Illumina (NASDAQ:ILMN) reported fourth-quarter 2025 results that management said exceeded expectations, driven primarily by accelerating clinical consumables demand outside China and stronger-than-anticipated NovaSeq X instrument placements. On the company’s earnings call, CEO Jacob Thaysen and CFO Ankur Dhingra also outlined Illumina’s 2026 outlook, emphasizing continued clinical momentum alongside ongoing pressure in research and academic markets.
Q4 results led by clinical consumables and NovaSeq X placements
Illumina posted fourth-quarter revenue of $1.16 billion, up 5% year-over-year on a reported basis and 4% on a constant-currency basis. Dhingra said revenue came in above internal expectations due to strength in clinical consumables, better-than-expected NovaSeq X placements, and “outperformance in China,” with a small benefit from year-end budget purchasing.
Sequencing consumables revenue totaled $755 million, increasing 8% year-over-year and 11% excluding China. Dhingra attributed the growth to high-throughput volume increases as customers in research and clinical markets ramped utilization of NovaSeq X systems. Management highlighted that clinical consumables revenue grew 20% outside of China in Q4, which Thaysen said reflected increased adoption of sequencing-based diagnostic tests and broader demand for more sequencing-intensive applications such as comprehensive genomic profiling and whole genome approaches.
Sequencing instrument revenue was $154 million, approximately flat year-over-year and up 3% excluding China, driven by NovaSeq X and MiSeq i100 placements. In Greater China, instrument revenue was down 55% due to export restrictions. Globally, Illumina placed over 100 NovaSeq X systems in Q4 (including about five on rental or lease contracts), bringing the active install base to 890 instruments. Management noted that more than 60% of NovaSeq X systems placed in Q4 went to clinical customers.
Service and other revenue was $157 million, up about 3% year-over-year (and 4% excluding China). Dhingra said strategic partnerships and the timing of data deals were “lumpy” in 2025, but Q4 returned to growth.
Transition to NovaSeq X and sequencing activity trends
Management provided an update on the company’s ongoing platform transition. As of Q4, Illumina said roughly 80% of volumes and 55% of revenue had transitioned to NovaSeq X. The research transition was described as nearing completion, with about 90% of high-throughput sequencing volumes for research customers now on X. Dhingra said Illumina expects pricing headwinds from the transition to continue dissipating for research customers, “especially in the second half of 2026.”
Clinical volume was said to be more than two-thirds converted to X, and management suggested future pricing dynamics may be more tied to new applications such as whole genome sequencing that drive higher volumes. The company expects the conversion to be “substantially complete” by the end of 2026.
On usage, Dhingra said total sequencing gigabase output on Illumina’s connected high- and mid-throughput instruments grew at a rate of more than 30% year-over-year, driven by robust clinical strength and more muted growth in research.
Margins, earnings, and capital deployment
Non-GAAP gross margin was 67%, down 40 basis points year-over-year. Dhingra said tariffs created a 205 basis point headwind; excluding tariffs, gross margin improved by 165 basis points. Non-GAAP operating expenses were $502 million, down 5% year-over-year, reflecting cost reduction programs and prioritization of growth investments.
Non-GAAP operating margin was 23.7%, expanding 400 basis points year-over-year, and Dhingra said operating profit grew about 26% on increased operating leverage. Non-GAAP EPS was $1.35, up about 42% year-over-year and above guidance.
Illumina generated $321 million of operating cash flow in Q4 and $1.1 billion for the full year. Q4 free cash flow was $267 million, and full-year free cash flow was $931 million. The company repurchased 337,000 shares in Q4 for $42 million at an average price of $124.12. Illumina ended the quarter with $643 million remaining on its share repurchase authorization and said it intends to continue repurchases opportunistically.
SomaLogic acquisition and multi-omics and data initiatives
Thaysen emphasized Illumina’s strategy, first introduced in 2024, built around three pillars: core sequencing, scaling multi-omics, and expanding services, data, and software capabilities. As part of its multi-omics push, Illumina completed the acquisition of SomaLogic, which Dhingra said closed on January 30 for an upfront payment of $350 million, funded with cash on hand, plus potential royalties and milestone payments.
Thaysen described SomaLogic’s aptamer-based affinity proteomics platform as enabling high-sensitivity, high-throughput profiling of thousands of protein markers in a single experiment. He also pointed to the company’s launch of Illumina Connected Multi-Omics software to help integrate and interpret data across different data types.
Illumina also discussed its BioInsight initiative, launched in Q4, which management positioned as a way to support discovery and drug development through data, software, and AI. Thaysen said BioInsight’s first data product, the Billion Cell Atlas, has drawn interest from biopharma partners, and the company announced initial collaborations with AstraZeneca, Merck, and Eli Lilly. Dhingra said Illumina views BioInsight as a multi-year opportunity, with potential monetization through specialized data and AI tools and, over time, “subscription-based models” for pharma customers.
Looking ahead, management said Illumina remains on track to introduce a spatial transcriptomic solution in the first half of 2026, along with its constellation map read technology over the same time frame. Thaysen said newer assays and offerings in multi-omics and BioInsight are expected to become more meaningful contributors starting in 2027 and beyond.
2026 outlook: clinical strength offset by research weakness and China headwinds
For 2026, Illumina guided to total revenue of $4.5 billion to $4.6 billion, representing reported growth of 4% to 6%. Management expects 2% to 4% organic revenue growth excluding China. Dhingra said foreign exchange is expected to add roughly one point to reported growth, while the SomaLogic acquisition is expected to add 1.5 to 2 points of revenue growth. China is expected to be a one-point headwind to total company growth, with China sales projected at $210 million to $220 million.
Thaysen said the outlook assumes continued robust clinical consumables growth, with guidance calling for double-digit to mid-teens clinical growth in 2026. At the same time, the company expects “no fundamental changes” in academic end markets, resulting in mid-to-high single-digit declines in research and applied consumables revenue. Instruments are expected to be roughly flat to slightly down, and Illumina reiterated a target of placing 50 to 60 NovaSeq X instruments per quarter on average through 2026.
On profitability, Illumina guided to 2026 non-GAAP operating margins of 23.3% to 23.5%. Dhingra said margins would expand about 130 basis points excluding acquisition impact, while SomaLogic is expected to have a 100 basis point impact to margins. EPS guidance was $5.05 to $5.20, including $0.18 of dilution from SomaLogic at the midpoint.
For the first quarter of 2026, management guided to revenue of $1.06 billion to $1.08 billion and EPS of $1.02 to $1.07, including $0.04 of deal dilution.
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.
