Illumina will seek to cut $100 million in expenses by the end of this fiscal year as it plans to deal with a loss of revenue from China, after the country banned the importation of its DNA sequencers in retaliation for new U.S. tariffs.
The company also lowered its annual financial forecast, narrowing its earnings-per-share pitch to the bottom end of its previous prediction—now down to about $4.50, from what had been a range of $4.50 to $4.65.
Sales in China, as well as the larger region including Hong Kong and Taiwan, make up about 7% of Illumina’s total revenue, amounting to about $300 million in 2024—though that dollar amount has been declining in recent years, amid increasing competition from the locally based BGI Genomics and MGI Tech.
Illumina had once planned to grow its manufacturing footprint within the country. It opened a reagent production site in greater Shanghai in 2022, with plans to expand to instruments by 2028.
However, after the Trump administration issued a 10% tariff on Chinese goods in early February, the country’s commerce ministry placed Illumina on its “unreliable entities list,” a warning shot that opened the company up to potential fines and sanctions as well as restrictions on hiring, sales and other investments.
Earlier this month—after the White House added an additional 10% duty on China, alongside planned 25% tariffs on Canada and Mexico—the country barred Illumina’s shipments of DNA sequencers, while allowing the company to continue operating in the region.
Now, Illumina CEO Jacon Thaysen said the company will focus its attention elsewhere—in other international markets, as well as by adding new capabilities to its sequencer platforms.
“We are confident in the large global market opportunity for our solutions, the strength of our business, and our strategy to continue to lead innovation in genomics and multiomics in support of our customers,” Thaysen said in a statement, citing a target of high-single-digit revenue growth by 2027.
In February, shortly after being added to China’s watchlist, the company reported $4.3 billion in 2024 revenue, down 2% compared to the prior fiscal year.
Meanwhile, pauses in grants from the National Institutes of Health—including a plan to cap funding of “indirect” research expenses, which can include purchases of new equipment—have dented the stock prices of sequencer makers such as Illumina, as well as Pacific Biosciences and 10x Genomics.
“Our new fiscal 2025 guidance provides for limited further earnings contribution from China, and assumes a continuation of the macro trends we see today,” said Illumina’s chief financial officer, Ankur Dhingra.
To achieve $100 million in cuts, the company said the cost-reduction program “includes optimizing stock-based compensation and non-labor spending and accelerating certain productivity measures,” in order to “mitigate the impact of a range of potential scenarios for a reduction in revenue and related operating income from the company's Greater China business.”
February also saw Illumina raise the curtain on its upcoming entry into spatial transcriptomics, set for release in 2026, which will include a new multimodal software platform that runs on its current NextSeq and NovaSeq hardware.
The company is also developing what it describes as constellation mapped reads technology for whole-genome research, as well as plans to span single-cell analysis, CRISPR, epigenetics research and more.