00:00I'm looking at your stock price and it is rallying the most in about 13 years, gaining 23% on the day.
00:07When you spoke with investors and analysts after your call last night, what do you think it is about your results or commentary that has made investors so enthusiastic about your stock today?
00:17Yeah, thank you very much. We're certainly very pleased with the performance today in the stock market also.
00:22But I think what you're seeing is there's a growing confidence in our ability to execute on our plans.
00:28We came out a little more than a year ago and explained or put a new mark in the sand of saying in 27, we will be growing by high single digital growth, but also delivering 26% operating margin, which would be 500 basis point improvements for 23.
00:44We entered into 2025 actually executing on that plan.
00:48But then we were hit, as you mentioned also, with certain headwinds that set us back a little bit.
00:54And I think here in Q3, we again showed very strong performance.
00:57We are moving on the top line that is improving, but also the rest of the P&L and with an impressive beat on the earnings with 18% growth.
01:07So I think that's what our analysts and our shareholders are seeing, that we continue to execute towards the long-term plan here.
01:15Well, you take a look at some of the sell-side reaction here.
01:18It seems like Wall Street was particularly encouraged by what you're seeing in your clinical markets, the growth that you're seeing there.
01:24We'd love a little bit more color on that, on what changed just in the last few quarters where you're starting to see this flywheel really come into effect.
01:33Yeah, exactly.
01:34It's a good way of looking at a flywheel.
01:37We are seeing actually DNA sequencing becoming more and more involved into healthcare and being a part of making the right decision, for example, for cancers, but also for many other genetic disorders.
01:51And more diseases are coming on board.
01:53So you're seeing our customers who are building their business on top of the Illumina Technologies.
01:59They are serving the clinical market, and they are growing very rapidly.
02:03And we are, of course, also growing very well when they're growing.
02:06So that's what you're seeing is that the market is healthy.
02:09That's a huge opportunity.
02:10We're just in the beginning of bringing sequencing into standard of care.
02:14So there's a huge opportunity in front of us in the clinical space and the healthcare space.
02:19And you see our customers are benefiting from it, and so are we.
02:22So we're very pleased with the performance in the clinical market.
02:25Well, let's talk a little bit about China, because that was also a big topic on your earnings call.
02:31And you think about China.
02:32I mean, when it comes to your revenues in the region, they came in better than expectations.
02:35But we know that those export restrictions are still in place.
02:39I know that there's not too much visibility you can give into 2026, Jacob.
02:43But when you take a look at the lay of the land, do you think that that ban will be reversed anytime soon when it comes to how China is treating Illumina machines?
02:52Well, it's still something that we are dealing with today.
02:55And last time we spoke at JP Morgan here, that situation was not the case.
03:00But we were definitely impacted by sanctions of our ability to place instruments in China in the beginning of the year.
03:08So it's been a turbulent situation for us.
03:10I think I'm very proud about how our Chinese team has been able to continue to serve our existing customers in China and also the existing customers that really see that Illumina continues to provide high-quality sequencing, but also, of course, continue to serve them in the market.
03:28There's a huge opportunity in China.
03:30We want to be a part of China, and we're working with regulators on both sides of the ocean here to make sure we can get to a resolution and continue to go back with full speed in China.
03:43Yeah, and I know a lot of it is out of your hands, of course, because it goes higher up.
03:48But I wonder if there's an existential risk to you if you're locked out of the Chinese market long term, given all the investment in life sciences taking place in that country right now.
03:58Well, we have already we have good connections in both sides.
04:02So we think there will be a future also.
04:04But we continue to have a very strong performance across the globe.
04:07And we see a lot of activities both in U.S. and Europe and rest of the world.
04:14So I'm not too concerned about that.
04:16I would love to be a part of the China opportunity also.
04:19But even in a situation where we wouldn't be able to be in China, I think that Illumina will continue or we will continue to be the leader.
04:26We continue to do a lot of innovations and really moving the field forward.
04:31There's a lot still to be gained in this market.
04:34And we see a lot of the pharmaceutical companies and others that is very reliant on our technology continue to use Illumina, even though if we are not in China.
04:43But again, I believe that we will be able and hopefully we will be able to find a solution, long term solution for China.
04:49Well, Jacob, not to be dramatic, but on the topic of existential threats here, let's talk a little bit about the competitive landscape,
04:54because we got the news that Roche, of course, is launching its own DNA sequencer.
05:00I believe that's time for next year.
05:02I would love to hear your thoughts on what this means for your business and your market share.
05:08Yeah, look, we've been in this industry, the DNA sequencing industry, for more than 20 years.
05:13The whole ecosystem is built around the Illumina technology.
05:16We have a very close relationship with our customers.
05:19And we are also spending a billion dollars per year in innovating.
05:23So we continue to really move the market forward and we continue to innovate to make sure we can serve our customers from what they want to do today, but also what they do for the next decade to come.
05:35I love competition.
05:37There's nothing better.
05:38It keeps us on our toes.
05:39It really makes sure that we continue to push ourselves to be better in front of our customers.
05:45And in reality, what you're seeing is that new competitions coming in is really speaking to the opportunity in this market.
05:51I actually truly believe that the competition will help us actually expand the opportunity in this market.
05:56It's a DNA sequencing and multiomics, RNA proteomics is going to be a big part of health care going forward.
06:06And Illumina will continue to be in lead on that.
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