Illumina consumables are 90% profit?
I’ve heard a few people say that the reagent/consumables costs for Illumina are very low, and that the reagent/flowcell cost is <10% of the cost to the user. I wanted to try and find some facts to back this up. As far as I can tell the latest 10Q backs this up, and the gross margin for consumables is 90% (I would be very interested in other peoples thoughts however!).
I started by looking at the Illumina financial statements. I picked the Q1 2018 10Q from their site, and played around to see if I could estimate their consumable and instrument markup. Consumable and Instrument revenue is broken down, but not the costs.
Q1 2018 and Q1 2017 had similar instrument revenue (118M and 100M). Consumable revenue was up 99MUSD. Cost of product revenue (which I think is consumables+instruments) was up by 11MUSD (173M to 184M).
If we assume instrument revenue was at similar cost. Then the majority of the cost was due to consumable production. 11M in costs gave 99M in revenue. 88% gross margin.
Plugging this back in and trying to break out the instrument costs give 55.44M in reagent costs, and 118M in instrument costs.
In the 10Q instrument revenue is listed as 118MUSD. This seems like quite a coincidence, and would indicate that they sell instruments at zero profit. I wonder if they pile all instrument development costs into the instrument costs? From what I know of the cost of the various components, I expect the BOM cost to be much lower that the price Illumina sell instruments for.
I’d love other peoples thoughts on Illumina consumables, and instrument costs! If you have any, please get in touch (new at sgenomics dot org).
RSS