Illumina Reports Financial Results for First Quarter of Fiscal Year 2021
Illumina, Inc. (NASDAQ: ILMN) today announced its financial results for the first quarter of fiscal year 2021.
First quarter results reflect record revenue:
-
Revenue of
$1,093 million , a27% increase compared to the prior year period -
GAAP net income for the quarter of
$147 million , or$1.00 per diluted share, compared to$173 million , or$1.17 per diluted share, for the prior year period -
Non-GAAP net income for the quarter of
$278 million , or$1.89 per diluted share, compared to$243 million , or$1.64 per diluted share, for the prior year period. Non-GAAP net income excludes acquisition-related expenses, primarily the Continuation Payments paid to GRAIL (see the “Reconciliation Between GAAP and Non-GAAP Net Income” table for a reconciliation of these GAAP and non-GAAP financial measures) -
Cash flow from operations of
$282 million compared to$281 million in the prior year period -
Free cash flow (cash flow from operations less capital expenditures) of
$240 million for the quarter compared to$241 million in the prior year period
“Illumina achieved its first billion-dollar revenue quarter in company history and delivered a very strong start to 2021, exceeding our expectations,” said Francis deSouza, Chief Executive Officer. “Orders during the first quarter of 2021 reached an all-time high demonstrating strength in our core business across all regions, reflecting growth in both clinical and research customers. We are seeing tremendous progress in clinical market access and reimbursement for genomic applications increasing access to genomic testing for patients worldwide. We are proud of the significant contributions our customers, partners, and employees are making to the creation of a genomic epidemiology infrastructure to combat COVID-19, as well as monitor for future pathogen outbreaks for the benefit of global public health.”
Gross margin in the first quarter of 2021 was
Research and development (R&D) expenses for the first quarter of 2021 were
Selling, general and administrative (SG&A) expenses for the first quarter of 2021 were
Depreciation and amortization expenses were
Updates since our last earnings release:
- Announced TSO 500 partnership with Kartos Therapeutics to advance comprehensive genomic profiling for blood cancers
- Published positive economic study results in partnership with Harvard Pilgrim Health Care demonstrating the cost-effectiveness of offering non-invasive prenatal testing (NIPT) to all pregnant women
- Illumina was selected among the top 100 influential global companies by Time magazine
- Published our second annual Corporate Social Responsibility report that highlights our commitment to society, our employees and the environment
-
Completed a senior unsecured investment grade bond offering for an aggregate principal amount of
$1 billion and finalized a$750 million 5-year unsecured revolving credit facility - Announced Jay Flatley will step down from the Board of Directors and John W. Thompson will be appointed as the new Chair of the Board effective May 26, 2021
- Received medical device registration in Russia for NextSeq 550Dx and associated reagent kits
Financial outlook and guidance
The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.
For fiscal 2021, the company expects year-over-year revenue growth in the range of
Conference call information
The conference call will begin at 2:00 pm Pacific Time (5:00 pm Eastern Time) on Tuesday, April 27, 2021. Interested parties may access the live teleconference through the Investor Info section of Illumina’s website under the “Company” tab at www.illumina.com. Alternatively, individuals can access the call by dialing 1 (866) 211-4597 or 1 (647) 689-6853 outside North America, both using conference ID 4359912.
A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted net income per share, net income, gross margins, operating expenses, operating margins, other income, and free cash flow in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets, non-cash interest expense associated with the company’s convertible debt instruments that may be settled in cash, and others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance. Additionally, non-GAAP net income and diluted earnings per share are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.
The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.
Use of forward-looking statements
This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) the impact to our business and operating results of the COVID-19 pandemic; (ii) changes in the rate of growth in the markets we serve; (iii) the volume, timing and mix of customer orders among our products and services; (iv) our ability to adjust our operating expenses to align with our revenue expectations; (v) the outcome of the pending acquisition of GRAIL, Inc.; (vi) our ability to manufacture robust instrumentation and consumables; (vii) the success of products and services competitive with our own; (viii) challenges inherent in developing, manufacturing, and launching new products and services, including expanding or modifying manufacturing operations and reliance on third-party suppliers for critical components; (ix) the impact of recently launched or pre-announced products and services on existing products and services; (x) our ability to further develop and commercialize our instruments and consumables, to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xi) our ability to obtain regulatory clearance for our products from government agencies; (xii) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xiii) our ability to successfully identify and integrate acquired technologies, products, or businesses; and (xiv) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.
About Illumina
Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as the global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture and other emerging segments. To learn more, visit www.illumina.com and connect with us on Twitter, Facebook, LinkedIn, Instagram, and YouTube.
Illumina, Inc. Condensed Consolidated Balance Sheets (In millions) |
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April 4,
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January 3,
|
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ASSETS |
(unaudited) |
|
|
|||||
Current assets: |
|
|
|
|||||
Cash and cash equivalents |
$ |
4,433 |
|
|
$ |
1,810 |
|
|
Short-term investments |
197 |
|
|
1,662 |
|
|||
Accounts receivable, net |
517 |
|
|
487 |
|
|||
Inventory |
364 |
|
|
372 |
|
|||
Prepaid expenses and other current assets |
131 |
|
|
152 |
|
|||
Total current assets |
5,642 |
|
|
4,483 |
|
|||
Property and equipment, net |
915 |
|
|
922 |
|
|||
Operating lease right-of-use assets |
529 |
|
|
532 |
|
|||
Goodwill |
897 |
|
|
897 |
|
|||
Intangible assets, net |
134 |
|
|
142 |
|
|||
Other assets |
638 |
|
|
609 |
|
|||
Total assets |
$ |
8,755 |
|
|
$ |
7,585 |
|
|
|
|
|
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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|
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Current liabilities: |
|
|
|
|||||
Accounts payable |
$ |
178 |
|
|
$ |
192 |
|
|
Accrued liabilities |
602 |
|
|
541 |
|
|||
Convertible senior notes, current portion |
488 |
|
|
511 |
|
|||
Total current liabilities |
1,268 |
|
|
1,244 |
|
|||
Operating lease liabilities |
664 |
|
|
671 |
|
|||
Term notes |
992 |
|
|
— |
|
|||
Convertible senior notes |
680 |
|
|
673 |
|
|||
Other long-term liabilities |
229 |
|
|
303 |
|
|||
Stockholders’ equity |
4,922 |
|
|
4,694 |
|
|||
Total liabilities and stockholders’ equity |
$ |
8,755 |
|
|
$ |
7,585 |
|
|
Illumina, Inc. Condensed Consolidated Statements of Income (In millions, except per share amounts) (unaudited) |
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Three Months Ended |
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April 4,
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March 29,
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Revenue: |
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Product revenue |
$ |
953 |
|
|
|
$ |
701 |
|
|
|
Service and other revenue |
140 |
|
|
|
158 |
|
|
|||
Total revenue |
1,093 |
|
|
|
859 |
|
|
|||
Cost of revenue: |
|
|
|
|||||||
Cost of product revenue (a) |
265 |
|
|
|
174 |
|
|
|||
Cost of service and other revenue (a) |
58 |
|
|
|
59 |
|
|
|||
Amortization of acquired intangible assets |
6 |
|
|
|
7 |
|
|
|||
Total cost of revenue |
329 |
|
|
|
240 |
|
|
|||
Gross profit |
764 |
|
|
|
619 |
|
|
|||
Operating expense: |
|
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|
|||||||
Research and development (a) |
197 |
|
|
|
156 |
|
|
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Selling, general and administrative (a) |
374 |
|
|
|
274 |
|
|
|||
Total operating expense |
571 |
|
|
|
430 |
|
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Income from operations |
193 |
|
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|
189 |
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