Illumina, Inc.

Good day, ladies and gentlemen. Welcome to the first quarter 2026 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 head of investor relations, Connor McNamara.

Hello, everyone, and welcome to Illumina's first quarter 2026 earnings call. Today, we will review our financial results released after market close and provide prepared remarks before opening the line for Q&A. Our earnings release is available in the investor relations section of Illumina.com. Joining me today are Jacob Tyson, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will begin with an update on Illumina's business, followed by Ankur's review of our financials. We will be discussing certain non-GAAP financial measures, and a reconciliation to GAAP can be found in today's release and in the supplementary data on our website. Unless stated otherwise, all growth rates are presented on a year-over-year reported basis. Organic growth adjusts for the impact of currency and acquisitions, and rest of world organic growth also adjusts for the impact from our greater China region. A reminder, starting in January 2026, we changed the geographical reporting segments to better align with the respective commercial organizational structure, and the supplementary file on our website shows historical results with the new geographic reporting. This call is being recorded, and the replay will be available on our website. It is our intent that all forward-looking statements 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 documents that Illumina files with the SEC, including our most recent Forms 10Q and 10K. With that, I will now turn the call over to Jacob.

Thank you, Connor, and good afternoon, everyone. We are off to a great start in 2026, with Q1 revenue, margin, and EPS all coming in above our guidance range. Our solid performance reflects disciplined execution across the organization, along with strength in our clinical markets and growth across all regions, excluding China. Our focus on delivering for our customers and shareholders is fueling the sustained success that positions us for continued growth well into the future. We are raising our 2026 guidance to reflect the Q1 outperformance, which we will discuss in more detail later in our prepared remarks. I want to recognize and thank the entire Illumina team for how they have managed through a higher cost environment while maintaining strong operational performance and delivering the quality and reliability our customers expect. As it relates to Q1, I'm going to focus on three areas. Our discipline commercial execution with continued momentum in clinical end markets. Product innovation and roadmap updates from our R&D team in the quarter. And progress we're making against our long-term strategy and targets. Overall, I'm very pleased with how the company delivered in Q1, giving us more confidence that our strategy is working. Building on momentum for 2025, our team delivered another quarter of solid performance. Highlights from the quarter include rest of world organic growth of 3.5% above the high end of our guidance. driven by strength in sequencing consumables and instruments. Approximately 7% growth in rest-of-world sequencing consumables, including approximately 20% growth in clinical, reflecting continued adoption of sequencing-based diagnostics and more sequencing-intensive applications. Over 80 NovoCyc X placements in the quarter, approximately 20 more than Q1-25. with year-over-year placements growth in both clinical and non-clinical markets. New high-volume clinical applications are being built on the NovoSig X as the platform becomes more embedded in clinical workflows and supports continued consumables growth over time. The successful close of the Summer Logic acquisition with the business performing in line with our expectations on both revenue and profitability. margins approximately 150 basis points above guidance, driven by solid revenue performance and disciplined expense management in higher cost environment. Overall, these results reflect our consistent execution and how we dedicated resources to best capitalize on a growing and evolving market. The investments Illumina has made over the last two decades to make sequencing technology more accessible are driving meaningful impact with continued clinical demand. Clinical made up more than 65% of our sequencing consumables revenue in the quarter, driven by both the expansion of sequencing based diagnostics and the increased use of more data intensive applications. Customers are launching new assays with ongoing progress in reimbursement, supporting broader adoption of sequencing in clinical decision-making. At the same time, demand for approaches such as comprehensive genomic profiling and whole genome sequencing is growing. This is driving higher sequencing intensity, an area where the NovoCyc-X is playing an increasingly central role as customers scale these applications. we see a long runway for continued growth in our clinical business. In research and academic markets, demand remains cautious as customers navigate funding uncertainty. But we are confident in the long-term opportunity in these end markets. And we continue to invest in leading technologies, including proteomics and single-cell, with additional offerings in spatial underway. These markets serve as an important entry point for new technologies, helping to drive long-term clinical adoption over time. Customer interest in our new product offerings remains robust, and as funding uncertainties start to ease, we expect to see a return to growth in research and academic markets. This quarter, we also saw our innovation strategy come through clearly in how we are expanding the value of our platform for our customers. At AGBT, we focused on how our end-to-end workflow approach is helping customers unlock new discoveries and generate deeper insights with the quality and reliability that only Illumina can offer. Our approach is becoming an important shift in how customers evaluate solutions, not just at the instrument level, but across the full workflow. We highlighted several examples of this at ATBT. We launched TruePath, enabling whole genome sequencing with deeper insight while eliminating traditional library prep, reducing hands-on time to about 10 minutes. Customers are showing significant interest, particularly in areas like rare disease, where some are using it to simplify the standard of care by consolidating multiple types of tests into a single TruePath workflow. This is helping them get to answers faster and with greater confidence compared to a traditional approach. Several customers are already in various stages of clinical studies using TruePath. and we expect customer demand to continue increasing in the coming quarters. We also saw very high engagement around our spatial transcriptomics offering, which is a good example of how we innovate with our customers to address their needs. Early access users have shown that the offering can generate data in highly challenging sample types, such as lymphatic tissue, that has previously been difficult to study. We remain on track to launch later this year and look forward to bringing this capability to the market. At the same time, we are continuing to expand what customers can do on the NovoSeq X. We introduced our 18-month roadmap, including new 14B and 35B flow cells, staggered flow cells run, and our ability to improve data quality with Q70 performance. These innovations on the X will offer more flexibility, increased throughput, and improve overall workflow efficiency for our customers. These introductions and platform improvements are driving higher Novosig X placements and increased demand. Even three years after we shipped our first X instrument. We exited the quarter with a solid backlog, giving us confidence to raise our full year instrument outlook. As we step back and look at the quarter, the most important takeaway is that our strategy is working. We are increasing the value of the NovoCX through continuous innovation, which is showing up in our financial results as customers scale and expand what they run on the platform. As sequencing moves further into clinical and research settings, customers are running more samples, generating more data, and relying on more sequencing-intensive applications. This is where the NovoCX continues to play a central role. As we expand what customers can do on the platform, we are enabling them to do more with the systems that they already have and support more complex applications over time. It gives them confidence that they can use their X well into the future to drive their own success. As our customers succeed, the success shows up in our results. We're also extending this into data and AI with BioInsight, which we introduced late last year to help customers accelerate discovery. A key program within BioInsight is the Billion Cell Atlas, which we introduced earlier this year to better understand how genes drive disease through the terpsey. We are seeing growing interest from partners with additional companies looking to participate. With hundreds of millions of cells already generated, customers are starting to see insights that can support AI-driven models for drug discovery. Turning to our outlook. Building on the strong start of this year, we are updating our outlook relative to the guidance we provided in Q4. Importantly, the current end-market dynamics we are seeing are consistent with what we expected going into 2026. Clinical continues to lead, while research and applied remain more cautious. Our first quarter performance came in ahead of expectations, and we are raising our full year revenue outlook. This is driven by the strength in our business and how it carries into the rest of the year. We are also raising our operating margin expectations and EPS outlook, reflecting the Q1 outperformance and higher revenues. also remain on track toward our 2027 targets. And the investments we are making in R&D and product innovation position us to deliver high single-digit revenue growth, continued margin expansion, and double-digit to teens' EPS growth for years to come. I want to thank the entire Illumina team, our customers, and all our stakeholders for another excellent quarter. I also want to thank our three outgoing board members for the years of service and contribution to Illumina. I'm very proud of how Illumina has progressed since I joined the company in 2023, especially given the dynamic macro environment we have been operating in. With that, I'll hand it over to Ankur to walk through the financial details before we move to Q&A.