Illumina’s fourth quarter was marked by strong performance in its clinical consumables business, with management citing 20% year-over-year growth outside China as a key driver. CEO Jacob Thaysen attributed the result to increased adoption of sequencing-based diagnostic tests and the transition toward more data-intensive clinical applications. While the company saw progress in clinical markets, Thaysen noted that research and academic demand remained subdued, reflecting ongoing funding constraints. Despite exceeding Wall Street’s expectations for both revenue and adjusted earnings, the market reacted negatively, as some investors appeared concerned about the sustainability of recent momentum and muted research demand.
Is now the time to buy ILMN? Find out in our full research report (it’s free for active Edge members).
Illumina (ILMN) Q4 CY2025 Highlights:
- Revenue: $1.16 billion vs analyst estimates of $1.12 billion (5% year-on-year growth, 3.2% beat)
- Adjusted EPS: $1.35 vs analyst estimates of $1.25 (8.3% beat)
- Adjusted EBITDA: $326 million vs analyst estimates of $293.6 million (28.1% margin, 11% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $5.13 at the midpoint, beating analyst estimates by 0.9%
- Operating Margin: 17.4%, up from 15.9% in the same quarter last year
- Organic Revenue rose 5% year on year (beat)
- Market Capitalization: $17.78 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 Q4 Earnings Call
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Doug Schenkel (Wolfe Research) asked about the trajectory for operating margins and the impact of the Somalogic acquisition. CEO Jacob Thaysen responded that the company remains committed to achieving its long-term margin targets, noting, “We are working through the opportunities for synergies, and we will get as close to the 26% operating margin as possible in ’27.”
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Vijay Kumar (Evercore ISI) questioned the rationale for more moderate growth guidance versus Q4’s strong clinical results. Thaysen explained that Q4 is typically a strong quarter and that guidance reflects a blend of recent momentum and ongoing research market caution.
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Puneet Souda (Leerink Partners) inquired about clinical versus research instrument placements and competitive dynamics. Thaysen confirmed clinical customers represented over 60% of Q4 placements and expects this mix to persist, while Dhingra indicated that research demand is more tied to funding than competition.
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Tycho Peterson (Jefferies) sought details on the drivers of clinical growth and the outlook for multiomics products. Thaysen emphasized that increasing sequencing intensity, such as the shift from whole exome to whole genome applications, will be the main growth driver, with multiomics solutions gaining significance in later years.
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Casey Woodring (JPMorgan) asked about China’s regulatory environment and monetization strategies for BioInsight. Thaysen said the company is maintaining dialogue with regulators and sees upside if import restrictions ease, while Dhingra described a multi-pronged approach to monetizing BioInsight through data products and AI tools for pharma customers.
Catalysts in Upcoming Quarters
In future quarters, the StockStory team will be monitoring (1) continued adoption and utilization rates of the NovaSeq X platform, (2) integration progress and early revenue contribution from the Somalogic acquisition, and (3) signs of stabilization or improvement in academic research funding. Additionally, we will track the commercial rollout and industry uptake of new multiomics and software solutions, as well as any updates on regulatory developments in China that could affect instrument sales and revenue growth.
Illumina currently trades at $116.89, down from $133.61 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).
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