Illumina, Inc.

Good day, ladies and gentlemen. Welcome to the second quarter 2025 Illumina Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the call over to Interim Head of Investor Relations, Brian Blanchett.

Hello, everyone, and welcome to Illumina's second quarter 2025 Earnings Call. Today, we will review our financial results, release after market close, and provide commentary before opening for Q&A. Our earnings release is available in the investor relations section of Illumina.com. Speaking today are Jacob Tyson, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will provide an update on Illumina's businesses, followed by Ankur's review of the company's financials. All financial information shared on this call relates to core Illumina. For historical consolidated financials, please refer to our earnings release and SEC filings. Please note that all year-over-year revenue growth rates discussed during the prepared remarks are presented on a constant currency basis to exclude the impact of foreign exchange fluctuations. We encourage you to review the gap reconciliation of our non-gap measures, which can be found in today's release and in the supplemental data available on our website. This call is being recorded and the audio will be archived in our investor section of our website. It is our intent that all forward-looking statements regarding the financial results and commercial activity made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Illumina files with the Securities and Exchange Commission, including our most recent forms 10-Q and 10-K. With that, I will now turn the call over to Jacob.

Thank you, Brian. And good afternoon, everyone. In the second quarter, despite a year-over-year decline, we delivered revenue at the high end of our guidance range at approximately $1.06 billion. At the same time, the team's strong execution drove profitability above expectations with a non-GAAP operating margin of 23.8% and a non-GAAP EPS of $1.19. Together, these results reflect meaningful progress across the business and reinforce our view that the underlying fundamentals remain robust. In Q2, we saw ongoing adoption of our Novosig X platform with greater than 50 placements. increased high throughput consumable sales, especially among NovoCX users as the transition continues to progress. Continued advancement of our innovation roadmap with key updates to our multi-omic strategy, reflecting disciplined execution of our long-term capital deployment plan. We are encouraged by the strength we are seeing in the clinical markets, which now accounts for roughly 60% of total sequencing consumables. Clinical has proven more resilient and in some areas is exceeding expectations, reinforcing our confidence in the durability of clinical demand. We're seeing this momentum across multiple clinical applications. In oncology, adoption continues to grow for comprehensive genomic profiling, and we are seeing increased interest in sequencing-intensive applications like minimal residual disease, which sets us up well for future clinical growth. In genetic disease testing, growth continues to be driven by expanding national genome programs and broader adoption of whole genome and whole exome sequencing for rare diseases. In reproductive health, we are seeing growth in NIPT sample volumes, particularly in the U.S., as more customers complete validation and ramp up clinical testing. We continue to believe the long-term clinical opportunity remains significant, with NGS adoption increasing as genomics becomes standard of care for therapy selection, early detection, monitoring, and expands into other disease types. While clinical demand has been encouraging, the research environment, particularly in the U.S., remains constrained amid ongoing NIH funding uncertainty. As expected, demand from this segment remains soft in Q2, with some labs delaying projects or holding off on hiring due to concerns about the future grant availability. In the meantime, we are actively working with our customers to help them navigate this period. Separately, in China, our ability to export instruments is still restricted. We continue to engage with regulators to identify solutions that support our long-term sustainable presence in the country, and we will keep you updated on any material developments. As we navigate these near-term market dynamics, our focus remains on disciplined execution and laying the foundation for long-term success. The focus underpins our commitment to achieving our financial targets and delivering high single-digit revenue growth and expanding non-GAAP operating margin to 26% by 2027. We are advancing towards these targets by delivering across our three key drivers. Growing our core sequencing business, including continued progress with NovoSig X-Transition. Scalable entry into multi-omics to complement our sequencing platforms. And expanding our services, data and software offerings to provide more integrated customer solutions. Together, these priorities support our broader strategy and vision for the industry of shifting from cost per gigabase model to delivering the highest quality biological insight at the lowest end-to-end cost. Now, I'd like to focus on the progress we're making in our multi-omics driver, which is centered on delivering differentiated solutions that integrate with our sequences. We've already announced our capabilities in single-cell, CRISPR-based perturb-seq, and spatial analysis. And in June, we took another step forward in proteomics with our announced acquisition of Somalogic from Standard BioTools. This acquisition expands our presence in affinity-based proteomics, a small but fast-growing segment of the broader proteomics market, and builds on the exclusive commercial relationship we have had with ThermoLogic since 2021. ThermoLogic is a key player in high-throughput proteomics, Their Somoscan assay can analyze over 9,500 unique human proteins from small biological samples, delivering deep, actionable insights for drug discovery, diagnostics, and health monitoring. What sets their technology apart is its proprietary Somamer binding reagents, highly precise affinity reagents that bind to specific proteins with unmatched sensitivity, scalability, and reproducibility. This approach delivers broader coverage than other methods by reducing the time and cost of deeper proteomics analysis. Bringing Somalogic into Illumina builds on our existing longstanding partnership. As our collaboration progressed, our conviction in that technology deepened, and we saw a clear opportunity to accelerate innovation by integrating their capabilities into our innovation engine. With Illumina's expertise in product development and global commercial reach, we will scale their technology faster, expand customer adoption, and achieve greater operational efficiencies. Somalogic is a strong strategic fit for Illumina. Their technology, when paired with our platforms, offer a highly scalable and cost-efficient solution for proteomics discovery. By more deeply integrating proteomics in our ecosystem, we are expanding our ability to deliver greater biology insights through our end-to-end workflows. This enhances the value proposition of the NovoSig X and creates the potential to extend Somalogics technology into other multi-armic applications, such as single-cell and spatial. With this addition, we are advancing Trueboard's and more comprehensive multi-omics portfolio spanning DNA, RNA, methylation, and now proteomics. We expect the transaction to close in the first half of 2026. After obtaining the necessary regulatory approvals, we are looking forward to welcoming the Somologic team to Illumina and expanding the impact of proteomics together. As we advance key elements of our multi-omic strategy, we're also seeing strong momentum across our recent platform launches. One example is the MySeq i100+, our latest benchtop sequencer. Since launching late last year, we've placed more than 500 instruments and are now seeing customers order additional units after just a few months of use. Customer feedback on the MySeq i100 platform remains very positive. Customers are calling it a game changer, highlighting faster turnaround times, ease of use and room temperature shipping and storage arrangements. All features that make sequencing more accessible for labs operating in a wide range of resource settings. This reduces reliance on centralized labs, shortens diagnosis turnaround time, and gives customers greater autonomy for running oncology, infectious disease, and other clinical applications. These features are especially attractive to labs adopting NGS for the first time, as well as those in emerging markets. The MiSeq i100 platform currently supports 18 proven workflows. including nine fully integrated from library prep through analysis. This level of integration reflects a broader shift in how we approach innovation, grounded in deeper customer insights and close collaboration throughout development. MySIG i100 sets a new standard for the future of Illumina innovation, optimizing for complete end-to-end workflows that lower barriers to adoption and deliver high-quality insights at scale. Before I hand it over to Ankur, I want to briefly share our views on the remainder of 2025. We are encouraged by the momentum in our Q2 results, the progress of our innovation roadmap, and we remain focused on discipline execution. However, we continue to approach the second half of the year with caution, given the ongoing funding uncertainties in the US research market. That said, we are raising our guidance for total company revenue growth, as well as total reported revenue, non-GAAP operating margin, and non-GAAP EPS, reflecting strong execution and operating discipline across the organization. I will now turn it over to Ankur to provide more detail on our results and outlook before we move into Q&A.