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Illumina's Q1 Revenues Grow 28 Percent

This article has been updated to include comments from Illumina's conference call.

NEW YORK (GenomeWeb) – Illumina reported after the close of the market today that its first quarter 2015 revenues grew 28 percent year over year, and on a constant currency basis were up 33 percent.

The San Diego-based firm reported total Q1 2015 revenues of $538.6 million compared to $420.8 million in Q1 2014. It beat the average analyst estimate of $524.5 million.

Product revenue grew 27 percent to $459.1 million, up from $362.2 million in Q1 2014. Product revenue growth included both a 26 percent increase in instrument revenue to $146 million, driven by demand for NextSeq and HiSeq X Ten, as well as a 27 percent increase in consumable revenue to $308 million, Marc Stapley, Illumina's senior vice president and CFO, said during a conference call discussing Illumina's Q1 performance.

Service and other revenue jumped 35 percent to $79.4 million from $58.6 million in the previous year's first quarter, driven by NIPT, revenue from oncology agreements, and extended maintenance contracts, Stapley said. In Q1, the firm performed around 50,000 noninvasive prenatal tests, a 13 percent sequential increase, and completed four new technology transfer agreements with laboratories in Europe.

Total sequencing revenue grew 40 percent driven by record consumable sales, NIPT samples, as well as increased demand for instruments.

Meantime, array revenue declined 11 percent year over year. However, CEO Jay Flatley noted during the call that the firm completed a large genotyping service order in Q1 2014. Excluding revenue associated with that order, total array revenue in the quarter declined 3 percent.

Illumina posted a profit of $136.7 million, or $.92 per share, compared to $60 million, or $.40 per share, in Q1 2014. Its non-GAAP net income was $135 million, or $.91 per share, compared to $80 million, or $.53 per share, in Q1 2014. It beat the consensus Wall Street estimate of $.72 per share.

Illumina's R&D expenses in Q1 2015 were $91.8 million, up 19 percent year over year from $77.0 million. Its SG&A expenses were up 6 percent year over year to $116.3 million from $109.6 million.

In a statement, CEO Jay Flatley attributed the earnings growth to "strong demand for products across our sequencing portfolio," adoption of which is "setting the stage for a robust 2015."

In Fiscal Year 2015, Illumina projects approximately 20 percent total revenue growth, including a 3 percent negative impact from foreign exchange assuming current currency exchange rates. It anticipates reporting GAAP EPS in the range of $3.07 to $3.13.

The company ended the quarter with $533.5 million in cash and cash equivalents, and $833 million in short-term investments.