Revenue in the third quarter was $1.12 billion, a year-on-year increase of 1%.

An increase of 3% year-over-year at constant exchange rates.

After the announcement, Illumina's U.S. stock price dropped 5% in after-hours trading.。

From this performance, Wall Street is not satisfied.

In terms of products, 65 units of NovaSeq 6000 were shipped, and the growth rate was too embarrassing to write.

If the factor of NovaSeq X's release is considered (although it was not launched until October), this lack of growth is also understandable.

However, the shipment volume of the mid-throughput NextSeq 1000/2000 series increased by 40% year-over-year, and the growth of 13% for low-throughput sequencers like the iSeq is still acceptable.

Sales from the sequencers themselves amounted to only $162 million,Growth declined severely, with a year-on-year decrease of 10% (as shown in the figure above).

Even the growth rate of sequencing reagents has only remained flat.

I think this is where Wall Street's dissatisfaction with the earnings report lies.

More notably, in Q3 2022, Illumina recorded a staggering loss of $3.816 billion (under GAAP rules), compared to a profit of $317 million in the previous year.

I'm afraid that a 5% drop is far from the end.

On October 29, 2022, the EU just "renewed" the temporary ban, continuing to block Illumina's acquisition of Grail, making this "de facto marriage" seem a bit awkward.

Breaking down Illumina's revenue, in the Core Illumina segment, revenue reached $1.11 billion, with a profit of $445 million, and a gross margin of 67.9%, which slightly decreased year-over-year but remains generally stable.

However, with the addition of GRAIL, the situation changed drastically, leading to a direct loss of $41.01 billion.

And this part actually comes from GRAIL's goodwill impairment loss.

According to Illumina's own explanation as follows:

As for how to understand it, everyone has their own perspective.

In terms of revenue, GRAIL also performed impressively, directly securing $10 million in income while spending $149 million.

In Q2, it earned $12 million but spent $156 million.

Actually, it could be considered as... earning... earning?

More worrying is that Illumina's cash flow has also shown a situation of expenditure exceeding income.

In Q2 2022, a negative value of $119 million occurred.

Note that the figure for Q1 2022 was a positive 111 million.

Cash and cash equivalents also declined from 1.4 billion in Q1 and 1.3 billion in Q2 to approximately 1 billion dollars.

Of course, everyone knows, there is a saying that stock trading is all about trading expectations.

So let's look back at Illumina's full-year profit outlook for Q1 2022.

Annual growth rate of 4-5%, such a large-scale advanced technology manufacturing company can be understood.

But today, the outlook given by Illumina is simply frightening.

Not only has the overall growth floor been revised to 1%, but the forecast for core business growth is also expected to remain flat.

The performance decline of such an industry-leading company is enough to shake the entire industry.

You could say the pressure on Illumina brought by the challenges from MGI Tech and PacBio.

However, the performance reversal of such a large-scale company may lead to investors reassessing the value of the entire industry, which is inevitable.

Of course, this does not mean that the trend has reversed, it's only been one quarter after all.

Oh, right, the previous quarter also saw a loss...

Uh...

This quarter was not a great one for Illumina.

Even the basic research market has seen an 8% decline.

This also explains why Illumina has been aggressively promoting their new business directions in clinical and pharmaceutical R&D during this period.

From all indications, Illumina's sequencing empire is on the verge of a storm.

On November 2, 2022, Illumina and Twist Bio announced their collaboration in exome sequencing.

Illumina will provide customers with the co-branded exome capture kit: Twist Bio for Illumina Exome 2.0 Plus.

It's a bit like Chery Tata Land Rover Range Rover Evoque, uh, more or less.

In fact, these two companies have deep roots and this is not the first time they have collaborated.

Previously, there were rumors that Illumina was its largest shareholder, but currently, from the perspective of shareholding, this is not the case.

But Illumina is indeed Twist's largest shareholder—at the time of the IPO.

It can also be said that the bone is broken but still connected by tendons.

The additional part ends, and I will have the opportunity to write in detail later.

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