Illumina, Inc. (ILMN) Business Profile

What it does

Illumina makes tools for reading and analyzing genetic information. Its sequencing systems determine the order of the chemical building blocks in DNA, while its arrays test samples for known genetic markers. Customers use these tools in research, drug development and clinical testing. Illumina was founded in 1998, is headquartered in San Diego and is led by chief executive Jacob Thaysen.

Its products include instruments, the materials needed to prepare and run samples, and software that helps customers manage and interpret the resulting data. The systems range from smaller machines used for targeted analyses to production-scale instruments used for whole-genome sequencing. Illumina also provides sequencing and genotyping services and support for customers that own its equipment.

Customers include universities, research centers, government laboratories, hospitals, pharmaceutical and biotechnology companies, diagnostic laboratories and consumer genomics companies. Their uses span cancer research, inherited disease research, reproductive health, agriculture and other applications.

The company has expanded its analysis tools beyond DNA alone. Its products support work on RNA, proteins and other biological information, and its BioInsight platform brings analysis applications, AI models and curated biological data together. Illumina also acquired SomaLogic and other assets to expand its work in proteomics, the study of proteins.

How it makes money

Illumina has one reportable segment, Core Illumina. It earns revenue by selling sequencing and array instruments, consumables used with those systems, and services. Its consumables include reagents, flow cells and materials for preparing samples. Customers can also use its sequencing and genotyping services rather than operate every part of a project themselves.

Consumables represented 74% of consolidated revenue in 2025, while instruments represented 11%. As customers run samples on installed instruments, they purchase materials for those runs. Illumina also provides product support and informatics tools for managing samples, sequencing runs and data analysis. In clinical markets, some customers continue to run existing tests on older instruments while adding NovaSeq X capacity for new tests.

Instrument pricing varies by system, and the cost of sequencing depends on the instrument and application. Illumina is willing to discuss pricing with customers that commit to large volumes. It also offers lease-type arrangements; the company says sales still account for over 90% of its NovaSeq X placements.

Full-year 2025 consolidated revenue was $4.34 billion; Q3 2026 revenue was $1.17 billion, excluding tariff refunds.

In 2025, increased demand for high-throughput consumables was partly offset by fewer shipments of high- and mid-throughput instruments and lower service and other revenue. In Q3 2026, sequencing consumables revenue was $792 million. The company expects its larger NovaSeq X installed base to support additional consumables revenue as instruments go into use.

Customers and how it sells

Illumina serves research and clinical customers, as well as applied markets such as agriculture and consumer genomics. Research buyers include academic institutions, government laboratories and biotechnology and pharmaceutical companies. Clinical customers include hospitals and commercial molecular diagnostic laboratories, which use its technologies across areas including oncology, genetic health and reproductive health.

Researchers use the company’s systems for projects ranging from targeted sequencing to whole-genome studies. In agriculture, customers use its products to study genetic variation in crops and livestock. In clinical markets, some customers use the technology to develop and run tests, while others use it for research into disease and potential treatments.

Illumina markets and distributes directly in North America, Europe, Latin America and the Asia-Pacific region. It also uses life-science distributors in certain markets in Europe, Asia-Pacific, Latin America, the Middle East and Africa. Shipments to customers outside the United States totaled $2,100 million, or 48%, of consolidated revenue in 2025.

China is part of its international business. Illumina was added to China’s List of Unreliable Entities in early 2025, and its Greater China revenue declined that year. The company subsequently said it had returned to growth in China and was continuing to work with customers and regulators there.

Suppliers and costs

Illumina manufactures sequencing and array platforms and reagent kits. Its facilities include manufacturing operations in San Diego, Singapore and Cambridge in the United Kingdom. It uses raw materials, electronic and mechanical components, chemicals and biochemical materials, as well as products and subassemblies supplied by third parties.

Many components have multiple commercial sources, but some materials and components come from single-source suppliers. Illumina says it could, where necessary, redesign products for alternative components or reagents, or develop an internal supply capability. It also purchases additional inventory when circumstances warrant it.

Manufacturing costs, sales mix, royalties, freight and tariffs affect gross margin. Core Illumina gross margin was 66.1% in 2025, down from 67.1% in 2024, partly because of higher tariff costs. The company says the largest tariff cost impact relates to imports from its Singapore manufacturing facility; it has used supply-chain changes, cost measures and pricing actions to mitigate the effect.

Research and development is another expense. It was $967 million in 2025, and Illumina expects to continue investing in product development during 2026.

Competitive position

Illumina competes in sequencing, genetic-marker analysis, gene expression, proteomics and molecular diagnostics. Customers can choose among products that address the same biological question, while other products compete for the same laboratory budgets even when they are adjacent to Illumina’s offerings. Illumina does not identify individual competitors by name in its discussion of competition.

The company says competitors may have greater financial, technical, research or AI resources, larger sales and service organizations, or larger installed bases. It expects competition to intensify and says it must demonstrate performance on throughput, cost and accuracy.

Illumina owns or exclusively licenses patents covering areas including sequencing technology, instruments, software and bioinformatics. Its systems also combine instruments, consumables and analysis software, and its technologies have been used in customer-authored scientific papers.

Our reading: The patent portfolio provides a meaningful source of protection for Illumina’s technologies, although patents expire and the company also relies on licenses from others. Our reading: The combination of installed instruments, consumables and software can support customer relationships, but the evidence does not establish that customers cannot switch. Our reading: The published research using Illumina’s technologies supports familiarity with its tools, while competition on cost and performance remains a constraint.

Growth opportunities

Illumina is pursuing demand for sequencing in clinical testing and research, alongside tools that combine several kinds of biological data. Clinical applications include oncology, inherited disease and reproductive health. The company expects clinical sequencing demand to remain a growth driver and says customers are adding NovaSeq X capacity for new tests.

In Q3 2026, Illumina reported clinical growth of 14% in rest-of-world sequencing consumables, while research and applied consumables declined 6%. It expects mid-teens clinical growth and mid-to-high single-digit declines in research and applied sequencing consumables for the rest of the world in 2026. It also expects lower year-over-year pricing headwinds from the transition to NovaSeq X in 2027 than in 2026.

The company is expanding in proteomics and other multiomics applications, which combine data types such as genomics, RNA and proteins. It completed the SomaLogic acquisition in January 2026 and launched BioInsight to combine analysis software, AI models and biological data.

Another initiative is the Billion Cell Atlas, a dataset intended to help biopharmaceutical partners connect genetic signals to cellular mechanisms. Illumina says the project is more than halfway complete and that GSK has joined its consortium. The company has raised its 2026 revenue guidance to $4.64 to $4.66 billion, reflecting its Q3 performance and higher expectations for sequencing consumables in Q4.

Structural risks

• Market adoption and funding: Illumina’s success depends on continued growth in markets for genetic analysis and increased use of sequencing. Research customers have managed inventory and capital conservatively, and some laboratories have delayed projects because of funding concerns.
• Competition and pricing: Competitors offer alternatives across sequencing and related markets. Illumina expects competition to intensify, and its results depend in part on product performance, availability and price relative to alternatives.
• Supply and manufacturing: Interruptions, delays or quality problems at suppliers could prevent Illumina from launching, manufacturing or shipping products on time. Some materials and components have a single source.
• Regulation and international trade: Diagnostic products may require regulatory clearance or approval, which can be delayed or denied. Tariffs and trade barriers also affect operations; Illumina’s inclusion on China’s List of Unreliable Entities contributed to lower Greater China revenue in 2025.
• Intellectual property and litigation: Failure to protect proprietary technologies could harm Illumina’s competitive position. Litigation or infringement claims could consume time and money or prevent it from selling products and services.
• Cybersecurity: Security breaches or other disruptions could compromise information, products and services, interrupt Illumina’s or customers’ operations, and expose the company to liability.

Bottom line

Our reading

Illumina’s business combines sales of sequencing equipment with substantial revenue from the materials customers use to run it. Its growth depends on customers adopting and expanding sequencing, particularly in clinical applications, while research spending remains sensitive to funding. The breadth of its platform and intellectual property support its position, but competition, supply constraints and international regulation can affect that position and its costs.