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Illumina Q1 Revenues Grow 12 Percent

NEW YORK – Illumina said after the close of the market on Thursday that its first quarter revenues rose 12 percent year over year.

For the three months ended April 3, the San Diego-based genomics technology firm recognized revenues of $1.22 billion compared to $1.09 billion in Q1 2021, in line with analysts' average estimate.

Nearly all revenues came from the core Illumina business; Grail, Illumina's cancer liquid biopsy subsidiary, recorded revenues of $10 million from Galleri test fees.

Product revenue for the quarter totaled $1.07 billion, up 12 percent from $953 million a year ago, and service and other revenue amounted to $153 million, up 9 percent from $140 million a year ago.

"Illumina maintained strong momentum in the first quarter, particularly across oncology therapy selection, genetic disease testing, and pathogen surveillance," Illumina CEO Francis deSouza said in a statement. "We saw record total orders and exited the quarter with record total backlog. Grail also continued to gain traction and has now entered more than 30 partnerships with health systems, employers, and insurers."

On a conference call following the release of the financial results on Tuesday, Illumina CFO Sam Samad said that sequencing instrument revenues were $212 million, up 20 percent from $176 million in the year ago quarter, driven by NovaSeq sales. Sequencing consumables revenues were $784 million, up 13 percent year over year from $695 million in Q1 2021, driven by NovaSeq demand and demand in oncology; TruSight Oncology test sales grew nearly 120 percent, year over year.

COVID-19 genomic surveillance added approximately $60 million in revenues, including $7 million from instrument sales and $53 million from consumables sales, Samad said on the call. 

Sequencing services and other revenues were $111 million, driven by growth in instrument service contracts. Array revenues were not disclosed.

By region, revenues from the Americas were $646 million, up 15 percent from $562 million, driven by oncology therapy selection, single-cell and proteomics applications, and pathogen surveillance; revenues from Europe, the Middle East, and Africa were $316 million, up 4 percent from $305 million a year ago, driven by strength in clinical markets partially offset by the conclusion of a collaboration with the UK Biobank in Q3 2021 and lower shipments to Russia as a result of the war in Ukraine; revenues from China were flat at $127 million, attributable to COVID-19 restrictions that began in March; and revenues from Asia-Pacific and Japan were $132 million, up 33 percent from $99 million a year ago, driven by large-scale projects.

During the Q&A portion of the call, Samad said revenues from China were approximately $10 million lower than expected.

Net income for the quarter was $86 million, or $.55 per share, compared to $147 million, or $1.00 per share, in Q1 2021. On an adjusted basis, EPS was $1.07, beating the consensus Wall Street estimate of $.90.

Illumina's R&D expenses grew 64 percent to $323 million from $197 million in the prior year period. SG&A expenses fell 18 percent to $308 million from $374 million a year ago.

Grail R&D expenses were $85 million, while its SG&A expenses were $58 million. Samad noted that operating expenses were approximately $15 million lower than expected due to timing and would shift to Q2.

As of April 3, Illumina had $1.35 billion in cash and cash equivalents and $65 million in short-term investments.

As previously announced, Illumina expects year-over-year revenue growth in the range of 14 percent to 16 percent and adjusted EPS between $4.00 and $4.20 per share. The guidance assumes COVID-related restrictions in China will ease by June. In Q2, Illumina expects consolidated revenues to grow between 7 percent and 9 percent year over year and expects headwinds of approximately 3 percent from China's COVID restrictions.

In Friday morning trading on the Nasdaq, Illumina shares were down 14 percent at $249.81.