Illumina Q3 earnings: net income rises to $220M
Excluding tariff refunds, Illumina raised its fiscal 2026 revenue and non-GAAP EPS outlook while keeping organic growth targets unchanged.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Form Type
8-K
Rhea-AI Filing Summary
Illumina reported Q3 fiscal 2026 revenue of $1.129 billion, up 4.2% year over year, and GAAP net income of $220 million, compared with $150 million a year earlier. GAAP diluted EPS was $1.43 versus $0.98, and GAAP operating margin was 27.0% versus 21.0%. Cash provided by operations was $419 million versus $284 million; free cash flow was $378 million versus $253 million.
Non-GAAP diluted EPS excluding tariff refunds was $1.44, and non-GAAP operating margin excluding tariff refunds was 25.0%. The reconciliation identifies a $79 million tariff-refund benefit recognized as a reduction to cost of revenue and a $37 million reduction to revenue for refunds expected to be credited to customers. Cash, cash equivalents and short-term investments totaled $1.34 billion at quarter-end.
For fiscal 2026, excluding tariff refunds, Illumina raised its revenue outlook to $4.64-$4.66 billion from $4.60-$4.64 billion and non-GAAP diluted EPS to $5.40-$5.45 from $5.30-$5.40. Non-GAAP operating margin is now expected at 23.6%, versus prior guidance of 23.4%-23.6%; organic revenue growth above 4% and ROW organic revenue growth above 5% are unchanged.
2 points · 0 major0 major · 0 points
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Positive
- Moderate pointQ3 net income reached $220 million, versus $150 million a year earlier.
- Moderate pointQ3 operating cash flow: $419 million, up from $284 million.
Negative
- None.
Insights
Analyzing...
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, or exhibit attachments filed with this report.
Key Figures
Q3 revenue: $1.129 billion
GAAP net income: $220 million
GAAP diluted EPS: $1.43
+5 more
8 metrics
Q3 revenue
$1.129 billion
Q3 2026; up 4.2% from Q3 2025
GAAP net income
$220 million
Q3 2026, compared with $150 million in Q3 2025
GAAP diluted EPS
$1.43
Q3 2026, compared with $0.98 in Q3 2025
GAAP operating margin
27.0%
Q3 2026, compared with 21.0% in Q3 2025
Cash provided by operating activities
$419 million
Q3 2026, compared with $284 million in Q3 2025
Free cash flow
$378 million
Q3 2026, compared with $253 million in Q3 2025
Fiscal 2026 revenue guidance
$4.64-$4.66 billion
Excluding tariff refunds; prior guidance was $4.60-$4.64 billion
Fiscal 2026 non-GAAP diluted EPS guidance
$5.40-$5.45
Excluding tariff refunds; prior guidance was $5.30-$5.40
Key Terms
ROW organic revenue growth, Free cash flow, Non-GAAP diluted earnings per share, IEEPA tariff refunds
4 terms
ROW organic revenue growth financial
"ROW organic revenue growth (non-GAAP)"
Free cash flow financial
"Free cash flow, which is a non-GAAP financial measure"
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
IEEPA tariff refunds financial
"impacts of IEEPA tariff refunds"
Refunds under the International Emergency Economic Powers Act (IEEPA) are repayments of import duties, fees, or penalties that were charged because of trade restrictions or sanctions put in place under emergency authority and later reversed, modified, or found inapplicable. For investors, these refunds can change a company’s past cash outflows and future cost structure—similar to getting a billed charge returned after a rule change—affecting reported earnings or cash available for other uses.
Earnings Snapshot
Revenue: $1.129 billion · Guidance included
Q3 2026
Revenue
$1.129 billion
Up 4.2% from Q3 2025
GAAP net income
$220 million
Compared with $150 million in Q3 2025
GAAP diluted EPS
$1.43
Compared with $0.98 in Q3 2025
Cash provided by operating activities
$419 million
Compared with $284 million in Q3 2025
Free cash flow
$378 million
Compared with $253 million in Q3 2025
Guidance
For fiscal 2026, excluding tariff refunds, revenue is expected to be $4.64-$4.66 billion, non-GAAP operating margin 23.6%, and non-GAAP diluted EPS $5.40-$5.45. Organic revenue growth above 4% and ROW organic revenue growth above 5% are unchanged.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What was ILMN's revenue in Q3 2026?
Illumina reported $1.129 billion in Q3 2026 revenue, up 4.2% from Q3 2025.
What is Illumina's fiscal 2026 guidance?
Excluding tariff refunds, Illumina expects fiscal 2026 revenue of $4.64-$4.66 billion, compared with prior guidance of $4.60-$4.64 billion. Non-GAAP diluted EPS guidance is $5.40-$5.45, versus $5.30-$5.40 previously. Organic revenue growth above 4% and ROW organic revenue growth above 5% are unchanged.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2026
(Exact name of registrant as specified in its charter)
(Commission File Number)
| (State or other jurisdiction of incorporation) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip code)
(858 ) 202-4500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13a of the Exchange Act. o
TABLE OF CONTENTS
Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURES
Exhibit Index
Table of Contents
Item 2.02 Results of Operations and Financial Condition.
On October 29, 2026, Illumina, Inc. (the “Company”) issued a press release announcing financial results for the third quarter ended September 27, 2026. The full text of the Company’s press release is attached hereto as Exhibit 99.1.
The information furnished pursuant to this Item 2.02 (including Exhibit 99.1) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933 or the Exchange Act.
Table of Contents
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
99.1 Press release dated October 29, 2026, announcing Illumina, Inc.’s financial results for the third quarter ended September 27, 2026
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ILLUMINA, INC. | ||||||||||||||
| Date: | October 29, 2026 | By: | /s/ ANKUR DHINGRA | |||||||||||
| Name: | Ankur Dhingra | |||||||||||||
| Title: | Chief Financial Officer | |||||||||||||
Table of Contents
Exhibit Index
| Exhibit Number | Description | |||||||
99.1 | Press release dated October 29, 2026 announcing Illumina, Inc.’s financial results for the third quarter ended September 27, 2026 | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
Investors: Conor McNamara +1.858.291.6421 ir@illumina.com | ||||||||||||||
 | ||||||||||||||
Media: Christine Douglass pr@illumina.com | ||||||||||||||
Illumina Reports Financial Results for Third Quarter of Fiscal Year 2026
San Diego, October 29, 2026 /PRNewswire/ -- Illumina, Inc. (Nasdaq: ILMN) (“Illumina” or the “company”) today announced its financial results for the third quarter of fiscal year 2026.
Third quarter 2026 results
•Reported revenue was $1.13 billion for Q3 2026, up 4.2% from Q3 2025. Revenue excluding tariff refunds was $1.17 billion, up 4.7% after also excluding the impacts of currency, acquisitions, and the Greater China region (“ROW1 organic revenue growth”).
•GAAP operating margin was 27.0% and non‑GAAP operating margin, excluding tariff refunds, was 25.0%.
•GAAP diluted EPS was $1.43 and non‑GAAP diluted EPS, excluding tariff refunds, was $1.44.
“In the third quarter, healthy clinical demand and robust NovaSeq X placements drove results above our guidance. Based on continued momentum, we are raising our full year revenue and earnings guidance,” said Jacob Thaysen, Chief Executive Officer of Illumina. “As we continue to execute our strategy, our innovation is broadening the value of the Illumina ecosystem. Together with our customers, we are laying the foundation for AI to transform our understanding of human biology and improve patient outcomes.”
Fiscal year 2026 guidance
For fiscal year 2026 and excluding tariff refunds, Illumina now expects:
•Total revenue of $4.64-$4.66 billion versus prior guidance of $4.60-$4.64 billion.
•Organic revenue growth greater than 4% and ROW organic revenue growth greater than 5%, both unchanged versus prior guidance.
•Non-GAAP operating margin of 23.6% versus prior guidance of 23.4%-23.6%.
•Non-GAAP diluted EPS of $5.40-$5.45 versus prior guidance of $5.30-$5.40.
Third quarter results
| GAAP | Non-GAAP (a) | Non-GAAP Excluding Tariff Refunds (b) | |||||||||||||||||||||||||||
Dollars in millions, except per share amounts | Q3 2026 | Q3 2025 | Q3 2026 | Q3 2025 | Q3 2026 | ||||||||||||||||||||||||
Revenue | $ | 1,129 | $ | 1,084 | $ | 1,129 | $ | 1,084 | $ | 1,166 | |||||||||||||||||||
Gross margin | 73.5 | % | 67.6 | % | 75.3 | % | 69.2 | % | 69.4 | % | |||||||||||||||||||
Operating profit | $ | 305 | $ | 227 | $ | 325 | $ | 265 | $ | 292 | |||||||||||||||||||
| Operating margin | 27.0 | % | 21.0 | % | 28.8 | % | 24.5 | % | 25.0 | % | |||||||||||||||||||
| Diluted EPS | $ | 1.43 | $ | 0.98 | $ | 1.62 | $ | 1.34 | $ | 1.44 | |||||||||||||||||||
(a)See tables in “Results of Operations - Non-GAAP” section below for GAAP and non-GAAP reconciliations.
(b)Excludes the impacts of International Emergency Economic Powers Act (IEEPA) tariff refunds expected to be recovered, consisting primarily of a $79 million benefit recognized as a reduction to cost of revenue in Q3 2026 and a reduction to revenue of $37 million for the portion of tariff refunds that we expect to credit to customers.
1 ROW = rest-of-world, excluding Greater China region due to our inclusion on China’s Unreliable Entities List
1
Capital expenditures for free cash flow purposes were $41 million for Q3 2026. Cash flow provided by operations was $419 million, compared to $284 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $378 million for the quarter, compared to $253 million in the prior year period. Depreciation and amortization expense was $71 million for Q3 2026. At the close of the quarter, the company held $1.34 billion in cash, cash equivalents and short-term investments.
Conference call information
The conference call will begin at 1:30 pm Pacific Time (4:30 pm Eastern Time) on Thursday, October 29, 2026. Interested parties may access the live webcast via the Investor Info section of Illumina’s website or directly through the following link - https://illumina-earnings-call-q3-2026.open-exchange.net/. To ensure timely connection, please join at least ten minutes before the scheduled start of the call. 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 earnings per share, gross margin, operating margin, and free cash flow, among others, 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, among others, that are listed in the reconciliations of 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. Non-GAAP operating margin 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 this release.
The company provides forward-looking guidance on a non-GAAP basis. The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures because it is unable to predict with reasonable certainty the impact of items such as acquisition-related costs, fair value adjustments to contingent consideration, gains and losses from strategic investments, asset impairments, restructuring activities, and the ultimate outcome of pending litigation, among others, without unreasonable effort. These items are uncertain, inherently difficult to predict, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the company is unable to address the significance of the unavailable information, which could be material to future results.
2
Use of forward-looking statements
This release contains 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) changes in the rate of growth in the markets we serve; (ii) the volume, timing and mix of customer orders among our products and services; (iii) our ability to adjust our operating expenses to align with our revenue expectations; (iv) uncertainty regarding the impact of our inclusion on the “unreliable entities list” by regulatory authorities in China; (v) uncertainty regarding tariffs imposed or threatened by the U.S. government and its trading partners, related court proceedings or administrative actions (including potential additional refund or relief programs), and other possible tariffs or trade protection measures and our efforts to mitigate the impact of such tariffs; (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 modify our business strategies to accomplish our desired operational goals; (xi) our ability to realize the anticipated benefits from prior or future actions to streamline and improve our R&D processes, reduce our operating expenses and maximize our revenue growth; (xii) our ability to further develop and commercialize our instruments, consumables, and products; (xiii) our ability to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xiv) the risk of additional litigation or other liabilities arising against us in connection with previous acquisitions, including the GRAIL acquisition; (xv) our ability to obtain approval by third-party payors to reimburse patients for our products; (xvi) changes in the regulatory landscape and our ability to obtain regulatory clearance for our products from government agencies; (xvii) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xviii) uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth or armed conflict; (xix) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments; and (xx) legislative, regulatory and economic developments, 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 a 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 X, Facebook, LinkedIn, Instagram, TikTok, and YouTube.
# # #
3
Illumina, Inc.
Condensed Consolidated Balance Sheets
(In millions)
| September 27, 2026 | December 28, 2025 | ||||||||||
| ASSETS | (unaudited) | ||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 1,289 | $ | 1,418 | |||||||
| Short-term investments | 48 | 215 | |||||||||
| Accounts receivable, net | 738 | 854 | |||||||||
| Inventory, net | 667 | 564 | |||||||||
| Prepaid expenses and other current assets | 293 | 238 | |||||||||
| Total current assets | 3,035 | 3,289 | |||||||||
| Property and equipment, net | 731 | 759 | |||||||||
| Operating lease right-of-use assets | 356 | 370 | |||||||||
| Goodwill | 1,284 | 1,113 | |||||||||
| Intangible assets, net | 391 | 210 | |||||||||
| Deferred tax assets, net | 454 | 454 | |||||||||
| Other assets | 561 | 449 | |||||||||
| Total assets | $ | 6,812 | $ | 6,644 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 241 | $ | 240 | |||||||
| Accrued liabilities | 915 | 846 | |||||||||
| Term debt, current portion | — | 499 | |||||||||
| Total current liabilities | 1,156 | 1,585 | |||||||||
| Operating lease liabilities | 439 | 486 | |||||||||
| Term debt | 1,789 | 1,490 | |||||||||
| Other long-term liabilities | 283 | 360 | |||||||||
| Stockholders’ equity | 3,145 | 2,723 | |||||||||
| Total liabilities and stockholders’ equity | $ | 6,812 | $ | 6,644 | |||||||
4
Illumina, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Product revenue | $ | 946 | $ | 927 | $ | 2,845 | $ | 2,719 | |||||||||||||||
| Service and other revenue | 183 | 157 | 535 | 465 | |||||||||||||||||||
| Total revenue | 1,129 | 1,084 | 3,380 | 3,184 | |||||||||||||||||||
| Cost of revenue: | |||||||||||||||||||||||
| Cost of product revenue | 199 | 267 | 763 | 795 | |||||||||||||||||||
| Cost of service and other revenue | 82 | 68 | 243 | 228 | |||||||||||||||||||
| Amortization of acquired intangible assets | 18 | 16 | 53 | 50 | |||||||||||||||||||
| Total cost of revenue | 299 | 351 | 1,059 | 1,073 | |||||||||||||||||||
| Gross profit | 830 | 733 | 2,321 | 2,111 | |||||||||||||||||||
| Operating expense: | |||||||||||||||||||||||
| Research and development | 244 | 229 | 736 | 728 | |||||||||||||||||||
| Selling, general and administrative | 281 | 277 | 826 | 777 | |||||||||||||||||||
| Total operating expense | 525 | 506 | 1,562 | 1,505 | |||||||||||||||||||
| Income from operations | 305 | 227 | 759 | 606 | |||||||||||||||||||
| Other (expense) income, net | (41) | (7) | (78) | 103 | |||||||||||||||||||
| Income before income taxes | 264 | 220 | 681 | 709 | |||||||||||||||||||
| Provision for income taxes | 44 | 70 | 120 | 193 | |||||||||||||||||||
| Net income | $ | 220 | $ | 150 | $ | 561 | $ | 516 | |||||||||||||||
| Earnings per share: | |||||||||||||||||||||||
| Basic | $ | 1.46 | $ | 0.98 | $ | 3.70 | $ | 3.30 | |||||||||||||||
| Diluted | $ | 1.43 | $ | 0.98 | $ | 3.65 | $ | 3.29 | |||||||||||||||
| Shares used in computing earnings per share: | |||||||||||||||||||||||
| Basic | 151 | 153 | 152 | 156 | |||||||||||||||||||
| Diluted | 154 | 154 | 154 | 157 | |||||||||||||||||||
5
Illumina, Inc.
Condensed Statements of Cash Flows
(In millions)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| Net cash provided by operating activities | $ | 419 | $ | 284 | $ | 909 | $ | 758 | |||||||||||||||
| Net cash provided by (used in) investing activities | 50 | (51) | (438) | (163) | |||||||||||||||||||
| Net cash used in financing activities | (223) | (115) | (602) | (681) | |||||||||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | 3 | (2) | 2 | 9 | |||||||||||||||||||
| Net increase (decrease) in cash and cash equivalents | 249 | 116 | (129) | (77) | |||||||||||||||||||
| Cash and cash equivalents, beginning of period | 1,040 | 934 | 1,418 | 1,127 | |||||||||||||||||||
| Cash and cash equivalents, end of period | $ | 1,289 | $ | 1,050 | $ | 1,289 | $ | 1,050 | |||||||||||||||
| Calculation of free cash flow: | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 419 | $ | 284 | $ | 909 | $ | 758 | |||||||||||||||
| Purchases of property and equipment | (41) | (31) | (118) | (93) | |||||||||||||||||||
| Free cash flow (a) | $ | 378 | $ | 253 | $ | 791 | $ | 665 | |||||||||||||||
(a)Free cash flow, which is a non-GAAP financial measure, is calculated as net cash provided by operating activities reduced by purchases of property and equipment. Free cash flow is useful to management as it is one of the metrics used to evaluate our performance and to compare us with other companies in our industry. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.
6
Illumina, Inc.
Results of Operations - Non-GAAP
(unaudited)
TABLE 1: RECONCILIATION OF REVENUE GROWTH:
| Three Months Ended | Nine Months Ended | ||||||||||
| September 27, 2026 | September 27, 2026 | ||||||||||
| Revenue growth | 4.2 | % | 6.2 | % | |||||||
| Impact of tariff refunds | 3.4 | % | 1.1 | % | |||||||
| Revenue growth, excluding tariff refunds (non-GAAP) (a) | 7.6 | % | 7.3 | % | |||||||
Impact of acquisitions | (2.4) | % | (2.1) | % | |||||||
Impact of currency exchange rates | (0.4) | % | (1.0) | % | |||||||
Organic revenue growth (non-GAAP) (a) | 4.8 | % | 4.2 | % | |||||||
| Impact of China | (0.1) | % | 1.2 | % | |||||||
| ROW organic revenue growth (non-GAAP) (a) | 4.7 | % | 5.4 | % | |||||||
TABLE 2: RECONCILIATION OF GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
| September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | ||||||||||||||||||||
| GAAP diluted earnings per share | $ | 1.43 | $ | 0.98 | $ | 3.65 | $ | 3.29 | |||||||||||||||
| Acquisition-related costs (d) | 0.10 | 0.17 | 0.33 | 0.28 | |||||||||||||||||||
| Transformational initiatives (e) | 0.03 | 0.08 | 0.10 | 0.33 | |||||||||||||||||||
| Strategic investment loss (gain), net (f) | 0.19 | (0.04) | 0.27 | (0.90) | |||||||||||||||||||
| Intangible impairment | — | — | — | 0.15 | |||||||||||||||||||
| Other (g) | — | — | — | 0.03 | |||||||||||||||||||
| Provision for income taxes (h) | (0.13) | 0.15 | (0.27) | 0.31 | |||||||||||||||||||
| Non-GAAP diluted earnings per share (b) | 1.62 | 1.34 | 4.08 | 3.49 | |||||||||||||||||||
| Tariff refunds (i) | (0.18) | — | (0.18) | — | |||||||||||||||||||
| Non-GAAP diluted earnings per share, excluding tariff refunds (b) | $ | 1.44 | $ | 1.34 | $ | 3.90 | $ | 3.49 | |||||||||||||||
7
Illumina, Inc.
Results of Operations - Non-GAAP (continued)
(unaudited)
TABLE 3: RECONCILIATION OF GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||||||
(Dollars in millions) | September 27, 2026 | September 28, 2025 | September 27, 2026 | September 28, 2025 | |||||||||||||||||||||||||||||||
GAAP gross profit (c) | $ | 830 | 73.5 | % | $ | 733 | 67.6 | % | $ | 2,321 | 68.7 | % | $ | 2,111 | 66.3 | % | |||||||||||||||||||
| Acquisition-related costs (d) | 20 | 1.8 | % | 16 | 1.5 | % | 64 | 1.9 | % | 50 | 1.6 | % | |||||||||||||||||||||||
| Transformational initiatives (e) | — | — | % | 1 | 0.1 | % | — | — | % | 3 | 0.1 | % | |||||||||||||||||||||||
| Intangible impairment | — | — | % | — | — | % | — | — | % | 23 | 0.7 | % | |||||||||||||||||||||||
| Non-GAAP gross profit (b) | 850 | 75.3 | % | 750 | 69.2 | % | 2,385 | 70.6 | % | 2,187 | 68.7 | % | |||||||||||||||||||||||
| Tariff refunds (i) | (41) | (5.9) | % | — | — | % | (41) | (2.0) | % | — | — | % | |||||||||||||||||||||||
| Non-GAAP gross profit, excluding tariff refunds (b) | $ | 809 | 69.4 | % | $ | 750 | 69.2 | % | $ | 2,344 | 68.6 | % | $ | 2,187 | 68.7 | % | |||||||||||||||||||
| GAAP operating profit | $ | 305 | 27.0 | % | $ | 227 | 21.0 | % | $ | 759 | 22.5 | % | $ | 606 | 19.0 | % | |||||||||||||||||||
| Acquisition-related costs (d) | 15 | 1.4 | % | 26 | 2.5 | % | 50 | 1.5 | % | 44 | 1.4 | % | |||||||||||||||||||||||
| Transformational initiatives (e) | 5 | 0.4 | % | 12 | 1.0 | % | 15 | 0.4 | % | 51 | 1.6 | % | |||||||||||||||||||||||
| Intangible impairment | — | — | % | — | — | % | — | — | % | 23 | 0.7 | % | |||||||||||||||||||||||
| Other (g) | — | — | % | — | — | % | — | — | % | 5 | 0.2 | % | |||||||||||||||||||||||
| Non-GAAP operating profit (b) | 325 | 28.8 | % | 265 | 24.5 | % | 824 | 24.4 | % | 729 | 22.9 | % | |||||||||||||||||||||||
| Tariff refunds (i) | (33) | (3.8) | % | — | — | % | (33) | (1.3) | % | — | — | % | |||||||||||||||||||||||
| Non-GAAP operating profit, excluding tariff refunds (b) | $ | 292 | 25.0 | % | $ | 265 | 24.5 | % | $ | 791 | 23.1 | % | $ | 729 | 22.9 | % | |||||||||||||||||||
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(a)Revenue growth, excluding tariff refunds adjusts for the tariff refund to customers. Organic revenue growth adjusts for the impact from the tariff refund to customers, acquisitions and currency movements, which is calculated using comparative prior period foreign exchange rates to translate current period revenue, net of the effects of hedges. Rest of World (ROW) organic revenue growth also adjusts for the impact from our China region.
(b)Non-GAAP gross profit, included within non-GAAP operating profit, is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non-GAAP diluted earnings per share and non-GAAP operating profit exclude the effects of the pro forma adjustments as detailed above. Non-GAAP operating margin 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. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing past and future operating performance.
(c)Reconciling amounts are recorded in cost of revenue.
(d)Amounts for Q3 2026 and YTD 2026 consist primarily of:
•Amortization of intangible assets of $18 million and $53 million (cost of revenue)
•Amortization of inventory fair value step-up for SomaLogic of $2 million and $10 million (cost of revenue)
•Expenses for the SomaLogic and GRAIL acquisitions of $5 million and $26 million (operating expense)
•Net gains on contingent consideration liabilities of ($11) million and ($43) million (operating expense)
Amounts for Q3 2025 and YTD 2025 consist primarily of:
•Amortization of intangible assets of $16 million and $50 million (cost of revenue)
•Expenses for the SomaLogic and GRAIL acquisitions of $4 million and $19 million (operating expense)
•Net losses (gains) on contingent consideration liabilities of $3 million and ($29) million (operating expense)
•Lease impairment of $4 million (operating expense)
(e)Amounts for Q3 2026 and YTD 2026 consist primarily of implementation costs to upgrade our ERP system. Amounts for Q3 2025 consist primarily of implementation costs to upgrade our ERP system. Amounts for YTD 2025 consist primarily of employee severance costs from restructuring activities and costs related to the ERP upgrade.
(f)Amounts consist of realized and unrealized gains and losses and impairments on our investments.
(g)Amount consists of $3 million for costs related to board membership changes and $2 million for a legal accrual.
(h)Amounts represent the aggregate of the difference between book and tax accounting related to stock-based compensation cost and the tax impact related to non-GAAP adjustments. Amounts for Q3 2025 and YTD 2025 also include a one-time $42 million valuation allowance adjustment recorded in Q3 2025 against deferred tax assets associated with certain U.S. foreign tax credits as a result of the U.S. tax legislation that was signed on July 4, 2025.
(i)Amounts represent the impacts of IEEPA tariff refunds, consisting primarily of the $79 million benefit recognized as a reduction to cost of revenue in Q3 2026 and the related reduction to revenue of $37 million for the portion of tariff refunds that we expect to credit to customers.
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