ILLUMINA, INC.

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)

(1)Percentages may not recalculate due to rounding.

Revenue

Consumables revenue increased in Q2 2026 and YTD 2026 primarily due to greater demand for high-throughput consumables, supported by continued growth of the NovaSeq X installed base, partially offset by a decrease in mid-throughput consumables. Instruments revenue increased in Q2 2026 and YTD 2026 primarily driven by higher NovaSeq X and MiSeq i100 shipments. Service and other revenue increased in Q2 2026 and YTD 2026 primarily due to revenue attributable to SomaLogic, which we acquired in January 2026, and increases in revenue from our development and licensing agreements and informatics solutions. Total revenue in Q2 2026 and YTD 2026 was impacted, across all products and services, by a decrease in revenue from our Greater China region of $7 million and $27 million, respectively, primarily due to our inclusion on the unreliable entities list.

Gross Margin

Gross margin increased in Q2 2026 and YTD 2026 primarily due to a $23 million intangible asset impairment recognized in Q2 2025. Excluding this impact, gross margin decreased in Q2 2026 and YTD 2026. The decrease in Q2 2026 is primarily due to an increased sales mix toward lower-margin instruments as compared to higher-margin consumables, rising memory costs, higher freight costs resulting from the Middle East conflict, and the contribution of lower-margin SomaLogic revenue, partially offset by lower tariff costs as a result of ongoing operational initiatives. The decrease in YTD 2026 is primarily due to higher tariff costs, an increased sales mix toward instruments as compared to consumables, rising memory and higher freight costs, and the addition of SomaLogic revenue, partially offset by decreases in field service and warranty costs.

Operating Expense

R&D expense increased in Q2 2026 primarily due to increases in lab supply and employee-related compensation costs, partially offset by a decrease in restructuring charges of $4 million and an increase in government incentive benefits of $3 million. R&D expense decreased in YTD 2026 primarily due to a decrease in restructuring charges of $14 million and an increase in government incentives of $7 million, partially offset by increases in lab supply costs.

SG&A expense increased in Q2 2026 and YTD 2026 primarily due to:

• increase in employee-related compensation costs

• increase in legal expenses related primarily to various IP litigation matters

• lower net gain recognized on contingent consideration liabilities in Q2 2026; flat in YTD 2026

• increase in costs associated with the upgrade of our global enterprise resource planning (ERP) system

• decrease in restructuring charges of $3 million and $22 million, respectively, for employee severance costs

• increase in government incentive benefits of $15 million and $14 million, respectively

Other Income (Expense)

Interest income consisted primarily of interest on our money market funds. Interest expense consisted primarily of interest on our outstanding term debt. The decrease in other income (expense), net in Q2 2026 was primarily due to a comparatively larger gain recognized on our retained GRAIL investment in Q2 2025. The fluctuation in other income (expense), net in YTD 2026 was primarily due to a net loss recognized on our GRAIL investment in YTD 2026, consisting of realized and unrealized activity, compared to a considerable net gain recognized in YTD 2025.

Provision for Income Taxes

Our effective tax rate was 20.5% and 18.4% in Q2 2026 and YTD 2026, compared to 23.4% and 25.1% in Q2 2025 and YTD 2025, respectively. The variance from the U.S. federal statutory tax rate of 21% for YTD 2026 was primarily due to prior year tax return adjustments. The tax rate in Q2 2026 and YTD 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 Q2 2025 and YTD 2025, the variance from the U.S. federal statutory tax rate of 21% was primarily due to the $10 million and $20 million income tax expense impact of capitalizing research and development expenses for tax purposes, respectively. The income tax rate in Q2 2025 and YTD 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.