Illumina Reports Record Financial Results for Third Quarter of Fiscal Year 2014
Illumina, Inc. announced its financial results for the third quarter of 2014.
Third quarter 2014 results:
- Revenue of $481 million, a 35% increase compared to $357 million in the third quarter of 2013
- GAAP net income for the quarter of $93 million, or $0.63 per diluted share, compared to $31 million, or $0.22 per diluted share, for the third quarter of 2013
- Non-GAAP net income for the quarter of $114 million, or $0.77 per diluted share, compared to $63 million, or $0.45 per diluted share, for the third quarter of 2013 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income” for a reconciliation of these GAAP and non-GAAP financial measures)
- Cash flow from operations of $146 million and free cash flow of $117 million for the quarter
Gross margin in the third quarter of 2014 was 69.5% compared to 58.8% in the prior year period; the prior year period included impairment charges of $25.2 million related to the discontinuation of a non-core product line. Excluding the effect of non-cash charges associated with stock compensation, amortization of acquired intangible assets, legal contingencies, and impairments, non-GAAP gross margin was 73.2% for the third quarter of 2014 compared to 70.2% in the prior year period.
Research and development (R&D) expenses for the third quarter of 2014 were $85.1 million compared to $71.0 million in the prior year period. R&D expenses included $14.6 million and $9.6 million of non-cash stock compensation expense in the third quarters of 2014 and 2013, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 14.6% compared to 17.2% in the prior year period.
Selling, general and administrative (SG&A) expenses for the third quarter of 2014 were $119.9 million compared to $95.6 million in the prior year period. SG&A expenses included $27.2 million and $16.1 million of non-cash stock compensation expense in the third quarters of 2014 and 2013, respectively. Excluding these charges, amortization of acquired intangible assets, and contingent compensation, SG&A expenses as a percentage of revenue were 19.0% compared to 20.6% in the prior year period.
Depreciation and amortization expenses were $26.7 million and capital expenditures were $28.8 million during the third quarter of 2014. The Company ended the third quarter of 2014 with $1.27 billion in cash, cash equivalents and short-term investments, compared to $1.17 billion as of December 29, 2013.
“Illumina experienced tremendous momentum in the third quarter, with strong shipments in HiSeq X, NextSeq and MiSeq, as well as the associated consumables, resulting in record financial results,” stated Jay Flatley, CEO. “With the most extensive sequencing portfolio available, we are well-positioned for continued long-term growth as we develop and address the large and untapped market opportunities ahead of us.”
Updates since our last earnings release:
- Announced the launch of the HiSeq X™ HD v2 Reagent Kit for use on the HiSeq X Ten Sequencing System and the HiSeq® Rapid v2 Reagent Kit for use on the HiSeq 2500 Sequencing System
- Announced a £78 million deal with Genomics England to sequence 100,000 human genomes
- Announced the formation of the Actionable Genome Consortium, alongside world-renowned cancer centers, in an effort to recommend standards for applying NGS to cancer tumors
- Entered into strategic partnerships with AstraZeneca, Janssen, and Sanofi to develop a universal NGS-based oncology test system
- Announced the selection of Encoded Genomics, Inc., EpiBiome, Inc., and Xcell Biosciences Inc. to the inaugural class of the Illumina Accelerator
- Launched new BaseSpace® apps developed with AB SCIEX to bring together proteomics and next-generation sequencing capabilities
- Further strengthened Illumina’s Board of Directors with the appointment of Jeff Huber, Senior Vice President at Google, Inc.
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