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Illumina reports financial results for third quarter of fiscal year 2015


San Diego, California, USA
October 20, 2015

Illumina, Inc. (NASDAQ: ILMN) today announced its financial results for the third quarter of fiscal year 2015.

Third quarter 2015 results:

  • Revenue of $550 million, a 14% increase compared to $481 million in the third quarter of 2014, and an increase of 18% on a constant currency basis
  • GAAP net income attributable to Illumina stockholders for the quarter of $118 million, or $0.79 per diluted share, compared to $93 million, or $0.63 per diluted share, for the third quarter of 2014
  • Non-GAAP net income attributable to Illumina stockholders for the quarter of $120 million, or $0.80 per diluted share, compared to $114 million, or $0.77 per diluted share, for the third quarter of 2014 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” for a reconciliation of these GAAP and non-GAAP financial measures)
  • Cash flow from operations of $181 million and free cash flow of $152 million for the quarter

Gross margin in the third quarter of 2015 was 70.4% compared to 69.5% 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 73.2% for the third quarters of 2015 and 2014.

Research and development (R&D) expenses for the third quarter of 2015 were $99.2 million compared to $85.1 million in the prior year period. R&D expenses included $9.1 million and $14.6 million of non-cash stock compensation expense in the third quarters of 2015 and 2014, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 16.4% compared to 14.6% in the prior year period.

Selling, general and administrative (SG&A) expenses for the third quarter of 2015 were $136.6 million compared to $119.9 million in the prior year period. SG&A expenses included $20.1 million and $27.2 million of non-cash stock compensation expense in the third quarters of 2015 and 2014, respectively. Excluding these charges, amortization of acquired intangible assets, and contingent compensation, SG&A expenses as a percentage of revenue were 20.9% compared to 19.0% in the prior year period.

During the quarter, the company recorded a GAAP tax benefit of $24.8 million, or $0.17, related to the exclusion of stock compensation from prior period cost-sharing charges as a result of a recent tax court ruling in which an unrelated third party was successful in challenging such charges. This benefit is reflected in the GAAP net income attributable to Illumina stockholders.

Depreciation and amortization expenses were $32.9 million and capital expenditures were $29.5 million during the third quarter of 2015. The company settled $207.4 million of the 0.25% Convertible Senior Notes due 2016 and repurchased $37.5 million of common stock under the previously announced 10b5-1 share repurchase program. At the close of the quarter the company held $1.44 billion in cash, cash equivalents and short-term investments, compared to $1.34 billion as of December 28, 2014.

“The fundamentals of our business remain strong, despite a 3% miss to revenue expectations,” stated Jay Flatley, CEO. “Our competitive position and product development pipeline are as robust as ever, which we believe will enable our continued penetration of the enormous market opportunities ahead.”

Updates since our last earnings release:

  • Launched TruSight® Tumor 15, a panel designed to identify variants in 15 genes commonly associated with oncology therapeutics
  • Launched new TruSeq® Custom Amplicon, Rapid Exome and Exome library preparation kits
  • Introduced Infinium® arrays that explore genetic variation through population and disease specific genotyping
  • Launched BaseSpace® Professional and Enterprise Editions, fully integrated Laboratory Information Management System (LIMS) solutions and advanced infrastructure upgrades
  • Expanded the rights of use for the HiSeq X™ Sequencing System to allow customers to perform whole-genome sequencing of non-human species
  • Entered into a collaboration with Memorial Sloan Kettering Cancer Center to conduct research studies focused on understanding the biology of circulating tumor DNA (ctDNA)
  • Entered into collaborations with Burning Rock and Amoy Diagnostics to develop clinical applications in China for oncology diagnostics based on Illumina’s NGS technology
  • Joined the Worldwide Innovative Networking (WIN) Consortium, a global network of leading academic, industry, and non-profit research organizations working to personalize cancer care
  • Announced the formation of Helix, a joint venture to empower consumers to discover insights into their genomes
  • Completed the acquisition of GenoLogics, a developer of industry-leading LIMS for life sciences organizations

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 projects approximately 18% total revenue growth (21% on a constant currency basis, assuming current rates) and fourth quarter revenue of approximately $570 million. The company has updated its projections for non-GAAP earnings per diluted share attributable to Illumina stockholders to $3.29 to $3.31 for fiscal 2015 and fourth quarter non-GAAP earnings per diluted share attributable to Illumina stockholders of $0.78 - $0.80.    



More news from: Illumina, Inc.


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Published: October 20, 2015

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