Illumina, Inc 10-Q for FY2021 Q1

Illumina, Inc. (ILMN)

10-Q 2021-04-28 For: 2021-04-04

Added on April 12, 2026

About this 10-Q

Illumina, Inc filed this 10-Q on April 28, 2021, covering the quarter ended April 4, 2021 (FY2021 Q1).

Headline figures

Quarter ended April 4, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.09B; up 27.2% from $859M a year earlier
Net income: $147M; down 15.0% from net income of $173M a year earlier
Diluted EPS: $1.00; down 14.5% from $1.17 a year earlier

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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 Stock Market LLC


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			9
Notes to Condensed Consolidated Financial Statements			10
1. Organization and Significant Accounting Policies			10
2. Revenue			11
3. Investments and Fair Value Measurements			12
4. Debt			15
5. Stockholders’ Equity			18
6. Supplemental Balance Sheet Details			19
7. Legal Proceedings			21
8. Income Taxes			21


MANAGEMENT’S DISCUSSION & ANALYSIS
Management’s Overview and Outlook			22
Results of Operations			22
Liquidity and Capital Resources			24
Critical Accounting Policies and Estimates			26
Recent Accounting Pronouncements			26
Off-Balance Sheet Arrangements			27
Quantitative and Qualitative Disclosures About Market Risk			27

OTHER KEY INFORMATION
Controls and Procedures			27
Legal Proceedings			28
Risk Factors			28
Share Repurchases and Sales			29
Exhibits			29
Form 10-Q Cross-Reference Index			31


	April 4, 2021		January 3, 2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	4,433	$	1,810
Short-term investments	197		1,662
Accounts receivable, net	517		487
Inventory	364		372

Prepaid expenses and other current assets	131		152
Total current assets	5,642		4,483
Property and equipment, net	915		922
Operating lease right-of-use assets	529		532
Goodwill	897		897
Intangible assets, net	134		142

Other assets	638		609
Total assets	$	8,755	$	7,585

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	178	$	192
Accrued liabilities	602		541


Convertible senior notes, current portion	488		511
Total current liabilities	1,268		1,244
Operating lease liabilities	664		671
Term notes	992		—
Convertible senior notes	680		673

Other long-term liabilities	229		303

Stockholders’ equity:

Common stock	2		2
Additional paid-in capital	3,914		3,815
Accumulated other comprehensive income	8		2
Retained earnings	4,870		4,723
Treasury stock, at cost	(3,872)		(3,848)


Total stockholders’ equity	4,922		4,694
Total liabilities and stockholders’ equity	$	8,755	$	7,585


	Three Months Ended
	April 4, 2021		March 29, 2020
Revenue:
Product revenue	$	953	$	701
Service and other revenue	140		158
Total revenue	1,093		859
Cost of revenue:
Cost of product revenue	265		174
Cost of service and other revenue	58		59
Amortization of acquired intangible assets	6		7
Total cost of revenue	329		240
Gross profit	764		619
Operating expense:
Research and development	197		156
Selling, general and administrative	374		274




Total operating expense	571		430
Income from operations	193		189
Other income (expense):
Interest income	1		14
Interest expense	(19)		(11)

Other expense, net	(6)		(14)
Total other expense, net	(24)		(11)
Income before income taxes	169		178
Provision for income taxes	22		5
Net income	$	147	$	173



Earnings per share:
Basic	$	1.01	$	1.18
Diluted	$	1.00	$	1.17
Shares used in computing earnings per share:
Basic	146		147
Diluted	147		148


☑			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



				Additional		Accumulated Other							Total
	Common Stock			Paid-In		Comprehensive		Retained		Treasury Stock			Stockholders’
	Shares	Amount		Capital		Income		Earnings		Shares	Amount		Equity





























































































































































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
Net income	—	—		—		—		179		—	—		179
Unrealized loss on available-for-sale debt securities, net of deferred tax	—	—		—		(2)		—		—	—		(2)
Issuance of common stock, net of repurchases	—	—		27		—		—		—	(128)		(101)
Share-based compensation	—	—		61		—		—		—	—		61
Balance as of September 27, 2020	194	2		3,737		12		4,466		(48)	(3,517)		4,700
Net income	—	—		—		—		257		—	—		257
Unrealized loss on available-for-sale debt securities, net of deferred tax	—	—		—		(10)		—		—	—		(10)
Issuance of common stock, net of repurchases	1	—		—		—		—		(1)	(331)		(331)
Share-based compensation	—	—		78		—		—		—	—		78
Balance as of January 3, 2021	195	2		3,815		2		4,723		(49)	(3,848)		4,694
Net income	—	—		—		—		147		—	—		147
Unrealized loss on available-for-sale debt securities, net of deferred tax	—	—		—		(1)		—		—	—		(1)
Unrealized gain on cash flow hedges, net of deferred tax	—	—		—		7		—		—	—		7
Issuance of common stock, net of repurchases	—	—		31		—		—		—	(24)		7
Share-based compensation	—	—		68		—		—		—	—		68
Balance as of April 4, 2021	195	$	2	$	3,914	$	8	$	4,870	(49)	$	(3,872)	$	4,922



In millions	Q1 2021	Q1 2020
Weighted average shares outstanding	146	147
Effect of potentially dilutive common shares from:
Equity awards	—	1
Convertible senior notes	1	—

Weighted average shares used in calculating diluted earnings per share	147	148
Potentially dilutive shares excluded from calculation due to anti-dilutive effect	—	1



Based on region of destination (in millions)	Q1 2021		Q1 2020
Americas	$	562	$	477
Europe, Middle East, and Africa	305		221
Greater China (1)	127		84
Asia-Pacific	99		77
Total revenue	$	1,093	$	859


	April 4, 2021				January 3, 2021
In millions	Amortized Cost		Gross Unrealized Gains		Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Estimated Fair Value

Debt securities in government-sponsored entities	$	—	$	—	$	—	$	10	$	—	$	10
Corporate debt securities	—		—		—		445		—		445
U.S. Treasury securities	—		—		—		830		1		831
Total	$	—	$	—	$	—	$	1,285	$	1	$	1,286


In millions	April 4, 2021


Principal amount of 2031 Term Notes outstanding	$	500
Principal amount of 2023 Term Notes outstanding	500

Unamortized discounts and debt issuance costs	(8)

Net carrying amount of term notes	992
Less: current portion	—
Term notes, non-current	$	992


In millions	2021 Notes
Cash paid for principal of notes converted	$	27
Conversion value over principal amount, paid in shares of common stock	$	17
Number of shares of common stock issued upon conversion	0.04


	Restricted Stock Units (RSU)	Performance Stock Units (PSU)(1)	Weighted-Average Grant Date Fair Value per Share
Units in thousands			RSU		PSU
Outstanding at January 3, 2021	1,721	—	$	313.35	—
Awarded	70	390	$	445.13	$	477.78
Vested	(17)	—	$	230.58	—
Cancelled	(88)	(6)	$	311.10	$	486.28
Outstanding at April 4, 2021	1,686	384	$	319.77	$	477.65


	Options (in thousands)	Weighted-Average Exercise Price
Outstanding at January 3, 2021	10	$	59.11

Exercised	(1)	$	48.36

Outstanding and exercisable at April 4, 2021	9	$	60.21


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES


2. REVENUE


3. INVESTMENTS AND FAIR VALUE MEASUREMENTS


4. DEBT


	Employee Stock Purchase Rights
Risk-free interest rate	0.08% - 1.56%
Expected volatility	30% - 48%
Expected term	0.5 - 1.0 year
Expected dividends	0		%
Weighted-average grant-date fair value per share	$	99.67


Dollars in millions	Q1 2021		Q1 2020		Change		% Change
Consumables	$	774	$	620	$	154	25	%
Instruments	179		81		98		121
Total product revenue	953		701		252		36
Service and other revenue	140		158		(18)		(11)
Total revenue	$	1,093	$	859	$	234	27	%


			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			9
Notes to Condensed Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			27
Item 4. Controls and Procedures			27

PART II. OTHER INFORMATION
Item 1. Legal Proceedings			28
Item 1A. Risk Factors			28
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			29
Item 3. Defaults Upon Senior Securities			None
Item 4. Mine Safety Disclosures			Not Applicable
Item 5. Other Information			None
Item 6. Exhibits			29
Signatures			32


		ILLUMINA, INC. (registrant)

Date:	April 27, 2021		/s/ SAM A. SAMAD
			Sam A. Samad Senior Vice President and Chief Financial 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/ FRANCIS A. DESOUZA
									Francis A. deSouza
									President and Chief Executive Officer


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