管理層發言
Good day, ladies and gentlemen. Welcome to the second quarter 2026 Illumina earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, we will conduct a question and answer session. Please be advised that today's conference is being recorded. I would now like to hand the call over to head of investor relations, Conor McNamara.
Hello, everyone. Welcome to Illumina's second quarter 2026 earnings call. Today, we will review our financial results, released after market close, and provide prepared remarks before opening the line for questions and answers. Our earnings release is available in the investor relations section of illumina.com. Joining me today are Jacob Thaysen, Chief Executive Officer, and Ankur Dhingra, Chief Financial Officer. Jacob will begin with an update on Illumina's business, followed by Ankur's review of the financials. We will be discussing certain non-GAAP financial measures, and a reconciliation to GAAP can be found in today's release and in the supplementary data on our website. Unless otherwise stated, all growth rates are presented on a year-over-year reported basis. Organic growth adjusts for the impact of currency and acquisitions, and rest of world organic growth also excludes Greater China due to our inclusion on China's unreliable entity list. This call is being recorded. The replay will be available on our website. It is our intent that all forward-looking statements made during today's call will be protected under the Private Securities Litigation Reform Act of 1995. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that Illumina files with the SEC, including our most recent Forms 10-Q and 10-K. With that, I will now turn the call over to Jacob.
Thank you, Conor. Good afternoon, everyone. We had a great first half of 2026, including another strong quarter in Q2. I couldn't be prouder of what the Illumina team delivered. Revenue grew at the fastest rate since I joined the company, driven by increasing demand for Illumina's technology as customers expand clinical applications. Our deep relationships with leading U.S. clinical customers and large installed base reinforce the durability of our position in these markets. Margins also came in above our guidance despite higher than expected costs. I want to thank our teams for their focus and commitment to our customers and shareholders. Our first half results put us in a strong position as we look ahead. We are raising our 2026 guidance for revenue growth and profitability while remaining committed to executing against our long-range targets. Today, I'm going to focus on three areas: our performance in the quarter and the trends we are seeing across our end markets, how we are expanding the value of our platform through new workflows and multi-omics capabilities, and the progress we are making against our long-term strategy and financial targets. Let me start with how the quarter came together. Rest of world organic revenue grew 8.1%, above the high end of our guidance, and demand for NovaSeq X remained high more than three years after launch, with more than 95 placements in the quarter. Together with disciplined expense management, this translated into both margin and EPS above guidance. Clinical markets, which represent approximately 65% of sequencing consumables revenue, remained our primary growth driver. Rest of world clinical growth was broad-based across regions and applications, with particular strength in our U.S.-Canada region. Strong instrument placements over the past three quarters are expanding customer capacity and will support consumable growth for many quarters to come. Placements will vary from quarter to quarter, but demand remains elevated. In research and academic markets, results improved from Q1. Customers remain cautious as they navigate funding uncertainty. We saw some signs of improvements late in the quarter, but it's too early to call a recovery. These customers remain an important source of innovation and help drive clinical adoption over time. Our expanding multi-omics portfolio gives customers more ways to analyze biology and broadens how we can support these markets over time. Let me turn next to innovation. Our strategy is to deliver the highest quality insights for the lowest end-to-end cost. The updates we made this quarter advance that goal by expanding what customers can do on NovaSeq X and increasing the value of the Illumina ecosystem. Within core sequencing, NovaSeq X remains central to our approach. Customers are investing in the platform not only for what it enables today, but because they see a clear path to use it for years to come. The roadmap we laid out earlier this year gives them confidence that the X will continue to support their workflows over time, helping sustain demand for the platform. We recently launched our whole genome MRD research workflow, a tool designed to help customers shorten asset development timelines and lower development costs. The solution runs on NovaSeq systems and is now in early access with select customers. Beyond core sequencing, we are expanding our multi-omics offerings, consistent with the strategy we laid out in 2024. This summer, we expanded our portfolio with the launch of the StrataMap Spatial, our sequencing-based spatial workflow. This launch broadens our capabilities in spatial biology and gives researchers another way to study tissue biology through the Illumina ecosystem. We are also seeing sustained proteomics momentum following the close of our SomaLogic acquisition. Our newly branded SomaScan and SomaSeq offerings are generating strong interest and helping customers connect proteomics and genomic insights. In BioInsight, we are expanding our data and insights offerings to help pharmaceutical customers advance AI-enabled drug discovery. BioInsight brings together sequencing, perturbation tools, compute power, and AI to build high-quality multi-omics data sets and interpretation tools. These capabilities can deepen understanding of disease pathways, infer causality, and enable more predictive biological models. One of the first key BioInsight initiatives is the Billion Cell Atlas, a genome-wide perturbation data set that deepens understanding of disease biology and generates data for AI models. We are producing this data at an unprecedented scale and with the quality and consistency needed to support biological discovery. With over 300 million cells delivered to date, biopharma interest continues to grow. We have started booking revenue from our Billion Cell Atlas, and we added three new partners subsequent to quarter end, bringing our total to six. While still early, these milestones are an encouraging sign of the opportunity ahead. Later this year, we look forward to sharing additional BioInsight updates as we expand how customers can use biological data to accelerate discovery. Turning to our improved 2026 outlook, we are increasing our full year revenue outlook to reflect both our Q2 outperformance and our expectations for the remainder of the year. The momentum we are seeing, especially from our clinical customers, gives us greater confidence as we enter the second half. We now expect full-year rest-of-the-world organic revenue growth greater than 5%. We expect the pace of growth in the second half to remain broadly consistent with the first half, although the mix will shift. Consumables revenue will continue to grow from a higher installed base, while instrument growth moderates against tougher comparisons following several quarters of elevated NovaSeq X placements. The expanding NovaSeq X installed base will also add further consumables growth beyond 2026 and support our path towards high single-digit revenue growth in 2027. We are also raising our EPS outlook, reflecting Q2 outperformance, higher revenue expectations, and continued expense discipline. Ankur will provide the details in his remarks. Our updated guidance reinforces our progress toward the long-term financial targets we laid out in 2024, and we remain focused on achieving them. We operate in a healthy market with significant untapped opportunity. By continuing to deliver innovative technology that improves customer workflows and expands their capabilities, we expect to maintain our leadership as the market evolves. With three consecutive quarters of growth, we enter the second half from a stronger position. Our teams are energized by the response to our recently launched end-to-end workflows. That interest confirms that we are solving the right problems and reinforces our innovation priorities. We are also strengthening the team leading this work. We recently welcomed Michael Sullivan and Julie Coletti to our management team, adding deep commercial and legal experience as we scale the business. We are equally pleased to welcome David King and Dan Skowronski to our board. Their experience across healthcare, diagnostics, and R&D will be valuable as we advance our clinical and innovation priorities. I want to thank the entire Illumina team for their focus and commitment, and our customers for the trust they place in us. With that, I'll hand it over to Ankur to walk through the financial details before we move to Q&A.
Thank you, Jacob, and good afternoon, everyone. I will walk through our second quarter financial results, provide additional color on revenue, expenses, earnings, the balance sheet, and capital deployment, then discuss our updated outlook. Before I get into the details of the financial performance, let me provide a high-level view of how the second quarter played out. For Q2, our revenue and earnings results came in ahead of our expectations and guidance. Revenue grew 8% on an organic basis ex-China, margins were ahead, and EPS of $1.31 grew 10% year-over-year. We placed more than 95 X instruments. Turning to the details. During the second quarter, Illumina's revenue of $1.16 billion was up 9.5% year-over-year, and 6.5% on an organic basis, with currency and acquired revenue together contributing approximately three percentage points to our reported growth rate. Rest of the world organic growth rate was 8.1%. Sequencing consumables revenue of $775 million was up 5% year-over-year on both a reported and organic rest of world basis. High throughput volume drove most of the revenue growth as the NovaSeq X install base continues to expand and pull through increased year-over-year. Sequencing consumables revenue in clinical markets grew 15% ex-China, with the U.S.-Canada region continuing to grow above 20%. We saw slower growth in Europe, Middle East, and Latin America region, largely due to ongoing near-term dynamics in the region. First half growth was approximately 17%, a slight acceleration versus the second half of 2025, reflecting continued adoption of sequencing-based diagnostics and more sequencing-intensive applications. We are raising our growth outlook in clinical markets towards the high end of our prior guide and now expect mid-teens growth for the year. Sequencing consumables in research and applied markets declined 7% rest of the world; year-to-date trends have remained consistent with our outlook entering the year. Though we were encouraged by the trends in the quarter, including 9% revenue growth quarter-over-quarter, we believe it's still too early to predict the timing of an end market recovery, and we continue to expect mid to high single-digit declines for research and applied consumables in 2026. We made further progress in the quarter transitioning customers to the NovaSeq X. As of Q2, approximately 83% of volumes and 59% of revenue had transitioned to the platform. Despite continued transition dynamics, sequencing consumables posted strong growth. Approximately 78% of clinical volume is now on the X; we continue to expect clinical volumes will reach 80%–85% conversion by the end of 2026. On sequencing activity, total sequencing gigabase output on our connected high and mid-throughput instruments once again grew more than 30% year-over-year, with clinical growth well above that. Sequencing instruments revenue of $125 million was up 31% year-over-year in Q2 on both reported and rest of world organic basis, driven by increased sales of NovaSeq X and the MiSeq i100. We made significant progress with our supply investments in the quarter, allowing us to place over 95 NovaSeq X instruments in Q2, as demand remains strong for the platform, especially among some of our largest clinical customers, where we saw several multi-unit capacity expansion orders, including for start of new clinical trials. We also placed over 10 NovaSeq 6000 units as some customers plan to remain on that platform for years to come. Sequencing service and other revenue of $154 million was up 14% on both a reported and rest of world organic basis. As Jacob mentioned in his prepared remarks, we are gaining traction in our Billion Cell Atlas program, resulting in higher data revenue from biopharma customers. Microarrays and other revenue of $105 million was up 21% reported and included SomaLogic revenue, which continues to track towards the high end of our deal expectations. On rest of world organic basis, microarrays and other revenue declined 4%. Moving to the rest of the P&L. Non-GAAP gross margin of 68.2% came in slightly better than our expectations, especially given product mix from the relatively high sales of instruments in the quarter. We also absorbed higher freight and memory costs in this quarter. Non-GAAP operating expenses were $530 million and include SomaLogic expenses. In addition, we had approximately 60 basis points of deferred compensation this quarter, which is EPS neutral with offset in other income. Non-GAAP operating margin was 22.5% for the quarter, above our guidance, driven by higher volume, as the team did an excellent job in absorbing increased inflationary effects. Looking below the line, non-GAAP net interest and other expense was $8 million in the quarter. Our non-GAAP tax rate was 20.5%, and average diluted shares were approximately 153 million, reflecting continued share buybacks. Altogether, non-GAAP EPS of $1.31 per diluted share grew approximately 10% year-over-year and approximately 13% excluding the dilutive impact of acquisitions. Moving to cash flow, the balance sheet and capital allocation for the quarter. Cash flow provided by operations was $201 million for the quarter, which is below the usual trend due to timing of tax payments and higher inventory as we secured supply for critical components for the next few quarters. Capital expenditures were $39 million. Free cash flow was $162 million. We repurchased 0.9 million shares of Illumina stock for approximately $122 million at an average price of $129.07 per share. At quarter end, we had approximately $1.8 billion remaining under current share repurchase authorizations. We intend to continue to repurchase shares opportunistically. We ended the quarter with approximately $1.17 billion in cash equivalents and short-term investments, $1.99 billion in total debt, and a leverage ratio of approximately 1.6x gross debt to last 12 months EBITDA. Overall, we had a great second quarter and first half of 2026, allowing us to raise our full-year guidance and reinforce our confidence in the progress we are making towards our long-term targets. Turning to our full-year 2026 guidance. Starting with revenue, we're raising our rest of world organic growth guidance greater than 5%, up from our prior range of 2%–4%, raising our reported revenue guidance by $50 million at the midpoint to $4.60 billion–$4.64 billion. This reflects the Q2 beat and also our increased expectations for the second half of the year. We are also expecting to come in towards the high end of our previously stated guidance for sequencing consumables and instruments. For rest of world organic sequencing consumables growth, we now expect mid-single-digit growth, including mid-teens growth in clinical and mid to high single-digit declines in research. This reflects a modest revenue benefit from our outperformance in X placements over the last two quarters, though most of that benefit will come in 2027, as our clinical customers typically take at least six to nine months to reach normalized consumables pull-through levels. Sequencing instruments are now expected to grow low single digits rest of the world organically in 2026. Demand for NovaSeq X remains robust, and we expect unit placements to remain at elevated levels in the second half of the year, with some moderation in year-over-year growth rates. We are maintaining our operating margin guidance of 23.4%–23.6%. With our higher revenue expectations for the year, this equates to diluted EPS guidance of $5.30–$5.40, an increase of $0.12 at the midpoint versus our prior guide, and a year-over-year growth of 11% at the midpoint and 14% ex acquisitions. Moving to Q3 2026 guidance, we expect rest of world organic revenue growth of approximately 4.5% and reported revenue of $1.14 billion–$1.16 billion, non-GAAP EPS of $1.33–$1.38, and non-GAAP operating margin of approximately 24%. This equates to approximately 150 basis points of margin expansion sequentially, driven by higher consumable mix and the increased benefit of cost actions and improved efficiency. Our solid half one performance and rapidly growing clinical install base provide a strong setup for continued consumable growth for years to come. We're seeing an increase in X placements to meet increasing volume demand, which will help accelerate consumable revenue growth as recent placements come online. In addition, we are beginning to see revenue contributions from our Billion Cell Atlas and our growing customer interest in our multiomics portfolio, and we still believe new products will add one to two points of growth next year. Taken together, we continue making progress towards our 2027 financial targets. In closing, I want to thank the Illumina team for their continued focus and disciplined execution throughout the quarter. We are off to a great start in 2026, and I'm extremely encouraged by the progress we've made in returning Illumina to long-term sustainable revenue and earnings growth. Thank you for joining our call today. I will now invite the operator to open the line for Q&A.
分析師問答
NovaSeq X installs in the second half. Given the backdrop of the clinical growth that you're seeing, it appears there's really no clinical cliff. You're cruising through it. You're already above 5%, as you pointed out, for a guide for this year. Why should we not contemplate something higher than a high single-digit revenue growth for 2027 that you outlined before? Thank you.
Well, Puneet, thank you very much for those comments. We are definitely also very pleased with the performance we had in the quarter. First and foremost, I'm convinced that the growth and the momentum we see in the clinical market will continue for years to come. The elevated placements we have had in the first half of the year speak to that. When we place instruments, eventually we'll start to see the consumables run on those instruments, and that will drive continued growth. As we laid out about 18 months ago, we laid out a logic around 50–60 placements per quarter; we have clearly over the last few quarters been running stronger than that. That really speaks to what is happening in the clinical space right now. While we do see some moderations up and down from each quarter, we still believe that the elevated placement level will continue into the second half of the year. We feel good about that. There will of course be a little bit of ups and downs in that. Talking about the clinical cliff, I agree it's not a cliff, it's a wave; we are surfing it, as you were saying. We think there is a lot of momentum there. I think there's a good opportunity to continue that momentum. Talking about 2027 right now, at this point, I'm still very committed to delivering on the high single-digit growth. We will continue to focus on building a very strong value proposition to our customers, and then we'll see where it takes us.
Hey, thanks. Wondering if you could address a couple things, the sequential slowdown in clinical consumables. One of the debates we've been having with investors is as the customers transition to X, are you over-earning on consumables? Because at some point, the 6000s get decommissioned. How do you think about that potential headwind as customers running both in parallel eventually wears off?
Tycho, thank you for that. First, we continue to see expansion of volume on the X, and we continue to see many of the NovaSeq 6000 instruments remain in operation for running current assets. In fact, we saw some customers purchase additional 6000s this quarter to continue their operations. Eventually they will move over to X, but we don't see that as a structural headwind; it's a standard part of the business evolution. We've seen similar transitions before from HiSeq to our current platforms. I don't view that as a true headwind for us. From the clinical performance, the momentum continues to be high. As Ankur mentioned, we continue to have strong confidence, and that's why we are raising our guide for clinical consumable growth up to mid-teens, which is an improvement from what we looked at at the beginning of the year. If you look at the detail for the decline from 20% growth last quarter to 15% now, first of all, it's still very strong. The U.S. continues to run faster than 20%. There have been some regional ins and outs, especially in the Middle East and Latin America. The situation in the Middle East is impacting, at least short term, the growth rate there. I wouldn't put more into it than that. The headline is that mid-teens growth is strong and is beyond what we expected at the start of the year, and it remains a major driver toward high single-digit growth for next year.
Hi, Jacob and Ankur. Thank you for taking my question and congrats on a nice sprint here. Just if I take a step back on the performance in the quarter, can you walk us through phasing in the quarter? Were there any one-offs? Because when I look at your guidance for third quarter, right, 4.5% rest of the world, why is that stepping down from 8%? Why is 8% not sustainable? What are you assuming for AI-related revenues, or is that a theme that could be a bigger theme for the stock when you look at the medium term? Thank you.
Vijay, thank you. We're excited about the placements we're doing now, which we believe are elevated and not a one-off. Many clinical customers are investing in the future, building out installed base and preparing for volume in their pipelines. There is a comparison effect to consider: placements in the first part of last year differed from the second half, and momentum started in the second half. That affects instrument comparisons. We expect consumables to continue to be strong, and we believe that momentum will continue to step up and be the main growth driver into next year. Regarding AI, we are excited about BioInsight. We have delivered more than 300 million single cells to our customers in the Billion Cell Atlas and added three more pharma partners, bringing our total to six. Customers are excited because that data helps drive insights for drug discovery programs and can serve as a foundation for high-quality AI models that become more predictive. It's early days, but we are already booking revenue on these initiatives and see significant opportunity over time.
Hey, can you guys hear me?
Yes.
Hey, Mike.
Wonderful. Thank you. I'll take it. All right. I'll just follow up on that Q3, Q4 pacing through the rest of the year question. It is a little bit of a surprising step down for the third quarter. Even more importantly, Q4's guided a little bit higher than we would have had. Is there anything unusual in terms of seasonality that you're anticipating? You can talk about any purchasing in the quarter. Obviously, you've had a lot of boxes placed. You talked about the backlog last quarter. If there was any stocking or anything like that. Also kind of tied to that, I know you've got an extra week in the fourth quarter. Just remind us what impact that's having on your revenue assumptions for Q4. Also, on margins and EPS, just make sure we're modeling that correctly. Thanks.
Thanks, Mike. The headline is that the momentum in the first half speaks to the opportunity ahead. Clinical customers are building out install base. Q2 was very strong, and Q3 is typically a little lower than Q4; that's normal seasonality for us. I am not worried about the Q3 pacing. The underlying trend remains strong. Ankur will provide detail on phasing and the extra week.
Thanks, Jacob. Mike, in terms of thinking about phasing Q3 and Q4, think about our usual seasonality: Q4 is typically our largest quarter for the year and is expected to remain so. Regarding the extra week, yes, we have one extra week this year in Q4, which would largely be a consumables story. You might expect roughly half a point or so of revenue contribution from that extra week in run rate terms. That's part of our thinking. The business is holding very well. Consumables growth story has remained steady through the year. The variability is almost always around instrument placements. We do expect an elevated level of instrument placements to continue in the second half of the year, and that elevated level started in the second half of last year.
Thanks a bunch. Hi, Jacob. Hi, Ankur. A follow-up question on the clinical growth rate. Can you discuss the breadth of the growth you're seeing in clinical, given that the U.S. grew greater than 20? I think you mentioned your largest clinical customers were especially strong when it came to instruments. I want to understand how narrow versus broad that strength is. Separately, can you talk about whether you've seen any shift in application mix from those customers over the past couple of quarters? Thank you.
Dan, thanks. Overall, the opportunity in the clinical space and shifting NGS into healthcare is still in front of us. There is a large opportunity to become standard of care over time. The performance continues to be broad-based. Regionally, the U.S. is the main driver, but all other regions except China are still growing nicely. From an application perspective, oncology continues to lead. Within oncology, we are seeing a shift where MRD is starting to drive momentum. From a dollar perspective, therapy selection remains the larger contributor today, but MRD is coming, and later we'll see MSAT contribute more. Rare disease and screening, including NIPT, remain healthy and growing. Overall, this is a broadband growth story led by oncology and led out of the U.S.
Hey, guys. Can you hear me?
Yes.
Hey, Subbu.
Great print. A couple of questions on memory cost. Prices are still rising and allocations continue to be strained. How are you thinking about the trajectory into the second half, especially with the stronger full quarter instrument placements and into 2027, particularly as you integrate more GPU-based compute for next-gen product? I have a follow-up.
Subbu, over the last two years, the Illumina team has done a good job compensating for headwinds on cost. The team knows how to handle these issues. Memory and freight costs have been a headwind we didn't anticipate to this level, and I'm pleased with how the team continues to operate and find ways to compensate. Those costs are real. We are sharing some of that cost increase with customers and driving operational excellence to offset impacts. We have a handle on the situation and a line of sight on the costs; we have proven we can address these issues and will continue to do so.
Subbu, the higher cost of memory is part of our Q2 results, so you can take that as a starting point run rate. We secured additional inventory and supply during the quarter to de-risk near-term movements in memory prices for the upcoming quarters. On your question about GPUs and new products, one strategic advantage we have is our instruments do not use GPU architecture; they use a different architecture that is relatively less expensive and cost-efficient versus GPU-based designs. As I mentioned, we've been securing supply for the next several quarters.
Super helpful. Thank you so much for that, Ankur and Jacob. My follow-up: you had a couple of stronger than expected placement quarters. We are in the fourth year of the instrument launch, and these are the instrument numbers. Was this at all a function of the market waiting for a more competitive information? Related, how much of this is a function of an improving funding environment? Thank you so much.
Subbu, I think it speaks to our value proposition and the trust customers place in Illumina. Customers continue to see Illumina as a partner for their success. The innovations to the X platform and the broader value proposition make it the platform to invest in. This, combined with a healthy market, explains the strength in placements.
Hey, this is Harrison on for Mason. Thanks for taking the questions. Within this quarter's NovaSeq X placements, did the clinical/non-clinical split move at all versus recent quarters? Could you give us the latest on what you're hearing from research customers on order timing and budget releases this quarter? Has anything in the underlying order pattern shifted versus last quarter, even if the headline number doesn't move much?
Overall, the majority of placements continue to go into the clinical space, and we expect that to continue. Even with improved activity in academic research, clinical will remain the strongest opportunity and account for most placements. That said, we did place instruments into academic research as well, so there is activity there.
In terms of mix of placements, it's still about 70% clinical and 30% research. The research market is international and spans the world, not just the U.S. During the latter part of the quarter, we did see some increased activity in the U.S. with funding releases and more requests, but we are not assuming a meaningful improvement in that market for the rest of the year. Directionally, there was some improvement late in the quarter.
Hey, guys. Thanks for the questions. A nice quarter. This quarter, you talked about multi-omics solutions and that StrataMap was announced. These are all promising. Got single-cell proteomics, et cetera. How do we track that going forward? How do we know the strategy is working? Will you break that out going forward, maybe next year? How are you accounting for all these products and the revenue contribution, for example, in Q4? Thanks.
Kyle, we're excited about the multi-omics portfolio. As outlined in our 2024 strategy, the approach is to make NovaSeq X the backbone and to expand into multi-omics to provide multiple layers of biological insight—from genome to proteome, bulk to single cell to spatial. These end-to-end workflows, combined with software, enable customers to gain integrated insights. We expected mid-term that multi-omics would start contributing incremental growth, and that is playing out: we expect these new products to add one to two points of growth next year. The StrataMap launch has generated more interest than we planned for, which bodes well, and TruPath and other offerings are also gaining momentum. We're encouraged by customer response across these platforms.
Kyle, in terms of accounting, most multi-omics products like single cell or TruPath appear in our consumables revenue because they are consumable workflows. Billion Cell Atlas and related BioInsight revenue show up in our services line. We'll continue to discuss contributions from initiatives like the Billion Cell Atlas as they grow.
Had a follow-up for Ankur just on the margin progression throughout the year. You did 22.4% in the quarter, going to 24% next quarter. It's a decent step-up. I was wondering how much of this is related to mix versus other factors and maybe related to that, any color you can share in terms of just revenue assumptions for consumables versus NGS instruments for the third quarter would be really helpful. Thank you.
Great question, Jack. At the start of the year, we expected margin step-up in the back half as cost actions and other measures take effect. Q2 operating margin was 22.5% and, excluding a deferred compensation item, about 23%. We're expecting roughly 100 basis points of step-up into Q3. Some of that will come from a higher mix of consumables and the benefit of cost actions on gross margin. Additional cost actions will continue into Q4. Most of the improvement will show up in gross margin as operational efficiencies and cost actions take hold.
Hi, this is Jaden on for Casey. Just one on the mid- and low-throughput instruments. Could you walk us through how low and mid-throughput instruments performed in the quarter? Then within mid-throughput specifically, are you seeing customers being constrained given the end market environment, and how should we think about that going forward for the rest of the year? Thank you.
We have the broadest range of instruments in the industry. The X addresses high-throughput, production-like sequencing. Low and mid-throughput instruments are more project-based and are driven by different dynamics. Mid-throughput is more sensitive to the macro environment and has been more muted recently. Low-throughput, such as the MiSeq i100 which we launched a little over a year ago, is performing well and has strong placement momentum. We expect mid-throughput to pick up over time with targeted investments, but today it is more muted due to macro conditions.
Thank you for joining us today. A replay of this call will be available in the investor section of our website. This concludes our call, and we look forward to seeing you at upcoming events.
This concludes today's call. We thank you for your participation. You may disconnect at this time, and have a great day.