$ILMN · ILLUMINA, INC.
Illumina filed its 10-Q for Q3 FY2026 (ended September 27, 2026), reporting total revenue of $1.129B (+4.2% YoY), net income of $220M (+47% YoY), and diluted EPS of $1.43 vs $0.98 a year ago. Gross margin expanded sharply to 73.5% from 67.6%, driven by a 25% drop in cost of product revenue. Operating income rose to $305M from $227M. The company disclosed a new $1.5B share repurchase authorization in April 2026, with $1.77B in total remaining buyback capacity. Revenue included a $37M reduction for IEEPA tariff refunds expected to be credited to customers.
- Q3 revenue $1.129B (+4.2% YoY), with consumables at $841M (+3%) and service revenue up 17% to $183M.
- Gross margin expanded to 73.5% from 67.6% a year ago, driven by sharply lower product cost of revenue ($199M vs $267M).
- Operating income surged to $305M from $227M; operating margin reached 27.0% vs 21.0% in Q3 2025.
- Diluted EPS of $1.43 vs $0.98 YoY; net income $220M vs $150M — a 47% increase.
- Board authorized a new $1.5B share repurchase program in April 2026, with $1.77B total remaining buyback capacity.
Stock closed regular session at $235.99, down 18.64% on the day. Extended-hours last trade at $236.59 (+0.25% vs close), suggesting the 10-Q results are providing stabilization after the sharp selloff. The 47% net income jump and 73.5% gross margin may support a reversal.
The 590-basis-point gross margin expansion and 47% net income surge signal Illumina's cost restructuring is delivering, even as tariff and China risks linger.
Illumina's 73.5% gross margin and 27.0% operating margin reassert its premium positioning in life sciences tools, well above peers. The consumables-driven model (74% of Q3 revenue) continues to deliver high-margin recurring revenue.
$37M revenue reduction in Q3 and YTD 2026 from IEEPA tariff refunds expected to be credited to customers. China regulatory risk from inclusion on the "unreliable entities list" could further pressure instrument sales. NIH funding cuts may reduce customer demand.