- Core Illumina revenue of $1.09
billion for Q2 2024, down 6% from Q2 2023 (down 6% on a
constant currency basis) and up 3% from Q1 2024
- Core Illumina GAAP operating margin of 40.5% and non-GAAP
operating margin of 22.2% for Q2 2024
- Core Illumina GAAP diluted earnings per share of $0.41 and non-GAAP diluted earnings per share of
$1.09 for Q2 2024
- Lowered fiscal year 2024 Core Illumina revenue guidance to
decline 2% to 3% (down 1.5% to 2.5% in constant currency) from
2023
- Raised Core Illumina non-GAAP operating margin guidance to a
range of 20.5% to 21% for fiscal year 2024
- Introducing guidance for Core Illumina non-GAAP diluted
earnings per share in the range of $3.80 to $3.95 for
fiscal year 2024
- On June 24, 2024, we completed
the spin-off of GRAIL into a new public company
SAN
DIEGO, Aug. 6, 2024 /PRNewswire/ -- Illumina,
Inc. (Nasdaq: ILMN) ("Illumina" or the "company") today announced
its financial results for the second quarter of fiscal year 2024,
which include the consolidated financial results for GRAIL through
June 24, 2024.
"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."
Second quarter consolidated results
|
GAAP
|
|
Non-GAAP
(a)
|
|
Dollars in millions,
except per share amounts
|
Q2
2024
|
|
Q2
2023
|
|
Q2
2024
|
|
Q2
2023
|
|
Revenue
|
$
1,112
|
|
$
1,176
|
|
$
1,112
|
|
$
1,176
|
|
Gross margin
|
64.8 %
|
|
62.2 %
|
|
69.0 %
|
|
66.5 %
|
|
Research and
development ("R&D") expense
|
$ 325
|
|
$ 358
|
|
$ 325
|
|
$ 345
|
|
Selling, general and
administrative ("SG&A") expense
|
$ 147
|
|
$ 462
|
|
$ 358
|
|
$ 355
|
|
Goodwill and intangible
impairment (b)
|
$
1,886
|
|
$ —
|
|
$
—
|
|
$ —
|
|
Operating (loss)
profit
|
$
(1,637)
|
|
$ (88)
|
|
$
84
|
|
$ 82
|
|
Operating
margin
|
(147.2) %
|
|
(7.5) %
|
|
7.6 %
|
|
7.0 %
|
|
Tax
provision
|
$
12
|
|
$ 145
|
|
$
16
|
|
$ 33
|
|
Tax rate
|
(0.6) %
|
|
(163.8) %
|
|
22.3 %
|
|
39.3 %
|
|
Net (loss)
income
|
$
(1,988)
|
|
$
(234)
|
|
$
57
|
|
$ 50
|
|
Diluted (loss) earnings
per share
|
$
(12.48)
|
|
$
(1.48)
|
|
$
0.36
|
|
$
0.32
|
|
|
|
(a) See the
tables included in the "Results of Operations - Non-GAAP" section
below for reconciliations of these GAAP and non-GAAP financial
measures.
|
|
(b) During the
second quarter of 2024, the company recognized $1,466 million in
goodwill and $420 million in intangible asset (IPR&D)
impairment related to the GRAIL segment.
|
Capital expenditures for free cash flow purposes were
$32 million for Q2 2024. Cash flow
provided by operations was $80
million, compared to cash flow provided by operations of
$105 million in the prior year
period. Free cash flow (cash flow provided by operations less
capital expenditures) was $48 million
for the quarter, compared to $58
million in the prior year period. Depreciation and
amortization expenses were $105
million for Q2 2024. At the close of the quarter, the
company held $994 million in cash, cash equivalents and
short-term investments.
Second quarter segment results
Illumina has two
reportable segments, Core Illumina and GRAIL, which was spun-off on
June 24, 2024.
Core Illumina
|
GAAP
|
|
Non-GAAP
(a)
|
|
Dollars in
millions
|
Q2
2024
|
|
Q2
2023
|
|
Q2
2024
|
|
Q2
2023
|
|
Revenue
(b)
|
$
1,092
|
|
$
1,159
|
|
$
1,092
|
|
$
1,159
|
|
Gross margin
(c)
|
68.0 %
|
|
65.5 %
|
|
69.4 %
|
|
67.0 %
|
|
R&D
expense
|
$ 241
|
|
$ 274
|
|
$ 241
|
|
$ 261
|
|
SG&A
expense
|
$
60
|
|
$ 371
|
|
$ 275
|
|
$ 270
|
|
Operating
profit
|
$ 442
|
|
$ 115
|
|
$ 242
|
|
$ 245
|
|
Operating
margin
|
40.5 %
|
|
9.9 %
|
|
22.2 %
|
|
21.2 %
|
|
Tax
provision
|
$
35
|
|
*
|
|
$
55
|
|
*
|
|
Tax rate
|
35.0 %
|
|
*
|
|
24.2 %
|
|
*
|
|
Net income
|
$
66
|
|
*
|
|
$ 174
|
|
*
|
|
Diluted earnings per
share
|
$
0.41
|
|
*
|
|
$
1.09
|
|
*
|
|
|
|
* Prior year
information not provided.
|
|
(a) See the
tables included in the "Results of Operations - Non-GAAP" section
below for reconciliations of these GAAP and non-GAAP financial
measures.
|
|
(b) Core
Illumina revenue for Q2 2024 was down 6% as compared to Q2 2023 and
down 6% on a constant currency basis. Amounts for Q2 2024 and Q2
2023 included intercompany revenue of $9 million and $5 million,
respectively, which is eliminated in consolidation.
|
|
(c) The
year-over-year increase in gross margin was primarily driven by a
more favorable mix of sequencing consumables and execution of our
operational excellence priorities that delivered cost savings,
including freight and improved productivity.
|
GRAIL
|
GAAP
|
|
Non-GAAP
(a)
|
|
In
millions
|
Q2
2024
|
|
Q2
2023
|
|
Q2
2024
|
|
Q2
2023
|
|
Revenue
|
$
29
|
|
$
22
|
|
$
29
|
|
$
22
|
|
Gross (loss)
profit
|
$ (16)
|
|
$
(24)
|
|
$
15
|
|
$
9
|
|
R&D
expense
|
$
88
|
|
$
89
|
|
$
88
|
|
$
89
|
|
SG&A
expense
|
$
88
|
|
$
91
|
|
$
84
|
|
$
85
|
|
Goodwill and intangible
impairment
|
$
1,886
|
|
$
—
|
|
$
—
|
|
$
—
|
|
Operating
loss
|
$
(2,078)
|
|
$ (204)
|
|
$
(157)
|
|
$ (164)
|
|
|
|
(a) See Table 5
included in the "Results of Operations - Non-GAAP" section below
for reconciliations of these GAAP and non-GAAP financial
measures.
|
Key announcements by Illumina since Illumina's last earnings
release
- Completed the spin-off of GRAIL
- Acquired Fluent Biosciences, developer of an emerging and
highly differentiated single-cell technology
- Appointed Everett Cunningham as
Chief Commercial Officer
- Announced that Anna Richo,
Corporate Senior Vice President, Strategic Advisor to the General
Counsel and CEO at Cargill, Inc., joined Illumina's Board of
Directors
- Presented research at the American Society of Clinical Oncology
(ASCO) Annual Meeting, with 14 total abstracts accepted to the
meeting
- Completed integration of Illumina's latest chemistry,
XLEAP-SBS™, into all reagents for its NextSeq™ 1000
and NextSeq 2000 next-generation sequencing instruments
- Expanded its oncology menu for NovaSeq™ X Series customers by
offering the newly verified high-throughput version of TruSight™
Oncology 500 (TSO 500 HT), and the latest version of its
distributed liquid biopsy research assay, TruSight Oncology 500
ctDNA v2 (TSO 500 ctDNA v2)
- Launched DRAGEN™ v4.3, the latest version of Illumina's
DRAGEN™ software, part of the Illumina Connected Software
portfolio, for analysis of next-generation sequencing data
A full list of recent Illumina announcements can be found in the
company's News Center.
Financial outlook and guidance
For fiscal year 2024,
the company lowered its Core Illumina revenue guidance to decline
2% to 3% (down 1.5% to 2.5% in constant currency) compared to
fiscal year 2023 and raised its Core Illumina non-GAAP operating
margin guidance to a range of 20.5% to 21%. The company is
introducing guidance for Core Illumina non-GAAP diluted EPS in the
range of $3.80 to $3.95 for fiscal year 2024.
The company provides forward-looking guidance on a non-GAAP
basis. The company is unable to provide a reconciliation of
forward-looking non-GAAP financial measures to the most directly
comparable GAAP reported financial measures because it is unable to
predict with reasonable certainty the financial impact of items
such as acquisition-related expenses, gains and losses from our
strategic investments, fair value adjustments related to contingent
consideration and contingent value rights, potential future asset
impairments, restructuring activities, and the ultimate outcome of
pending litigation without unreasonable effort. These items are
uncertain, inherently difficult to predict, depend on various
factors, and could have a material impact on GAAP reported results
for the guidance period. For the same reasons, the company is
unable to address the significance of the unavailable information,
which could be material to future results.
Conference call information
The conference call will
begin at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Tuesday, August
6, 2024. Interested parties may access the live teleconference
through the Investor Info section of Illumina's website
at investor.illumina.com. Alternatively, individuals can
access the call by dialing 866.400.0049 or +1.323.701.0231 outside
North America, both using
conference ID 9881025. To ensure timely connection, please dial in
at least ten minutes before the scheduled start of the call.
A replay of the conference call will be posted on Illumina's
website after the event and will be available for at least 30 days
following.
Statement regarding use of non-GAAP financial
measures
The company reports non-GAAP results for diluted
earnings per share, net income, gross margin, operating expenses,
including research and development expense, selling general and
administrative expense, and from time to time, as applicable, legal
contingencies and settlement, and goodwill and intangible
impairment, operating income (loss), operating margin, gross profit
(loss), other income (expense), tax provision, constant currency
revenue growth, and free cash flow (on a consolidated and, as
applicable, segment basis) in addition to, and not as a substitute
for, or superior to, financial measures calculated in accordance
with GAAP. The company's financial measures under GAAP include
substantial charges such as amortization of acquired intangible
assets among others that are listed in the itemized reconciliations
between GAAP and non-GAAP financial measures included in this press
release, as well as the effects of currency translation. Management
has excluded the effects of these items in non-GAAP measures to
assist investors in analyzing and assessing past and future
operating performance, including in the non-GAAP measures related
to our segments. Additionally, non-GAAP net income, diluted
earnings per share and operating margin are key components of the
financial metrics utilized by the company's board of directors to
measure, in part, management's performance and determine
significant elements of management's compensation.
The company encourages investors to carefully consider its
results under GAAP, as well as its supplemental non-GAAP
information and the reconciliation between these presentations, to
more fully understand its business. Reconciliations between GAAP
and non-GAAP results are presented in the tables of this
release.
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; (xi) to
deploy new products, services, and applications, and to expand the
markets for our technology platforms; (xii) the risks and costs
associated with the divestment of GRAIL; (xiii) the risk of
additional litigation arising against us in connection with the
GRAIL acquisition; (xiv) our ability to obtain approval by
third-party payors to reimburse patients for our products; (xv) our
ability to obtain regulatory clearance for our products from
government agencies; (xvi) our ability to successfully partner with
other companies and organizations to develop new products, expand
markets, and grow our business; (xvii) uncertainty, or adverse
economic and business conditions, including as a result of slowing
or uncertain economic growth or armed conflict; (xviii) the
application of generally accepted accounting principles, which are
highly complex and involve many subjective assumptions, estimates,
and judgments and (xix) 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. Our focus on innovation 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. To learn more,
visit www.illumina.com and connect with us on X
(Twitter), Facebook, LinkedIn, Instagram, TikTok, and YouTube.
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, Inc. was spun-out into
a new public company on June 24,
2024. For more information, please visit www.grail.com.
|
Illumina,
Inc.
Condensed
Consolidated Balance Sheets
(In
millions)
|
|
|
June 30,
2024
|
|
December 31,
2023
|
|
ASSETS
|
(unaudited)
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
920
|
|
$
1,048
|
|
Short-term
investments
|
74
|
|
6
|
|
Accounts receivable,
net
|
641
|
|
734
|
|
Inventory,
net
|
561
|
|
587
|
|
Prepaid expenses and
other current assets
|
263
|
|
234
|
|
Total current
assets
|
2,459
|
|
2,609
|
|
Property and equipment,
net
|
859
|
|
1,007
|
|
Operating lease
right-of-use assets
|
460
|
|
544
|
|
Goodwill
|
1,079
|
|
2,545
|
|
Intangible assets,
net
|
278
|
|
2,993
|
|
Deferred tax assets,
net
|
632
|
|
56
|
|
Other assets
|
314
|
|
357
|
|
Total
assets
|
$
6,081
|
|
$
10,111
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
199
|
|
$
245
|
|
Accrued
liabilities
|
1,265
|
|
1,325
|
|
Term debt, current
portion
|
744
|
|
—
|
|
Total current
liabilities
|
2,208
|
|
1,570
|
|
Operating lease
liabilities
|
616
|
|
687
|
|
Term debt
|
1,490
|
|
1,489
|
|
Other long-term
liabilities
|
331
|
|
620
|
|
Stockholders'
equity
|
1,436
|
|
5,745
|
|
Total liabilities and
stockholders' equity
|
$
6,081
|
|
$
10,111
|
|
Illumina,
Inc.
Condensed
Consolidated Statements of Operations
(In millions, except
per share amounts)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
June 30,
2024
|
|
July 2,
2023
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Product
revenue
|
$
927
|
|
$
1,001
|
|
$
1,803
|
|
$
1,923
|
|
Service and other
revenue
|
185
|
|
175
|
|
385
|
|
340
|
|
Total
revenue
|
1,112
|
|
1,176
|
|
2,188
|
|
2,263
|
|
Cost of
revenue:
|
|
|
|
|
|
|
|
|
Cost of product
revenue (a)
|
250
|
|
305
|
|
504
|
|
591
|
|
Cost of service and
other revenue (a)
|
95
|
|
91
|
|
202
|
|
190
|
|
Amortization of
acquired intangible assets
|
46
|
|
48
|
|
94
|
|
96
|
|
Total cost of
revenue
|
391
|
|
444
|
|
800
|
|
877
|
|
Gross
profit
|
721
|
|
732
|
|
1,388
|
|
1,386
|
|
Operating
expense:
|
|
|
|
|
|
|
|
|
Research and
development (a)
|
325
|
|
358
|
|
660
|
|
699
|
|
Selling, general and
administrative (a)
|
147
|
|
462
|
|
588
|
|
839
|
|
Goodwill and
intangible impairment
|
1,886
|
|
—
|
|
1,889
|
|
—
|
|
Total operating
expense
|
2,358
|
|
820
|
|
3,137
|
|
1,538
|
|
Loss from
operations
|
(1,637)
|
|
(88)
|
|
(1,749)
|
|
(152)
|
|
Other expense,
net
|
(339)
|
|
(1)
|
|
(337)
|
|
(15)
|
|
Loss before income
taxes
|
(1,976)
|
|
(89)
|
|
(2,086)
|
|
(167)
|
|
Provision for income
taxes
|
12
|
|
145
|
|
28
|
|
64
|
|
Net loss
|
$
(1,988)
|
|
$
(234)
|
|
$
(2,114)
|
|
$
(231)
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
Basic
|
$
(12.48)
|
|
$
(1.48)
|
|
$
(13.28)
|
|
$
(1.46)
|
|
Diluted
|
$
(12.48)
|
|
$
(1.48)
|
|
$
(13.28)
|
|
$
(1.46)
|
|
Shares used in
computing loss per share:
|
|
|
|
|
|
|
|
|
Basic
|
159
|
|
158
|
|
159
|
|
158
|
|
Diluted
|
159
|
|
158
|
|
159
|
|
158
|
|
|
(a) Includes
stock-based compensation expense for stock-based awards:
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
June 30,
2024
|
|
July 2,
2023
|
|
Cost of product
revenue
|
$
7
|
|
$
8
|
|
$
13
|
|
$
15
|
|
Cost of service and
other revenue
|
1
|
|
6
|
|
4
|
|
12
|
|
Research and
development
|
43
|
|
43
|
|
82
|
|
79
|
|
Selling, general and
administrative
|
59
|
|
48
|
|
109
|
|
93
|
|
Stock-based
compensation expense before taxes
|
$
110
|
|
$
105
|
|
$
208
|
|
$
199
|
|
Illumina,
Inc.
Condensed
Consolidated Statements of Cash Flows
(In
millions)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
June 30,
2024
|
|
July 2,
2023
|
|
Net cash provided by
operating activities
|
$
80
|
|
$
105
|
|
$
157
|
|
$
115
|
|
Net cash used in
investing activities
|
(41)
|
|
(37)
|
|
(89)
|
|
(93)
|
|
Net cash used in
financing activities
|
(225)
|
|
(3)
|
|
(191)
|
|
(476)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
(2)
|
|
(6)
|
|
(5)
|
|
(4)
|
|
Net (decrease) increase
in cash and cash equivalents
|
(188)
|
|
59
|
|
(128)
|
|
(458)
|
|
Cash and cash
equivalents, beginning of period
|
1,108
|
|
1,494
|
|
1,048
|
|
2,011
|
|
Cash and cash
equivalents, end of period
|
$
920
|
|
$
1,553
|
|
$
920
|
|
$
1,553
|
|
|
|
|
|
|
|
|
|
Calculation of free
cash flow:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
$
80
|
|
$
105
|
|
$
157
|
|
$
115
|
|
Purchases of property
and equipment
|
(32)
|
|
(47)
|
|
(67)
|
|
(99)
|
|
Free cash flow
(a)
|
$
48
|
|
$
58
|
|
$
90
|
|
$
16
|
|
|
(a) Free cash
flow, which is a non-GAAP financial measure, is calculated as net
cash provided by operating activities reduced by purchases of
property and equipment. Free cash flow is useful to management as
it is one of the metrics used to evaluate our performance and to
compare us with other companies in our industry. However, our
calculation of free cash flow may not be comparable to similar
measures used by other companies.
|
|
Illumina,
Inc.
Results of
Operations - Revenue by Segment
(Dollars in
millions)
(unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
%
Change
|
|
June 30,
2024
|
|
July 2,
2023
|
|
%
Change
|
|
Consolidated
revenue
|
$
1,112
|
|
$
1,176
|
|
(5) %
|
|
$
2,188
|
|
$
2,263
|
|
(3) %
|
|
Less: Hedge
gains
|
4
|
|
2
|
|
|
|
7
|
|
3
|
|
|
|
Consolidated revenue,
excluding hedge effect
|
1,108
|
|
1,174
|
|
|
|
2,181
|
|
2,260
|
|
|
|
Less: Exchange rate
effect
|
(5)
|
|
—
|
|
|
|
(7)
|
|
—
|
|
|
|
Consolidated constant
currency revenue (a)
|
$
1,113
|
|
$
1,174
|
|
(5) %
|
|
$
2,188
|
|
$
2,260
|
|
(3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Illumina
revenue
|
$
1,092
|
|
$
1,159
|
|
(6) %
|
|
$
2,148
|
|
$
2,235
|
|
(4) %
|
|
Less: Hedge
gains
|
4
|
|
2
|
|
|
|
7
|
|
3
|
|
|
|
Core Illumina revenue,
excluding hedge effect
|
1,088
|
|
1,157
|
|
|
|
2,141
|
|
2,232
|
|
|
|
Less: Exchange rate
effect
|
(5)
|
|
—
|
|
|
|
(7)
|
|
—
|
|
|
|
Core Illumina constant
currency revenue (a)
|
$
1,093
|
|
$
1,157
|
|
(6) %
|
|
$
2,148
|
|
$
2,232
|
|
(4) %
|
|
|
(a) Constant
currency revenue growth, which is a non-GAAP financial measure, is
calculated using comparative prior period foreign exchange rates to
translate current period revenue, net of the effects of
hedges.
|
Illumina, Inc.
Results of Operations
- Non-GAAP
(In millions, except per share
amounts)
(unaudited)
TABLE 1: CONSOLIDATED RECONCILIATION BETWEEN GAAP AND
NON-GAAP DILUTED (LOSS) EARNINGS PER SHARE:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
June 30,
2024
|
|
July 2,
2023
|
|
GAAP loss per share
- diluted
|
$
(12.48)
|
|
$
(1.48)
|
|
$
(13.28)
|
|
$
(1.46)
|
|
Cost of revenue
(b)
|
0.29
|
|
0.32
|
|
0.60
|
|
0.63
|
|
R&D expense
(b)
|
—
|
|
0.08
|
|
0.01
|
|
0.09
|
|
SG&A expense
(b)
|
(1.33)
|
|
0.68
|
|
(0.75)
|
|
0.89
|
|
Goodwill and intangible
impairment (b)
|
11.84
|
|
—
|
|
11.86
|
|
—
|
|
Other expense, net
(b)
|
2.06
|
|
0.01
|
|
2.01
|
|
0.08
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (c)
|
0.62
|
|
0.44
|
|
0.73
|
|
0.16
|
|
Incremental non-GAAP
tax expense (d)
|
(0.65)
|
|
0.27
|
|
(0.74)
|
|
(0.04)
|
|
Income tax provision
(e)
|
0.01
|
|
—
|
|
0.01
|
|
0.05
|
|
Non-GAAP earnings per
share - diluted (a)
|
$
0.36
|
|
$
0.32
|
|
$
0.45
|
|
$
0.40
|
TABLE 2: CONSOLIDATED RECONCILIATION BETWEEN GAAP AND
NON-GAAP NET (LOSS) INCOME:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
July 2,
2023
|
|
June 30,
2024
|
|
July 2,
2023
|
|
GAAP net
loss
|
$
(1,988)
|
|
$
(234)
|
|
$
(2,114)
|
|
$
(231)
|
|
Cost of revenue
(b)
|
46
|
|
50
|
|
95
|
|
99
|
|
R&D expense
(b)
|
—
|
|
13
|
|
2
|
|
14
|
|
SG&A expense
(b)
|
(211)
|
|
107
|
|
(120)
|
|
142
|
|
Goodwill and intangible
impairment (b)
|
1,886
|
|
—
|
|
1,889
|
|
—
|
|
Other expense, net
(b)
|
328
|
|
2
|
|
319
|
|
13
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (c)
|
99
|
|
69
|
|
116
|
|
25
|
|
Incremental non-GAAP
tax expense (d)
|
(104)
|
|
43
|
|
(117)
|
|
(6)
|
|
Income tax provision
(e)
|
1
|
|
—
|
|
1
|
|
8
|
|
Non-GAAP net income
(a)
|
$
57
|
|
$
50
|
|
$
71
|
|
$
64
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(In millions, except per share
amounts)
(unaudited)
TABLE 3: CORE ILLUMINA RECONCILIATION BETWEEN GAAP AND
NON-GAAP DILUTED EARNINGS PER SHARE:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
June 30,
2024
|
|
GAAP earnings per
share - diluted
|
$
0.41
|
|
$
0.85
|
|
Cost of revenue
(b)
|
0.10
|
|
0.19
|
|
R&D expense
(b)
|
—
|
|
0.01
|
|
SG&A expense
(b)
|
(1.35)
|
|
(0.84)
|
|
Goodwill and intangible
impairment (b)
|
—
|
|
0.02
|
|
Other expense, net
(b)
|
2.06
|
|
2.01
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (c)
|
0.12
|
|
0.21
|
|
Incremental non-GAAP
tax expense (d)
|
(0.26)
|
|
(0.39)
|
|
Income tax provision
(e)
|
0.01
|
|
0.01
|
|
Non-GAAP earnings per
share - diluted (a)
|
$
1.09
|
|
$
2.07
|
TABLE 4: CORE ILLUMINA RECONCILIATION BETWEEN GAAP AND
NON-GAAP NET INCOME:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
June 30,
2024
|
|
GAAP net
income
|
$
66
|
|
$
135
|
|
Cost of revenue
(b)
|
15
|
|
30
|
|
R&D expense
(b)
|
—
|
|
2
|
|
SG&A expense
(b)
|
(215)
|
|
(132)
|
|
Goodwill and intangible
impairment (b)
|
—
|
|
3
|
|
Other expense, net
(b)
|
328
|
|
319
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (c)
|
20
|
|
33
|
|
Incremental non-GAAP
tax expense (d)
|
(41)
|
|
(62)
|
|
Income tax provision
(e)
|
1
|
|
1
|
|
Non-GAAP net income
(a)
|
$
174
|
|
$
329
|
|
|
All amounts
in tables are rounded to the nearest millions, except as otherwise
noted. As a result, certain amounts may not recalculate using the
rounded amounts provided.
|
|
|
(a) Non-GAAP net
income and diluted earnings per share exclude the effects of the
pro forma adjustments as detailed above. Non-GAAP net income and
diluted earnings per share are key components of the financial
metrics utilized by the company's board of directors to measure, in
part, management's performance and determine significant elements
of management's compensation. Management has excluded the effects
of these items in these measures to assist investors in analyzing
and assessing our past and future operating performance.
|
|
(b) Refer to the
Itemized Reconciliations between GAAP and Non-GAAP Results of
Operations for the components of these amounts.
|
|
(c) Amounts
represent the impact of GRAIL pre-acquisition net operating losses
on GILTI, the utilization of U.S. foreign tax credits, and the
Pillar Two global minimum top-up tax, which became effective in Q1
2024.
|
|
(d) Incremental
non-GAAP tax expense reflects the tax impact of the non-GAAP
adjustments listed.
|
|
(e) Amounts
represent the difference between book and tax accounting related to
stock-based compensation cost.
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(Dollars in
millions)
(unaudited)
TABLE 5: ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP
RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
|
Three Months
Ended
|
|
June 30,
2024
|
|
Core
Illumina
|
|
GRAIL
|
|
Eliminations
|
|
Consolidated
|
|
GAAP gross profit
(loss) (b)
|
$
743
|
68.0 %
|
|
$
(16)
|
|
$
(6)
|
|
$
721
|
64.8 %
|
|
Amortization of
acquired intangible assets
|
15
|
1.4 %
|
|
31
|
|
—
|
|
46
|
4.2 %
|
|
Non-GAAP gross profit
(a)
|
$
758
|
69.4 %
|
|
$
15
|
|
$
(6)
|
|
$
767
|
69.0 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP and Non-GAAP
R&D expense
|
$
241
|
22.1 %
|
|
$
88
|
|
$
(4)
|
|
$
325
|
29.2 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SG&A
expense
|
$ 60
|
5.5 %
|
|
$
88
|
|
$
(1)
|
|
$
147
|
13.2 %
|
|
Amortization of
acquired intangible assets
|
—
|
—
|
|
(1)
|
|
—
|
|
(1)
|
(0.1) %
|
|
Contingent
consideration liabilities (c)
|
271
|
24.8 %
|
|
—
|
|
—
|
|
271
|
24.4 %
|
|
Acquisition-related
expenses (d)
|
(46)
|
(4.2) %
|
|
(3)
|
|
—
|
|
(49)
|
(4.4) %
|
|
Restructuring
(g)
|
(3)
|
(0.3) %
|
|
—
|
|
—
|
|
(3)
|
(0.3) %
|
|
Accrued interest on EC
fine (h)
|
(7)
|
(0.6) %
|
|
—
|
|
—
|
|
(7)
|
(0.6) %
|
|
Non-GAAP SG&A
expense
|
$
275
|
25.2 %
|
|
$
84
|
|
$
(1)
|
|
$
358
|
32.2 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP goodwill and
intangible impairment
|
$ —
|
—
|
|
$
1,886
|
|
$
—
|
|
$
1,886
|
169.6 %
|
|
Goodwill impairment
(i)
|
—
|
—
|
|
(1,466)
|
|
—
|
|
(1,466)
|
(131.8) %
|
|
Intangible (IPR&D)
impairment (i)
|
—
|
—
|
|
(420)
|
|
—
|
|
(420)
|
(37.8) %
|
|
Non-GAAP goodwill and
intangible impairment
|
$ —
|
—
|
|
$
—
|
|
$
—
|
|
$
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit (loss)
|
$
442
|
40.5 %
|
|
$
(2,078)
|
|
$
(1)
|
|
$
(1,637)
|
(147.2) %
|
|
Cost of
revenue
|
15
|
1.4 %
|
|
31
|
|
—
|
|
46
|
4.2 %
|
|
SG&A
costs
|
(215)
|
(19.7) %
|
|
4
|
|
—
|
|
(211)
|
(19.0) %
|
|
Goodwill and intangible
impairment
|
—
|
—
|
|
1,886
|
|
—
|
|
1,886
|
169.6 %
|
|
Non-GAAP operating
profit (loss) (a)
|
$
242
|
22.2 %
|
|
$
(157)
|
|
$
(1)
|
|
$ 84
|
7.6 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense)
income, net
|
$
(341)
|
(31.2) %
|
|
$
2
|
|
$
—
|
|
$
(339)
|
(30.5) %
|
|
Strategic investment
related loss, net (e)
|
334
|
30.5 %
|
|
—
|
|
—
|
|
334
|
30.0 %
|
|
Gain on Helix
contingent value right (f)
|
(8)
|
(0.7) %
|
|
—
|
|
—
|
|
(8)
|
(0.7) %
|
|
Foreign currency loss
on EC fine (j)
|
2
|
0.2 %
|
|
—
|
|
—
|
|
2
|
0.2 %
|
|
Non-GAAP other
(expense) income, net (a)
|
$
(13)
|
(1.2) %
|
|
$
2
|
|
$
—
|
|
$ (11)
|
(1.0) %
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(Dollars in
millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND
NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
|
Three Months
Ended
|
|
July 2,
2023
|
|
Core
Illumina
|
|
GRAIL
|
|
Eliminations
|
|
Consolidated
|
|
GAAP gross profit
(loss) (b)
|
$
760
|
65.5 %
|
|
$ (24)
|
|
$
(4)
|
|
$
732
|
62.2 %
|
|
Amortization of
acquired intangible assets
|
14
|
1.2 %
|
|
33
|
|
—
|
|
47
|
4.0 %
|
|
Restructuring
(g)
|
3
|
0.3 %
|
|
—
|
|
—
|
|
3
|
0.3 %
|
|
Non-GAAP gross profit
(a)
|
$
777
|
67.0 %
|
|
$
9
|
|
$
(4)
|
|
$
782
|
66.5 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP R&D
expense
|
$
274
|
23.6 %
|
|
$
89
|
|
$
(5)
|
|
$
358
|
30.4 %
|
|
Acquisition-related
expenses (d)
|
(1)
|
(0.1) %
|
|
—
|
|
—
|
|
(1)
|
(0.1) %
|
|
Restructuring
(g)
|
(12)
|
(1.0) %
|
|
—
|
|
—
|
|
(12)
|
(1.0) %
|
|
Non-GAAP R&D
expense
|
$
261
|
22.5 %
|
|
$
89
|
|
$
(5)
|
|
$
345
|
29.3 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SG&A
expense
|
$
371
|
31.9 %
|
|
$
91
|
|
$
—
|
|
$
462
|
39.3 %
|
|
Amortization of
acquired intangible assets
|
—
|
—
|
|
(1)
|
|
—
|
|
(1)
|
(0.1) %
|
|
Contingent
consideration liabilities (c)
|
(29)
|
(2.5) %
|
|
—
|
|
—
|
|
(29)
|
(2.5) %
|
|
Acquisition-related
expenses (d)
|
(18)
|
(1.4) %
|
|
(3)
|
|
—
|
|
(21)
|
(1.8) %
|
|
Restructuring
(g)
|
(17)
|
(1.5) %
|
|
(2)
|
|
—
|
|
(19)
|
(1.6) %
|
|
Legal contingency and
settlement (k)
|
(12)
|
(1.0) %
|
|
—
|
|
—
|
|
(12)
|
(1.0) %
|
|
Proxy
contest
|
(25)
|
(2.2) %
|
|
—
|
|
—
|
|
(25)
|
(2.1) %
|
|
Non-GAAP SG&A
expense
|
$
270
|
23.3 %
|
|
$
85
|
|
$
—
|
|
$
355
|
30.2 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit (loss)
|
$
115
|
9.9 %
|
|
$ (204)
|
|
$
1
|
|
$ (88)
|
(7.5) %
|
|
Cost of
revenue
|
17
|
1.5 %
|
|
33
|
|
—
|
|
50
|
4.3 %
|
|
R&D
costs
|
13
|
1.1 %
|
|
—
|
|
—
|
|
13
|
1.1 %
|
|
SG&A
costs
|
100
|
8.7 %
|
|
7
|
|
—
|
|
107
|
9.1 %
|
|
Non-GAAP operating
profit (loss) (a)
|
$
245
|
21.2 %
|
|
$ (164)
|
|
$
1
|
|
$ 82
|
7.0 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense)
income, net
|
$ (3)
|
(0.3) %
|
|
$
2
|
|
$
—
|
|
$ (1)
|
(0.1) %
|
|
Strategic investment
related loss, net (e)
|
2
|
0.2 %
|
|
—
|
|
—
|
|
2
|
0.2 %
|
|
Non-GAAP other
(expense) income, net (a)
|
$ (1)
|
(0.1) %
|
|
$
2
|
|
$
—
|
|
$
1
|
0.1 %
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(Dollars in
millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND
NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
|
Six Months
Ended
|
|
June 30,
2024
|
|
Core
Illumina
|
|
GRAIL
|
|
Eliminations
|
|
Consolidated
|
|
GAAP gross profit
(loss) (b)
|
$
1,436
|
66.9 %
|
|
$
(38)
|
|
$
(10)
|
|
$
1,388
|
63.5 %
|
|
Amortization of
acquired intangible assets
|
30
|
1.4 %
|
|
65
|
|
—
|
|
95
|
4.3 %
|
|
Non-GAAP gross profit
(a)
|
$
1,466
|
68.3 %
|
|
$
27
|
|
$
(10)
|
|
$
1,483
|
67.8 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP R&D
expense
|
$
479
|
22.3 %
|
|
$ 189
|
|
$
(8)
|
|
$ 660
|
30.2 %
|
|
Restructuring
(g)
|
(2)
|
(0.1) %
|
|
—
|
|
—
|
|
(2)
|
(0.1) %
|
|
Non-GAAP R&D
expense
|
$
477
|
22.2 %
|
|
$ 189
|
|
$
(8)
|
|
$ 658
|
30.1 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SG&A
expense
|
$
396
|
18.5 %
|
|
$ 192
|
|
$
—
|
|
$ 588
|
26.9 %
|
|
Amortization of
acquired intangible assets
|
—
|
—
|
|
(2)
|
|
—
|
|
(2)
|
(0.1) %
|
|
Contingent
consideration liabilities (c)
|
255
|
11.9 %
|
|
—
|
|
—
|
|
255
|
11.7 %
|
|
Acquisition-related
expenses (d)
|
(70)
|
(3.3) %
|
|
(11)
|
|
—
|
|
(81)
|
(3.7) %
|
|
Restructuring
(g)
|
(38)
|
(1.8) %
|
|
(1)
|
|
—
|
|
(39)
|
(1.8) %
|
|
Accrued interest on EC
fine (h)
|
(14)
|
(0.7) %
|
|
—
|
|
—
|
|
(14)
|
(0.7) %
|
|
Non-GAAP SG&A
expense
|
$
529
|
24.6 %
|
|
$ 178
|
|
$
—
|
|
$ 707
|
32.3 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP goodwill and
intangible impairment
|
$
3
|
0.1 %
|
|
$
1,886
|
|
$
—
|
|
$
1,889
|
86.3 %
|
|
Goodwill impairment
(i)
|
—
|
—
|
|
(1,466)
|
|
—
|
|
(1,466)
|
(67.0) %
|
|
Intangible (IPR&D)
impairment (i)
|
(3)
|
(0.1) %
|
|
(420)
|
|
—
|
|
(423)
|
(19.3) %
|
|
Non-GAAP goodwill and
intangible impairment
|
$ —
|
—
|
|
$
—
|
|
$
—
|
|
$
—
|
—
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit (loss)
|
$
558
|
26.0 %
|
|
$
(2,305)
|
|
$
(2)
|
|
$
(1,749)
|
(79.9) %
|
|
Cost of
revenue
|
30
|
1.4 %
|
|
65
|
|
—
|
|
95
|
4.3 %
|
|
R&D
costs
|
2
|
0.1 %
|
|
—
|
|
—
|
|
2
|
0.1 %
|
|
SG&A
costs
|
(133)
|
(6.2) %
|
|
13
|
|
—
|
|
(120)
|
(5.4) %
|
|
Goodwill and intangible
impairment
|
3
|
0.1 %
|
|
1,886
|
|
—
|
|
1,889
|
86.3 %
|
|
Non-GAAP operating
profit (loss) (a)
|
$
460
|
21.4 %
|
|
$
(341)
|
|
$
(2)
|
|
$ 117
|
5.4 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense)
income, net
|
$
(342)
|
(15.9) %
|
|
$
5
|
|
$
—
|
|
$
(337)
|
(15.4) %
|
|
Strategic investment
related loss, net (e)
|
327
|
15.2 %
|
|
—
|
|
—
|
|
327
|
15.0 %
|
|
Gain on Helix
contingent value right (f)
|
(11)
|
(0.5) %
|
|
—
|
|
—
|
|
(11)
|
(0.5) %
|
|
Foreign currency loss
on EC fine (j)
|
3
|
0.1 %
|
|
—
|
|
—
|
|
3
|
0.1 %
|
|
Non-GAAP other
(expense) income, net (a)
|
$
(23)
|
(1.1) %
|
|
$
5
|
|
$
—
|
|
$ (18)
|
(0.8) %
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(Dollars in
millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND
NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
|
Six Months
Ended
|
|
July 2,
2023
|
|
Core
Illumina
|
|
GRAIL
|
|
Eliminations
|
|
Consolidated
|
|
GAAP gross profit
(loss) (b)
|
$ 1,446
|
64.7 %
|
|
$ (50)
|
|
$
(10)
|
|
$
1,386
|
61.3 %
|
|
Amortization of
acquired intangible assets
|
29
|
1.3 %
|
|
67
|
|
—
|
|
96
|
4.2 %
|
|
Restructuring
(g)
|
3
|
0.1 %
|
|
—
|
|
—
|
|
3
|
0.1 %
|
|
Non-GAAP gross profit
(a)
|
$ 1,478
|
66.1 %
|
|
$ 17
|
|
$
(10)
|
|
$
1,485
|
65.6 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP R&D
expense
|
$
532
|
23.7 %
|
|
$ 175
|
|
$
(8)
|
|
$ 699
|
30.9 %
|
|
Acquisition-related
expenses (d)
|
(1)
|
—
|
|
—
|
|
—
|
|
(1)
|
—
|
|
Restructuring
(g)
|
(13)
|
(0.5) %
|
|
—
|
|
—
|
|
(13)
|
(0.6) %
|
|
Non-GAAP R&D
expense
|
$
518
|
23.2 %
|
|
$ 175
|
|
$
(8)
|
|
$ 685
|
30.3 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP SG&A
expense
|
$
656
|
29.4 %
|
|
$ 184
|
|
$
(1)
|
|
$ 839
|
37.1 %
|
|
Amortization of
acquired intangible assets
|
—
|
—
|
|
(2)
|
|
—
|
|
(2)
|
(0.1) %
|
|
Contingent
consideration liabilities (c)
|
(28)
|
(1.3) %
|
|
—
|
|
—
|
|
(28)
|
(1.2) %
|
|
Acquisition-related
expenses (d)
|
(38)
|
(1.7) %
|
|
(9)
|
|
—
|
|
(47)
|
(2.1) %
|
|
Restructuring
(g)
|
(17)
|
(0.7) %
|
|
(2)
|
|
—
|
|
(19)
|
(0.8) %
|
|
Legal contingency and
settlement (k)
|
(15)
|
(0.7) %
|
|
—
|
|
—
|
|
(15)
|
(0.7) %
|
|
Proxy
contest
|
(31)
|
(1.4) %
|
|
—
|
|
—
|
|
(31)
|
(1.4) %
|
|
Non-GAAP SG&A
expense
|
$
527
|
23.6 %
|
|
$ 171
|
|
$
(1)
|
|
$ 697
|
30.8 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP operating
profit (loss)
|
$
257
|
11.5 %
|
|
$
(408)
|
|
$
(1)
|
|
$
(152)
|
(6.7) %
|
|
Cost of
revenue
|
32
|
1.4 %
|
|
67
|
|
—
|
|
99
|
4.3 %
|
|
R&D
costs
|
14
|
0.6 %
|
|
—
|
|
—
|
|
14
|
0.6 %
|
|
SG&A
costs
|
129
|
5.8 %
|
|
13
|
|
—
|
|
142
|
6.3 %
|
|
Non-GAAP operating
profit (loss) (a)
|
$
432
|
19.3 %
|
|
$
(328)
|
|
$
(1)
|
|
$ 103
|
4.5 %
|
|
|
|
|
|
|
|
|
|
|
|
GAAP other (expense)
income, net
|
$
(19)
|
(0.9) %
|
|
$
4
|
|
$
—
|
|
$ (15)
|
(0.7) %
|
|
Strategic investment
related loss, net (e)
|
16
|
0.7 %
|
|
—
|
|
—
|
|
16
|
0.7 %
|
|
Gain on Helix
contingent value right (f)
|
(3)
|
(0.1) %
|
|
—
|
|
—
|
|
(3)
|
(0.1) %
|
|
Non-GAAP other
(expense) income, net (a)
|
$ (6)
|
(0.3) %
|
|
$
4
|
|
$
—
|
|
$ (2)
|
(0.1) %
|
|
|
All amounts in
tables are rounded to the nearest millions, except as otherwise
noted. As a result, certain amounts may not recalculate using the
rounded amounts provided. Percentages of revenue are calculated
based on the revenue of the respective segment.
|
|
|
(a) Non-GAAP
gross profit, included within non-GAAP operating profit (loss), is
a key measure of the effectiveness and efficiency of manufacturing
processes, product mix and the average selling prices of our
products and services. Non-GAAP operating profit (loss) and
non-GAAP other (expense) income, net exclude the effects of the pro
forma adjustments as detailed above. Non-GAAP operating margin is a
key component of the financial metrics utilized by the company's
board of directors to measure, in part, management's performance
and determine significant elements of management's compensation.
Management has excluded the effects of these items in these
measures to assist investors in analyzing and assessing past and
future operating performance, including in the non-GAAP measures
related to our segments.
|
|
(b) Reconciling
amounts are recorded in cost of revenue.
|
|
(c) Amounts
consist of fair value adjustments for our contingent consideration
liability related to GRAIL.
|
|
(d) Amounts
consist primarily of legal and other expenses related to the
acquisition and divestiture of GRAIL.
|
|
(e) Amounts
consist primarily of mark-to-market adjustments and impairments
from our strategic investments. Amounts for Q2 2024 and YTD 2024
primarily relate to the impairment on our retained investment in
GRAIL post spin-off.
|
|
(f) Amounts
consist of fair value adjustments related to our Helix contingent
value right.
|
|
(g) Amount for
Q2 2024 consists primarily of employee severance costs. Amount for
YTD 2024 consists primarily of lease and other asset impairments.
Amounts for Q2 2023 and YTD 2023 consist primarily of employee
severance costs and lease and other asset impairments.
|
|
(h) Amounts for
Q2 2024 and YTD 2024 consist of accrued interest on the fine
imposed by the European Commission.
|
|
(i) Amounts
for Q2 2024 and YTD 2024 consist of goodwill and IPR&D
intangible asset impairments related to GRAIL. Amount for YTD 2024
also consists of an IPR&D intangible asset impairment related
to Core Illumina in Q1 2024.
|
|
(j) Amounts for
Q2 2024 and YTD 2024 consist of unrealized gains/losses related to
foreign currency balance sheet remeasurement of the EC fine
liability and unrealized/realized mark-to-market gains/losses on
the hedge associated with the EC fine.
|
|
(k) Amount for
Q2 2023 consists of an adjustment to our accrual for the fine
imposed by the European Commission. Amount for YTD 2023 also
consists of a loss related to a patent litigation settlement in Q1
2023.
|
Illumina, Inc.
Results of Operations
- Non-GAAP (continued)
(Dollars in
millions)
(unaudited)
TABLE 6: CONSOLIDATED ITEMIZED RECONCILIATION BETWEEN GAAP
AND NON-GAAP TAX PROVISION:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
June 30,
2024
|
|
GAAP tax
provision
|
$
12
|
(0.6) %
|
|
$
28
|
(1.4) %
|
|
Incremental non-GAAP
tax expense (b)
|
104
|
|
|
117
|
|
|
Income tax provision
(c)
|
(1)
|
|
|
(1)
|
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (d)
|
(99)
|
|
|
(116)
|
|
|
Non-GAAP tax provision
(a)
|
$
16
|
22.3 %
|
|
$
28
|
28.8 %
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
July 2,
2023
|
|
July 2,
2023
|
|
GAAP tax
provision
|
$ 145
|
(163.8) %
|
|
$
64
|
(38.5) %
|
|
Incremental non-GAAP
tax expense (b)
|
(43)
|
|
|
6
|
|
|
Income tax provision
(c)
|
—
|
|
|
(8)
|
|
|
GILTI and U.S. foreign
tax credits (d)
|
(69)
|
|
|
(25)
|
|
|
Non-GAAP tax provision
(a)
|
$
33
|
39.3 %
|
|
$
37
|
37.2 %
|
TABLE 7: CORE ILLUMINA ITEMIZED RECONCILIATION
BETWEEN GAAP AND NON-GAAP TAX PROVISION:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2024
|
|
June 30,
2024
|
|
GAAP tax
provision
|
$
35
|
35.0 %
|
|
$
80
|
37.3 %
|
|
Incremental non-GAAP
tax expense (b)
|
41
|
|
|
62
|
|
|
Income tax provision
(c)
|
(1)
|
|
|
(1)
|
|
|
GILTI, U.S. foreign tax
credits, and global minimum top-up tax (d)
|
(20)
|
|
|
(33)
|
|
|
Non-GAAP tax provision
(a)
|
$
55
|
24.2 %
|
|
$
108
|
24.9 %
|
|
|
(a) Non-GAAP tax
provision excludes the effects of the pro forma adjustments as
detailed above. Management has excluded the effects of these items
in this measure to assist investors in analyzing and assessing past
and future operating performance.
|
|
(b) Incremental
non-GAAP tax expense reflects the tax impact of the non-GAAP
adjustments listed in Table 2 and 4.
|
|
(c) Amounts
represent the difference between book and tax accounting related to
stock-based compensation cost.
|
|
(d) Amounts
represent the impact of GRAIL pre-acquisition net operating losses
on GILTI, the utilization of U.S. foreign tax credits, and the
Pillar Two global minimum top-up tax, which became effective in Q1
2024.
|
Investors:
Salli Schwartz
+1.858.291.6421
ir@illumina.com
Media:
Bonny Fowler
+1.740.641.5579
pr@illumina.com
View original
content:https://www.prnewswire.com/news-releases/illumina-reports-financial-results-for-second-quarter-of-fiscal-year-2024-302215890.html
SOURCE Illumina, Inc.