Executive Summary

Q3 2025 revenue and EPS beat: Revenue $1.084B (+0% y/y; +2% ex-China) vs S&P consensus $1.065B*, non‑GAAP EPS $1.34 vs $1.17*; non‑GAAP operating margin expanded to 24.5% (vs 22.6% y/y; 23.8% in Q2) . Results exceeded the high end of guidance, driven by clinical consumables strength and NovaSeq X adoption .
Guidance raised: FY25 constant-currency revenue decline improved to (1.5%)–(0.5%) (from (2.5%)–(1.5%)); non‑GAAP OM to 22.75%–23% (from 22%–22.5%); non‑GAAP EPS to $4.65–$4.75 (from $4.45–$4.55). Q4 implies ex‑China +4% growth and ~$33M from China .
Clinical led the quarter: sequencing consumables $747M; double‑digit clinical growth ex‑China; Greater China revenue $52M; instruments $107M; services/other $147M (timing headwind) .
NovaSeq X transition on track: >55 placements; 78% of high‑throughput volume and 51% of revenue on X; research 91% transitioned, clinical ~64% .
Margin drivers: Base business gross margin up ~90 bps y/y excluding tariffs; tariffs were a ~220 bps y/y headwind to gross margin; continued cost discipline and share repurchases ($120M) support EPS leverage .

What Went Well and What Went Wrong

What Went Well

Clinical momentum and beat: “Q325 results...exceeded the high‑end of our guidance...driven by revenue acceleration in clinical,” and ex‑China growth returned to positive (~2% y/y) .
NovaSeq X transition ahead of plan: >55 X placements; high‑throughput volumes 78% and revenue 51% on X; research 91%, clinical ~64% transitioned—supporting consumables elasticity .
Margin execution: Non‑GAAP OM 24.5% (+190 bps y/y), non‑GAAP EPS $1.34, with base gross margin +~90 bps y/y excluding tariffs; operating leverage from cost structure improvements .

What Went Wrong

Research softness and services timing: Research/applied consumables declined high single digits ex‑China; services/other $147M (‑~3% y/y) on partnership revenue timing .
Tariffs and China remain headwinds: Tariffs reduced gross margin by ~220 bps y/y; China revenue limited by export restrictions (Q3 China revenue $52M); resolution remains uncertain .
Flat top-line y/y: Revenue $1.084B was flat y/y on both reported and constant currency bases despite execution—reflecting lingering pricing and macro pressures .

Financial Results

Headline Financials – GAAP and Non‑GAAP (Q1→Q3 2025)

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($B)	$1.041	$1.059	$1.084
GAAP Operating Margin	15.8%	20.2%	21.0%
Non‑GAAP Operating Margin	20.4%	23.8%	24.5%
GAAP Diluted EPS	$0.82	$1.49	$0.98
Non‑GAAP Diluted EPS	$0.97	$1.19	$1.34

Notes: Q3 2025 revenue flat y/y ($1.084B vs $1.080B) and +2% ex‑China .

Segment Detail – Revenue Mix and Geography

Metric	Q2 2025	Q3 2025
Sequencing Consumables ($M)	$740	$747
Sequencing Instruments ($M)	$96	$107
Sequencing Services & Other ($M)	$136	$147
Greater China Revenue ($M)	$63	$52
Ex‑China Revenue Growth (y/y)	(2)% CC	~+2%

Operating/CF Highlights and Balance Sheet

Cash from operations $284M; capex $31M; free cash flow $253M; cash+ST investments ~$1.28B; repurchased ~1.2M shares for $120M .

KPIs – NovaSeq X Transition and Utilization

KPI	Q2 2025	Q3 2025
NovaSeq X placements (units)	>50	>55
High‑throughput volumes on X (%)	69%	78%
High‑throughput revenue on X (%)	44%	51%
Research volumes on X (%)	>80%	91%
Clinical volumes on X (%)	~55%	~64%
Total sequencing GB output growth	>30% y/y	>30% y/y

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Company CC Revenue Growth	FY 2025	(2.5%) to (1.5%)	(1.5%) to (0.5%)	Raised
Revenue ex‑China (CC)	FY 2025	0%–2% (midpoint unchanged)	0.5%–1.5% (midpoint unchanged)	Maintained midpoint
Greater China Revenue	FY 2025	~$200M (mid)	~$220M	Raised
Non‑GAAP Operating Margin	FY 2025	22%–22.5%	22.75%–23%	Raised
Non‑GAAP Diluted EPS	FY 2025	$4.45–$4.55	$4.65–$4.75	Raised
Q4 ex‑China Revenue Growth (implied)	Q4 2025	—	~+4% ex‑China; China ~$33M	New detail

Earnings Call Themes & Trends

Topic	Q1 2025	Q2 2025	Q3 2025	Trend
Multi‑omics & product roadmap	Roadmap unveiled (spatial, single‑cell, CRISPR); focus on differentiation	Announced SomaLogic acquisition; MiSeq i100 Plus momentum	Launched 5‑base solution; Protein Prep; introduced BioInsight; Constellation mapped read	Expanding solutions beyond sequencing
Supply chain/tariffs	$85M tariff headwind; OM/EPS guidance cut	Net tariff impact ~110 bps in Q2	~220 bps GM y/y headwind; mitigation underway	Persistent headwind, mitigation in progress
Research funding/macro	Funding uncertainty pressuring demand	US research constrained; mid‑throughput weakness	Research muted; stabilization expected; ex‑China clinical growth offsets	Soft/stable; watch 2026
Product performance (NovaSeq X)	Transition progressing; pricing actions embedded	69% volumes, 44% revenue on X; >50 placements	78% volumes, 51% revenue; >55 placements	Transition ahead of target
Regional trends	China restrictions modeled; ex‑China low growth	China slightly better than guide; ex‑China down ~2% CC	Ex‑China +~2% y/y; China $52M	Ex‑China improving; China uncertain
Regulatory/legal (China)	Export restrictions noted	Restrictions continue	OEM partner pathway approved; long‑term solution pending	Incremental progress
OpEx/R&D discipline	Non‑GAAP OM ~21.5%–22% guide	Non‑GAAP OM 23.8%; structural cost actions	Non‑GAAP OM 24.5%; additional levers ahead	Margin expansion continuing

Management Commentary

CEO: “The Illumina team delivered Q325 results that exceeded the high‑end of our guidance range... During the quarter, we returned to growth ex‑China and are executing on our strategic pillars that support our long‑range financial targets.”
CEO (on markets): “Clinical continues to accelerate... NovaSeq X is proving to be the ideal solution... We have now received approval to serve [OEM] partners through manufacturing of select instruments locally in Greater China.”
CFO: “Non‑GAAP operating margin expanded by 190 basis points to 24.5%... Tariffs impacted gross margins by roughly 220 basis points year‑over‑year.”
CFO (transition): “Roughly 78% of volumes and 51% of revenue in Q3 was sequenced on X... 91% of research volumes on X; clinical ~64%.”

Q&A Highlights

China outlook: OEM partner serving via local manufacturing approved; broader resolution still pending; taking it quarter by quarter .
Margin trajectory: Further expansion expected from cost structure actions, manufacturing footprint optimization, and operating leverage as growth returns .
Research & GB growth: Research still growing GBs but below historical pace; total connected high/mid‑throughput GB output grew >30% y/y; funding predictability needed before labs accelerate spend .
Competition (Roche): Management emphasized multi‑dimensional value (data quality, workflow, end‑to‑end cost) over single‑attribute competition; confident on positioning .
Instruments seasonality: Stronger Q4 instrument placements expected as typical industry pattern; not assuming unusual “budget flush” .

Estimates Context

Actuals vs S&P Global consensus (EPS and revenue):

Metric	Q1 2025	Q2 2025	Q3 2025
Primary EPS Consensus Mean*	$0.94*	$1.01*	$1.17*
Actual Non‑GAAP EPS	$0.97	$1.19	$1.34
Revenue Consensus Mean ($B)*	$1.037*	$1.052*	$1.065*
Actual Revenue ($B)	$1.041	$1.059	$1.084

*Values retrieved from S&P Global.

Implications: ILMN delivered three straight quarterly beats on both revenue and EPS, with the Q3 beat largest year‑to‑date, supported by clinical consumables strength and X transition .

Key Takeaways for Investors

Clinical‑led beats and raised FY guide position ILMN for year‑end momentum; Q4 implies ex‑China +4% growth with China ~$33M contribution .
NovaSeq X transition metrics (78% volume/51% revenue on X) confirm elasticity is offsetting price; expect continued consumables leverage into 2026 .
Margin expansion is structural, with additional levers in gross margin and operating leverage; tariff headwinds (~220 bps y/y) are being addressed .
Research remains a swing factor; stabilization observed but visibility hinges on funding cadence; multi‑omics launches (5‑base, Protein Prep) can reinforce demand as research normalizes .
China risk persists but is shrinking in revenue mix; OEM/local manufacturing step is constructive; base case assumes cautious contribution .
Capital deployment (share repurchases) and cash generation (Q3 FCF $253M) support EPS resilience during transition .
Near‑term trading: Positive reaction likely anchored to beats and raised guide; medium‑term thesis supported by clinical demand, multi‑omics expansion, and operating leverage.

Additional Relevant Press Releases (Q3 timeframe and recent)

Illumina Protein Prep launches—bringing NGS to proteomics with up to 9,500 proteins per sample; streamlines sample‑to‑insight for discovery and clinical research (Sept 3) .
Expanded personalized cancer care via new pharma development partnerships on TruSight Oncology Comprehensive (Sept 23) .
AGD expansion—Alnylam joins Alliance for Genomic Discovery, enhancing clinical genomic dataset (Sept 18) .
Five‑base solution launched—simultaneous genomic + epigenomic detection enabling streamlined multi‑omic discovery (Oct 15) .

(Press releases summarized above provide qualitative context to product momentum referenced on the call and in the 8‑K.)

Citations:

Q3 2025 press release and 8‑K (Item 2.02 Exhibits): revenue, margins, EPS, guidance, cash flow, and reconciliations .
Q3 2025 earnings call transcript: ex‑China growth, segment details, tariffs, X transition metrics, guidance color, Q&A themes .
Q2 2025 press release and call: prior‑quarter comps, guidance baseline, segment detail .
Q1 2025 press release: baseline, tariff headwind, and margin context .
Product/multi‑omics releases: 5‑base solution .

ILLUMINA, INC. (ILMN)·Q3 2025 Earnings Summary