Genomics company Illumina (NASDAQ: ILMN) beat Wall Street’s revenue expectations in Q3 CY2025, but sales were flat year on year at $1.08 billion. Its non-GAAP profit of $1.34 per share was 14.7% above analysts’ consensus estimates.

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"I am pleased to announce that the Illumina team delivered Q325 results that exceeded the high-end of our guidance range for revenue and earnings, driven by revenue acceleration in clinical, our largest market segment," said Jacob Thaysen, Chief Executive Officer.

Company Overview

Pioneering the ability to read the human genome at unprecedented speed and affordability, Illumina (NASDAQ: ILMN) develops and sells advanced DNA sequencing and microarray technologies that allow researchers and clinicians to analyze genetic variations and functions.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Illumina grew its sales at a mediocre 5.8% compounded annual growth rate. This was below our standard for the healthcare sector and is a poor baseline for our analysis.

We at StockStory place the most emphasis on long-term growth, but within healthcare, a half-decade historical view may miss recent innovations or disruptive industry trends. Illumina’s performance shows it grew in the past but relinquished its gains over the last two years, as its revenue fell by 1.3% annually.

We can better understand the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Illumina’s organic revenue averaged 1.6% year-on-year declines. Because this number aligns with its two-year revenue growth, we can see the company’s core operations (not acquisitions and divestitures) drove most of its results.

This quarter, Illumina’s $1.08 billion of revenue was flat year on year but beat Wall Street’s estimates by 1.8%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection implies its newer products and services will fuel better top-line performance, it is still below the sector average.

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Adjusted Operating Margin

Adjusted operating margin is a key measure of profitability. Think of it as net income (the bottom line) excluding the impact of non-recurring expenses, taxes, and interest on debt - metrics less connected to business fundamentals.

Illumina has been an efficient company over the last five years. It was one of the more profitable businesses in the healthcare sector, boasting an average adjusted operating margin of 23.1%.

Analyzing the trend in its profitability, Illumina’s adjusted operating margin decreased by 5.9 percentage points over the last five years, but it rose by 2.3 percentage points on a two-year basis. Still, shareholders will want to see Illumina become more profitable in the future.

This quarter, Illumina generated an adjusted operating margin profit margin of 24.4%, up 1.9 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sadly for Illumina, its EPS declined by 2.2% annually over the last five years while its revenue grew by 5.8%. However, its adjusted operating margin actually improved during this time, telling us that non-fundamental factors such as interest expenses and taxes affected its ultimate earnings.

We can take a deeper look into Illumina’s earnings to better understand the drivers of its performance. As we mentioned earlier, Illumina’s adjusted operating margin expanded this quarter but declined by 5.9 percentage points over the last five years. Its share count also grew by 4.1%, meaning the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q3, Illumina reported adjusted EPS of $1.34, up from $1.14 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Illumina’s full-year EPS of $4.45 to grow 5.6%.

Key Takeaways from Illumina’s Q3 Results

We enjoyed seeing Illumina beat analysts’ full-year EPS guidance expectations this quarter. We were also glad its organic revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 4.9% to $104 immediately after reporting.

Sure, Illumina had a solid quarter, but if we look at the bigger picture, is this stock a buy? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free for active Edge members.