San Diego, California, USA
July 21, 2015
Illumina, Inc. (NASDAQ:ILMN) today announced its financial results for the second quarter of fiscal year 2015.
Second quarter 2015 results:
- Revenue of $539 million, a 21% increase compared to $448 million in the second quarter of 2014, and an increase of 25% on a constant currency basis
- GAAP net income for the quarter of $102 million, or $0.69 per diluted share, compared to $47 million, or $0.31 per diluted share, for the second quarter of 2014
- Non-GAAP net income for the quarter of $120 million, or $0.80 per diluted share, compared to $85 million, or $0.57 per diluted share, for the second quarter of 2014 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income” for a reconciliation of these GAAP and non-GAAP financial measures)
- Cash flow from operations of $171 million and free cash flow of $130 million for the quarter
Gross margin in the second quarter of 2015 was 69.8% compared to 67.1% in the prior year period. Excluding the effect of non-cash stock compensation expense, amortization of acquired intangible assets, and legal contingencies, non-GAAP gross margin was 72.4% for the second quarter of 2015 compared to 70.9% in the prior year period.
Research and development (R&D) expenses for the second quarter of 2015 were $96.2 million compared to $83.0 million in the prior year period. R&D expenses included $10.7 million and $12.8 million of non-cash stock compensation expense in the second quarters of 2015 and 2014, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 15.8% compared to 15.6% in the prior year period.
Selling, general and administrative (SG&A) expenses for the second quarter of 2015 were $124.4 million compared to $114.6 million in the prior year period. SG&A expenses included $19.6 million and $20.8 million of non-cash stock compensation expense in the second quarters of 2015 and 2014, respectively. Excluding these charges and amortization of acquired intangible assets, SG&A expenses as a percentage of revenue were 19.2% compared to 20.5% in the prior year period.
Depreciation and amortization expenses were $30.7 million and capital expenditures were $41.4 million during the second quarter of 2015. The Company ended the quarter with $1.51 billion in cash, cash equivalents and short-term investments, compared to $1.34 billion as of December 28, 2014.
“We delivered solid financial results in the second quarter with increasing demand for our new products,” stated Jay Flatley, CEO. “The fundamentals of our business are strong and we remain focused on innovation and market expansion.”
Updates since our last earnings release:
- Announced an agreement with Annoroad to jointly develop advanced clinical applications for non-invasive prenatal testing in China based on our next-generation sequencing technology
- Launched Illumina SeqLab for large-scale human whole genome sequencing operations, an integrated solution for customers with HiSeq X™ systems
- Published a preliminary study in The Journal of the American Medical Association which retrospectively correlated 10 cases of occult maternal cancer among pregnant women receiving an “aneuploidy detected” or “aneuploidy suspected” positive results on the verifi® noninvasive Prenatal Test (NIPT)
- Entered into a collaboration with Merck KGaA and Genea to advance excellence in fertility technologies and processes within the assisted reproductive treatment (ART) laboratory
- Further strengthened Illumina's management team by appointing Sanjay Chikarmane as Senior Vice President and General Manager of the Enterprise Informatics business unit
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 2015, the Company continues to project approximately 20% total revenue growth, including a 3% negative impact from foreign exchange assuming current currency exchange rates. The Company has increased its projections for non-GAAP earnings per diluted share to $3.39 to $3.45.
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