Q4 2019

SAN DIEGO--(BUSINESS WIRE)-- Illumina, Inc. (NASDAQ: ILMN) today announced its financial results for the fourth quarter and fiscal year 2019.

Fourth quarter 2019 results:

- Revenue of $953 million, a 10% increase compared to $867 million in the fourth quarter of 2018
- GAAP net income attributable to Illumina stockholders for the quarter of $239 million, or $1.61 per diluted share, compared to $210 million, or $1.41 per diluted share, for the fourth quarter of 2018
- Non-GAAP net income attributable to Illumina stockholders for the quarter of $252 million, or $1.70 per diluted share, compared to $197 million, or $1.32 per diluted share, for the fourth quarter of 2018 (see the “Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” table for a reconciliation of these GAAP and non-GAAP financial measures)
- Cash flow from operations of $443 million compared to $300 million in the fourth quarter of 2018
- Free cash flow (cash flow from operations less capital expenditures) of $386 million for the quarter compared to $235 million in the fourth quarter of 2018

Gross margin in the fourth quarter of 2019 was 69.5% compared to 68.1% in the prior year period. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.2% for the fourth quarter of 2019 compared to 69.1% in the prior year period.

Research and development (R&D) expenses for the fourth quarter of 2019 were $161 million compared to $176 million in the prior year period. Excluding restructuring charges, non-GAAP R&D expenses as a percentage of revenue were 16.8% compared to 20.3% in the prior year period.

Selling, general and administrative (SG&A) expenses for the fourth quarter of 2019 were $233 million compared to $217 million in the prior year period. Excluding amortization of acquired intangible assets, acquisition-related expenses, and restructuring charges, non-GAAP SG&A expenses as a percentage of revenue were 22.2% compared to 24.5% in the prior year period.

Depreciation and amortization expenses were $46 million and capital expenditures for free cash flow purposes were $57 million during the fourth quarter of 2019. At the close of the quarter, the company held $3.4 billion in cash, cash equivalents and short-term investments, compared to $3.5 billion as of December 30, 2018.

Fiscal year 2019 results:

- Revenue of $3,543 million, a 6% increase compared to $3,333 million in fiscal 2018
- GAAP net income attributable to Illumina stockholders of $1,002 million, or $6.74 per diluted share, compared to $826 million, or $5.56 per diluted share, in fiscal 2018
- Non-GAAP net income attributable to Illumina stockholders of $976 million, or $6.57 per diluted share, compared to $850 million, or $5.72 per diluted share, in fiscal 2018. Non-GAAP net income excludes unrealized net gains of $66 million from mark-to-market adjustments on our strategic investments, primarily from our marketable equity securities (see the “Itemized Reconciliation Between GAAP and Non-GAAP Net Income Attributable to Illumina Stockholders” table for a reconciliation of these GAAP and non-GAAP financial measures)
- Cash flow from operations of $1,051 million compared to $1,142 million in fiscal 2018
- Free cash flow (cash flow from operations less capital expenditures) of $842 million, compared to $846 million in fiscal 2018

Gross margin for fiscal 2019 was 69.6% compared to 69.0% in the prior year. Excluding amortization of acquired intangible assets, non-GAAP gross margin was 70.6% for fiscal 2019 compared to 70.1% in the prior year period.

R&D expenses for fiscal 2019 were $647 million compared to $623 million in the prior year. Excluding restructuring charges, non-GAAP R&D expenses as a percentage of revenue were 18.2% compared to 18.7% in the prior year period.

SG&A expenses for fiscal 2019 were $835 million compared to $794 million in the prior year period. Excluding amortization of acquired intangible assets, acquisition-related expenses, and restructuring charges, non-GAAP SG&A expenses as a percentage of revenue were 22.0% compared to 23.6% in the prior year period.

“Illumina shipped a record 2,400 sequencing systems in 2019, including a record number of our high-throughput NovaSeq systems and mid-throughput NextSeq systems, reflecting strong demand for research and clinical sequencing,” said Francis deSouza, President and CEO. “With the launch of our most innovative system to date in the NextSeq 2000, and a growing pipeline of clinical IVD and software solutions, Illumina continues to improve the accessibility of sequencing. Almost 17 years after the first human genome was sequenced, we believe that this is the decade that genomics becomes available to cancer and genetic disease patients on a mass scale and integrates into standard of care.”