Illumina Inc

Strong Q2 beat + raised outlook (good/surprising): Revenue $1.16B (+9.5% YoY; +6.5% organic ex-currency/acquisitions); rest-of-world organic +8.1%. Sequencing consumables $775M (+5% YoY on reported/organic rest-of-world). EPS $1.31 (+10% YoY) with non-GAAP gross margin 68.2% and non-GAAP operating margin 22.5% (above guidance). Management said Q2 instrument placements >95 NovaSeq X supported the quarter’s outperformance.

Clinical demand remains the core growth engine; “no cliff” (good): Clinical markets are ~65% of sequencing consumables and are driving results. Clinical consumables growth ex-China: 15% in Q2, with U.S.-Canada >20%. Jacob explicitly framed the demand cycle as a multi-quarter “wave” (not a cliff) driven by elevated NovaSeq X placements (already >3 consecutive quarters of growth) and ongoing capacity builds by clinical customers.

NovaSeq X transition momentum supports multi-quarter consumables (opportunity): As of Q2, ~83% of volumes and 59% of revenue are transitioned to NovaSeq X. Clinical volume on X is ~78%, with expectation to reach ~80–85% conversion by end of 2026. Total connected instrument output (gigabases) grew >30% YoY, with clinical growth “well above that.” Management believes elevated placements will keep consumables growing for many quarters, even as instrument mix fluctuates.