Technology
Illumina Reports Financial Results for Second Quarter of Fiscal Year 2024
Published
5 months agoon
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Core Illumina revenue of $1.09 billion for Q2 2024, down 6% from Q2 2023 (down 6% on a constant currency basis) and up 3% from Q1 2024Core Illumina GAAP operating margin of 40.5% and non-GAAP operating margin of 22.2% for Q2 2024Core Illumina GAAP diluted earnings per share of $0.41 and non-GAAP diluted earnings per share of $1.09 for Q2 2024Lowered fiscal year 2024 Core Illumina revenue guidance to decline 2% to 3% (down 1.5% to 2.5% in constant currency) from 2023Raised Core Illumina non-GAAP operating margin guidance to a range of 20.5% to 21% for fiscal year 2024Introducing guidance for Core Illumina non-GAAP diluted earnings per share in the range of $3.80 to $3.95 for fiscal year 2024On June 24, 2024, we completed the spin-off of GRAIL into a new public company
SAN DIEGO, Aug. 6, 2024 /PRNewswire/ — Illumina, Inc. (Nasdaq: ILMN) (“Illumina” or the “company”) today announced its financial results for the second quarter of fiscal year 2024, which include the consolidated financial results for GRAIL through June 24, 2024.
“The Illumina team delivered results ahead of our expectations in the quarter, driven by disciplined execution on our strategic priorities,” said Jacob Thaysen, Chief Executive Officer. “Consumable sales remained solid as customers continued to increase their sequencing activity, but instrument demand has softened in a constrained funding environment. We are progressing our operating excellence initiatives and will deliver expanded margins this year.”
Second quarter consolidated results
GAAP
Non-GAAP (a)
Dollars in millions, except per share amounts
Q2 2024
Q2 2023
Q2 2024
Q2 2023
Revenue
$ 1,112
$ 1,176
$ 1,112
$ 1,176
Gross margin
64.8 %
62.2 %
69.0 %
66.5 %
Research and development (“R&D”) expense
$ 325
$ 358
$ 325
$ 345
Selling, general and administrative (“SG&A”) expense
$ 147
$ 462
$ 358
$ 355
Goodwill and intangible impairment (b)
$ 1,886
$ —
$ —
$ —
Operating (loss) profit
$ (1,637)
$ (88)
$ 84
$ 82
Operating margin
(147.2) %
(7.5) %
7.6 %
7.0 %
Tax provision
$ 12
$ 145
$ 16
$ 33
Tax rate
(0.6) %
(163.8) %
22.3 %
39.3 %
Net (loss) income
$ (1,988)
$ (234)
$ 57
$ 50
Diluted (loss) earnings per share
$ (12.48)
$ (1.48)
$ 0.36
$ 0.32
(a) See the tables included in the “Results of Operations – Non-GAAP” section below for reconciliations of these GAAP and non-GAAP financial measures.
(b) During the second quarter of 2024, the company recognized $1,466 million in goodwill and $420 million in intangible asset (IPR&D) impairment related to the GRAIL segment.
Capital expenditures for free cash flow purposes were $32 million for Q2 2024. Cash flow provided by operations was $80 million, compared to cash flow provided by operations of $105 million in the prior year period. Free cash flow (cash flow provided by operations less capital expenditures) was $48 million for the quarter, compared to $58 million in the prior year period. Depreciation and amortization expenses were $105 million for Q2 2024. At the close of the quarter, the company held $994 million in cash, cash equivalents and short-term investments.
Second quarter segment results
Illumina has two reportable segments, Core Illumina and GRAIL, which was spun-off on June 24, 2024.
Core Illumina
GAAP
Non-GAAP (a)
Dollars in millions
Q2 2024
Q2 2023
Q2 2024
Q2 2023
Revenue (b)
$ 1,092
$ 1,159
$ 1,092
$ 1,159
Gross margin (c)
68.0 %
65.5 %
69.4 %
67.0 %
R&D expense
$ 241
$ 274
$ 241
$ 261
SG&A expense
$ 60
$ 371
$ 275
$ 270
Operating profit
$ 442
$ 115
$ 242
$ 245
Operating margin
40.5 %
9.9 %
22.2 %
21.2 %
Tax provision
$ 35
*
$ 55
*
Tax rate
35.0 %
*
24.2 %
*
Net income
$ 66
*
$ 174
*
Diluted earnings per share
$ 0.41
*
$ 1.09
*
* Prior year information not provided.
(a) See the tables included in the “Results of Operations – Non-GAAP” section below for reconciliations of these GAAP and non-GAAP financial measures.
(b) Core Illumina revenue for Q2 2024 was down 6% as compared to Q2 2023 and down 6% on a constant currency basis. Amounts for Q2 2024 and Q2 2023 included intercompany revenue of $9 million and $5 million, respectively, which is eliminated in consolidation.
(c) The year-over-year increase in gross margin was primarily driven by a more favorable mix of sequencing consumables and execution of our operational excellence priorities that delivered cost savings, including freight and improved productivity.
GRAIL
GAAP
Non-GAAP (a)
In millions
Q2 2024
Q2 2023
Q2 2024
Q2 2023
Revenue
$ 29
$ 22
$ 29
$ 22
Gross (loss) profit
$ (16)
$ (24)
$ 15
$ 9
R&D expense
$ 88
$ 89
$ 88
$ 89
SG&A expense
$ 88
$ 91
$ 84
$ 85
Goodwill and intangible impairment
$ 1,886
$ —
$ —
$ —
Operating loss
$ (2,078)
$ (204)
$ (157)
$ (164)
(a) See Table 5 included in the “Results of Operations – Non-GAAP” section below for reconciliations of these GAAP and non-GAAP financial measures.
Key announcements by Illumina since Illumina’s last earnings release
Completed the spin-off of GRAILAcquired Fluent Biosciences, developer of an emerging and highly differentiated single-cell technologyAppointed Everett Cunningham as Chief Commercial OfficerAnnounced that Anna Richo, Corporate Senior Vice President, Strategic Advisor to the General Counsel and CEO at Cargill, Inc., joined Illumina’s Board of DirectorsPresented research at the American Society of Clinical Oncology (ASCO) Annual Meeting, with 14 total abstracts accepted to the meetingCompleted integration of Illumina’s latest chemistry, XLEAP-SBS™, into all reagents for its NextSeq™ 1000 and NextSeq 2000 next-generation sequencing instrumentsExpanded its oncology menu for NovaSeq™ X Series customers by offering the newly verified high-throughput version of TruSight™ Oncology 500 (TSO 500 HT), and the latest version of its distributed liquid biopsy research assay, TruSight Oncology 500 ctDNA v2 (TSO 500 ctDNA v2)Launched DRAGEN™ v4.3, the latest version of Illumina’s DRAGEN™ software, part of the Illumina Connected Software portfolio, for analysis of next-generation sequencing data
A full list of recent Illumina announcements can be found in the company’s News Center.
Financial outlook and guidance
For fiscal year 2024, the company lowered its Core Illumina revenue guidance to decline 2% to 3% (down 1.5% to 2.5% in constant currency) compared to fiscal year 2023 and raised its Core Illumina non-GAAP operating margin guidance to a range of 20.5% to 21%. The company is introducing guidance for Core Illumina non-GAAP diluted EPS in the range of $3.80 to $3.95 for fiscal year 2024.
The company provides forward-looking guidance on a non-GAAP basis. The company is unable to provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable GAAP reported financial measures because it is unable to predict with reasonable certainty the financial impact of items such as acquisition-related expenses, gains and losses from our strategic investments, fair value adjustments related to contingent consideration and contingent value rights, potential future asset impairments, restructuring activities, and the ultimate outcome of pending litigation without unreasonable effort. These items are uncertain, inherently difficult to predict, depend on various factors, and could have a material impact on GAAP reported results for the guidance period. For the same reasons, the company is unable to address the significance of the unavailable information, which could be material to future results.
Conference call information
The conference call will begin at 1:30 p.m. Pacific Time (4:30 p.m. Eastern Time) on Tuesday, August 6, 2024. Interested parties may access the live teleconference through the Investor Info section of Illumina’s website at investor.illumina.com. Alternatively, individuals can access the call by dialing 866.400.0049 or +1.323.701.0231 outside North America, both using conference ID 9881025. To ensure timely connection, please dial in at least ten minutes before the scheduled start of the call.
A replay of the conference call will be posted on Illumina’s website after the event and will be available for at least 30 days following.
Statement regarding use of non-GAAP financial measures
The company reports non-GAAP results for diluted earnings per share, net income, gross margin, operating expenses, including research and development expense, selling general and administrative expense, and from time to time, as applicable, legal contingencies and settlement, and goodwill and intangible impairment, operating income (loss), operating margin, gross profit (loss), other income (expense), tax provision, constant currency revenue growth, and free cash flow (on a consolidated and, as applicable, segment basis) in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The company’s financial measures under GAAP include substantial charges such as amortization of acquired intangible assets among others that are listed in the itemized reconciliations between GAAP and non-GAAP financial measures included in this press release, as well as the effects of currency translation. Management has excluded the effects of these items in non-GAAP measures to assist investors in analyzing and assessing past and future operating performance, including in the non-GAAP measures related to our segments. Additionally, non-GAAP net income, diluted earnings per share and operating margin are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation.
The company encourages investors to carefully consider its results under GAAP, as well as its supplemental non-GAAP information and the reconciliation between these presentations, to more fully understand its business. Reconciliations between GAAP and non-GAAP results are presented in the tables of this release.
Use of forward-looking statements
This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors to which our business is subject that could cause actual results to differ materially from those in any forward-looking statements are: (i) changes in the rate of growth in the markets we serve; (ii) the volume, timing and mix of customer orders among our products and services; (iii) our ability to adjust our operating expenses to align with our revenue expectations; (iv) our ability to manufacture robust instrumentation and consumables; (v) the success of products and services competitive with our own; (vi) challenges inherent in developing, manufacturing, and launching new products and services, including expanding or modifying manufacturing operations and reliance on third-party suppliers for critical components; (vii) the impact of recently launched or pre-announced products and services on existing products and services; (viii) our ability to modify our business strategies to accomplish our desired operational goals; (ix) our ability to realize the anticipated benefits from prior or future actions to streamline and improve our R&D processes, reduce our operating expenses and maximize our revenue growth; (x) our ability to further develop and commercialize our instruments, consumables, and products; (xi) to deploy new products, services, and applications, and to expand the markets for our technology platforms; (xii) the risks and costs associated with the divestment of GRAIL; (xiii) the risk of additional litigation arising against us in connection with the GRAIL acquisition; (xiv) our ability to obtain approval by third-party payors to reimburse patients for our products; (xv) our ability to obtain regulatory clearance for our products from government agencies; (xvi) our ability to successfully partner with other companies and organizations to develop new products, expand markets, and grow our business; (xvii) uncertainty, or adverse economic and business conditions, including as a result of slowing or uncertain economic growth or armed conflict; (xviii) the application of generally accepted accounting principles, which are highly complex and involve many subjective assumptions, estimates, and judgments and (xix) legislative, regulatory and economic developments, together with other factors detailed in our filings with the Securities and Exchange Commission, including our most recent filings on Forms 10-K and 10-Q, or in information disclosed in public conference calls, the date and time of which are released beforehand. We undertake no obligation, and do not intend, to update these forward-looking statements, to review or confirm analysts’ expectations, or to provide interim reports or updates on the progress of the current quarter.
About Illumina
Illumina is improving human health by unlocking the power of the genome. Our focus on innovation has established us as a global leader in DNA sequencing and array-based technologies, serving customers in the research, clinical, and applied markets. Our products are used for applications in the life sciences, oncology, reproductive health, agriculture, and other emerging segments. To learn more, visit www.illumina.com and connect with us on X (Twitter), Facebook, LinkedIn, Instagram, TikTok, and YouTube.
About GRAIL
GRAIL is a healthcare company whose mission is to detect cancer early, when it can be cured. GRAIL is focused on alleviating the global burden of cancer by developing pioneering technology to detect and identify multiple deadly cancer types early. The company is using the power of next-generation sequencing, population-scale clinical studies, and state-of-the-art computer science and data science to enhance the scientific understanding of cancer biology, and to develop its multi-cancer early detection blood test. GRAIL is headquartered in Menlo Park, CA with locations in Washington, D.C., North Carolina, and the United Kingdom. GRAIL, Inc. was spun-out into a new public company on June 24, 2024. For more information, please visit www.grail.com.
Illumina, Inc.
Condensed Consolidated Balance Sheets
(In millions)
June 30,
2024
December 31,
2023
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents
$ 920
$ 1,048
Short-term investments
74
6
Accounts receivable, net
641
734
Inventory, net
561
587
Prepaid expenses and other current assets
263
234
Total current assets
2,459
2,609
Property and equipment, net
859
1,007
Operating lease right-of-use assets
460
544
Goodwill
1,079
2,545
Intangible assets, net
278
2,993
Deferred tax assets, net
632
56
Other assets
314
357
Total assets
$ 6,081
$ 10,111
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$ 199
$ 245
Accrued liabilities
1,265
1,325
Term debt, current portion
744
—
Total current liabilities
2,208
1,570
Operating lease liabilities
616
687
Term debt
1,490
1,489
Other long-term liabilities
331
620
Stockholders’ equity
1,436
5,745
Total liabilities and stockholders’ equity
$ 6,081
$ 10,111
Illumina, Inc.
Condensed Consolidated Statements of Operations
(In millions, except per share amounts)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
June 30,
2024
July 2,
2023
Revenue:
Product revenue
$ 927
$ 1,001
$ 1,803
$ 1,923
Service and other revenue
185
175
385
340
Total revenue
1,112
1,176
2,188
2,263
Cost of revenue:
Cost of product revenue (a)
250
305
504
591
Cost of service and other revenue (a)
95
91
202
190
Amortization of acquired intangible assets
46
48
94
96
Total cost of revenue
391
444
800
877
Gross profit
721
732
1,388
1,386
Operating expense:
Research and development (a)
325
358
660
699
Selling, general and administrative (a)
147
462
588
839
Goodwill and intangible impairment
1,886
—
1,889
—
Total operating expense
2,358
820
3,137
1,538
Loss from operations
(1,637)
(88)
(1,749)
(152)
Other expense, net
(339)
(1)
(337)
(15)
Loss before income taxes
(1,976)
(89)
(2,086)
(167)
Provision for income taxes
12
145
28
64
Net loss
$ (1,988)
$ (234)
$ (2,114)
$ (231)
Loss per share:
Basic
$ (12.48)
$ (1.48)
$ (13.28)
$ (1.46)
Diluted
$ (12.48)
$ (1.48)
$ (13.28)
$ (1.46)
Shares used in computing loss per share:
Basic
159
158
159
158
Diluted
159
158
159
158
(a) Includes stock-based compensation expense for stock-based awards:
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
June 30,
2024
July 2,
2023
Cost of product revenue
$ 7
$ 8
$ 13
$ 15
Cost of service and other revenue
1
6
4
12
Research and development
43
43
82
79
Selling, general and administrative
59
48
109
93
Stock-based compensation expense before taxes
$ 110
$ 105
$ 208
$ 199
Illumina, Inc.
Condensed Consolidated Statements of Cash Flows
(In millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
June 30,
2024
July 2,
2023
Net cash provided by operating activities
$ 80
$ 105
$ 157
$ 115
Net cash used in investing activities
(41)
(37)
(89)
(93)
Net cash used in financing activities
(225)
(3)
(191)
(476)
Effect of exchange rate changes on cash and cash equivalents
(2)
(6)
(5)
(4)
Net (decrease) increase in cash and cash equivalents
(188)
59
(128)
(458)
Cash and cash equivalents, beginning of period
1,108
1,494
1,048
2,011
Cash and cash equivalents, end of period
$ 920
$ 1,553
$ 920
$ 1,553
Calculation of free cash flow:
Net cash provided by operating activities
$ 80
$ 105
$ 157
$ 115
Purchases of property and equipment
(32)
(47)
(67)
(99)
Free cash flow (a)
$ 48
$ 58
$ 90
$ 16
(a) Free cash flow, which is a non-GAAP financial measure, is calculated as net cash provided by operating activities reduced by purchases of property and equipment. Free cash flow is useful to management as it is one of the metrics used to evaluate our performance and to compare us with other companies in our industry. However, our calculation of free cash flow may not be comparable to similar measures used by other companies.
Illumina, Inc.
Results of Operations – Revenue by Segment
(Dollars in millions)
(unaudited)
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
% Change
June 30,
2024
July 2,
2023
% Change
Consolidated revenue
$ 1,112
$ 1,176
(5) %
$ 2,188
$ 2,263
(3) %
Less: Hedge gains
4
2
7
3
Consolidated revenue, excluding hedge effect
1,108
1,174
2,181
2,260
Less: Exchange rate effect
(5)
—
(7)
—
Consolidated constant currency revenue (a)
$ 1,113
$ 1,174
(5) %
$ 2,188
$ 2,260
(3) %
Core Illumina revenue
$ 1,092
$ 1,159
(6) %
$ 2,148
$ 2,235
(4) %
Less: Hedge gains
4
2
7
3
Core Illumina revenue, excluding hedge effect
1,088
1,157
2,141
2,232
Less: Exchange rate effect
(5)
—
(7)
—
Core Illumina constant currency revenue (a)
$ 1,093
$ 1,157
(6) %
$ 2,148
$ 2,232
(4) %
(a) Constant currency revenue growth, which is a non-GAAP financial measure, is calculated using comparative prior period foreign exchange rates to translate current period revenue, net of the effects of hedges.
Illumina, Inc.
Results of Operations – Non-GAAP
(In millions, except per share amounts)
(unaudited)
TABLE 1: CONSOLIDATED RECONCILIATION BETWEEN GAAP AND NON-GAAP DILUTED (LOSS) EARNINGS PER SHARE:
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
June 30,
2024
July 2,
2023
GAAP loss per share – diluted
$ (12.48)
$ (1.48)
$ (13.28)
$ (1.46)
Cost of revenue (b)
0.29
0.32
0.60
0.63
R&D expense (b)
—
0.08
0.01
0.09
SG&A expense (b)
(1.33)
0.68
(0.75)
0.89
Goodwill and intangible impairment (b)
11.84
—
11.86
—
Other expense, net (b)
2.06
0.01
2.01
0.08
GILTI, U.S. foreign tax credits, and global minimum top-up tax (c)
0.62
0.44
0.73
0.16
Incremental non-GAAP tax expense (d)
(0.65)
0.27
(0.74)
(0.04)
Income tax provision (e)
0.01
—
0.01
0.05
Non-GAAP earnings per share – diluted (a)
$ 0.36
$ 0.32
$ 0.45
$ 0.40
TABLE 2: CONSOLIDATED RECONCILIATION BETWEEN GAAP AND NON-GAAP NET (LOSS) INCOME:
Three Months Ended
Six Months Ended
June 30,
2024
July 2,
2023
June 30,
2024
July 2,
2023
GAAP net loss
$ (1,988)
$ (234)
$ (2,114)
$ (231)
Cost of revenue (b)
46
50
95
99
R&D expense (b)
—
13
2
14
SG&A expense (b)
(211)
107
(120)
142
Goodwill and intangible impairment (b)
1,886
—
1,889
—
Other expense, net (b)
328
2
319
13
GILTI, U.S. foreign tax credits, and global minimum top-up tax (c)
99
69
116
25
Incremental non-GAAP tax expense (d)
(104)
43
(117)
(6)
Income tax provision (e)
1
—
1
8
Non-GAAP net income (a)
$ 57
$ 50
$ 71
$ 64
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(In millions, except per share amounts)
(unaudited)
TABLE 3: CORE ILLUMINA RECONCILIATION BETWEEN GAAP AND NON-GAAP DILUTED EARNINGS PER SHARE:
Three Months Ended
Six Months Ended
June 30,
2024
June 30,
2024
GAAP earnings per share – diluted
$ 0.41
$ 0.85
Cost of revenue (b)
0.10
0.19
R&D expense (b)
—
0.01
SG&A expense (b)
(1.35)
(0.84)
Goodwill and intangible impairment (b)
—
0.02
Other expense, net (b)
2.06
2.01
GILTI, U.S. foreign tax credits, and global minimum top-up tax (c)
0.12
0.21
Incremental non-GAAP tax expense (d)
(0.26)
(0.39)
Income tax provision (e)
0.01
0.01
Non-GAAP earnings per share – diluted (a)
$ 1.09
$ 2.07
TABLE 4: CORE ILLUMINA RECONCILIATION BETWEEN GAAP AND NON-GAAP NET INCOME:
Three Months Ended
Six Months Ended
June 30,
2024
June 30,
2024
GAAP net income
$ 66
$ 135
Cost of revenue (b)
15
30
R&D expense (b)
—
2
SG&A expense (b)
(215)
(132)
Goodwill and intangible impairment (b)
—
3
Other expense, net (b)
328
319
GILTI, U.S. foreign tax credits, and global minimum top-up tax (c)
20
33
Incremental non-GAAP tax expense (d)
(41)
(62)
Income tax provision (e)
1
1
Non-GAAP net income (a)
$ 174
$ 329
All amounts in tables are rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided.
(a) Non-GAAP net income and diluted earnings per share exclude the effects of the pro forma adjustments as detailed above. Non-GAAP net income and diluted earnings per share are key components of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing our past and future operating performance.
(b) Refer to the Itemized Reconciliations between GAAP and Non-GAAP Results of Operations for the components of these amounts.
(c) Amounts represent the impact of GRAIL pre-acquisition net operating losses on GILTI, the utilization of U.S. foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective in Q1 2024.
(d) Incremental non-GAAP tax expense reflects the tax impact of the non-GAAP adjustments listed.
(e) Amounts represent the difference between book and tax accounting related to stock-based compensation cost.
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(Dollars in millions)
(unaudited)
TABLE 5: ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
Three Months Ended
June 30, 2024
Core Illumina
GRAIL
Eliminations
Consolidated
GAAP gross profit (loss) (b)
$ 743
68.0 %
$ (16)
$ (6)
$ 721
64.8 %
Amortization of acquired intangible assets
15
1.4 %
31
—
46
4.2 %
Non-GAAP gross profit (a)
$ 758
69.4 %
$ 15
$ (6)
$ 767
69.0 %
GAAP and Non-GAAP R&D expense
$ 241
22.1 %
$ 88
$ (4)
$ 325
29.2 %
GAAP SG&A expense
$ 60
5.5 %
$ 88
$ (1)
$ 147
13.2 %
Amortization of acquired intangible assets
—
—
(1)
—
(1)
(0.1) %
Contingent consideration liabilities (c)
271
24.8 %
—
—
271
24.4 %
Acquisition-related expenses (d)
(46)
(4.2) %
(3)
—
(49)
(4.4) %
Restructuring (g)
(3)
(0.3) %
—
—
(3)
(0.3) %
Accrued interest on EC fine (h)
(7)
(0.6) %
—
—
(7)
(0.6) %
Non-GAAP SG&A expense
$ 275
25.2 %
$ 84
$ (1)
$ 358
32.2 %
GAAP goodwill and intangible impairment
$ —
—
$ 1,886
$ —
$ 1,886
169.6 %
Goodwill impairment (i)
—
—
(1,466)
—
(1,466)
(131.8) %
Intangible (IPR&D) impairment (i)
—
—
(420)
—
(420)
(37.8) %
Non-GAAP goodwill and intangible impairment
$ —
—
$ —
$ —
$ —
—
GAAP operating profit (loss)
$ 442
40.5 %
$ (2,078)
$ (1)
$ (1,637)
(147.2) %
Cost of revenue
15
1.4 %
31
—
46
4.2 %
SG&A costs
(215)
(19.7) %
4
—
(211)
(19.0) %
Goodwill and intangible impairment
—
—
1,886
—
1,886
169.6 %
Non-GAAP operating profit (loss) (a)
$ 242
22.2 %
$ (157)
$ (1)
$ 84
7.6 %
GAAP other (expense) income, net
$ (341)
(31.2) %
$ 2
$ —
$ (339)
(30.5) %
Strategic investment related loss, net (e)
334
30.5 %
—
—
334
30.0 %
Gain on Helix contingent value right (f)
(8)
(0.7) %
—
—
(8)
(0.7) %
Foreign currency loss on EC fine (j)
2
0.2 %
—
—
2
0.2 %
Non-GAAP other (expense) income, net (a)
$ (13)
(1.2) %
$ 2
$ —
$ (11)
(1.0) %
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(Dollars in millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
Three Months Ended
July 2, 2023
Core Illumina
GRAIL
Eliminations
Consolidated
GAAP gross profit (loss) (b)
$ 760
65.5 %
$ (24)
$ (4)
$ 732
62.2 %
Amortization of acquired intangible assets
14
1.2 %
33
—
47
4.0 %
Restructuring (g)
3
0.3 %
—
—
3
0.3 %
Non-GAAP gross profit (a)
$ 777
67.0 %
$ 9
$ (4)
$ 782
66.5 %
GAAP R&D expense
$ 274
23.6 %
$ 89
$ (5)
$ 358
30.4 %
Acquisition-related expenses (d)
(1)
(0.1) %
—
—
(1)
(0.1) %
Restructuring (g)
(12)
(1.0) %
—
—
(12)
(1.0) %
Non-GAAP R&D expense
$ 261
22.5 %
$ 89
$ (5)
$ 345
29.3 %
GAAP SG&A expense
$ 371
31.9 %
$ 91
$ —
$ 462
39.3 %
Amortization of acquired intangible assets
—
—
(1)
—
(1)
(0.1) %
Contingent consideration liabilities (c)
(29)
(2.5) %
—
—
(29)
(2.5) %
Acquisition-related expenses (d)
(18)
(1.4) %
(3)
—
(21)
(1.8) %
Restructuring (g)
(17)
(1.5) %
(2)
—
(19)
(1.6) %
Legal contingency and settlement (k)
(12)
(1.0) %
—
—
(12)
(1.0) %
Proxy contest
(25)
(2.2) %
—
—
(25)
(2.1) %
Non-GAAP SG&A expense
$ 270
23.3 %
$ 85
$ —
$ 355
30.2 %
GAAP operating profit (loss)
$ 115
9.9 %
$ (204)
$ 1
$ (88)
(7.5) %
Cost of revenue
17
1.5 %
33
—
50
4.3 %
R&D costs
13
1.1 %
—
—
13
1.1 %
SG&A costs
100
8.7 %
7
—
107
9.1 %
Non-GAAP operating profit (loss) (a)
$ 245
21.2 %
$ (164)
$ 1
$ 82
7.0 %
GAAP other (expense) income, net
$ (3)
(0.3) %
$ 2
$ —
$ (1)
(0.1) %
Strategic investment related loss, net (e)
2
0.2 %
—
—
2
0.2 %
Non-GAAP other (expense) income, net (a)
$ (1)
(0.1) %
$ 2
$ —
$ 1
0.1 %
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(Dollars in millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
Six Months Ended
June 30, 2024
Core Illumina
GRAIL
Eliminations
Consolidated
GAAP gross profit (loss) (b)
$ 1,436
66.9 %
$ (38)
$ (10)
$ 1,388
63.5 %
Amortization of acquired intangible assets
30
1.4 %
65
—
95
4.3 %
Non-GAAP gross profit (a)
$ 1,466
68.3 %
$ 27
$ (10)
$ 1,483
67.8 %
GAAP R&D expense
$ 479
22.3 %
$ 189
$ (8)
$ 660
30.2 %
Restructuring (g)
(2)
(0.1) %
—
—
(2)
(0.1) %
Non-GAAP R&D expense
$ 477
22.2 %
$ 189
$ (8)
$ 658
30.1 %
GAAP SG&A expense
$ 396
18.5 %
$ 192
$ —
$ 588
26.9 %
Amortization of acquired intangible assets
—
—
(2)
—
(2)
(0.1) %
Contingent consideration liabilities (c)
255
11.9 %
—
—
255
11.7 %
Acquisition-related expenses (d)
(70)
(3.3) %
(11)
—
(81)
(3.7) %
Restructuring (g)
(38)
(1.8) %
(1)
—
(39)
(1.8) %
Accrued interest on EC fine (h)
(14)
(0.7) %
—
—
(14)
(0.7) %
Non-GAAP SG&A expense
$ 529
24.6 %
$ 178
$ —
$ 707
32.3 %
GAAP goodwill and intangible impairment
$ 3
0.1 %
$ 1,886
$ —
$ 1,889
86.3 %
Goodwill impairment (i)
—
—
(1,466)
—
(1,466)
(67.0) %
Intangible (IPR&D) impairment (i)
(3)
(0.1) %
(420)
—
(423)
(19.3) %
Non-GAAP goodwill and intangible impairment
$ —
—
$ —
$ —
$ —
—
GAAP operating profit (loss)
$ 558
26.0 %
$ (2,305)
$ (2)
$ (1,749)
(79.9) %
Cost of revenue
30
1.4 %
65
—
95
4.3 %
R&D costs
2
0.1 %
—
—
2
0.1 %
SG&A costs
(133)
(6.2) %
13
—
(120)
(5.4) %
Goodwill and intangible impairment
3
0.1 %
1,886
—
1,889
86.3 %
Non-GAAP operating profit (loss) (a)
$ 460
21.4 %
$ (341)
$ (2)
$ 117
5.4 %
GAAP other (expense) income, net
$ (342)
(15.9) %
$ 5
$ —
$ (337)
(15.4) %
Strategic investment related loss, net (e)
327
15.2 %
—
—
327
15.0 %
Gain on Helix contingent value right (f)
(11)
(0.5) %
—
—
(11)
(0.5) %
Foreign currency loss on EC fine (j)
3
0.1 %
—
—
3
0.1 %
Non-GAAP other (expense) income, net (a)
$ (23)
(1.1) %
$ 5
$ —
$ (18)
(0.8) %
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(Dollars in millions)
(unaudited)
TABLE 5 (CONTINUED): ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP RESULTS OF OPERATIONS AS A PERCENT OF REVENUE:
Six Months Ended
July 2, 2023
Core Illumina
GRAIL
Eliminations
Consolidated
GAAP gross profit (loss) (b)
$ 1,446
64.7 %
$ (50)
$ (10)
$ 1,386
61.3 %
Amortization of acquired intangible assets
29
1.3 %
67
—
96
4.2 %
Restructuring (g)
3
0.1 %
—
—
3
0.1 %
Non-GAAP gross profit (a)
$ 1,478
66.1 %
$ 17
$ (10)
$ 1,485
65.6 %
GAAP R&D expense
$ 532
23.7 %
$ 175
$ (8)
$ 699
30.9 %
Acquisition-related expenses (d)
(1)
—
—
—
(1)
—
Restructuring (g)
(13)
(0.5) %
—
—
(13)
(0.6) %
Non-GAAP R&D expense
$ 518
23.2 %
$ 175
$ (8)
$ 685
30.3 %
GAAP SG&A expense
$ 656
29.4 %
$ 184
$ (1)
$ 839
37.1 %
Amortization of acquired intangible assets
—
—
(2)
—
(2)
(0.1) %
Contingent consideration liabilities (c)
(28)
(1.3) %
—
—
(28)
(1.2) %
Acquisition-related expenses (d)
(38)
(1.7) %
(9)
—
(47)
(2.1) %
Restructuring (g)
(17)
(0.7) %
(2)
—
(19)
(0.8) %
Legal contingency and settlement (k)
(15)
(0.7) %
—
—
(15)
(0.7) %
Proxy contest
(31)
(1.4) %
—
—
(31)
(1.4) %
Non-GAAP SG&A expense
$ 527
23.6 %
$ 171
$ (1)
$ 697
30.8 %
GAAP operating profit (loss)
$ 257
11.5 %
$ (408)
$ (1)
$ (152)
(6.7) %
Cost of revenue
32
1.4 %
67
—
99
4.3 %
R&D costs
14
0.6 %
—
—
14
0.6 %
SG&A costs
129
5.8 %
13
—
142
6.3 %
Non-GAAP operating profit (loss) (a)
$ 432
19.3 %
$ (328)
$ (1)
$ 103
4.5 %
GAAP other (expense) income, net
$ (19)
(0.9) %
$ 4
$ —
$ (15)
(0.7) %
Strategic investment related loss, net (e)
16
0.7 %
—
—
16
0.7 %
Gain on Helix contingent value right (f)
(3)
(0.1) %
—
—
(3)
(0.1) %
Non-GAAP other (expense) income, net (a)
$ (6)
(0.3) %
$ 4
$ —
$ (2)
(0.1) %
All amounts in tables are rounded to the nearest millions, except as otherwise noted. As a result, certain amounts may not recalculate using the rounded amounts provided. Percentages of revenue are calculated based on the revenue of the respective segment.
(a) Non-GAAP gross profit, included within non-GAAP operating profit (loss), is a key measure of the effectiveness and efficiency of manufacturing processes, product mix and the average selling prices of our products and services. Non-GAAP operating profit (loss) and non-GAAP other (expense) income, net exclude the effects of the pro forma adjustments as detailed above. Non-GAAP operating margin is a key component of the financial metrics utilized by the company’s board of directors to measure, in part, management’s performance and determine significant elements of management’s compensation. Management has excluded the effects of these items in these measures to assist investors in analyzing and assessing past and future operating performance, including in the non-GAAP measures related to our segments.
(b) Reconciling amounts are recorded in cost of revenue.
(c) Amounts consist of fair value adjustments for our contingent consideration liability related to GRAIL.
(d) Amounts consist primarily of legal and other expenses related to the acquisition and divestiture of GRAIL.
(e) Amounts consist primarily of mark-to-market adjustments and impairments from our strategic investments. Amounts for Q2 2024 and YTD 2024 primarily relate to the impairment on our retained investment in GRAIL post spin-off.
(f) Amounts consist of fair value adjustments related to our Helix contingent value right.
(g) Amount for Q2 2024 consists primarily of employee severance costs. Amount for YTD 2024 consists primarily of lease and other asset impairments. Amounts for Q2 2023 and YTD 2023 consist primarily of employee severance costs and lease and other asset impairments.
(h) Amounts for Q2 2024 and YTD 2024 consist of accrued interest on the fine imposed by the European Commission.
(i) Amounts for Q2 2024 and YTD 2024 consist of goodwill and IPR&D intangible asset impairments related to GRAIL. Amount for YTD 2024 also consists of an IPR&D intangible asset impairment related to Core Illumina in Q1 2024.
(j) Amounts for Q2 2024 and YTD 2024 consist of unrealized gains/losses related to foreign currency balance sheet remeasurement of the EC fine liability and unrealized/realized mark-to-market gains/losses on the hedge associated with the EC fine.
(k) Amount for Q2 2023 consists of an adjustment to our accrual for the fine imposed by the European Commission. Amount for YTD 2023 also consists of a loss related to a patent litigation settlement in Q1 2023.
Illumina, Inc.
Results of Operations – Non-GAAP (continued)
(Dollars in millions)
(unaudited)
TABLE 6: CONSOLIDATED ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP TAX PROVISION:
Three Months Ended
Six Months Ended
June 30,
2024
June 30,
2024
GAAP tax provision
$ 12
(0.6) %
$ 28
(1.4) %
Incremental non-GAAP tax expense (b)
104
117
Income tax provision (c)
(1)
(1)
GILTI, U.S. foreign tax credits, and global minimum top-up tax (d)
(99)
(116)
Non-GAAP tax provision (a)
$ 16
22.3 %
$ 28
28.8 %
Three Months Ended
Six Months Ended
July 2,
2023
July 2,
2023
GAAP tax provision
$ 145
(163.8) %
$ 64
(38.5) %
Incremental non-GAAP tax expense (b)
(43)
6
Income tax provision (c)
—
(8)
GILTI and U.S. foreign tax credits (d)
(69)
(25)
Non-GAAP tax provision (a)
$ 33
39.3 %
$ 37
37.2 %
TABLE 7: CORE ILLUMINA ITEMIZED RECONCILIATION BETWEEN GAAP AND NON-GAAP TAX PROVISION:
Three Months Ended
Six Months Ended
June 30,
2024
June 30,
2024
GAAP tax provision
$ 35
35.0 %
$ 80
37.3 %
Incremental non-GAAP tax expense (b)
41
62
Income tax provision (c)
(1)
(1)
GILTI, U.S. foreign tax credits, and global minimum top-up tax (d)
(20)
(33)
Non-GAAP tax provision (a)
$ 55
24.2 %
$ 108
24.9 %
(a) Non-GAAP tax provision excludes the effects of the pro forma adjustments as detailed above. Management has excluded the effects of these items in this measure to assist investors in analyzing and assessing past and future operating performance.
(b) Incremental non-GAAP tax expense reflects the tax impact of the non-GAAP adjustments listed in Table 2 and 4.
(c) Amounts represent the difference between book and tax accounting related to stock-based compensation cost.
(d) Amounts represent the impact of GRAIL pre-acquisition net operating losses on GILTI, the utilization of U.S. foreign tax credits, and the Pillar Two global minimum top-up tax, which became effective in Q1 2024.
Investors:
Salli Schwartz
+1.858.291.6421
ir@illumina.com
Media:
Bonny Fowler
+1.740.641.5579
pr@illumina.com
View original content:https://www.prnewswire.com/news-releases/illumina-reports-financial-results-for-second-quarter-of-fiscal-year-2024-302215890.html
SOURCE Illumina, Inc.
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Ansys and Synopsys Announce Agreement with Keysight Technologies for Sale of Ansys PowerArtist
Published
44 minutes agoon
January 6, 2025By
/ Key Highlights
Ansys PowerArtist is a comprehensive register-transfer-level (RTL) design-for-power platform used for early-stage power analysis and reduction of semiconductor designs, across a wide range of end industry applications.The tool will complement and broaden Keysight’s existing design engineering software portfolio.The transaction is subject to customary closing conditions, including review by regulatory authorities, and the closing of Synopsys’ proposed acquisition of Ansys, which is currently pending regulatory approvals and expected to close in the first half of 2025.
PITTSBURGH and SUNNYVALE, Calif., Jan. 6, 2025 /PRNewswire/ — Ansys (NASDAQ: ANSS) and Synopsys (NASDAQ: SNPS) today announced that Ansys has entered into a definitive agreement for the sale of its PowerArtist™ business to Keysight Technologies, Inc. (NYSE: KEYS), a global leader in design and simulation software for semiconductors, electronics and high-performance systems. The transaction is subject to customary closing conditions, including review by regulatory authorities, and the closing of Synopsys’ proposed acquisition of Ansys, which is pending regulatory approvals and expected to close in the first half of 2025. Ansys and Synopsys determined that the sale of PowerArtist was necessary to obtain regulatory approval for Synopsys’ proposed acquisition of Ansys.
PowerArtist is a comprehensive RTL design-for-power platform used by semiconductor companies for early-stage power analysis, profiling and reduction. Compared to traditional gate-level methodologies, PowerArtist provides rapid turnaround on multimillion instance designs—enabling power-related design decisions at an earlier stage of the design process.
“We are proud of the role PowerArtist has played to advance low power innovation across semiconductor design applications,” said John Lee, vice president and general manager, electronics semiconductor and optics business unit at Ansys. “PowerArtist will continue to flourish as part of Keysight’s portfolio as a leading, independent RTL power product agnostic of vendor-specific design implementation flows.”
Keysight is a major supplier to semiconductor and electronics companies worldwide. Its planned acquisition of the PowerArtist business furthers its strategy to expand its position in the high-performance system design and simulation software sector.
“Our acquisition of the RTL design-for-power solution from Ansys will further expand our portfolio of design engineering software solutions,” said Niels Faché, vice president and general manager, Keysight Design Engineering Software. “We look forward to strengthening our offering in digital systems and welcoming the PowerArtist team to Keysight.”
The sale of PowerArtist is not material to Ansys’ financials, and terms of the agreement were not disclosed. The parties are committed to having a seamless transition for the Ansys PowerArtist team, customers and partners. During the interim period until the transaction closes, Ansys will continue to offer Ansys PowerArtist as part of its product line, and is committed to providing the same high-quality service its customers have come to expect.
Cautionary Statement Regarding Forward-Looking Statements
This release may contain “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on Ansys’ and Synopsys’ current expectations, estimates and projections about the expected date of the closing of the proposed transaction with Synopsys and the proposed divestiture of PowerArtist and the potential benefits thereof, its business and industry, management’s beliefs and certain assumptions made by Ansys and Synopsys, all of which are subject to change. In this context, forward-looking statements often address expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “could,” “seek,” “see,” “will,” “may,” “would,” “might,” “potentially,” “estimate,” “continue,” “expect,” “target,” similar expressions or the negatives of these words or other comparable terminology that convey uncertainty of future events or outcomes. All forward-looking statements by their nature address matters that involve risks and uncertainties, many of which are beyond our control, and are not guarantees of future results, such as statements about the consummation of the proposed transactions, the anticipated benefits thereof, and any filing or action required to consummate the transactions on a timely basis or at all. There are or will be important factors that could cause actual results to differ materially from those indicated in such statements and, therefore, you should not place undue reliance on any such statements and caution must be exercised in relying on forward-looking statements. Important risk factors that may cause such a difference include, but are not limited to: (i) the completion of the proposed transactions on anticipated terms and timing, including obtaining regulatory approvals, anticipated tax treatment, unforeseen liabilities, future capital expenditures, revenues, expenses, earnings, synergies, economic performance, indebtedness, financial condition, losses, future prospects, business and management strategies for the management, expansion and growth of Ansys’ business and other conditions to the completion of the transactions; (ii) failure to realize the anticipated benefits of the proposed transactions, including as a result of delay in completing the transactions or integrating the businesses of Ansys and Synopsys; (iii) Ansys’ ability to implement its business strategy; (iv) pricing trends, including Ansys’ and Synopsys’ ability to achieve economies of scale; (v) potential litigation relating to the proposed transactions that could be instituted against Ansys, Synopsys or their respective directors; (vi) the risk that disruptions from the proposed transactions will harm Ansys’ or Synopsys’ business, including current plans and operations; (vii) the ability of Ansys or Synopsys to retain and hire key personnel; (viii) potential adverse reactions or changes to business relationships resulting from the announcement, pendency or completion of the proposed transactions; (ix) legislative, regulatory and economic developments affecting Ansys’ and Synopsys’ businesses; (x) general economic and market developments and conditions; (xi) the evolving legal, regulatory and tax regimes under which Ansys and Synopsys operate; (xii) potential business uncertainty, including changes to existing business relationships, during the pendency of the proposed transactions that could affect Ansys’ or Synopsys’ financial performance; and (xiii) restrictions on Ansys’ or Synopsys’ operations during the pendency of the proposed transactions that may impact Ansys’ or Synopsys’ ability to pursue certain business opportunities or strategic transactions, as well as Ansys’ and Synopsys’ response to any of the aforementioned factors. The risks associated with the proposed Synopsys transaction are more fully discussed in the proxy statement/prospectus filed with the Securities and Exchange Commission (the “SEC”) in connection with the proposed Synopsys transaction. While the list of factors presented here is, and the list of factors presented in the proxy statement/prospectus are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Consequences of material differences in results as compared with those anticipated in the forward-looking statements could include, among other things, business disruption, operational problems, financial loss, legal liability to third parties and similar risks, any of which could have a material adverse effect on Ansys’ or Synopsys’ consolidated financial condition, results of operations, or liquidity. Neither Ansys nor Synopsys assumes any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws.
/ About Ansys
Our Mission: Powering Innovation that Drives Human Advancement™
When visionary companies need to know how their world-changing ideas will perform, they close the gap between design and reality with Ansys simulation. For more than 50 years, Ansys software has enabled innovators across industries to push boundaries by using the predictive power of simulation. From sustainable transportation to advanced semiconductors, from satellite systems to life-saving medical devices, the next great leaps in human advancement will be powered by Ansys.
Ansys and any and all ANSYS, Inc. brand, product, service and feature names, logos and slogans are registered trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All other brand, product, service and feature names or trademarks are the property of their respective owners.
ANSS–T
/ About Synopsys
Catalyzing the era of pervasive intelligence, Synopsys, Inc. (Nasdaq: SNPS) delivers trusted and comprehensive silicon to systems design solutions, from electronic design automation to silicon IP and system verification and validation. We partner closely with semiconductor and systems customers across a wide range of industries to maximize their R&D capability and productivity, powering innovation today that ignites the ingenuity of tomorrow. Learn more at www.synopsys.com.
/ Ansys Contacts
Media Mary Kate Joyce
724.820.4368
marykate.joyce@ansys.com
Investors Kelsey DeBriyn
724.820.3927
kelsey.debriyn@ansys.com
/ Synopsys Contacts
Media Cara Walker
corp-pr@synopsys.com
Investors Trey Campbell
synopsys-ir@synopsys.com
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SOURCE Synopsys, Inc.
Technology
LG UNVEILS A DAY IN A LIFE WITH “AFFECTIONATE INTELLIGENCE” AT LG WORLD PREMIERE
Published
44 minutes agoon
January 6, 2025By
Company Showcases Future of AI-Powered Customer Experiences Through CEO Keynote and Immersive Storytelling
LAS VEGAS, Jan. 6, 2025 /PRNewswire/ — LG Electronics (LG) unveiled its vision for AI-powered customer experiences themed “Life’s Good 24/7 with Affectionate Intelligence” at the LG World Premiere event in Las Vegas on January 6, the eve of CES 2025, widely regarded as the world’s most influential tech event.
Over 1,000 attendees, including global media and partners, were present at the press conference, which was also livestreamed online. To showcase the full scope of LG’s Affectionate Intelligence-powered customer experience, the event stage was divided into three areas representing the various spaces in people’s lives, from the home to mobility and commercial spaces. The company, through engaging demonstrations highlighting real-life scenarios, made clear how its advanced AI will transform daily life for the better.
LG “Affectionate Intelligence” is redefining the conventional, technical understanding of AI by focusing on its potential to revolutionize the customer experience paradigm. This concept leverages AI technology to better understand and empathize with customers, delivering more personalized and differentiated experiences.
The LG World Premiere kicked off with a video titled “Less Artificial, More Human,” followed by a keynote speech delivered by LG CEO William Cho.
“At LG, we’re seamlessly integrating AI into physical living spaces around us. We see space not merely as a physical location but as an environment where holistic experiences come to life – across the Home, Mobility, Commercial and even Virtual spaces,” said CEO Cho. “In these spaces, devices and services will harmonize to create entirely new customer value. This is where our Affectionate Intelligence truly shines, clearly standing out from the others.”
Cho then highlighted three fundamental elements to realize this vision: connected devices, capable AI agents and integrated services.
Connected devices, which serve as the customer touchpoint for AI, are one of LG’s greatest assets. Not only are there hundreds of millions of LG smart products already in use worldwide, but with last year’s acquisition of smart home solutions provider Athom, LG now offers seamless connectivity with IoT devices from over 170 global brands.
As for AI agents, LG is set to advance its AI agent, LG FURON, which combines the power of generative AI built on large language models with real-time spatial sensing and insights into customer lifestyle patterns. This innovative AI agent can understand customer situations and contexts in real-time, effortlessly coordinating devices and services to provide a more tailored and responsive user experience, all while protecting personal data.
Empowering AI-Based Integrated Services with Microsoft
To support his vision of providing compelling integrated services, CEO Cho announced a strategic partnership with Microsoft. The plan is to lead innovation by combining LG’s products and customer insights from various spaces, such as the home, mobility and commercial areas, with Microsoft’s AI technology to implement empathetic AI integrated services.
Judson Althoff, executive vice president and chief commercial officer at Microsoft, shared, “At Microsoft, we believe AI will fundamentally change the way we live and work, and we could not be more excited to partner with LG Electronics – the pioneers of smart, connected spaces – to integrate AI into life’s everyday experiences.”
The two companies are working on enhancing AI agents for various spaces, including homes, vehicles, hotels and offices. LG has been applying Microsoft’s voice recognition and speech synthesis technologies to its Self-Driving AI Home Hub, enabling it to understand diverse accents, pronunciations and colloquial expressions. Plans also include developing AI agents that not only understand and interact with customers but also predict their needs and preferences.
Althoff also announced further Microsoft collaboration with LG in the rapidly growing field of AI data centers. With LG’s thermal management systems and advanced chiller technologies optimized for AI data centers, the partnership aims to enhance energy efficiency in these critical backbones of AI infrastructure. Together, the companies plan to create next-generation data centers that are more efficient and sustainable.
Bringing AI Vision to Life
Illustrating Cho’s Affectionate Intelligence vision, LG captivated the audience with a short play about a family’s day from morning to night. Departing from the traditional product presentation speech format, this vivid portrayal demonstrated how LG’s AI innovations unveiled at CES 2025 and driven by the vision of “Better Life for All,” seamlessly enhance everyday life across various spaces.
In the morning scene, LG’s AI agent, FURON, highlights its personalized capabilities: “I noticed some coughing last night, so I adjusted the room temperature for your comfort.” Beyond environmental adjustments, FURON demonstrates thoughtful assistance, suggesting, “You don’t have any plans this afternoon – why not accompany your mother to her scheduled health check-up?”
The morning commute further highlights the convenience of AI integration. In the car, LG’s AI-powered in-cabin sensing solution detects when the driver forgets their coffee tumbler, asking, “Would you like to stop by a café two minutes away for coffee?” It also monitors biometric signals, responding to an elevated heart rate before an afternoon meeting by playing soothing music to help the driver relax. The system also proactively suggests rerouting to avoid accidents and recommends holding a video conference inside the vehicle if traffic delays risk causing the driver to miss an important meeting. Upon arriving at the office, the AI adds a personal touch, such as displaying previously recorded family vacation footage on the car’s internal and external cameras.
After work, the living room TV equipped with AI technology enhances the home entertainment experience. It analyzes the viewing environment, patterns and history to recommend tailored content. If the customer mentions difficulty hearing dialogue in a video, the AI adjusts the audio, enhancing voice clarity by isolating it from background noise and making it sound as though it’s coming naturally from the center of the TV screen.
Seamless and Holistic Customer Experiences Anytime, Anywhere, Seen or Unseen
Concluding his keynote address, CEO Cho emphasized AI’s role in driving transformative change across both B2C (business-to-consumer) and B2B (business-to-business) sectors.
He highlighted innovative initiatives like the LG Smart Cottage, a compact modular home that integrates AI-powered appliances, HVAC systems and other advanced technologies to redefine residential living. Similarly, LG envisions the automobile as a “personalized digital cave,” featuring software-defined vehicle solutions and AI technologies that understand and adapt to both the internal and external vehicle environment, delivering groundbreaking mobility experiences.
In smart factory solutions, LG leverages over 60 years of world-class manufacturing expertise, offering next-generation manufacturing systems powered by AI and robotics. Additionally, LG’s AI-based thermal management systems and advanced chiller technologies are optimizing energy efficiency in AI data centers worldwide.
“Our ultimate goal is simple yet profound: to leverage AI as a means to create holistic customer value, no matter where you are,” said CEO Cho. “Irrespective of how AI transforms our lives, one thing will never change: our promise of Life’s Good. With this unwavering commitment, we will strive to deliver differentiated customer experiences – seen or unseen – to everyone, everywhere, every time.”
About LG Electronics USA
LG Electronics USA, Inc., based in Englewood Cliffs, N.J., is the North American subsidiary of LG Electronics, Inc., a $68 billion global innovator in technology and manufacturing. In the United States, LG sells a wide range of innovative home appliances, home entertainment products, commercial displays, air conditioning systems, and vehicle components. LG is an 11-time ENERGY STAR® Partner of the Year. The company’s commitment to environmental sustainability and its “Life’s Good” marketing theme encompass how LG is dedicated to people’s happiness by exceeding expectations today and tomorrow. For more information, visit www.LG.com.
Media Contacts:
LG Electronics USA
LG Electronics USA
Chris De Maria
JL Lavinia
LG-One
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SOURCE LG Electronics USA
Technology
Cboe Global Markets Reports Trading Volume for December and Full Year 2024
Published
44 minutes agoon
January 6, 2025By
CHICAGO, Jan. 6, 2025 /PRNewswire/ — Cboe Global Markets, Inc. (Cboe: CBOE), the world’s leading derivatives and securities exchange network, today reported December and full year 2024 trading volume statistics across its global business lines and provided guidance for selected revenue per contract/net revenue capture metrics for the fourth quarter of 2024.
The data sheet “Cboe Global Markets Monthly Volume & RPC/Net Revenue Capture Report” contains an overview of certain December and full year 2024 trading statistics and market share by business segment, volume in select index products, and RPC/net capture, which is reported on a one-month lag, across business lines.
Average Daily Trading Volume (ADV) by Month
Year-To-Date
Dec
2024
Dec
2023
%
Chg
Nov
2024
%
Chg
Dec
2024
Dec
2023
%
Chg
Multiply-listed options (contracts, k)
11,864
10,472
13.3 %
12,355
-4.0 %
10,853
10,814
0.4 %
Index options (contracts, k)
4,014
3,984
0.8 %
4,141
-3.0 %
4,094
3,800
7.7 %
Futures (contracts, k)
213
201
6.0 %
222
-3.8 %
239
223
6.9 %
U.S. Equities – On-Exchange (matched shares, mn)
1,515
1,654
-8.4 %
1,601
-5.4 %
1,392
1,413
-1.4 %
U.S. Equities – Off-Exchange (matched shares,
mn)1
70
71
-1.9 %
94
-25.7 %
79
79
-0.6 %
Canadian Equities (matched shares, k)
154,344
151,854
1.6 %
159,068
-3.0 %
147,576
136,110
8.4 %
European Equities (€, mn)
9,291
8,816
5.4 %
11,262
-17.5 %
9,780
9,398
4.1 %
Cboe Clear Europe Cleared Trades2 (k)
96,747
83,648
15.7 %
114,701
-15.7 %
1,229,203
1,172,028
4.9 %
Cboe Clear Europe Net Settlements2 (k)
926
770
20.2 %
995
-6.9 %
11,199
10,045
11.5 %
Australian Equities (AUD, mn)
772
777
-0.7 %
822
-6.1 %
790
704
12.2 %
Japanese Equities (JPY, bn)
250
192
30.0 %
251
-0.5 %
304
177
72.3 %
Global FX ($, mn)
43,122
45,600
-5.4 %
49,565
-13.0 %
46,731
44,706
4.5 %
1 U.S. Equities – Off-Exchange ATS Block metrics restated to incorporate a tier of sell-side activity from July 2023 and forward, previously excluded from reporting.
2 Cboe Clear Europe figures are totals (not ADV) for the months and years-to-date. As of April 2023, data has been restated to reflect both On-Book and Off-Book cleared trades.
December and Full Year 2024 Trading Volume Highlights
U.S. Options
Total volume across Cboe’s four options exchanges was 3.8 billion contracts in 2024, with an ADV of 14.95 million contracts traded, the fifth consecutive record-breaking year.Cboe’s proprietary product suite set several volume records for the year, including:Overall proprietary index options product suite traded a total of 1.03 billion contracts, with an ADV of 4.1 million contractsS&P 500 Index (SPX) options traded a total of 784.2 million contracts, with an ADV of 3.1 million contractsCboe Volatility Index (VIX) options traded a total of 209.2 million contracts, with an ADV of 830 thousand contractsXSP (Mini-SPX) options traded a total of 17.6 million contracts, with an ADV of 69 thousand contractsIn the fourth quarter, zero days to expiry trading in SPX comprised of 51% of overall SPX volumes, a quarterly record.
Global FX
Global FX reported a record full year spot average daily notional volume (ADNV) of $45.4 billion, eclipsing last year’s record of $43.6 billion.
Fourth-Quarter 2024 RPC/Net Revenue Capture Guidance
The projected RPC/net capture metrics for the fourth quarter of 2024 are estimated, preliminary and may change. There can be no assurance that our final RPC for the three months ended December 31, 2024, will not differ materially from these projections.
(In USD unless stated otherwise)
Three-Months Ended
Product:
4Q Projection
Nov-24
Oct-24
Sept-24
Multiply-Listed Options (per contract)
$0.065
$0.067
$0.066
$0.063
Index Options
$0.905
$0.895
$0.894
$0.892
Total Options
$0.281
$0.288
$0.300
$0.298
Futures (per contract)
$1.767
$1.753
$1.760
$1.767
U.S. Equities – Exchange (per 100 touched shares)
$0.018
$0.020
$0.022
$0.024
U.S. Equities – Off-Exchange (per 100 touched shares)
$0.128
$0.129
$0.130
$0.135
Canadian Equities (per 10,000 touched shares)
CAD 4.057
CAD 4.158
CAD 4.192
CAD 4.240
European Equities (per matched notional value)
0.260
0.260
0.257
0.257
Australian Equities (per matched notional value)
0.153
0.156
0.155
0.156
Japanese Equities (per matched notional value)
0.234
0.228
0.219
0.221
Global FX (per one million dollars traded)
$2.742
$2.687
$2.680
$2.665
Cboe Clear Europe Fee per Trade Cleared
€ 0.009
€ 0.008
€ 0.008
€ 0.008
Cboe Clear Europe Net Fee per Settlement
€ 0.976
€ 0.979
€ 1.001
€ 1.026
The above represents average revenue per contract (RPC) or net capture is based on a three-month rolling average, reported on a one-month lag. Average transaction fees per contract can be affected by various factors, including exchange fee rates, volume-based discounts and transaction mix by contract type and product type.
For Options and Futures, the average RPC represents total net transaction fees recognized for the period divided by total contracts traded during the period for options exchanges: BZX Options, Cboe Options, C2 Options and EDGX Options; futures include contracts traded on Cboe Futures Exchange, LLC (CFE).For U.S. Equities, “net capture per 100 touched shares” refers to transaction fees less liquidity payments and routing and clearing costs divided by the product of one-hundredth ADV of touched shares on BZX, BYX, EDGX and EDGA and the number of trading days for the period.For U.S. Equities – Off-Exchange, “net capture per 100 touched shares” refers to transaction fees less OMS/EMS costs and clearing costs divided by the product of one-hundredth ADV of touched shares on BIDS Trading and the number of trading days for the period.For Canadian Equities, “net capture per 10,000 touched shares” refers to transaction fees divided by the product of one-ten thousandth ADV of shares for Cboe Canada and the number of trading days for the period and includes revenue.For European Equities, “net capture per matched notional value” refers to transaction fees less liquidity payments in British pounds divided by the product of ADNV in British pounds of shares matched on Cboe Europe Equities and the number of trading days.For Australian Equities, “net capture per matched notional value” refers to transaction fees less trading fee relief in Australian Dollars divided by the product of ADNV in Australian Dollars of shares matched on Cboe Australia and the number of trading days.For Japanese Equities, “net capture per matched notional value” refers to transaction fees less liquidity payments in Japanese Yen divided by the product of ADNV in Japanese Yen of shares matched on Cboe Japan and the number of trading days.For Global FX, “net capture per one million dollars traded” refers to transaction fees less liquidity payments, if any, divided by the Spot and SEF products of one-thousandth of ADNV traded on the Cboe FX Markets and the number of trading days, divided by two, which represents the buyer and seller that are both charged on the transaction.For Cboe Clear Europe, “Fee per Trade Cleared” refers to clearing fees divided by number of non-interoperable trades cleared and “Net Fee per Settlement” refers to settlement fees less direct costs incurred to settle divided by the number of settlements executed after netting.
About Cboe Global Markets
Cboe Global Markets (Cboe: CBOE), the world’s leading derivatives and securities exchange network, delivers cutting-edge trading, clearing and investment solutions to people around the world. Cboe provides trading solutions and products in multiple asset classes, including equities, derivatives and FX across North America, Europe and Asia Pacific. Above all, we are committed to building a trusted, inclusive global marketplace that enables people to pursue a sustainable financial future. To learn more about the Exchange for the World Stage, visit www.cboe.com.
Cboe Media Contacts
Cboe Analyst Contact
Angela Tu
Tim Cave
Kenneth Hill, CFA
+1-646-856-8734
+44 (0) 7593-506-719
+1-312-786-7559
atu@cboe.com
tcave@cboe.com
khill@cboe.com
CBOE-V
Cboe®, Cboe Global Markets®, Cboe Volatility Index®, and VIX® are registered trademarks of Cboe Exchange, Inc. or its affiliates. Standard & Poor’s®, S&P®, SPX®, and S&P 500® are registered trademarks of Standard & Poor’s Financial Services, LLC, and have been licensed for use by Cboe Exchange, Inc. All other trademarks and service marks are the property of their respective owners.
Any products that have the S&P Index or Indexes as their underlying interest are not sponsored, endorsed, sold or promoted by Standard & Poor’s or Cboe and neither Standard & Poor’s nor Cboe make any representations or recommendations concerning the advisability of investing in products that have S&P indexes as their underlying interests. All other trademarks and service marks are the property of their respective owners.
Cboe Global Markets, Inc. and its affiliates do not recommend or make any representation as to possible benefits from any securities, futures or investments, or third-party products or services. Cboe Global Markets, Inc. is not affiliated with S&P. Investors should undertake their own due diligence regarding their securities, futures, and investment practices. This press release speaks only as of this date. Cboe Global Markets, Inc. disclaims any duty to update the information herein.
Nothing in this announcement should be considered a solicitation to buy or an offer to sell any securities or futures in any jurisdiction where the offer or solicitation would be unlawful under the laws of such jurisdiction. Nothing contained in this communication constitutes tax, legal or investment advice. Investors must consult their tax adviser or legal counsel for advice and information concerning their particular situation.
Cboe Global Markets, Inc. and its affiliates make no warranty, expressed or implied, including, without limitation, any warranties as of merchantability, fitness for a particular purpose, accuracy, completeness or timeliness, the results to be obtained by recipients of the products and services described herein, or as to the ability of the indices referenced in this press release to track the performance of their respective securities, generally, or the performance of the indices referenced in this press release or any subset of their respective securities, and shall not in any way be liable for any inaccuracies, errors. Cboe Global Markets, Inc. and its affiliates have not calculated, composed or determined the constituents or weightings of the securities that comprise the third-party indices referenced in this press release and shall not in any way be liable for any inaccuracies or errors in any of the indices referenced in this press release.
There are important risks associated with transacting in any of the Cboe Company products discussed here. Before engaging in any transactions in those products, it is important for market participants to carefully review the disclosures and disclaimers contained at: https://www.cboe.com/us_disclaimers/.
Options involve risk and are not suitable for all market participants. Prior to buying or selling an option, a person should review the Characteristics and Risks of Standardized Options (ODD), which is required to be provided to all such persons. Copies of the ODD are available from your broker or from The Options Clearing Corporation, 125 S. Franklin Street, Suite 1200, Chicago, IL 60606.
Cautionary Statements Regarding Forward-Looking Information
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “might,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” and the negative of these terms and other comparable terminology. All statements that reflect our expectations, assumptions or projections about the future other than statements of historical fact are forward-looking statements. These forward-looking statements, which are subject to known and unknown risks, uncertainties and assumptions about us, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from those expressed or implied by the forward-looking statements.
We operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Some factors that could cause actual results to differ include: the loss of our right to exclusively list and trade certain index options and futures products; economic, political and market conditions; compliance with legal and regulatory obligations; price competition and consolidation in our industry; decreases in trading or clearing volumes, market data fees or a shift in the mix of products traded on our exchanges; legislative or regulatory changes or changes in tax regimes; our ability to protect our systems and communication networks from security vulnerabilities and breaches; our ability to attract and retain skilled management and other personnel; increasing competition by foreign and domestic entities; our dependence on and exposure to risk from third parties; global expansion of operations; factors that impact the quality and integrity of our and other applicable indices; our ability to manage our growth and strategic acquisitions or alliances effectively; our ability to operate our business without violating the intellectual property rights of others and the costs associated with protecting our intellectual property rights; our ability to minimize the risks, including our credit, counterparty, investment, and default risks, associated with operating a European clearinghouse; our ability to accommodate trading and clearing volume and transaction traffic, including significant increases, without failure or degradation of performance of our systems; misconduct by those who use our markets or our products or for whom we clear transactions; challenges to our use of open source software code; our ability to meet our compliance obligations, including managing potential conflicts between our regulatory responsibilities and our for-profit status; our ability to maintain BIDS Trading as an independently managed and operated trading venue, separate from and not integrated with our registered national securities exchanges; damage to our reputation; the ability of our compliance and risk management methods to effectively monitor and manage our risks; restrictions imposed by our debt obligations and our ability to make payments on or refinance our debt obligations; our ability to maintain an investment grade credit rating; impairment of our goodwill, long-lived assets, investments or intangible assets; the impacts of pandemics; the accuracy of our estimates and expectations; litigation risks and other liabilities; and risks relating to digital assets, including winding down the Cboe Digital spot crypto market and transitioning digital asset futures contracts to CFE, operating a digital assets futures clearinghouse, cybercrime, changes in digital asset regulation, and fluctuations in digital asset prices. More detailed information about factors that may affect our actual results to differ may be found in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2023 and other filings made from time to time with the SEC.
We do not undertake, and we expressly disclaim, any duty to update any forward-looking statement whether as a result of new information, future events or otherwise, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.
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SOURCE Cboe Global Markets, Inc.
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