Investment Thesis
Illumina demonstrates exceptional financial health with robust profitability metrics (66.1% gross margin, 19.6% net margin) and outstanding ROE of 31.2%, despite flat revenue growth. The company generates substantial free cash flow of $931M (21.4% margin) with minimal leverage (0.25x D/E) and strong liquidity, providing financial flexibility for investments and shareholder returns. Net income surged 169.5% YoY, indicating operational efficiency improvements and potential margin expansion even in a growth-constrained environment.
ILMN Strengths
- Exceptional profitability with 66.1% gross margin and 19.6% net margin
- Outstanding return metrics with 31.2% ROE and 12.8% ROA
- Strong free cash flow generation of $931M with 21.4% FCF margin
- Fortress balance sheet with 2.08x current ratio and 0.25x debt-to-equity
- Net income jumped 169.5% YoY indicating significant operational leverage
- Exceptional interest coverage of 44.8x demonstrates minimal solvency risk
ILMN Risks
- Revenue declined 0.7% YoY indicating top-line stagnation and potential market headwinds
- Operating margin of 18.6% may be vulnerable if revenue declines persist
- Heavy concentration in life sciences instrumentation sector creates cyclical exposure
- Capital intensity with $148M annual capex required to maintain competitive position
- Sharp 169.5% net income increase appears unsustainable and may reflect one-time items or cost restructuring
Key Metrics to Watch
- Revenue growth trajectory and customer demand trends
- Gross margin sustainability as scale potentially becomes challenged
- Free cash flow conversion and capex requirements for R&D
- Operating leverage and ability to maintain net income growth with flat revenues
- Debt levels and covenant compliance on $673M long-term debt
ILMN Financial Metrics
ILMN Profitability Ratios
ILMN Balance Sheet & Liquidity
ILMN 5-Year Financial Trend
5-Year Trend Summary: ILLUMINA, INC.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $-7.34 indicates the company is currently unprofitable.
ILMN Growth Metrics (YoY)
ILMN Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $1.1B | -$126.0M | $0.98 |
| Q2 2025 | $1.1B | -$126.0M | $1.49 |
| Q1 2025 | $1.0B | -$126.0M | $-0.79 |
| Q3 2024 | $1.1B | $3.0M | $4.42 |
| Q2 2024 | $1.1B | $3.0M | $-1.46 |
| Q1 2024 | $1.1B | $3.0M | $0.02 |
| Q3 2023 | $1.1B | $3.0M | $-4.77 |
| Q2 2023 | $1.2B | $3.0M | $-1.46 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ILMN Capital Allocation
ILMN SEC Filings
Access official SEC EDGAR filings for ILLUMINA, INC. (CIK: 0001110803)