On August 6, 2024, Illumina Inc (ILMN, Financial) released its 8-K filing detailing the financial results for the second quarter of fiscal year 2024. Illumina, a leader in DNA sequencing and array-based technologies, provides tools and services for genetic analysis with applications in life sciences and clinical labs.
Performance Overview
Illumina Inc (ILMN, Financial) reported a Q2 2024 revenue of $1.112 billion, a 5.4% decline from $1.176 billion in Q2 2023. Despite the revenue drop, the company achieved a GAAP diluted earnings per share (EPS) of $0.41 and a non-GAAP diluted EPS of $1.09, surpassing the analyst estimate of $0.98. The company’s GAAP operating margin was 40.5%, while the non-GAAP operating margin stood at 22.2%.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $1.112 billion | $1.176 billion |
| Gross Margin (GAAP) | 64.8% | 62.2% |
| Operating Margin (GAAP) | 40.5% | 9.9% |
| Net Income (GAAP) | $66 million | $174 million |
| Diluted EPS (GAAP) | $0.41 | $1.09 |
Challenges and Achievements
Illumina faced a challenging quarter with a 6% year-over-year decline in core revenue, attributed to softened instrument demand in a constrained funding environment. However, consumable sales remained robust, reflecting increased sequencing activity among customers. The company also completed the spin-off of GRAIL, which impacted its financials with a significant goodwill and intangible impairment charge of $1.886 billion.
"The Illumina team delivered results ahead of our expectations in the quarter, driven by disciplined execution on our strategic priorities," said Jacob Thaysen, Chief Executive Officer. "Consumable sales remained solid as customers continued to increase their sequencing activity, but instrument demand has softened in a constrained funding environment. We are progressing our operating excellence initiatives and will deliver expanded margins this year."
Financial Statements Highlights
Illumina's balance sheet showed total assets of $6.081 billion as of June 30, 2024, down from $10.111 billion at the end of 2023. The company reported $994 million in cash, cash equivalents, and short-term investments. Operating cash flow for Q2 2024 was $80 million, with free cash flow at $48 million.
Segment Performance
Core Illumina revenue for Q2 2024 was $1.092 billion, a 6% decrease from Q2 2023. The gross margin for Core Illumina improved to 68.0% from 65.5% in the previous year, driven by a favorable mix of sequencing consumables and cost-saving initiatives. GRAIL, which was spun off on June 24, 2024, contributed $29 million in revenue but incurred a significant operating loss due to the impairment charges.
Outlook and Guidance
For fiscal year 2024, Illumina has lowered its Core Illumina revenue guidance to a decline of 2% to 3% compared to 2023. However, the company raised its non-GAAP operating margin guidance to a range of 20.5% to 21% and introduced a non-GAAP diluted EPS guidance of $3.80 to $3.95.
For more detailed insights and the complete financial statements, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Illumina Inc for further details.
