Illumina (NASDAQ:ILMN) reported first-quarter 2026 results that came in above its guidance range on revenue, margins, and earnings per share, supported by strength in clinical demand and better-than-expected NovaSeq X instrument placements. Chief Executive Officer Jacob Thaysen said the company was “off to a great start in 2026,” citing “disciplined execution across the organization” and growth across all regions excluding China.
Q1 results top guidance as NovaSeq X placements exceed targets
Chief Financial Officer Ankur Dhingra said first-quarter revenue was $1.09 billion, “$20 million above the midpoint of our guidance,” driven primarily by instrument strength. Illumina placed more than 80 NovaSeq X instruments in the quarter, above its targeted range of 50 to 60 placements per quarter, and Dhingra said clinical consumables also came in at the high end of expectations. Non-GAAP diluted EPS was $1.15, up about 19% year-over-year and roughly $0.10 above the midpoint of guidance.
- Sequencing consumables: $726 million, up 4% year-over-year; rest-of-world organic growth of 5%.
- Sequencing instruments: $118 million, up 9% year-over-year; 10% rest-of-world organic growth.
- Sequencing service and other: $151 million, up 7% year-over-year; 5% rest-of-world organic growth.
Dhingra said high-throughput volume drove most consumables growth as the NovaSeq X install base expanded and utilization increased. He also noted that total sequencing gigabase output on connected high- and mid-throughput instruments grew “greater than 30% year-over-year,” with clinical growth “well above that.”
Clinical demand remains a bright spot; research and applied stay cautious
Management repeatedly emphasized clinical momentum. Thaysen said clinical represented “more than 65% of our sequencing consumables revenue in the quarter,” helped by the “expansion of sequencing-based diagnostics” and “more data-intensive applications.” Dhingra added that clinical sequencing consumable demand grew 20% outside China for the second consecutive quarter, driven by expansion of clinical volumes and adoption of “information-rich, sequencing-intensive tests in new trials.”
By contrast, Dhingra said sequencing consumables in research and applied declined 12% outside China, reflecting continued uncertainty in the funding environment. Thaysen said demand in research and academic markets “remains cautious as customers navigate funding uncertainty,” though he added that Illumina expects a return to growth when uncertainties ease.
In response to analyst questions about research funding, Thaysen pointed to what he described as “alignment from D.C. around the commitment to NIH funding,” while noting that it can take time for released grants to translate into tool and consumables purchases. He characterized potential improvement during the year as upside that is not meaningfully embedded in current guidance.
Illumina also provided details on NovaSeq X migration trends. Dhingra said that as of Q1, about 82% of volumes and 55% of revenue had transitioned to NovaSeq X, with 90% of research and applied volume and 76% of clinical volume on the platform. He said the company continues to expect over 80% to 85% of clinical volumes will be on NovaSeq X by the end of 2026.
Product updates highlight workflow focus and NovaSeq X roadmap
Thaysen said Illumina’s innovation strategy was on display during the quarter, including at AGBT, where the company emphasized an end-to-end workflow approach. He highlighted a launch of TruPath, which he said enables whole genome sequencing without traditional library prep and reduces hands-on time to “about 10 minutes.” Thaysen said customer interest has been strong, particularly in rare disease, and that several customers are already in clinical studies using TruPath.
Thaysen also discussed Illumina’s spatial transcriptomics offering, saying early access users have shown it can generate data in challenging sample types such as lymphatic tissue. He said the company remains on track to launch the offering later in 2026.
For NovaSeq X, Thaysen outlined an 18-month roadmap that includes new 14B and 35B flow cells, staggered flow cell runs, and improvements aimed at Q70 performance. He said these updates should provide more flexibility, throughput, and workflow efficiency, and added that Illumina exited the quarter with a “solid backlog,” supporting an increase in its full-year instrument outlook.
Margins expand; SomaLogic acquisition closes and share repurchase authorization increases
Dhingra reported non-GAAP gross margin of 68.2%, up 80 basis points year-over-year, driven by cost efficiencies and higher revenue and partly offset by tariffs. Non-GAAP operating expenses were $506 million, up 3% year-over-year, which he said largely reflected the addition of the SomaLogic team. Non-GAAP operating margin was 21.9%.
On capital deployment, Dhingra said operating cash flow was $289 million, capital expenditures were $38 million, and free cash flow was $251 million. Illumina repurchased 2 million shares for approximately $242 million at an average price of $120.85 per share, leaving about $400 million remaining on its then-current authorization. Dhingra said the board also authorized an additional $1.5 billion in share repurchases.
Illumina closed its acquisition of SomaLogic on Jan. 30 for a net cash payment of $363 million, plus potential royalties and milestone payments. Dhingra said Illumina paid a first $25 million milestone after quarter end for achievement of certain 2025 targets. He added that SomaLogic is reported “mostly in the microarrays.”
At quarter end, Illumina had approximately $1.16 billion in cash equivalents and short-term investments, and gross leverage of about 1.5x gross debt to last-12-months EBITDA.
Guidance raised for 2026 and Q2 as NovaSeq X demand remains strong
Following the Q1 outperformance, Dhingra said Illumina raised its 2026 reported revenue outlook by $20 million to $4.52 billion to $4.62 billion. He said acquired revenue is still expected to contribute 1.5 to 2 points of growth, and currency is expected to add about 1% growth. He also reiterated that end-market conditions remain consistent with expectations: strong clinical demand and continued caution in research and applied markets.
Illumina lifted its full-year instrument outlook to flat to low single-digit growth year-over-year, which Dhingra attributed to “very strong NovaSeq X demand.” He said the company was supply constrained in Q1 and is investing to scale supply, with progress expected through Q2 and into Q3.
Profitability expectations were also increased. Dhingra said Illumina now expects operating margin of 23.4% to 23.6% for 2026 and non-GAAP diluted EPS of $5.15 to $5.30, with both ends of the EPS range raised by $0.10. For Q2, Illumina guided to rest-of-world organic revenue growth of 4% to 6%, reported revenue of $1.12 billion to $1.14 billion, and non-GAAP EPS of $1.20 to $1.25. Dhingra said Q2 operating margin is expected to be about 22%, reflecting a higher instrument mix, investments to scale NovaSeq X supply, near-term inflationary pressures such as freight and electronic component costs, and a full quarter of SomaLogic.
In the Q&A, Thaysen said Illumina was not seeing signs of deceleration in clinical markets and described mid-teens clinical growth as strong, while acknowledging it could be upside if higher. On competitive questions, Thaysen said Illumina did not see a substantial change in the competitive environment and emphasized the company’s focus on instrument placements as a driver of consumables pull-through over time. Dhingra noted that performance obligations were up more than 20% year-over-year, which he said reflected strength in both instruments and consumables.
About Illumina (NASDAQ:ILMN)
Illumina, Inc (NASDAQ: ILMN) is a global life sciences company that develops, manufactures and markets integrated systems for the analysis of genetic variation and function. Headquartered in San Diego, California and founded in 1998, Illumina offers a range of sequencing and array-based technologies used by academic researchers, clinical laboratories, pharmaceutical and biotechnology companies, consumer genomics firms and agricultural researchers to enable discovery, translational research and clinical applications.
The company’s product portfolio includes next-generation sequencing (NGS) platforms and associated consumables, microarrays for genotyping and methylation analysis, library preparation kits and targeted assays.
