NEW YORK (GenomeWeb) – Illumina reported after the close of the market on Tuesday that its third quarter 2017 revenues rose 18 percent year over year.
The San Diego, California-based genomic analysis firm reported total revenues of $714.0 million, up from $607.1 million in the third quarter of 2016. It beat analysts' average estimate of $692.8 million.
Illumina's Q3 2017 product revenue was $596.0 million, up 16 percent from $513.7 million in Q3 2016. Service and other revenue grew 26 percent to $118.0 million from $93.4 million.
Total microarray revenues grew 27 percent to $121 million, driven by DTC customers as well as growth in agricultural customers, Illumina CEO Francis deSouza said during a conference call discussing the firm's Q3 performance. He added that eventually both DTC and agricultural customers will likely transition to sequencing, but it is "hard to predict" how much of the microarray market will move.
Total instrument revenues were $140 million, an increase of 24 percent from Q3 2016, Illumina CFO Sam Samad said during the conference call. On the sequencing side, NovaSeq drove instrument revenues while direct-to-consumer customers drove growth on the microarray side of the business.
"NovaSeq momentum continued to grow in the third quarter, with close to 200 NovaSeq systems now in customers' hands," deSouza said.
Illumina shipped more than 80 NovaSeq instruments in Q3 and is on track to exceed its forecast of NovaSeq sales in 2017, deSouza added. He said that most orders in Q3 came from existing HiSeq customers who are upgrading and anticipates that the majority of its 800 HiSeq customers will upgrade to NovaSeq, while a subset will switch to NextSeq.
Illumina's net income was $163.0 million, or $1.12 per share, up from $128.9 million in the prior year period, or $.88 per share. Its non-GAAP net income was $1.11 per share, beating the Wall Street estimate of $.99 per share.
Illumina's R&D expenses were $134.0 million, up from $125.9 million in Q3 2016, while SG&A expenses grew to $167.0 million, from $139.1 million.
The company updated its 2017 revenue forecast, predicting its total revenues would grow 13 percent, up from its previous estimate of 12 percent. It predicts that its GAAP earnings per diluted share attributable to Illumina stockholders will be between $5.56 and $5.61, and non-GAAP earnings per diluted share attributable to Illumina stockholders of $3.73 to $3.78.
At the close of the quarter, Illumina held $1.35 billion in cash and cash equivalents and $687.0 million in short-term investments.
Illumina's shares were down about 2 percent at $206.64 in Wednesday morning trading.