Illumina Reports Financial Results for First Quarter of Fiscal Year 2023, Announces Commitment to Accelerate Margin Growth

SAN DIEGOIllumina, Inc. (Nasdaq: ILMN) (‘Illumina’ or the ‘company’) today announced its financial results for the first quarter of fiscal year 2023, which include the consolidated financial results for GRAIL.

‘The year is off to a solid start, led by NovaSeq X outperforming expectations in both customer demand and manufacturing supply,’ said Francis deSouza, Chief Executive Officer. ‘We shipped 67 NovaSeq X instruments in the first quarter, exceeding our plan. Demand remains strong, with our quarter-end NovaSeq X order book standing at over 200 instruments. We continue to work closely with our customers and partners to help them manage the challenging macroeconomic environment and to deliver on our 2023 goals. Our commitment to higher margins will set Illumina on the best path to deliver long-term sustainable success for our shareholders.’

Revenue of $1.09 billion for Q1 2023, up 1% from Q4 2022; down 11% from Q1 2022 (down 9% on a constant currency basis)

GAAP diluted EPS of $0.02 for Q1 2023, compared to GAAP diluted EPS of $0.55 for Q1 2022

Non-GAAP diluted EPS of $0.08 for Q1 2023, compared to non-GAAP diluted EPS of $1.07 for Q1 2022

Reiterating fiscal year 2023 consolidated revenue guidance of 7% to 10% growth from 2022, including Core Illumina revenue growth of 6% to 9% and GRAIL revenue in the range of $90 million to $110 million

Expect GAAP diluted loss per share of $(0.28) to $(0.03) for fiscal year 2023

Reiterating non-GAAP diluted EPS guidance of $1.25 to $1.50 for fiscal year 2023

Committing to Core Illumina non-GAAP operating margins of 25% for fiscal year 2024 and 27% for fiscal year 20251

Announcing a plan to achieve more than $100 million in annualized run rate cost savings to accelerate margin improvement and create flexibility for further investment in high-growth areas

Key announcements by Illumina since Illumina’s last earnings release

Launched Illumina Complete Long Read Prep, Human, which enables access to both long- and short-read data on the same instrument for the first time

Partnered with Henry Ford Health, a not-for-profit health care organization in the Detroit metro area, to assess the impact of comprehensive genomic testing in cardiovascular disease

Launched Illumina Connected Insights, a new cloud-based software enabling tertiary analysis for clinical next-generation sequencing (NGS) data, with applications for oncology and soon rare diseases

Celebrated the company’s 25th anniversary, a quarter-century after its founding in San Diego in April 1998

Expanded strategic partnership with Myriad Genetics to broaden access and availability of oncology homologous recombination deficiency (HRD) testing in the United States; under the agreement, Illumina TruSight Oncology 500 HRD (TSO 500 HRD), a research-use-only test, is now available in the US

Received the international privacy certification (ISO/IEC 27701) of six of Illumina’s cloud-based informatics programs, recognizing that the company implements, and complies with, robust, international data privacy requirements

Exceeded more than 200 orders for the revolutionary NovaSeq X, representing a diverse customer base spanning research and clinical customer segments in nearly 30 countries

Was granted expedited appellate review of the FTC order to divest GRAIL

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) 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) our ability to manufacture robust instrumentation and consumables; (v) the success of products and services competitive with our own; (vi) 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; (vii) the impact of recently launched or pre-announced products and services on existing products and services; (viii) our ability to modify our business strategies to accomplish our desired operational goals; (ix) 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; (x) our ability to further develop and commercialize our instruments, consumables, and products, including Galleri, the cancer screening test developed by GRAIL, to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xi) the risks and costs associated with our ongoing inability to integrate GRAIL due to the interim measures imposed on us by the European Commission as a result of their prohibition of our acquisition of GRAIL and an order issued by the Federal Trade Commission requiring that we divest GRAIL; (xii) the risks and costs associated with the integration of GRAIL’s business if we are ultimately able to integrate GRAIL; (xiii) the risk that disruptions from the consummation of our acquisition of GRAIL and associated legal or regulatory proceedings, including related appeals, or obligations will harm our business, including current plans and operations; (xiv) the risk of incurring fines associated with the consummation of our acquisition of GRAIL and the possibility that we may be required to divest all or a portion of the assets or equity interests of GRAIL on terms that could be materially worse than the terms on which we acquired GRAIL; (xv) our ability to obtain approval by third-party payors to reimburse patients for our products; (xvi) 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, COVID-19 pandemic mitigation measures, 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. In 2023, we celebrate 25 years of innovation, which 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.

About GRAIL

GRAIL is a healthcare company whose mission is to detect cancer early, when it can be cured. GRAIL is focused on alleviating the global burden of cancer by developing pioneering technology to detect and identify multiple deadly cancer types early. The company is using the power of next-generation sequencing, population-scale clinical studies, and state-of-the-art computer science and data science to enhance the scientific understanding of cancer biology, and to develop its multi-cancer early detection blood test. GRAIL is headquartered in Menlo Park, CA with locations in Washington, D.C., North Carolina, and the United Kingdom. GRAIL, LLC, is a wholly-owned subsidiary of Illumina, which currently must be held and operated separately and independently from Illumina pursuant to interim measures ordered by the European Commission, which prohibited our acquisition of GRAIL on September 6, 2022.

Contact:

David McAlpine

Tel: +1.347.327.1336

Email: pr@illumina.com

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