NEW YORK – Illumina reported after the close of the market on Thursday that its fourth quarter 2021 revenues rose 26 percent year over year, narrowly beating its own forecast last month of 25 percent growth.
For the three months ended Jan. 2, 2022, Illumina reported revenues of $1.20 billion, up from $953 million in the year-ago quarter and above analysts' average estimate of $1.13 billion. Product revenues were $1.07 billion, up 29 percent from $831 million, and service and other revenues were $133 million, up 9 percent from $122 million in Q4 of 2020.
"We are seeing strength across our business as a growing number of patients around the world are accessing the life-saving benefits of genomics, from oncology therapy selection to genetic disease testing and pathogen surveillance," Illumina CEO Francis deSouza said in a statement. "Opportunities are also expanding across new markets like proteomics, infectious disease, and drug discovery. In addition, momentum for Grail's groundbreaking multi-cancer early detection blood test continues to accelerate. We are also making great progress on exciting new innovations, like our breakthrough Chemistry X and our Infinity long-read technology, to help clinicians and scientists make discoveries that improve patient care."
On a conference call following the release of the financial results, Illumina officials noted that while the company had closed its acquisition of Grail in August and included Grail's results in its consolidated revenues, it was still operating the division under a "hold separate" agreement to appease European regulators.
Core Illumina revenues grew 25 percent year over year to $1.19 billion, driven by record instrument shipments for both clinical and research markets, Illumina CFO Sam Samad said. Sequencing consumables revenues grew 32 percent year over year to $792 million driven by record NovaSeq consumable sales, while sequencing instrument revenues grew 35 percent year over year to $191 million, also driven by NovaSeq sales. Core Illumina service and other revenues were flat, with revenue growth from more service contracts and lab services offset by lower in vitro diagnostic partnership revenues. Illumina did not report on its microarray business.
In Q4, COVID-19 surveillance contributed $42 million in consumables sales and $8 million in incremental instrument sales.
Grail revenues in Q4 totaled $10 million, consisting of Galleri test fees and minimal residual disease partnership revenue.
By region, Americas revenues were $619 million, up 25 percent year over year and driven by clinical demand, especially oncology testing, as well as pharma, population genomics, and COVID-19 surveillance. Revenues from Europe, the Middle East, and Africa were $350 million, up 23 percent year over year, driven by emerging markets, population genetics, and COVID-19 surveillance. Revenue from greater China totaled $121 million, up 26 percent year over year, driven by clinical sequencing; and Asia Pacific-Japan revenues were $103 million, up 34 percent year over year, driven by NovaSeq and clinical sequencing.
Net income for the quarter was $112 million, or $.71 per share, compared to $257 million, or $1.75 per share, in Q4 2020. Adjusted net income was $.75 per share, beating analysts' average estimate of $.49 per share.
Illumina's Q4 R&D expenses were $350 million, up 75 percent from $200 million a year ago. The firm's SG&A expenses increased 47 percent to $426 million from $298 million a year ago.
Full-year 2021 revenues grew 40 percent to $4.53 billion from $3.24 billion in 2020, beating Illumina's January forecast and the consensus Wall Street estimate of $4.45 billion. Product revenues were $3.97 billion, up 45 percent from $2.74 billion in 2020, and service and other revenues were $558 million, up 11 percent from $504 million the previous year. Sequencing instrument revenues grew 76 percent, year over year, while sequencing consumables revenues grew 46 percent. Clinical consumables revenues grew 42 percent year over year, driven by oncology testing, deSouza said, while research and applied markets consumables sales grew 43 percent.
In 2021, revenues from COVID-19 surveillance totaled approximately $220 million.
In general, about 80 percent of Illumina's revenues are "recurring in nature," deSouza said, and "more predictable and profitable."
Net income for the year was $762 million, or $5.04 per share, compared to $656 million, or $4.45 per share, in 2020. Adjusted EPS for 2021 was $5.90 per share, beating the Wall Street estimate of $5.64 per share.
Illumina's 2021 R&D expenses nearly doubled to $1.19 billion from $682 million a year ago. SG&A expenses more than doubled in 2021 to $2.09 billion from $941 million in 2020.
Illumina reiterated its previous full-year 2022 revenue guidance in the range of $5.15 billion to $5.24 billion, representing growth of 14 to 16 percent. Core Illumina revenues are still expected to grow 13 percent to 15 percent, and Grail is projected to have revenue in the range of $70 million to $90 million. The firm expects adjusted EPS in the range of $4 to $4.20.
For Q1 2022, Illumina expects total revenues to increase between 10 percent and 12 percent, year over year. The firm expects core Illumina sequencing growth of 10 percent and sequencing consumables growth of 18 percent.
Intercompany sales are expected to be $25 million, Samad said, and will be eliminated in consolidation.
As of Jan. 2, Illumina held $1.23 billion in cash and cash equivalents and $107 million in short-term investments.
In Friday morning trading on the Nasdaq, shares of Illumina were down 4 percent at $343.27.