$ILMN · ILLUMINA, INC.
Illumina reported Q3 FY2026 revenue of $1.129B (+4.2% YoY), GAAP diluted EPS of $1.43, and non-GAAP diluted EPS of $1.62. Results included a one-time $79M IEEPA tariff refund benefit that inflated gross margin by ~590 bps. Excluding tariff refunds, non-GAAP EPS was $1.44 and non-GAAP gross margin was 69.4% — essentially flat YoY. FY2026 guidance was raised modestly to $4.64-$4.66B revenue and $5.40-$5.45 non-GAAP EPS, both excluding tariff refunds.
- Q3 revenue $1.129B, up 4.2% YoY, but excluding $37M tariff refund credits to customers, revenue was $1.166B — still above prior guidance.
- GAAP diluted EPS $1.43 vs $0.98 YoY; non-GAAP diluted EPS $1.62, but excluding tariff refunds only $1.44 — barely above GAAP.
- GAAP gross margin 73.5% vs 67.6% YoY, but non-GAAP ex-tariff-refund gross margin was just 69.4%, flat vs 69.2% a year ago.
- FY2026 guidance raised: revenue $4.64-$4.66B (from $4.60-$4.64B), non-GAAP EPS $5.40-$5.45 (from $5.30-$5.40), both excluding tariff refunds.
- Free cash flow $378M for Q3 vs $253M YoY; cash/investments $1.34B at quarter-end.
Extended-hours last trade at $257.00, down 11.40% vs regular close of $290.06. The selloff suggests the market is stripping out the one-time $79M tariff refund benefit and focusing on the ex-refund non-GAAP EPS of $1.44, which barely exceeds GAAP EPS of $1.43 and reveals limited underlying margin expansion.
The 11% after-hours plunge on a headline beat reveals the market is rejecting tariff-refund-inflated results and focusing on stagnant underlying margins — a critical signal for a $43.8B life-sciences bellwether.
Life sciences tools peers have faced similar tariff headwinds and China exposure. Illumina's NovaSeq X placement strength and AI positioning are bright spots, but the ex-refund margin stagnation mirrors broader sector concerns about instrument-heavy mix pressure.
Tariff refunds ($79M cost-reduction benefit, $37M customer credit) are one-time and tied to IEEPA litigation — future refunds are uncertain. China Unreliable Entities List inclusion continues to pressure ROW organic growth metrics.