ILMN

Illumina is a high-quality franchise that has just turned the corner on profitability. After two years of GRAIL-driven losses (net income -$1.16B in FY2023 and -$1.22B in FY2024), FY2025 net income swung to +$850M (+169.5%) and diluted EPS to $5.45 (+170.9%), with operating income up to $807M (+196.9%). Profitability is genuinely strong on a normalized basis: 66.1% gross margin, 18.6% operating margin, 19.6% net margin and a 31.2% return on equity. The balance sheet is healthy — $1.42B cash (+25.8%), $2.72B equity (+14.7%), and current assets of $3.29B against $1.58B current liabilities (current ratio ~2.1) — and operating cash flow of $1.08B (+28.9%) comfortably funds $148M of capex. Management is returning cash aggressively, with $742M of buybacks (+539.7%) shrinking the share count 3.5%.

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