Illumina’s second quarter performance in 2025 was met with a significant negative market reaction, as shares declined in response to ongoing revenue contraction and sharply lower operating margins. Management attributed the sales decline primarily to continued weakness in the U.S. research funding environment, where academic and government customers delayed projects due to uncertainty around National Institutes of Health (NIH) grants. CEO Jacob Thaysen highlighted that “the research environment, particularly in the U.S., remains constrained,” and confirmed that while clinical segment demand proved resilient, softness in research spending weighed on overall results.
Is now the time to buy ILMN? Find out in our full research report (it’s free).
Illumina (ILMN) Q2 CY2025 Highlights:
- Revenue: $1.06 billion vs analyst estimates of $1.05 billion (3% year-on-year decline, 1% beat)
- Adjusted EPS: $1.19 vs analyst estimates of $1.01 (17.7% beat)
- Adjusted EBITDA: $312.3 million vs analyst estimates of $265.1 million (29.5% margin, 17.8% beat)
- Management raised its full-year Adjusted EPS guidance to $4.50 at the midpoint, a 5.9% increase
- Operating Margin: 20.2%, down from 40.5% in the same quarter last year
- Organic Revenue fell 3.4% year on year vs analyst estimates of 3.3% declines (in line)
- Market Capitalization: $14.97 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 Q2 Earnings Call
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Vijay Muniyappa (Evercore): Asked about the guide change and pipeline impact. CEO Jacob Thaysen emphasized early positive feedback from customers on upcoming products but said meaningful revenue impact will begin in 2026.
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Subhalaxmi T. Nambi (Guggenheim): Inquired about competitive threats, especially Roche’s platform. Thaysen responded that Illumina is focused on customer needs and sees its R&D scale and customer engagement as advantages, with ongoing innovation to address fast turnaround applications.
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Puneet Souda (Leerink): Questioned if there was a pull-forward in clinical consumable orders ahead of tariffs. Thaysen clarified no significant pull-forward was observed, and the NovaSeq X transition remains gradual and customer-driven.
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Douglas Anthony Schenkel (Wolfe): Sought clarity on growth expectations post-2025 amid research and China headwinds. Thaysen suggested clinical and multiomics will drive growth, but stopped short of providing explicit guidance for 2026.
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Tycho W. Peterson (Jefferies): Asked about the pace of NovaSeq X placements and software advancements. Thaysen said prior strong placements are still ramping into production, expecting continued but non-linear transition; Dhingra highlighted cost actions as the main margin driver.
Catalysts in Upcoming Quarters
In coming quarters, the StockStory team will focus on (1) the pace of NovaSeq X adoption among clinical customers and associated increases in consumables usage, (2) the rollout and early uptake of the MiSeq i100 and feedback from new labs, and (3) progress on integrating SomaLogic’s proteomics technology and its commercial impact. Monitoring margin trends as operational cost actions take hold will also be a key indicator of execution.
Illumina currently trades at $98, down from $102.81 just before the earnings. Is there an opportunity in the stock?The answer lies in our full research report (it’s free).
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