ILMN Q4 Deep Dive: Clinical Consumables Growth, Multiomics Expansion, and Margin Momentum

Genomics company Illumina (NASDAQ:ILMN) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 5% year on year to $1.16 billion. The company’s full-year revenue guidance of $4.55 billion at the midpoint came in 3% above analysts’ estimates. Its non-GAAP profit of $1.35 per share was 8.3% above analysts’ consensus estimates.

Is now the time to buy ILMN? Find out in our full research report (it’s free for active Edge members).

StockStory’s Take

Illumina’s fourth quarter was marked by strong performance in its clinical consumables business, with management citing 20% year-over-year growth outside China as a key driver. CEO Jacob Thaysen attributed the result to increased adoption of sequencing-based diagnostic tests and the transition toward more data-intensive clinical applications. While the company saw progress in clinical markets, Thaysen noted that research and academic demand remained subdued, reflecting ongoing funding constraints. Despite exceeding Wall Street’s expectations for both revenue and adjusted earnings, the market reacted negatively, as some investors appeared concerned about the sustainability of recent momentum and muted research demand.

Looking ahead, Illumina’s guidance reflects confidence in continued clinical strength, driven by double-digit to mid-teens growth in clinical consumables. Management expects ongoing adoption of whole genome approaches in oncology and genetic diseases, which require higher sequencing intensity and support durable consumables demand. Thaysen highlighted the integration of new multiomics capabilities and the recently acquired Somalogic proteomics platform as strategic priorities. However, CFO Ankur Dhingra emphasized caution in the research segment, noting persistent uncertainty in academic funding and limited visibility into grant distributions, which could weigh on overall growth in the coming year.

Key Insights from Management’s Remarks

Management pointed to accelerating clinical adoption, progress on strategic initiatives, and margin expansion as the primary factors shaping fourth quarter results and setting the stage for 2026.

• Clinical consumables momentum: Management credited broader adoption of sequencing in clinical diagnostics and expanded reimbursement for tests like minimal residual disease and early cancer detection as key drivers. Thaysen said, “The strength we are seeing in clinical consumables, including 20% ex-China growth in Q4, is being driven primarily by adoption of sequencing-based diagnostic tests and broader demand for comprehensive genomic profiling.”

• NovaSeq X platform transition: Over half of high-throughput sequencing revenue has now shifted to the NovaSeq X instrument, supporting both instrument sales and consumables demand. The company highlighted robust placements in Q4, particularly among clinical customers, and expects this transition to be largely complete by the end of 2026.

• Multiomics and Somalogic acquisition: Illumina completed the acquisition of Somalogic, strengthening its position in proteomics—a field focused on large-scale protein analysis. The integration is expected to broaden Illumina’s offerings in multiomics, which combines genomic, proteomic, and other biological data to support drug discovery and clinical research.

• Software and data initiatives: The launch of BioInsight and the Billion Cell Atlas, which leverages single-cell sequencing, CRISPR-based perturbation, and AI, opens new opportunities in data-driven drug discovery. Early collaborations with major pharma companies signal potential for new recurring revenue streams.

• Margin expansion and cost discipline: Non-GAAP operating margin expanded 180 basis points year over year, supported by prior cost reduction programs and a focus on prioritizing growth investments. Dhingra emphasized that these actions helped offset macro-related headwinds, including tariffs, and positioned the company to deliver continued margin gains in 2026.

Drivers of Future Performance

Illumina’s outlook for 2026 is anchored by growth in clinical applications, expanding multiomics capabilities, and careful management of research market headwinds.

• Sustained clinical growth: The company anticipates double-digit to mid-teens clinical consumables growth, supported by increasing adoption of sequencing for oncology and genetic disease testing. Management expects this trend to drive higher demand for both instruments and consumables, especially as whole genome sequencing becomes more prevalent.

• Multiomics product expansion: With the integration of Somalogic and the launch of new solutions such as spatial transcriptomics and Constellation MAP Read, Illumina aims to broaden its reach in multiomics. Management believes these additions will drive incremental growth beginning in 2027, with early traction expected among pharma and research partners.

• Research segment uncertainty: Persistent funding challenges in academic markets remain a headwind, with management guiding for mid- to high-single-digit declines in research and applied consumables revenue. CFO Dhingra noted that any improvement in grant distribution could provide upside, but current assumptions remain cautious.

Catalysts in Upcoming Quarters

In future quarters, the StockStory team will be monitoring (1) continued adoption and utilization rates of the NovaSeq X platform, (2) integration progress and early revenue contribution from the Somalogic acquisition, and (3) signs of stabilization or improvement in academic research funding. Additionally, we will track the commercial rollout and industry uptake of new multiomics and software solutions, as well as any updates on regulatory developments in China that could affect instrument sales and revenue growth.

Illumina currently trades at $127.11, down from $133.61 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).

Stocks That Trumped Tariffs

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.