Illumina, Inc 10-Q for FY2020 Q2

Illumina, Inc. (ILMN)

10-Q 2020-08-07 For: 2020-06-28

Added on April 12, 2026

About this 10-Q

Illumina, Inc filed this 10-Q on August 7, 2020, covering the quarter ended June 28, 2020 (FY2020 Q2).

Headline figures

Quarter ended June 28, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $633M; down 24.5% from $838M a year earlier
Net income: $47M; down 84.1% from net income of $296M a year earlier
Diluted EPS: $0.32; down 83.9% from $1.99 a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


Delaware						33-0804655
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	ILMN	The NASDAQ Global Select Market


CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			PAGE
Condensed Consolidated Balance Sheets			5
Condensed Consolidated Statements of Income			6
Condensed Consolidated Statements of Comprehensive Income			7
Condensed Consolidated Statement of Stockholders’ Equity			8
Condensed Consolidated Statements of Cash Flows			10
Notes to Condensed Consolidated Financial Statements			11
1. Organization and Significant Accounting Policies			11
2. Revenue			12
3. Investments and Fair Value Measurements			14
4. Debt			17
5. Stockholders’ Equity			18
6. Supplemental Balance Sheet Details			20
7. Legal Proceedings			22
8. Income Taxes			22
9. Segment Information			22

MANAGEMENT’S DISCUSSION & ANALYSIS
Management’s Overview and Outlook			24
Results of Operations			26
Liquidity and Capital Resources			29
Critical Accounting Policies and Estimates			31
Recent Accounting Pronouncements			31
Off-Balance Sheet Arrangements			31
Quantitative and Qualitative Disclosures About Market Risk			32

OTHER KEY INFORMATION
Controls and Procedures			32
Legal Proceedings			33
Risk Factors			33
Share Repurchases and Sales			33
Exhibits			34
Form 10-Q Cross-Reference Index			35


	June 28, 2020		December 29, 2019
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	1,770	$	2,042
Short-term investments	1,498		1,372
Accounts receivable, net	385		573
Inventory	435		359

Prepaid expenses and other current assets	106		105
Total current assets	4,194		4,451
Property and equipment, net	890		889
Operating lease right-of-use assets	549		555
Goodwill	894		824
Intangible assets, net	156		145
Deferred tax assets, net	13		64
Other assets	552		388
Total assets	$	7,248	$	7,316

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	135	$	149
Accrued liabilities	477		516


Long-term debt, current portion	503		—
Total current liabilities	1,115		665
Operating lease liabilities	681		695
Long-term debt	659		1,141

Other long-term liabilities	230		202

Stockholders’ equity:

Common stock	2		2
Additional paid-in capital	3,649		3,560
Accumulated other comprehensive income	14		5
Retained earnings	4,287		4,067
Treasury stock, at cost	(3,389)		(3,021)


Total stockholders’ equity	4,563		4,613
Total liabilities and stockholders’ equity	$	7,248	$	7,316


	Three Months Ended						Six Months Ended
	June 28, 2020		June 30, 2019		June 28, 2020		June 30, 2019
Revenue:
Product revenue	$	527	$	704	$	1,228	$	1,372
Service and other revenue	106		134		264		312
Total revenue	633		838		1,492		1,684
Cost of revenue:
Cost of product revenue	152		196		326		378
Cost of service and other revenue	46		59		105		130
Amortization of acquired intangible assets	7		10		14		19
Total cost of revenue	205		265		445		527
Gross profit	428		573		1,047		1,157
Operating expense:
Research and development	155		166		311		335
Selling, general and administrative	177		202		451		412




Total operating expense	332		368		762		747
Income from operations	96		205		285		410
Other income (expense):
Interest income	7		20		21		43
Interest expense	(11)		(15)		(22)		(30)

Other income, net	73		136		58		157
Total other income, net	69		141		57		170
Income before income taxes	165		346		342		580
Provision for income taxes	118		53		122		63
Consolidated net income	47		293		220		517
Add: Net loss attributable to noncontrolling interests	—		3		—		12

Net income attributable to Illumina stockholders	$	47	$	296	$	220	$	529
Earnings per share attributable to Illumina stockholders:
Basic	$	0.32	$	2.01	$	1.50	$	3.60
Diluted	$	0.32	$	1.99	$	1.49	$	3.56
Shares used in computing earnings per share:
Basic	147		147		147		147
Diluted	148		149		148		149


☑			Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


☐			Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	Illumina Stockholders
				Additional		Accumulated Other									Total
	Common Stock					Paid-In		Comprehensive		Retained	Treasury Stock						Noncontrolling	Stockholders’
	Shares	Amount		Capital		(Loss) Income		Earnings		Shares	Amount		Interests		Equity



























































































































Balance as of December 30, 2018	192	$	2	$	3,290	$	(1)	$	3,083	(45)	$	(2,616)	$	87	$	3,845







Net income (loss)	—	—		—		—		233		—	—		(2)		231
Unrealized gain on available-for-sale debt securities, net of deferred tax	—	—		—		3		—		—	—		—		3
Issuance of common stock, net of repurchases	—	—		27		—		—		—	(86)		—		(59)
Share-based compensation	—	—		51		—		—		—	—		—		51
Cumulative-effect adjustment from adoption of ASU 2016-02, net of deferred tax	—	—		—		—		(18)		—	—		—		(18)
Vesting of redeemable equity awards	—	—		(1)		—		—		—	—		—		(1)
Adjustment to the carrying value of redeemable noncontrolling interests	—	—		18		—		—		—	—		—		18
Balance as of March 31, 2019	192	2		3,385		2		3,298		(45)	(2,702)		85		4,070
Net income (loss)	—	—		—		—		296		—	—		(1)		295
Unrealized gain on available-for-sale debt securities, net of deferred tax	—	—		—		3		—		—	—		—		3
Issuance of common stock, net of repurchases	1	—		3		—		—		—	(3)		—		—
Share-based compensation	—	—		48		—		—		—	—		—		48

Adjustment to the carrying value of redeemable noncontrolling interests	—	—		(2)		—		—		—	—		—		(2)
Deconsolidation of Helix	—	—		2		—		—		—	—		(84)		(82)
Balance as of June 30, 2019	193	2		3,436		5		3,594		(45)	(2,705)		—		4,332
Net income	—	—		—		—		234		—	—		—		234

Issuance of common stock, net of repurchases	—	—		29		—		—		(1)	(201)		—		(172)
Share-based compensation	—	—		45		—		—		—	—		—		45

Balance as of September 29, 2019	193	2		3,510		5		3,828		(46)	(2,906)		—		4,439
Net income	—	—		—		—		239		—	—		—		239

Issuance of common stock, net of repurchases	1	—		—		—		—		(1)	(115)		—		(115)
Share-based compensation	—	—		50		—		—		—	—		—		50
Balance as of December 29, 2019	194	2		3,560		5		4,067		(47)	(3,021)		—		4,613
Net income	—	—		—		—		173		—	—		—		173
Unrealized gain on available-for-sale debt securities, net of deferred tax	—	—		—		1		—		—	—		—		1
Issuance of common stock, net of repurchases	—	—		32		—		—		—	(223)		—		(191)
Share-based compensation	—	—		39		—		—		—	—		—		39
Balance as of March 29, 2020	194	2		3,631		6		4,240		(47)	(3,244)		—		4,635
Net income	—	—		—		—		47		—	—		—		47
Unrealized gain on available-for-sale debt securities, net of deferred tax	—	—		—		8		—		—	—		—		8


Issuance of common stock, net of repurchases	—	—		2		—		—		(1)	(145)		—		(143)
Share-based compensation	—	—		16		—		—		—	—		—		16
Balance as of June 28, 2020	194	$	2	$	3,649	$	14	$	4,287	(48)	$	(3,389)	$	—	$	4,563



In millions	Q2 2020	Q2 2019	YTD 2020	YTD 2019
Weighted average shares outstanding	147	147	147	147
Effect of potentially dilutive common shares from:
Equity awards	1	1	1	1
Convertible senior notes	—	1	—	1

Weighted average shares used in calculating diluted earnings per share	148	149	148	149
Potentially dilutive shares excluded from calculation due to anti-dilutive effect	—	—	1	—



Based on region of destination (in millions)	Q2 2020		Q2 2019		YTD 2020		YTD 2019
Americas	$	335	$	476	$	812	$	949
Europe, Middle East, and Africa	168		208		389		418
Greater China (1)	79		97		163		185
Asia-Pacific	51		57		128		132
Total revenue	$	633	$	838	$	1,492	$	1,684


	June 28, 2020										December 29, 2019
In millions	Amortized Cost		Gross Unrealized Gains		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains			Estimated Fair Value

Debt securities in government-sponsored entities	$	50	$	—	$	50	$	18	$	—		$	18
Corporate debt securities	598		9		607		627		3			630
U.S. Treasury securities	656		9		665		616		2			618
Total	$	1,304	$	18	$	1,322	$	1,261	$	5		$	1,266


In millions	Estimated Fair Value
Due within one year	$	525
After one but within five years	797
Total	$	1,322


	Restricted Stock Units (RSU)	Performance Stock Units (PSU)(1)	Weighted-Average Grant Date Fair Value per Share
Units in thousands					RSU		PSU
Outstanding at December 29, 2019	1,700	271	$	271.49	$	258.66
Awarded	208	(200)	$	292.92	$	257.76
Vested	(58)	—	$	218.61	—
Cancelled	(135)	(71)	$	264.36	$	261.19
Outstanding at June 28, 2020	1,715	—	$	276.43	—


	Options (in thousands)	Weighted-Average Exercise Price
Outstanding at December 29, 2019	58	$	56.65

Exercised	(48)	$	56.33

Outstanding and exercisable at June 28, 2020	10	$	58.21


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES


2. REVENUE


3. INVESTMENTS AND FAIR VALUE MEASUREMENTS


4. DEBT


	Employee Stock Purchase Rights
Risk-free interest rate	1.46% - 2.56%
Expected volatility	30% - 37%
Expected term	0.5 - 1.0 year
Expected dividends	0		%
Weighted-average grant-date fair value per share	$	77.19


Dollars in millions	Q2 2020		Q2 2019		Change		% Change		YTD 2020		YTD 2019		Change		% Change
Consumables	$	436	$	571	$	(135)	(24)	%	$	1,056	$	1,127	$	(71)	(6)	%
Instruments	91		133		(42)		(32)		172		245		(73)		(30)
Total product revenue	527		704		(177)		(25)		1,228		1,372		(144)		(10)
Service and other revenue	106		134		(28)		(21)		264		312		(48)		(15)
Total revenue	$	633	$	838	$	(205)	(25)	%	$	1,492	$	1,684	$	(192)	(11)	%


In thousands, except price per share	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Programs
First Quarter	660	$	284.08	660	$	562,500
Second Quarter (1)	410	$	348.63	410	$	419,624

Total	1,070	$	308.80	1,070	$	419,624


Exhibit Number						Description of Document

4.6						Description of Illumina, Inc.’s securities registered pursuant to Section 12 of the Exchange Act of 1934

10.35						2000 Employee Stock Purchase Plan, as amended and restated through April 29, 2020

31.1						Certification of Francis A. deSouza pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2						Certification of Sam A. Samad pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1						Certification of Francis A. deSouza pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2						Certification of Sam A. Samad pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH						XBRL Taxonomy Extension Schema

101.CAL						XBRL Taxonomy Extension Calculation Linkbase

101.LAB						XBRL Taxonomy Extension Label Linkbase

101.PRE						XBRL Taxonomy Extension Presentation Linkbase

101.DEF						XBRL Taxonomy Extension Definition Linkbase

104						Cover Page Interactive Data File - formatted in Inline XBRL and included as Exhibit 101


			Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements			5
Condensed Consolidated Balance Sheets			5
Condensed Consolidated Statements of Income			6
Condensed Consolidated Statements of Comprehensive Income			7
Condensed Consolidated Statement of Stockholders’ Equity			8
Condensed Consolidated Statements of Cash Flows			10
Notes to Condensed Consolidated Financial Statements			11
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3. Quantitative and Qualitative Disclosures About Market Risk			32
Item 4. Controls and Procedures			32

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			33
Item 1A. Risk Factors			33
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			33
Item 3. Defaults Upon Senior Securities			None
Item 4. Mine Safety Disclosures			Not Applicable
Item 5. Other Information			None
Item 6. Exhibits			34
Signatures			36


			By:						/s/ FRANCIS A. DESOUZA
									Francis A. deSouza
									President and Chief Executive Officer


1	I have reviewed this Quarterly Report on Form 10-Q of Illumina, Inc.;

2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


			By:						/s/ SAM A. SAMAD
									Sam A. Samad
									Senior Vice President and Chief Financial Officer