . And we were very pleased with the performance we had in Q4 with more than 100 instruments placed in the .
Speaker #4: Instruments and and as expected , more than 60% of those placements were related to clinical . And we expect that to be the case that the dynamic to continue into into 26 where clinical will the majority of of the placements of instruments .
Jacob Thaysen: So, we continue to see that customers are building their assays on our X instruments, and we are not seeing any slowdown in that part of the business. As you mentioned also, we have a mid-throughput business that has been more challenged, as we talked about before, by some of the macro trends, where some of our customers are maybe more conservative in how they have spent their funding over the past years, also in the research and academic market. So I think that market is still a little more muted than, but not really a change from what we have seen in 2025 also. So that's how we think about the business right now.
Jacob Thaysen: So, we continue to see that customers are building their assays on our X instruments, and we are not seeing any slowdown in that part of the business. As you mentioned also, we have a mid-throughput business that has been more challenged, as we talked about before, by some of the macro trends, where some of our customers are maybe more conservative in how they have spent their funding over the past years, also in the research and academic market. So I think that market is still a little more muted than, but not really a change from what we have seen in 2025 also. So that's how we think about the business right now.
Speaker #4: So we are we see that continue to customers are building their assays on our on the instruments . And we're not seeing any slowdown in that part of the business .
Speaker #4: As you mentioned . Also , a throughput business that has more been as we before , have been more challenged by macro trends some of the where some of our customers are maybe more conservative in how they have spent their the past years .
Speaker #4: research and Also , in the academic market . So I think that that is still market a little more muted but not than really a change from what we've seen in 25 So also .
Ankur Dhingra: From a competitive perspective, Puneet, no, we didn't see much in Q4. As Jacob said, very, very strong instrument placements quarter overall across clinical and research as well. We're getting very good interest in the new launches. We've launched the 5-base genome. Our spatial is in early access, and the demand and the interest from the research side looks very good. Our thinking on the research from 2026 perspective is more based on the funding environment and the evolution of the funding environment this year.
Ankur Dhingra: From a competitive perspective, Puneet, no, we didn't see much in Q4. As Jacob said, very, very strong instrument placements quarter overall across clinical and research as well. We're getting very good interest in the new launches. We've launched the 5-base genome. Our spatial is in early access, and the demand and the interest from the research side looks very good. Our thinking on the research from 2026 perspective is more based on the funding environment and the evolution of the funding environment this year.
Speaker #4: that's how we think about the now business right
Speaker #1: competitive perspective . see much
Speaker #1: in No , we didn't Q4 . From a Jacob . As said , we very strong instrument are placements . Quarter across overall clinical and research , getting as well .
Speaker #1: We're very good launched . interest in the new The or five base is early is in in spatial and access demand the and the and the interest from the research side very looks good .
Speaker #1: thinking on the research from Our is more 2026 perspective on the funding environment based and the evolution of the funding environment .
Operator: Your next question will come from Tycho Pedersen with Jefferies.
Operator: Your next question will come from Tycho Pedersen with Jefferies.
Speaker #5: same At the .
Tycho Peterson: Hey, thanks, guys. A couple quick ones. Just on clinical, Jacob, you know, you talked about growing use of whole genome, whole exome. Can you just talk on, you know, delineate how much of the growth is, you know, mix versus maybe volume? So that's kind of the first question. Second is on Onso. Just curious if you can touch on that and, you know, thought process, how quickly could you incorporate that technology, if you're planning to? And then, maybe just lastly on adjacencies, a little bit more color on, you know, what you're baking in for spatial Constellation and 5-base.
Tycho Peterson: Hey, thanks, guys. A couple quick ones. Just on clinical, Jacob, you know, you talked about growing use of whole genome, whole exome. Can you just talk on, you know, delineate how much of the growth is, you know, mix versus maybe volume? So that's kind of the first question. Second is on Onso. Just curious if you can touch on that and, you know, thought process, how quickly could you incorporate that technology, if you're planning to? And then, maybe just lastly on adjacencies, a little bit more color on, you know, what you're baking in for spatial Constellation and 5-base.
Speaker #2: Your question will come from Tycho next Peterson with Jefferies
Speaker #2: . guys .
Speaker #8: thanks Hey , A couple ones just on clinical . Jacob , you know , you talked about growing use of of whole genome , whole exome .
Speaker #8: Can you just talk know , on , you delineate how much of is , you know , the growth versus mix maybe . So volume that's kind of the first question .
Speaker #8: Onso . Just curious if you can touch on that . And Second is on , you know , thought process , how quickly could you incorporate that technology if you're planning to .
Speaker #8: And then maybe , just lastly on adjacencies , a little bit more color on what you're baking in for spatial constellation and five base .
Jacob Thaysen: Okay. So now thanks for that, Tycho. And if you look at the opportunity with the X and what our customers are using it for, clearly, we continue to see, as you can see, many of our clinical customers are, of course, seeing a significant uptake in volume. Many, many more physicians are starting to use genetic profiling for the cancers, but also for monitoring diseases. So that is a strong momentum. But we're also seeing that our customers are choosing to make larger and larger panels. As you mentioned, some of them are going from exome to whole genome. That's more in the genetic space. But we're also seeing that customers are building larger panels for therapy selection. And the next thing here is to expand their panels for MRD. So we see all that.
Jacob Thaysen: Okay. So now thanks for that, Tycho. And if you look at the opportunity with the X and what our customers are using it for, clearly, we continue to see, as you can see, many of our clinical customers are, of course, seeing a significant uptake in volume. Many, many more physicians are starting to use genetic profiling for the cancers, but also for monitoring diseases. So that is a strong momentum. But we're also seeing that our customers are choosing to make larger and larger panels. As you mentioned, some of them are going from exome to whole genome. That's more in the genetic space. But we're also seeing that customers are building larger panels for therapy selection. And the next thing here is to expand their panels for MRD. So we see all that.
Speaker #4: Okay . So no thanks for that . Tycho . And if at the you look the X and what our customers are we continue to you can see as see , many for , clearly using it our of clinical customers are of are course seeing a uptake significant many Many , more physicians in volume .
Speaker #4: are starting to use genetic but also monitoring for cancers , profiling for So the so that diseases . a strong momentum . But we is also choosing to customers that our that make are larger and larger panels , them are as you seeing mentioned , some of going from exome to whole That's more in genetic But we space .
Speaker #4: also that genome . the customers building are panels larger seeing for therapy selection . next thing And the to here is the expand for MD .
Jacob Thaysen: We're not spreading it down at this into the pieces at this point of time, but I would say over time, I think actually the intensity, meaning the larger panels, is gonna be the main growth driver going forward. We see a lot of opportunities there. But the acquisition of the IP from PacBio, we saw that as a great opportunity to strengthen our portfolio. We're very bullish about our SDS technology, so we believe there's a lot of options in that still. But we felt it was a great way to keep optionality. And then I think the last one you had was on how much do you build in for the Phi Base and for Constellation and others? This is still early days.
Jacob Thaysen: We're not spreading it down at this into the pieces at this point of time, but I would say over time, I think actually the intensity, meaning the larger panels, is gonna be the main growth driver going forward. We see a lot of opportunities there. But the acquisition of the IP from PacBio, we saw that as a great opportunity to strengthen our portfolio. We're very bullish about our SDS technology, so we believe there's a lot of options in that still. But we felt it was a great way to keep optionality. And then I think the last one you had was on how much do you build in for the Phi Base and for Constellation and others? This is still early days.
Speaker #4: that we're So not panels for spreading it we see all down into this point of into the pieces at time . But over but I would say think time , I the actually intensity the meaning larger going to be panels is the main growth driver going forward .
Speaker #4: We see a lot of opportunities there , but the acquisition of IP from from Pacbio , we saw that great opportunity to strengthen our as a portfolio , be very bullish about our ESPs technology .
Speaker #4: So we believe there's a lot of options in that . Still . But we felt it was a great way to to keep optionality .
Speaker #4: And think the was on last one you had how much we build in for for the five base and , and for constellation and others .
Jacob Thaysen: We have seen a very, very strong interest for the products we brought to market already. I don't think it's gonna be meaningful here really in 2026, but it will start to be meaningful, as we talked about before, in 2027 and beyond, where we believe one or two basis points of growth, 1 or 2% growth, will come from our new assets in multi-omics, both multi-omics and our data, the BioInsight business.
Jacob Thaysen: We have seen a very, very strong interest for the products we brought to market already. I don't think it's gonna be meaningful here really in 2026, but it will start to be meaningful, as we talked about before, in 2027 and beyond, where we believe one or two basis points of growth, 1 or 2% growth, will come from our new assets in multi-omics, both multi-omics and our data, the BioInsight business.
Speaker #4: This is still early days . We a very , have seen very strong interest for the products we market already . I don't think it's going to be meaningful here , really , in will start 26 , but it meaningful .
Speaker #4: talked about As we before , in 27 and beyond , where we believe 1 or 2 basis growth , 1 or 2% growth will from our come new assays in Multi-omics , Multi-omics both and our data Insight business .
Operator: Your next question will come from Michael Ryskin with B of A.
Operator: Your next question will come from Michael Ryskin with B of A.
Michael Ryskin: Great. Thanks for taking the question, guys. I want to dive into some of the pieces of the 2026 guide and sort of the sequencing consumable, sequencing instruments. You know, a little, little bit surprised that you got them as close. I would have thought that sequencing consumables would have been a little bit better as you're, as you said, as you're moving past some of the headwinds from the price transition. At the same time, sequencing instruments, I thought could have been a little bit worse. So if you could just dive into some of the, the moving pieces there. You know, are you expecting something similar in terms of Nova X placements next, this next year in, in the, you know, mid- to high-200s range?
Michael Ryskin: Great. Thanks for taking the question, guys. I want to dive into some of the pieces of the 2026 guide and sort of the sequencing consumable, sequencing instruments. You know, a little, little bit surprised that you got them as close. I would have thought that sequencing consumables would have been a little bit better as you're, as you said, as you're moving past some of the headwinds from the price transition. At the same time, sequencing instruments, I thought could have been a little bit worse. So if you could just dive into some of the, the moving pieces there. You know, are you expecting something similar in terms of Nova X placements next, this next year in, in the, you know, mid- to high-200s range?
Speaker #2: Your next question will come from Michael Riskin with B of a .
Speaker #9: Great . Thanks for taking the question , guys . I want to dive into some of the pieces of the 2026 guide in terms of the sequencing , consumable sequencing instruments .
Speaker #9: You know , a little bit surprised that you got them as close . I would have thought that consumers would have been a little bit better .
Speaker #9: As you're as you said , as you're moving past some of the from the price headwinds transition , at the same time , sequencing instruments .
Speaker #9: I thought a little bit worse . could have been So maybe you could just dive into some of the the moving pieces there .
Speaker #9: You know, are you expecting something similar in terms of Nova X placements this year, next year, in the mid- to high-end? And maybe talk about some of the other platforms that make that the next up.
Michael Ryskin: Just maybe talk about some of the other platforms that make that up, you know, the NextSeq, the mid-throughput platforms, the NovaSeq 6000. Just would love to get more color on the moving pieces there. Thanks.
Michael Ryskin: Just maybe talk about some of the other platforms that make that up, you know, the NextSeq, the mid-throughput platforms, the NovaSeq 6000. Just would love to get more color on the moving pieces there. Thanks.
Jacob Thaysen: Hey, Mike. So thank you for the questions. And I would say, first and foremost, on the, on the high-throughput consumables, especially in the clinical, as we mentioned, we continue to see very strong performance in that, so we don't think that is gonna change. We actually think that there are potential upsides in that, obviously, if, if the market continues to be as strong as we have seen in the, in the last part of the year. We do see, of course, in the consumables, if you blend the blended consumables, that both for the research segment but also for the mid-throughput, there's still some headwinds in that space. So, so that's why you see the blend is where, where it is.
Jacob Thaysen: Hey, Mike. So thank you for the questions. And I would say, first and foremost, on the, on the high-throughput consumables, especially in the clinical, as we mentioned, we continue to see very strong performance in that, so we don't think that is gonna change. We actually think that there are potential upsides in that, obviously, if, if the market continues to be as strong as we have seen in the, in the last part of the year. We do see, of course, in the consumables, if you blend the blended consumables, that both for the research segment but also for the mid-throughput, there's still some headwinds in that space. So, so that's why you see the blend is where, where it is.
Speaker #9: You know , mid throughput platforms . Nova six K just The get more color on the moving pieces there . Thanks .
Speaker #4: Hey , Mike . So thank you for the questions . And I would say first and foremost on the on the high throughput consumables , especially in the clinical , as we mentioned , we continue to see very strong performance in that .
Speaker #4: we don't think So that is going to actually think change . that We there are potential upsides in that . Obviously if the market continue to be as strong as we've seen in the in the last part of the year , we do see , of course , in the consumables , if you blend the blend consumables that both for the research segment but also for the through , mid there's still some headwinds in that so that's why space .
Jacob Thaysen: I would, I would put it this way: if you, if you think about it, the low end of, of the guide in the, in the consumables is probably, what we saw in Q3, and then we started to see momentum. So there's probably, probably more in the, in, in the higher end of the guide that we, we expect us to be for, for consumables. So that's how to think about it. On the instruments, I, I mean, we, we continue to see a lot of momentum in instruments. Right now, we are, we're guiding for 50 to 60 placements, but many of our clinical customers continue to expand, their, their placements. So we continue to believe that, that this is a, this is their strong moment opportunities here.
Jacob Thaysen: I would, I would put it this way: if you, if you think about it, the low end of, of the guide in the, in the consumables is probably, what we saw in Q3, and then we started to see momentum. So there's probably, probably more in the, in, in the higher end of the guide that we, we expect us to be for, for consumables. So that's how to think about it. On the instruments, I, I mean, we, we continue to see a lot of momentum in instruments. Right now, we are, we're guiding for 50 to 60 placements, but many of our clinical customers continue to expand, their, their placements. So we continue to believe that, that this is a, this is their strong moment opportunities here.
Speaker #4: So you see the blend is where where it is . I would put it this way if you if you think about it , the low end of of the guide in in consumables is probably what we saw in Q3 .
Speaker #4: And then we started to see So there's momentum . probably probably more in the , the higher guide in end of the that we expect us to be consumables .
Speaker #4: So that's think about it how to on the instruments . I mean , we , we continue to see a lot of in instruments right now we are guiding for 50 to 6 placements , but many of our clinical customers continue to expand their placements .
Ankur Dhingra: Mike, on the instrumentation side, as I mentioned in my, in my script for Xs, yes, about 200 to 240 for the year, so on average, 50 to 60 a quarter, is still quite good. The Q4 placements were phenomenal.
Ankur Dhingra: Mike, on the instrumentation side, as I mentioned in my, in my script for Xs, yes, about 200 to 240 for the year, so on average, 50 to 60 a quarter, is still quite good. The Q4 placements were phenomenal.
Speaker #4: So we continue to believe that that this is a this is a strong momentum opportunities here .
Speaker #1: Mike , on the instrumentation side , as I in my in my mentioned script for AXS , yes , about 200 to 240 for the year , sit on average , 50 to 60 a quarter is still quite good .
Jack Meehan: ... we got quite a few multi-pack orders. We do look at several of our customers trying to expand their fleets, sometimes thinking about tens of X's scenarios. So good instrument demand. As you all know, we made a major software upgrade into X in the early part of 2025. The performance there has been running above the spec for a very large part of our customers. So X is performing at an extremely high level for our clinical customers, and the research customers are super excited about some of these new multi-omic technologies that get enabled on X. So very pleased, and it looks quite good so far.
Ankur Dhingra: ... we got quite a few multi-pack orders. We do look at several of our customers trying to expand their fleets, sometimes thinking about tens of X's scenarios. So good instrument demand. As you all know, we made a major software upgrade into X in the early part of 2025. The performance there has been running above the spec for a very large part of our customers. So X is performing at an extremely high level for our clinical customers, and the research customers are super excited about some of these new multi-omic technologies that get enabled on X. So very pleased, and it looks quite good so far.
Speaker #1: The with the Q4 placements , were phenomenal . We got few quite a orders . multi-pack We do look at several of our customers trying to expand their fleets .
Speaker #1: Sometimes thinking about tens of access scenarios . So instrument good demand . As you all know , we major software upgrade into ECS in the early part of 2025 .
Speaker #1: The performance there has been running above the for a very large part of our customers. X is performing at an extremely high level for our clinical customers, and the research customers are super excited about these new technologies.
Speaker #1: Get that , get enabled on X . So very pleased and looks quite good so .
Operator: Your next question will come from Kyle Mixon with Canaccord.
Operator: Your next question will come from Kyle Mixon with Canaccord.
Speaker #5: Far .
Kyle Mikson: Hey, guys. Thanks for the questions. Congrats on an impressive Q4, the clinical side, especially. On that note, I know you're not splitting out clinical into the applications, but could you just speak a bit, you know, just for some context, it looks like oncology was just under $1 billion in 2025, then you have genetic, which was just under $500 million. So which of these will, I guess, grow faster in 2026? So just help us frame the different drivers, you know, split it out just a bit more for us. And then just secondly, you spoke to some of the multi-omics aspects before, but maybe BioInsight, is that a needle mover this year? Thanks.
Kyle Mikson: Hey, guys. Thanks for the questions. Congrats on an impressive Q4, the clinical side, especially. On that note, I know you're not splitting out clinical into the applications, but could you just speak a bit, you know, just for some context, it looks like oncology was just under $1 billion in 2025, then you have genetic, which was just under $500 million. So which of these will, I guess, grow faster in 2026? So just help us frame the different drivers, you know, split it out just a bit more for us. And then just secondly, you spoke to some of the multi-omics aspects before, but maybe BioInsight, is that a needle mover this year? Thanks.
Speaker #2: Your next come question will from Kyle Mixon with Canaccord .
Speaker #10: guys . Thanks for the Hey questions . Congrats on an impressive fourth quarter . The the clinical side , especially on that note I know you're not out splitting applications , but clinical into the could you just speak .
Speaker #10: You know just for some context . Looks like oncology was just under 1,000,000,000 in 25 . Then you genetic which was just under have half a billion .
Speaker #10: which of these will I guess grow 26 . faster in Just help us frame the different drivers , you know , split out just a bit more for us .
Speaker #10: And then just secondly, you spoke to some of the multiomics aspects before. Maybe bio insight is a needle mover this year?
Jacob Thaysen: Yeah, thanks, Kyle. I think overall, we of course are very pleased with clinical. And from the highest level, clinical is growing from all dimensions, both on the different type of applications, but also from the different regions and different customer types. So a really broad-based performance in clinical, and we expect that to continue, as we've mentioned a few times here. We are still seeing that oncology is the main driver and the main growth driver, but rare diseases is definitely also growing on a healthy speed. So I do think that over the next year, also, oncology will be the main growth driver for us and for our customers.
Jacob Thaysen: Yeah, thanks, Kyle. I think overall, we of course are very pleased with clinical. And from the highest level, clinical is growing from all dimensions, both on the different type of applications, but also from the different regions and different customer types. So a really broad-based performance in clinical, and we expect that to continue, as we've mentioned a few times here. We are still seeing that oncology is the main driver and the main growth driver, but rare diseases is definitely also growing on a healthy speed. So I do think that over the next year, also, oncology will be the main growth driver for us and for our customers.
Speaker #10: Thanks .
Speaker #4: Yeah . Kyle . I Thanks , think overall we of course are pleased clinical very and and highest with with from the is , clinical level growing on from all dimensions , both on on the different of applications , but types also from the different regions and different customer types types .
Speaker #4: really broad based So a performance in clinical . And we expect continue , as we've few times mentioned a here , I we we are seeing still oncology is is that the main driver and the growth main driver .
Speaker #4: the rare diseases is also a on a speed . healthy So But definitely going on I do over the next year , oncology the main growth driver for will be for us and for our customers .
Operator: Your next question will come from Dan Arias with Stifel.
Operator: Your next question will come from Dan Arias with Stifel.
Dan Arias: Hi, guys. Thanks for the questions here. Jacob, I wanted to ask about messaging the customers as we get ready to head down to AGBT here. You guys have talked pretty consistently about the fact that the labs really should focus on the full workflow, and that when you look at it that way, it becomes advantageous to use Illumina products. The question is really, when and where should we look to see that in action? Will you be able to lay out for people, you know, how the economics of using Fluent plus NovaSeq plus DRAGEN gives you a better outcome? Or do people just sort of have to figure that out for themselves? Because the idea seems logical, but I don't get the sense that customers can see it or that they can do the math that has them arriving at that conclusion.
Dan Arias: Hi, guys. Thanks for the questions here. Jacob, I wanted to ask about messaging the customers as we get ready to head down to AGBT here. You guys have talked pretty consistently about the fact that the labs really should focus on the full workflow, and that when you look at it that way, it becomes advantageous to use Illumina products. The question is really, when and where should we look to see that in action? Will you be able to lay out for people, you know, how the economics of using Fluent plus NovaSeq plus DRAGEN gives you a better outcome? Or do people just sort of have to figure that out for themselves? Because the idea seems logical, but I don't get the sense that customers can see it or that they can do the math that has them arriving at that conclusion.
Speaker #2: next come from Your question will Dan Arias with Stifel .
Speaker #11: Hi guys . Thanks for the Jacob . questions here , to I wanted about messaging to customers . As we ask get to ready down to get here .
Speaker #11: guys have talked pretty consistently You fact that the labs really should focus on and workflow the full that when you look at it that way , it advantageous becomes use to Illumina products .
Speaker #11: The is question when and where really should we see look to that in action ? Will you be out for lay people you know how the economics able to of using plus Fluent Novaseq Dragon Plus gives you a better outcome people just sort of have ?
Speaker #11: to figure that out for themselves ? Because the Or do logical , but idea the seems I don't get sense that customers they can it , or that do the can see has them math that at that conclusion .
Dan Arias: Is that something that we should expect to change here?
Dan Arias: Is that something that we should expect to change here?
Jacob Thaysen: Yeah, Dan, I think actually this is the conversation we have with our customers. We are looking forward here also to the AGBT conference coming up in a few weeks, where, as I mentioned, also in prepared remarks, we have the gold sponsorship, which gives us a great platform to speak to, not only us, but also key opinion leaders, to speak to the usage of the different technologies and how to think about them from the highest quality insight with the lowest end-to-end. Obviously, a part of that is to also show that you can actually do this in a more cost-efficient way, but also creating the highest quality insight. So it depends a little bit on the different assays.
Jacob Thaysen: Yeah, Dan, I think actually this is the conversation we have with our customers. We are looking forward here also to the AGBT conference coming up in a few weeks, where, as I mentioned, also in prepared remarks, we have the gold sponsorship, which gives us a great platform to speak to, not only us, but also key opinion leaders, to speak to the usage of the different technologies and how to think about them from the highest quality insight with the lowest end-to-end. Obviously, a part of that is to also show that you can actually do this in a more cost-efficient way, but also creating the highest quality insight. So it depends a little bit on the different assays.
Speaker #11: arriving Is that we expect to change should something that here ?
Speaker #4: this is this is think Yeah , I we have with our conversation customers the . are we are We looking forward here to the also ATG conference coming up in a few weeks , where , as I mentioned , also prepared remarks .
Speaker #4: We goal sponsorship , which gives us a great platform to to speak to not us , but also key opinions , to speak to the , the usage the , of of the different to think them from technologies about the highest quality insight with the end to lowest end .
Speaker #4: Obviously , a part of that is to also that that show you can actually do this in a , in a more cost efficient way , but also creating the highest quality insights .
Jacob Thaysen: If you think about our Constellation MAP-Read, where you have really no hands-on on the workflow upfront, and you receive a lot of insights with very little workflow, you know, hands-on on the workflow. So I think that is one element where you can start to eliminate the cost of library prep out, and also getting much more insight out. So it's a good example of how you can think about that, where you will actually have great transparency on the pricing from our end, because it's really just the cost of sequencing, where others have to also do library prep and other things. So that's one example, and we'll talk more about that at AGBT.
Jacob Thaysen: If you think about our Constellation MAP-Read, where you have really no hands-on on the workflow upfront, and you receive a lot of insights with very little workflow, you know, hands-on on the workflow. So I think that is one element where you can start to eliminate the cost of library prep out, and also getting much more insight out. So it's a good example of how you can think about that, where you will actually have great transparency on the pricing from our end, because it's really just the cost of sequencing, where others have to also do library prep and other things. So that's one example, and we'll talk more about that at AGBT.
Speaker #4: depends So it a little bit on the different assays . If you think about our map , read where you have constellation really no hands on on workflow up front , and you receive a lot of insights with with very little workflow .
Speaker #4: You know , hands workflows . I on on the think that is one element where you can where you to can start eliminate the cost of of library prep out , and getting also much more So it's insight out .
Speaker #4: a good of of how example you can think about where that , you will actually have great transparency on the pricing end , from our really because it's cost of just the the sequencing where others have to also do prep and other things .
Jacob Thaysen: But the same goes now with the SomaLogic business we have, we've just acquired, where we will go out there and present the cost per sample, the cost per experiment, which I think will be another one that is gonna be very important. So, those conversations are already happening with the customers. We will continue to educate all of you on that also.
Jacob Thaysen: But the same goes now with the SomaLogic business we have, we've just acquired, where we will go out there and present the cost per sample, the cost per experiment, which I think will be another one that is gonna be very important. So, those conversations are already happening with the customers. We will continue to educate all of you on that also.
Speaker #4: library So that's one example . When we talk more about that at adept . But goes with now the business . We logic just acquired where we will we will go out there and the the cost per the cost sample , present experiment with per which I think will be another one that is going to be very important .
Speaker #4: So, those conversations are already happening with the customers. We will continue to educate all of you on that also.
Operator: Your next question will come from Jack Meehan with Nephron.
Operator: Your next question will come from Jack Meehan with Nephron.
Jack Meehan: Thank you. Good afternoon, guys.
Jack Meehan: Thank you. Good afternoon, guys.
Jacob Thaysen: Good afternoon.
Jacob Thaysen: Good afternoon.
Jack Meehan: Wanted to build on Dan's question there, just continue on the path of AGBT. It seems like on the competitive front, you know, at least one competitor's talked about the $100 price point per genome. Understand you're trying to change the conversation around that, but I was just curious, like, you know, investors see headlines like that, what does that mean for you? I'm not sure how we know your list pricing, but you're you know, there's discounts to that. Like, you know, can you just talk about what that would mean for Illumina if we start to see those headlines?
Jack Meehan: Wanted to build on Dan's question there, just continue on the path of AGBT. It seems like on the competitive front, you know, at least one competitor's talked about the $100 price point per genome. Understand you're trying to change the conversation around that, but I was just curious, like, you know, investors see headlines like that, what does that mean for you? I'm not sure how we know your list pricing, but you're you know, there's discounts to that. Like, you know, can you just talk about what that would mean for Illumina if we start to see those headlines?
Speaker #2: Your next question will come from Jack Meehan with Nephron .
Speaker #12: Thank you . Good afternoon guys on Dan's question there . . Want to build continue on the path Just of AGT . seems like on the competitive front , you know It at least one competitors talked about $100 price the point per genome .
Speaker #12: you're trying Understand to change the conversation around that . But I was just curious , like , you know , investors see headlines like that .
Speaker #12: What does that mean for you ? I'm not sure how we know your pricing , you know , but you're , there's discounts to that .
Jacob Thaysen: Yeah, I think we're looking forward to AGBT. I think that it will be the conference, of course, that all our competitors will put their best foot forward. We will do the same. As I've mentioned, our customers are thinking way beyond just one parameter, one feature. They are more sophisticated than just looking at one element. So I think you will see also us really highlighting some of the things that our customers are really excited about from the whole workflow perspective. That said, I would say that we feel we have the portfolio, we have the pipeline, we have the capability to compete on all parameters. So I feel really good about who we are and what we can do.
Jacob Thaysen: Yeah, I think we're looking forward to AGBT. I think that it will be the conference, of course, that all our competitors will put their best foot forward. We will do the same. As I've mentioned, our customers are thinking way beyond just one parameter, one feature. They are more sophisticated than just looking at one element. So I think you will see also us really highlighting some of the things that our customers are really excited about from the whole workflow perspective. That said, I would say that we feel we have the portfolio, we have the pipeline, we have the capability to compete on all parameters. So I feel really good about who we are and what we can do.
Speaker #12: You, like, know, talk—can you just talk about what that would mean for Illumina? Start to see headlines, those?
Speaker #4: think Yeah , I we looking are . We're I think that it will be the conference . course forward to , that that all our competitors will put their best foot forward .
Speaker #4: We will do the same . As I've mentioned , our customers are thinking way beyond just one parameter , one feature . They are more sophisticated than just looking at at one element .
Speaker #4: So I think you will see also us really highlighting some of the things that our customers are really excited about from the whole workflow That perspective .
Speaker #4: said , I would say that we feel we have the the portfolio , we have the pipeline , we have the capability to to compete on all parameters .
Jacob Thaysen: And obviously, if there are opportunities for us to address market segments with a different price point, which, where there's a significant number of elasticity, we are all for it, and, and we have those conversations with our customers on a regular basis, and we'll continue to do so.
Jacob Thaysen: And obviously, if there are opportunities for us to address market segments with a different price point, which, where there's a significant number of elasticity, we are all for it, and, and we have those conversations with our customers on a regular basis, and we'll continue to do so.
Speaker #4: So I feel really good about who we are and what we can do . And obviously if there are opportunities for us to address market segments with a different price point , which where there is a significant number of elasticity , we all for it .
Speaker #4: And we have those customers in our regular conversations on a consistent basis, and we continue to do so.
Operator: ... Your next question will come from Casey Woodring, with J.P. Morgan.
Operator: ... Your next question will come from Casey Woodring, with J.P. Morgan.
Dave Westenberg: Hi, great. Thank you for taking my questions. So I guess you said you would revisit your China assumptions as you work with the government on imports. Maybe just walk us through how conversations are going there and the range of outcomes. And then, you know, my follow-up is just on BioInsight. Was hoping you could elaborate on some of the comments you made earlier there, just given how much airtime AI is getting currently. You know, curious how you plan to monetize these capabilities over time, the level of enthusiasm you're seeing from pharma customers, and any sort of way to quantify the revenue opportunity over the next few years. Thank you.
Casey Woodring: Hi, great. Thank you for taking my questions. So I guess you said you would revisit your China assumptions as you work with the government on imports. Maybe just walk us through how conversations are going there and the range of outcomes. And then, you know, my follow-up is just on BioInsight. Was hoping you could elaborate on some of the comments you made earlier there, just given how much airtime AI is getting currently. You know, curious how you plan to monetize these capabilities over time, the level of enthusiasm you're seeing from pharma customers, and any sort of way to quantify the revenue opportunity over the next few years. Thank you.
Speaker #2: Your next question will come from Casey Woodring with JP Morgan.
Speaker #13: Hi. Great. Thank you for taking my questions. So I guess you said you would revisit your China, as you work with the government assumptions on imports.
Speaker #13: Maybe us through just walk how conversations are going there and the range of outcomes and then , you know , my follow up is just on bio insight .
Speaker #13: Was hoping you elaborate on some comments you of the could made earlier there . Just given how much air time AI is getting currently , you know , curious how you plan to monetize these over The level of time ?
Jacob Thaysen: Yeah, thanks, Casey. So, thanks for the questions on China here. So, as just a reminder, it's still less than 5% of our business. I'm actually very pleased with what Jenny and the team have been able to do, our general manager in China, and the Chinese team have been able to serve our customers over the past year, and continue to do so. As we have also updated all of you on over the last period of time, we have had great conversations and collaboration with the Chinese regulators to ensure that we can continue to run our business in China.
Jacob Thaysen: Yeah, thanks, Casey. So, thanks for the questions on China here. So, as just a reminder, it's still less than 5% of our business. I'm actually very pleased with what Jenny and the team have been able to do, our general manager in China, and the Chinese team have been able to serve our customers over the past year, and continue to do so. As we have also updated all of you on over the last period of time, we have had great conversations and collaboration with the Chinese regulators to ensure that we can continue to run our business in China.
Speaker #13: you're seeing from pharma customers and any sort of way to quantify the revenue opportunity over the next few years . Thank you .
Speaker #4: Yeah . Thanks , Casey . So for the first , for thanks the first , for the questions on China here . So we as just it's reminder , still less than 5% of our business .
Speaker #4: actually the what Jenny and pleased with very I'm team have been able to do . manager in China Our Chinese team and the have been able to general our customers over the past year and continue to do so as we have also updated all of you last on over the period of time .
Speaker #4: We have had great conversations and collaboration with the Chinese regulators to ensure that we we can continue to run our business in UL .
Jacob Thaysen: While we're still on the UAL, we feel good about our relationship and how we can work through to be able to import or export the instruments back into to China. Now, of course, when you for a long period of time have not sold an instrument, it takes time to build up a funnel again, and I think that's more the reflection of what we're seeing right now. But as Ankur mentioned also, we have a target for China, but I think if there's a way to get off the list or see improvements in that, I think there's upside to the China business. But we do believe that we have a good line of sight, at least to 2026 at this point.
Jacob Thaysen: While we're still on the UAL, we feel good about our relationship and how we can work through to be able to import or export the instruments back into to China. Now, of course, when you for a long period of time have not sold an instrument, it takes time to build up a funnel again, and I think that's more the reflection of what we're seeing right now. But as Ankur mentioned also, we have a target for China, but I think if there's a way to get off the list or see improvements in that, I think there's upside to the China business. But we do believe that we have a good line of sight, at least to 2026 at this point.
Speaker #4: on a China , but we're still We feel good about our relationship and how we work through to be can able to import or export the instruments back into to China .
Speaker #4: Now , of when course , when for a long period of time have not sold an instrument , it you takes time to build up a again .
Speaker #4: funnel And I think that's more the reflection of what we , we seeing right as , as Ankur now . But mentioned , also we have a target for China .
Speaker #4: But I if we think if there is a way to get off the list improvements , I see in that . I think there is upside to the to the China business .
Jacob Thaysen: If you think about the BioInsight business, we were, we're very excited about the opportunity. It's still in the early days, but as we came out presenting the 1 Billion Cell Atlas here at J.P. Morgan, and it was very well received. As I mentioned also, there has been a lot of conversation with pharma companies that wants to get access to the cell atlas. It provides deep insight for the drug discovery, for them to choose the right targets to work on. So we clearly see momentum in that space.
Jacob Thaysen: If you think about the BioInsight business, we were, we're very excited about the opportunity. It's still in the early days, but as we came out presenting the 1 Billion Cell Atlas here at J.P. Morgan, and it was very well received. As I mentioned also, there has been a lot of conversation with pharma companies that wants to get access to the cell atlas. It provides deep insight for the drug discovery, for them to choose the right targets to work on. So we clearly see momentum in that space.
Speaker #4: But we do believe that we have a good line of sight at least to 26 at this point . If you the think about buying side business , we were excited about the were we opportunity .
Speaker #4: It's still in the early days , but but as we came out presenting the $1 billion , excuse me , 1 billion sell out last year at at at JP Morgan .
Speaker #4: And it was very well received . As I mentioned has been a lot of conversation with pharma companies that wants to get access to the cell provides deeper insight for the drug discovery , for them Atlas .
Jacob Thaysen: As we mentioned also earlier, we do believe that this will, together with our multi-omics business, start to create at least a 1% to 2% growth in 2027, but we think that that will actually be an accelerating momentum at this point. Ankur, maybe you have more to share?
Jacob Thaysen: As we mentioned also earlier, we do believe that this will, together with our multi-omics business, start to create at least a 1% to 2% growth in 2027, but we think that that will actually be an accelerating momentum at this point. Ankur, maybe you have more to share?
Speaker #4: to It choose the right targets to to work on . So we so clearly see momentum that space . As we in in mentioned also earlier , we we do believe that this will , together with our multi-omics business , start to create at least a 1 to 2% growth in in 27 .
Ankur Dhingra: Yeah, on BioInsight, a couple more things, as Jacob was saying. We do think our intention on BioInsight is to work directly with our pharma customers and effectively adding a third customer base here. And we think if we take a five-year view, it's a very meaningful opportunity. The Billion Cell Atlas has been received very well, and the interest since the conference has been tremendous. So we're very pleased with some of the early steps that we've taken here. The monetization strategy here would be in two or three different ways. One is around very specialized data and AI tool constructions.
Ankur Dhingra: Yeah, on BioInsight, a couple more things, as Jacob was saying. We do think our intention on BioInsight is to work directly with our pharma customers and effectively adding a third customer base here. And we think if we take a five-year view, it's a very meaningful opportunity. The Billion Cell Atlas has been received very well, and the interest since the conference has been tremendous. So we're very pleased with some of the early steps that we've taken here. The monetization strategy here would be in two or three different ways. One is around very specialized data and AI tool constructions.
Speaker #4: But , but we think that that will actually be an accelerating momentum at this point . Uncle , maybe you have more to share .
Speaker #1: Yeah . On couple a things as couple more Jacob was saying , we do think our bio intention of insight is to work directly with our farmer customers and effectively adding a third customer here , and we base think we take a five year view .
Speaker #1: That's a very meaningful opportunity . The the Billion Cell Atlas has been been received has very well . And the interest since the conference has tremendous .
Speaker #1: So very pleased we're the early with some of steps that we've taken here . The monetization strategy here would be 2 or 3 different in ways .
Ankur Dhingra: And then over time, we see significant subscription-based models, where we can help pharma companies both on the discovery as well as on the development side of things. But, that's a multi-year opportunity there.
Ankur Dhingra: And then over time, we see significant subscription-based models, where we can help pharma companies both on the discovery as well as on the development side of things. But, that's a multi-year opportunity there.
Speaker #1: One is around very specialized data and AI constructions . tool And then over we time see significant subscription based models where we can help pharma both on the companies , discovery as well development side of as on the things .
Operator: Your next question will come from Dave Westenberg with Piper Sandler. David, you may now unmute and ask your question.
Operator: Your next question will come from Dave Westenberg with Piper Sandler. David, you may now unmute and ask your question.
Speaker #1: that's a that's But a multi-year opportunity .
Speaker #5: There .
Speaker #2: Your question will next from come Westenberg with Dave Sandler Piper . now unmute David , you may and ask a question .
Dave Westenberg: Thank you. My bad. So you can hear me now, right? All right, perfect.
Dave Westenberg: Thank you. My bad. So you can hear me now, right? All right, perfect.
Jacob Thaysen: Yes, perfect.
Jacob Thaysen: Yes, perfect.
Dave Westenberg: All right. Can you discuss the conversations you're having with academic core labs in terms of investments in instruments? I have to imagine you weren't—they weren't the biggest buyers of instruments in 2025. What is the assumptions in your guidance for academic, both consumables and instruments? And you did hire Eric Green, so is there anything he can do to spur kind of confidence in your academics? I know the NIH is slightly up. Are they gonna actually believe it? And sorry, I'm gonna tag one more on to Jack and Dan's question on pricing versus competitors. You are seeing much better specs, I believe, which means more output. That is a direct cost reduction to a lot of your customers in terms of cost per G, right?
Dave Westenberg: All right. Can you discuss the conversations you're having with academic core labs in terms of investments in instruments? I have to imagine you weren't—they weren't the biggest buyers of instruments in 2025. What is the assumptions in your guidance for academic, both consumables and instruments? And you did hire Eric Green, so is there anything he can do to spur kind of confidence in your academics? I know the NIH is slightly up. Are they gonna actually believe it? And sorry, I'm gonna tag one more on to Jack and Dan's question on pricing versus competitors. You are seeing much better specs, I believe, which means more output. That is a direct cost reduction to a lot of your customers in terms of cost per G, right?
Speaker #14: My bad . So you can hear me now Thank you . All right . . Right . Alright . Perfect , you can you perfect .
Speaker #14: discuss Can the the you're conversations having with academic core labs in terms of investments and instruments ? I have to they weren't you weren't imagine the biggest buyers of instruments in 2025 .
Speaker #14: What is the assumptions guidance in your for academic ? Both consumables and instruments . And hire you did Eric Green . So is there anything he can do to spur kind of confidence in your academics ?
Speaker #14: know the I the NIH is slightly up . Are they going to actually believe ? And sorry , I'm going to tag one more on to Jack and Dan's question on pricing competitors .
Speaker #14: versus You're you are seeing much better specs . I believe , which means more That output . is a direct cost reduction to a lot of your customers in terms of cost per g .
Dave Westenberg: So even if they're getting 25 B at $200, they're actually getting less than that because the output has been greater. Just wanna ask if that assumption is correct. Thank you.
Dave Westenberg: So even if they're getting 25 B at $200, they're actually getting less than that because the output has been greater. Just wanna ask if that assumption is correct. Thank you.
Speaker #14: Right . So even if they're getting 25 b at $200 , they're getting less than that output because the has been greater . Am just want to ask I if that is correct ?
Jacob Thaysen: So Dave, thank you for your one question. But let me start with the first one here. We have, I think, over the last 18 months, really built out our relationship with the academic core labs and really focusing on ensuring that we can support them also, of course, in a very tough environment. So obviously, though, they have been challenged with, of course, the impact from NIH funding and other types of funding. But we have done a very good job, I think, and that's also the feedback we're getting from them to support, both from when they have opportunities to acquire instruments; we have made sure that we can place NovaSeq X in those types of labs also, so they can get all the benefit from the NovaSeq X.
Jacob Thaysen: So Dave, thank you for your one question. But let me start with the first one here. We have, I think, over the last 18 months, really built out our relationship with the academic core labs and really focusing on ensuring that we can support them also, of course, in a very tough environment. So obviously, though, they have been challenged with, of course, the impact from NIH funding and other types of funding. But we have done a very good job, I think, and that's also the feedback we're getting from them to support, both from when they have opportunities to acquire instruments; we have made sure that we can place NovaSeq X in those types of labs also, so they can get all the benefit from the NovaSeq X.
Speaker #14: Thank
Speaker #14: you .
Speaker #4: , Dave , thank you for your So one question .
Speaker #4: That is with the first one here on on . We we have , I think over the 18 months , last really out built our relationship with academic the labs and really focusing on ensuring that that we can support them .
Speaker #4: Also , of course , in a very tough environment . So obviously they have challenged with of course , the , with from NIH funding and other types of funding .
Speaker #4: have But we done a very good job . think , I and that's also the feedback we're getting from them to to support both from when they have opportunities to acquire instruments .
Jacob Thaysen: I do think now with Dr. Eric Green on board here, there's more opportunities for help them and navigate also through a challenging situation, as we said, and you also mentioned, you know, at least now we have better line of sight to NIH funding, but there's still some in the details, still things that needs to get into place before we really start to see the different institutes, the different collabs continue to move ahead. You are right that if you look at, we have, and this is our, we have a tradition for going out and deliver on par or better than our specs.
Jacob Thaysen: I do think now with Dr. Eric Green on board here, there's more opportunities for help them and navigate also through a challenging situation, as we said, and you also mentioned, you know, at least now we have better line of sight to NIH funding, but there's still some in the details, still things that needs to get into place before we really start to see the different institutes, the different collabs continue to move ahead. You are right that if you look at, we have, and this is our, we have a tradition for going out and deliver on par or better than our specs.
Speaker #4: We have made sure that that place we can access in those types of labs also, so they can get all the benefit from the and access.
Speaker #4: I do now think with , with Doctor Eric Green on , on , on board here , there's more opportunities for help them and navigate also through a we said .
Speaker #4: And you at least challenging mentioned, you know, now we situation. As have a better line of NIH funding. But there’s still in the details.
Speaker #4: Still some needs to get into place before we really start to see the different institutes , the different collapse continue to move to ahead .
Speaker #4: are You right that if you look at we have and this is our we have a tradition for going out and deliver on par or better than , than our specs .
Jacob Thaysen: This is something we're proud of and something that our customers know from Illumina, is that we're not going out and commit to something we can't keep. We will actually keep it and also overperform. I think that is something that many could learn from. So we will continue to do so, and in the meantime, customers are enjoying those benefits.
Jacob Thaysen: This is something we're proud of and something that our customers know from Illumina, is that we're not going out and commit to something we can't keep. We will actually keep it and also overperform. I think that is something that many could learn from. So we will continue to do so, and in the meantime, customers are enjoying those benefits.
Speaker #4: is This something we're proud of and something that our customers know from Illumina . Is that we're not going out and commit to something can't keep .
Speaker #4: We will we actually keep it . And and also perform . And I think that is something that many could learn from . So we will continue we will so .
Operator: Your next question will come from Subbu Nambi with Guggenheim.
Operator: Your next question will come from Subbu Nambi with Guggenheim.
Speaker #4: And in the meantime , customers enjoying those benefits .
Subbu Nambi: Hey, guys. Thank you for taking my question. It appears that NovaSeq 6000 pull-through is holding up a lot better than expected. Has that leveled off moving forward, or is that still a material headwind? And then my separate question is, there has been a lot of focus on US clinical strength for good reasons, but can you speak to how Europe and Asia might look this year from a growth perspective? And are there any differences you'd expect from the US market throughout this year? Thank you so much.
Subbu Nambi: Hey, guys. Thank you for taking my question. It appears that NovaSeq 6000 pull-through is holding up a lot better than expected. Has that leveled off moving forward, or is that still a material headwind? And then my separate question is, there has been a lot of focus on US clinical strength for good reasons, but can you speak to how Europe and Asia might look this year from a growth perspective? And are there any differences you'd expect from the US market throughout this year? Thank you so much.
Speaker #2: Your next question will come from Subbu Nambi with Guggenheim.
Speaker #15: guys .
Speaker #15: Thank you for taking my question. It seems that NovaSeq 6000 pull-through is holding up a lot better than expected. Has that leveled?
Speaker #15: off is that still a forward , or material headwind ? And then my separate question is there has been a lot of focus on US clinical strength for good reasons , but can you speak to how Europe and Asia might look this year from a growth perspective ?
Jacob Thaysen: Yeah. So Subbu, let me start on the Six K, and what you are seeing is that, and we've spoken to that before, that many of our customers that are transitioning is either building their new assays on the X platform, and then they keep the NovaSeq six K for their traditional assays that are already built, they have already validated, and they want to keep that. So that's also what you're seeing, the customers that have decided to stay with assays on the platform, keep running those assays on that platform, and that's why we continue to see a pull-through. There's, of course, customers that have shifted away from the six K and is now moving on to the X, and they are seeing substantial growth on the X platform.
Jacob Thaysen: Yeah. So Subbu, let me start on the Six K, and what you are seeing is that, and we've spoken to that before, that many of our customers that are transitioning is either building their new assays on the X platform, and then they keep the NovaSeq six K for their traditional assays that are already built, they have already validated, and they want to keep that. So that's also what you're seeing, the customers that have decided to stay with assays on the platform, keep running those assays on that platform, and that's why we continue to see a pull-through. There's, of course, customers that have shifted away from the six K and is now moving on to the X, and they are seeing substantial growth on the X platform.
Speaker #15: And are there any differences you would expect from the US market throughout this year ? Thank you so much .
Speaker #4: So let me start Yeah . the six K and what you what you are seeing is that we've spoken to that before , that many of customers our that are transitioning is either building their new assays the , on on the X platform , and then they keep the Novaseq six K for , for that traditional assays that are already built , already they have validated and they want to keep that .
Speaker #4: So that's also what you're seeing the the customers that that have decided to stay with assays on the platform , keep running those assays on that platform .
Speaker #4: And that's why we continue to see up pull through . There's of course , customers that have shifted away from the six K and from the is now to the moving on X .
Jacob Thaysen: So, that's why we're seeing the pull-through continue to be sitting up there. But we still believe, of course, that there will be fewer and fewer six K customers over time. What was another question? Oh, geography. Yeah, I mean, Europe have done tremendously well, I think, holding up very, very nice growth over the past years, and we expect that to continue here into 2026. And we also expect that our APAC region and EMEA region will rebound somewhat.
Jacob Thaysen: So, that's why we're seeing the pull-through continue to be sitting up there. But we still believe, of course, that there will be fewer and fewer six K customers over time. What was another question? Oh, geography. Yeah, I mean, Europe have done tremendously well, I think, holding up very, very nice growth over the past years, and we expect that to continue here into 2026. And we also expect that our APAC region and EMEA region will rebound somewhat.
Speaker #4: And they are seeing substantial growth on the X platform . So so that's why we're seeing pull pull through continue to that be sitting up there .
Speaker #4: But still we course that there will be fewer and fewer six K customers over time over . What was another question . Geography .
Speaker #4: Yeah, I mean Europe have done tremendously well. I think holding up very, very nice growth over the, and we, past years.
Speaker #4: We expect that to continue here into 2026. And we also expect that our APAC region meeting will rebound somewhat.
Ankur Dhingra: Okay, Subbu, on the Six K and the transition, as you know, we've substantially on the research side, the transition is substantially complete, and clinical is now moving into the latter part of the transition here. Our expectation is by the time we get to end of 2026, the Six K transition should be mostly substantially done, from a volume perspective, similar to the trends that we have been seeing. So that's how we're looking about it.
Ankur Dhingra: Okay, Subbu, on the Six K and the transition, as you know, we've substantially on the research side, the transition is substantially complete, and clinical is now moving into the latter part of the transition here. Our expectation is by the time we get to end of 2026, the Six K transition should be mostly substantially done, from a volume perspective, similar to the trends that we have been seeing. So that's how we're looking about it.
Speaker #1: Hey , Subbu , on the on the six K's and the transition . As you know , we've substantially research on the side , the transition substantially complete and clinical is now moving into the into the latter part of the transition here .
Speaker #1: Our expectation is by the time we get to end of 2026 , the six K transition should be mostly substantially done from a from a volume perspective , similar to the trends that been .
Speaker #1: we have
Speaker #5: Seeing
Operator: This concludes the Q&A section of the call. I would now like to turn the call back to Conor McNamara for closing remarks.
Operator: This concludes the Q&A section of the call. I would now like to turn the call back to Conor McNamara for closing remarks.
Speaker #1: So
Speaker #1: that's that's how we're thinking .
Speaker #5: About it .
Speaker #5: .
Conor McNamara: 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 upcoming events.
Conor McNamara: 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 upcoming events.
Speaker #2: This concludes the Q&A section of the call . I would now like to turn the call back to Conor McNamara for closing remarks .
Speaker #7: Thank you for .
Speaker #16: Thank you for joining us today. A replay of this call will be available in the Investor section of our website. This concludes our call, and we look forward to seeing you at upcoming events.
Operator: This concludes today's call. We thank you for your participation. You may disconnect at this time and have a great day.
Operator: This concludes today's call. We thank you for your participation. You may disconnect at this time and have a great day.
