Illumina’s third quarter results reflected stable year-over-year revenue and a notable beat on Wall Street’s profit expectations, with positive market reaction following the report. Management attributed the outperformance to accelerating adoption of the NovaSeq X platform, particularly in the clinical segment, and disciplined cost controls. CEO Jacob Thaysen pointed to “high single-digit” growth in clinical sequencing consumables and strong progress in transitioning customers from NovaSeq 6000 to NovaSeq X as key factors. The company also highlighted resilience in China amid ongoing export restrictions.
Is now the time to buy ILMN? Find out in our full research report (it’s free for active Edge members).
Illumina (ILMN) Q3 CY2025 Highlights:
- Revenue: $1.08 billion vs analyst estimates of $1.07 billion (flat year on year, 1.8% beat)
- Adjusted EPS: $1.34 vs analyst estimates of $1.17 (14.7% beat)
- Adjusted EBITDA: $324.4 million vs analyst estimates of $273.3 million (29.9% margin, 18.7% beat)
- Management raised its full-year Adjusted EPS guidance to $4.70 at the midpoint, a 4.4% increase
- Operating Margin: 20.9%, down from 68.6% in the same quarter last year
- Organic Revenue was flat year on year vs analyst estimates of 1.8% declines (172.4 basis point beat)
- Market Capitalization: $18.71 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Illumina’s Q3 Earnings Call
- Puneet Souda (Leerink): Sought clarity on China’s 2026 outlook and competitive dynamics. CEO Jacob Thaysen reiterated ongoing regulatory discussions and noted strong customer relationships, while not providing forward guidance for China.
- Douglas Schenkel (Wolfe Research): Asked about 2026 growth drivers and margin sustainability. Thaysen agreed clinical will drive growth, with research muted, and CFO Ankur Dhingra expects further margin expansion through cost actions and operating leverage.
- Vijay Kumar (Evercore ISI): Probed the sources of consumables outperformance and future margin expansion. Dhingra attributed it mainly to clinical demand and confirmed the company is still targeting cumulative 500 basis points of margin improvement.
- Tycho Peterson (Jefferies): Questioned the outlook for research funding and gross margin levers. Thaysen noted research remains cautious but expects eventual normalization, while Dhingra detailed tariff impacts and ongoing cost initiatives.
- Patrick Donnelly (Citi): Asked about competitive pressures, especially from Roche. Thaysen stated Illumina continues to differentiate by offering high-quality data and integrated workflows, rather than competing on a single feature.
Catalysts in Upcoming Quarters
In future quarters, our analysts will closely monitor (1) continued adoption rates and placement volumes for NovaSeq X instruments, (2) the pace of clinical assay launches and approvals that could expand sequencing volume, and (3) the impact of new multiomics products, such as Illumina Protein Prep, on revenue diversification. Progress on tariff mitigation and resolution of regulatory issues in China will also be key indicators of future performance.
Illumina currently trades at $125.15, up from $99.13 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).
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