ILLUMINA, INC.

For the period ended Mar 29, 2026. Filed May 4, 2026.

About this filing

A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.

Mar 29, 2026 · Filed May 4, 2026

ILMN$214.91-2.7%Stored close · as of Nov 10, 2026

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Contents

Item 2. Results of Operations

RESULTS OF OPERATIONS

To enhance comparability, the following table sets forth unaudited condensed consolidated statement of operations data for the specified reporting periods, stated as a percentage of total revenue.(1)

	Q1 2026	Q1 2025
Revenue:
Product revenue	84.1%	84.5%
Service and other revenue	15.9	15.5
Total revenue	100.0	100.0
Cost of revenue:
Cost of product revenue	25.0	24.3
Cost of service and other revenue	7.3	8.5
Amortization of acquired intangible assets	1.6	1.6
Total cost of revenue	33.9	34.4
Gross profit	66.1	65.6
Operating expense:
Research and development	22.0	24.2
Selling, general and administrative	24.9	25.6
Total operating expense	46.9	49.8
Income from operations	19.2	15.8
Other income (expense):
Interest income	1.0	1.1
Interest expense	(2.2)	(2.4)
Other (expense) income, net	(3.6)	3.0
Total other (expense) income, net	(4.8)	1.7
Income before income taxes	14.4	17.5
Provision for income taxes	2.1	4.9
Net income	12.3%	12.6%

(1)Percentages may not recalculate due to rounding.

Revenue

Dollars in millions	Q1 2026	Q1 2025	Change	% Change
Consumables	$797	$768	$29	4%
Instruments	120	112	8	7
Total product revenue	917	880	37	4
Service and other revenue	174	161	13	8
Total revenue	$1,091	$1,041	$50	5%

The increase in consumables revenue in Q1 2026 was primarily due to demand for high-throughput consumables as the NovaSeq X installed base continues to grow. Instruments revenue increased in Q1 2026 primarily driven by increased NovaSeq X shipments. Service and other revenue increased in Q1 2026 primarily due to revenue attributable to SomaLogic. Total revenue in Q1 2026 was impacted, across all products and services, by a decrease in revenue in our Greater China region of $20 million primarily due to our inclusion on the unreliable entities list.

Gross Margin

Dollars in millions	Q1 2026	Q1 2025	Change	% Change
Gross profit	$721	$683	$38	6%
Gross margin	66.1%	65.6%

Gross margin increased in Q1 2026 primarily due to decreases in field service and warranty costs and higher product margins, partially offset by the addition of SomaLogic revenue that is lower margin and higher tariff costs.

Operating Expense

Dollars in millions	Q1 2026	Q1 2025	Change	% Change
Research and development	$240	$252	$(12)	(5)%
Selling, general and administrative	272	267	5	2
Total operating expense	$512	$519	$(7)	(1)%

R&D expense decreased by $12 million, or 5%, in Q1 2026 primarily due to a decrease in restructuring charges of $11 million. SG&A expense increased by $5 million, or 2%, in Q1 2026 primarily due to an increase in outside professional services, primarily related to our global enterprise resource planning (ERP) system upgrade and legal expenses, and an increase in acquisition-related costs, primarily related to the SomaLogic acquisition. These increases were partially offset by a decrease in restructuring charges of $17 million.

Other Income (Expense)

Dollars in millions	Q1 2026	Q1 2025	Change	% Change
Interest income	$11	$11	$—	—%
Interest expense	(24)	(25)	1	(4)
Other (expense) income, net	(39)	32	(71)	(222)
Total other (expense) income, net	$(52)	$18	$(70)	(389)%

Interest income consisted primarily of interest on our money market funds. Interest expense consisted primarily of interest on our outstanding term debt. The fluctuation in other (expense) income, net in Q1 2026 was primarily due to a net loss recognized on our strategic investments in Q1 2026, consisting of realized and unrealized activity, compared to a net gain recognized in Q1 2025, primarily related to our retained GRAIL investment in both periods.

Provision for Income Taxes

Dollars in millions	Q1 2026	Q1 2025	Change	% Change
Income before income taxes	$157	$182	$(25)	(14)%
Provision for income taxes	23	51	(28)	(55)
Net income	$134	$131	$3	2%
Effective tax rate	14.8%	27.9%

Our effective tax rate was 14.8% in Q1 2026 compared to 27.9% in Q1 2025. The variance from the U.S. federal statutory tax rate of 21% for Q1 2026 was primarily due to prior year tax return adjustments. The tax rate in Q1 2026 was favorably impacted by the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore. In Q1 2025, the variance from the U.S. federal statutory tax rate of 21% was primarily due to the $10 million income tax expense impact of capitalizing research and development expenses for tax purposes. The income tax rate in Q1 2025 was favorably impacted by the mix of earnings in jurisdictions with lower statutory tax rates than the U.S. federal statutory tax rate, such as in Singapore.

Our future effective tax rate may vary from the U.S. federal statutory tax rate due to the mix of earnings in tax jurisdictions with different statutory tax rates and the other factors discussed in the risk factor “We are subject to risks related to taxation in multiple jurisdictions” described in “Risk Factors” within the Business & Market Information section of our Annual Report on Form 10-K for the fiscal year ended December 28, 2025.

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