Good morning. Please welcome to the stage Vice President of Investor Relations, Salli Schwartz. We just had a great week convening innovators across the genomics industry at the Illumina Genomics Forum. During our Investor Day event today, multiple speakers will touch on how much our customers appreciated it and the groundbreaking technology that we launched at the event. Thank you for joining us here today, both everyone here in the room and everyone joining us virtually on the webcast. My name is Salli Schwartz, and I'm Illumina's Vice President of Investor Relations. Prior to joining Illumina, I spent the past almost dozen years leading investor relations at companies or investor relations teams at various companies. Before that, I held a variety of corporate and financial advisory roles. Before we get started, I need to provide a few cautionary notes. On this slide behind me are really important disclaimers for our business. They include a statement reflecting the current hold separate requirement related to our GRAIL B usiness. We encourage you to review them, and they'll be included on the presentation on our website. We have a really full agenda for you today. We're gonna focus our conversation on Core Illumina, and we have so much to share with you. We'll start the day with Francis deSouza discussing Illumina's vision and growth strategy. Alex will then cover our innovation roadmap, including the product announcements that we made at our Illumina Genomics Forum last week. Phil's gonna discuss where we are and where we're going in clinical markets, and then we're gonna take a short break. After the break, Susan's gonna provide a commercial update and let you know what we're hearing from our customers. Joydeep will wrap up the presentations with our long-term financial outlook. After that, we'll move to Q&A with all of our speakers. For those joining us via webcast, you're welcome to submit your questions at any time during the presentations. We understand that you are curious about how our third quarter went. We just finished the quarter yesterday, and therefore, we won't be commenting on it today or our full year 2022 guidance. We'll have a full update for you in just a few weeks during our third quarter earnings call, which will be on Thursday, November 3rd. Before we move to Francis's presentation, I wanted to highlight a construct that's really central to the way that we operate. Environmental and social responsibility is core to Illumina's business, and today you're going to hear components of it across all of our presenter sessions. We understand that with our leadership position comes added accountability. Our five corporate and social responsibility pillars reflect our unique position to deepen our impact on human health by focusing on enabling genomics for good. We've been honored to have our work recognized by a number of organizations, and we're gonna continue pushing forward with all these critical efforts. Similar to last year, we're gonna be hosting an ESG Investor Event later this month to highlight our latest progress in each of these areas. We're gonna have additional details for you on that soon, and we really hope that you'll join us there. On that note, let me welcome Francis deSouza, Illumina CEO, to the stage for his presentation. Francis. Hello, everyone. Thank you for joining us. As you saw in that video, we're coming off our sold-out Illumina Genomics Forum. It was a terrific customer conference where we launched a suite of incredible products in front of an in-person audience of over 1,000 people and an online audience of over 10,000 people. It's an exciting time to be at Illumina. You know, last week at the conference, I was speaking to the crowd, and we'd launched NovaSeq X, and I was challenging the audience to be bold in their ambitions. And I said, "Look, for the non-Nobel Prize winners in the room," 'cause there were some Nobel Prize winners, "think big. Think of where your research could go." I don't know if you saw this morning the Nobel Prize for medicine. It was. Went to a researcher who did their seminal work, partly on Illumina machines on the GA2. Didn't expect them to move that quickly. In this session, I'm gonna talk about how genomics is changing human health and our strategy to continue to lead the large and high-growth next-generation sequencing market. Here are the key messages. Next-generation sequencing represents a $120 billion market opportunity, one that we're still in the very early stages of penetrating. Our strategy is to leverage our proprietary innovation to deliver NGS platforms and select applications to accelerate the penetration into this market and catalyze new large adjacent NGS markets. Our innovation leadership creates a powerful flywheel that represents a strong competitive advantage. We've attracted and built the deepest talent pool in the industry with a world-class leadership team. This all sets us up well to deliver superior shareholder value through mid-teens revenue growth and expanding margins over the long term. Let's start where we are now and our position at Illumina at the center of the genomics landscape. Illumina's mission is to improve human health by unlocking the power of the genome. Over the last two decades, Illumina has emerged as the clear leader in research and clinical genomics, with an installed base of more than 21,000 sequencing systems across more than 9,100 customers in 150 countries. Our world-leading 1,000+ person clinical genomics team has enabled us to get 72 product approvals from 58 regulatory agencies globally. Our terrific market access team has helped us get coverage for 1 billion lives globally for genomic testing, and we're working to increase that number to 2 billion by 2026. We have achieved this through our relentless focus on delivering breakthrough innovations. One of our values at Illumina is innovation is in our DNA. As you saw last week, that's as true today as it's ever been. We have a portfolio of more than 8,400 patents worldwide, and we spent $885 million on R&D last year. More than 300,000 scientific publications used our breakthrough technology, significantly more than anyone else, and we're only just beginning. As we look ahead, I wanna ground these conversations in the why. The immense potential of genomics that we've only just begun to unlock. Genomics will transform lifetime health management, improving health outcomes, and lowering healthcare costs. We're working towards a world where newborns with suspected genetic diseases will have their genome sequenced as a frontline diagnostic. Carrier screening of parents will be a part of the reproductive process. Omic testing for screening and early detection of deadly diseases like cancer and neurodegenerative diseases will be routine. Our own immune system will be activated as the strongest therapeutic available. Pharmacogenomic testing will select the right treatment at the right level for patients. Therapy effectiveness and recurrence monitoring for cancer and many other diseases will be required at every progressive treatment line. Illumina's products will touch every step of this health management continuum. Each stage of this lifetime journey will involve genomic research, testing, and personalized drug development. Today, only 4 million people, that's 0.07% of the world's population, have ever had their genome sequenced even once. We'll go from this to over 1 billion people being sequenced dozens of times over their lifetime. Several orders of magnitude more sequencing than is being done today. Now, to make this vision of lifetime health management a reality, we have to enable more discoveries, get more applications into the clinic, and make genomics a standard of care. Realizing this vision starts with research and biological discoveries. From identifying a new biomarker for diagnostic or therapies, to targeted mechanisms for drug development. Each discovery must be translated into clinical utility. It must then become a standard of care. Since the Human Genome Project completed in 2003, we've seen clinical applications start to go from research through translation to standard of care. As research continues to expand, the pace of applications continues to accelerate. Our platforms initially power genomic research, which is our first addressable market. In 2005, our TAM included genomic research in areas like genetic disease and genotyping. By 2014, applications such as non-invasive prenatal testing, research disease diagnosis, and therapy selection for oncology emerged from research and were moving into the clinic. This increased our addressable market to $20 billion. Looking forward to 2027, we see another six-fold increase to an addressable market of $120 billion, driven by, first, the emergence of large new clinical applications like cancer screening and minimal residual disease monitoring and oncology. The transition from single point use cases in clinical care to multiple touch points throughout a person's lifetime for screening disease and disease recurrence monitoring, and the expansion of sequencing intensive modalities like spatial and single cell. Most of this addressable market is in clinical segments, and today, these applications are less than 10% penetrated. We're focused on accelerating this penetration and estimate it will grow to about 15% over the next 15 years. Later today, you'll hear from Phil Febbo, our Chief Medical Officer, who will review each of these clinical markets in detail. In research and applied markets, the current penetration is higher at 26%, and we expect this to reach about 35% in the next five years as democratization of sequencing continues and as research projects increase in size. We have a four-pronged strategy to strengthen our leadership across these key markets and position ourselves for long-term growth. First, we will deliver breakthrough innovation to remain the NGS platform of choice across research, clinical, and applied applications. We'll deliver end-to-end tests in select areas where we have differentiated skill and scale. We'll accelerate adoption in existing clinical markets like oncology, reproductive health, and genetic disease. Fourth, we'll catalyze new areas like drug discovery, proteomics, and others, seeding future growth. Let's go through each of these. First, we're focused on being the NGS platform of choice across the dozens of research, applied, and clinical markets we serve. To do this, we are relentlessly committed to delivering breakthrough innovations in every aspect of sequencing, from sample to insight, and to continually pushing the envelope to dramatically improve output, accuracy, user experience, price, and sustainability, while also improving turnaround times. Now, these innovations make sequencing more accessible to more labs, allowing us to unlock the elasticity in those markets. Time and again, our new products have helped expand and open up new markets. For example, after we launched the HiSeq X and the $1,000 Genome, our customers sequenced more genomes in one year than in all previous years combined. Alex Aravanis, our CTO and head of R&D, will talk to you about our exciting new releases and our powerful R&D engine. Susan Tousi, our Chief Commercial Officer, and Phil Febbo, our CMO, will talk about how these products, including the new NovaSeq X, will unlock the next wave of elasticity in research, clinical, and applied markets. Finally, we have always been committed to our open platform approach, allowing customers and partners to easily and rapidly develop their tests on our platforms. Today, Illumina has by far the broadest ecosystem of third-party applications, including LDT and IVD content. Second, we'll work to be. We'll deliver our own end-to-end applications in addition to being the platform of choice across the dozens of markets we serve. We'll pick only a handful of select applications where we look to deliver these end-to-end applications. How do we decide which markets to target? We're looking for markets that meet certain criteria. First, we're looking for large markets with high growth potential. Second, we're looking for markets where it's possible to deliver a highly differentiated product, for example, through proprietary content. Third, we're looking for markets that leverage Illumina's core competencies. Fourth, we're looking for markets that are strategically important to us. Large, growing markets where we can deliver a differentiated product that play to our core competencies and are strategically important. Let me give you some examples. In 2013, we entered the non-invasive prenatal testing market through our acquisition of Verinata. That was the first, and at that time, the largest clinical application of genomics. Big market, potential for growth. Verinata had a very strong IP position, so it was able to establish a proprietary position in that market, which we like. It was strategically important to us too, because by entering the clinical genomics market, we acquired a lot of capability, regulatory capability, reimbursement capability, that we didn't have as an RUO company. Not only was that important for us to get into NIPT, but it changed us as a company and set us down the path of targeting clinical genomics. That's why we did NIPT. A few years later, we entered the cancer therapy selection market through our TSO 500 product. Again, very large market for cancer therapy selection genomic testing, high growth market. We were able to get a proprietary position because at the time, the entire market was focused on small panels, and we went after the 500, the large panel market. Strategically, it was important to us because we knew oncology was gonna be the largest market for clinical genomics, and so we wanted to get deeper into the oncology space. Now, in both of those markets, we continued to support partners who built their own tests to compete with our tests. In fact, we today still make more money from supporting partners, from selling our sequences to partners that create their own tests than ours. We've established a model where we can enter these applications and still support partners to compete with our applications. Then we entered the cancer screening market through the acquisition of GRAIL. Now, GRAIL also fits those criteria. Cancer screening is the largest genomic application that we're likely to see over the next decade. GRAIL has a privileged position. It's not only the only player in the multi-cancer early detection space, and likely to be that way for a while, but it has a very proprietary position because of all the IP that it's generated and the patents that are both issued as well as pending. Strategically, it's very important to us because, you know, GRAIL will be servicing millions and then tens of millions of people every year, giving us a front row in terms of being able to innovate for future tests. Now, while I'm on GRAIL, I'd like to mention a few things. First, we believe Illumina's acquisition of GRAIL can have life-saving benefits for people who have cancer and don't know about it. We also believe it creates long-term shareholder value for Illumina's shareholders, which is why we did the deal. Second, we believe the GRAIL acquisition is pro-competitive, and the recent decision from the FTC's Chief Administrative Judge supports this view. Third, as we work through this process, we will always be pragmatic and make the right decision looking forward for our shareholders. Finally, in parallel, as we said, to appealing the EC decision, we are starting to explore options should we have to divest GRAIL in the next nine to 18 months. Turning now to our third strategic area, our clinical markets are under-penetrated. As a market leader in clinical genomics, we play an important role in driving markets forward, well beyond delivering technology. We do this in a number of ways, partnering closely with our pioneering customers to create successful implementations from the first population studies in the 100,000 Genomes Project with Genomics England, to the first national health system rollout of genomic testing in the NHS. We then help share these learnings across our customers through events like last week's IGF. We also help demonstrate the clinical utility of NGS through evidence generation to accelerate reimbursement. We currently have more than 260 studies and research collaborations in the pipeline, including our recent work in Belgium, to demonstrate the utility of comprehensive genomic profiling within a national health system. Our market access team is working on increasing reimbursement for NGS globally from 1 billion covered lives globally in 2021 to 2 billion by 2026. In addition to reimbursement, we are focused on establishing pathways for regulatory approvals for genomic technologies. We have reached more than 1,000 IVD EUA product registrations across more than 60 countries. Phil will provide more color in his remarks, and Susan will touch on how our customer relationships support these efforts. Finally, we're working to catalyze new markets, seeding the next big genomics markets in areas such as drug discovery, proteomics, cardiovascular, and neurological disease. In drug discovery, for example, we're working with multiple pharma partners to support greater genomic target usage in drug development, partnering with groups like Nashville Biosciences to develop large data sets and with Deerfield Management to help advance genetic-based drug targets. In proteomics, we're collaborating with multiple players to accelerate the use of proteomics by leveraging NGS as a high-throughput readout platform. This includes our co-development work with SomaLogic on a proteomics assay that's on track to launch in 2024. This strategy has enabled us to deliver strong and profitable growth. For core Illumina, this represents a 14% CAGR for revenue and a 15% CAGR for operating profit in the last five years. We've maintained this growth rate even with vast changes in the industry and challenging global macroeconomic dynamics, emerging even stronger. The underlying growth for our markets gives us confidence in our long-term trajectory despite current dynamics. We will enable our long-term growth through our innovation flywheel. A breakthrough technology innovation is the underpinning of this flywheel. Our innovations have earned us the largest NGS customer base in the world. These deep customer relationships with over 9,100 customers, which Susan will talk about, helps us deeply understand how our customers are using sequencing technology, but more importantly, how they need it to evolve. This closeness to our customers gives us an early look into new applications, and it helps us innovate in ways that anticipate and help us meet future market needs. You can see this with some of the innovations from performance to stability to sustainability that we delivered last week in the NovaSeq X. This innovation flywheel is a powerful competitive advantage, especially when it's coupled with a best-in-class team. On the governance side, we have a world-class board of directors with deep experience, broad and complementary skill sets, and diverse backgrounds. Two of our independent directors have large public company CEO experience. John Thompson, our Independent Chair, was recently Chairman of Microsoft and previously CEO of Symantec. Gary Guthart, CEO of Intuitive Surgical. Frances Arnold, a Chemistry Nobel laureate and professor at Caltech, is, as you can imagine, an active Chair of our board Science and Technology Committee. We also have deep regulatory experience, including Scott Gottlieb, the former U.S. FDA Commissioner, and deep experience, financial experience in regulated markets from board members like Caroline Dorsa. The board's expertise and strengths across multiple areas of the industry ensure that we have broad perspectives, critical guidance, and strong governance as we develop and implement our growth strategies and advance human health. Finally, Illumina is led by our incredible management team. These leaders represent a wide variety of backgrounds, and each brings both deep technical skill in their area as well as a breadth of experience. I'm going to embarrass a couple of them now, but Alex Aravanis, for example, has been in the company for over a decade, and we're very fortunate to have somebody leading as our CTO and head of R&D, leading product development, who is both an MD from Stanford as well as a PhD from Stanford in engineering with an expertise in AI. That's a very unique sort of combination to get and is incredibly helpful to us as we plan out future innovations with an eye towards clinical markets. Susan Tousi, our Chief Commercial Officer, another decade-plus veteran of Illumina, is in the position of having built our products before she took over her current role as Chief Commercial Officer. You can imagine there are very few people more passionate about getting our innovations into the hands of as many customers as possible. We're lucky to have a combination of both veterans at Illumina as well as attract some extraordinary new talent. Carissa Rollins, for example, joined us from UnitedHealthcare, where she was their CIO and is now our Chief Information Officer. We've also had John Frank join us as our Head of Government Affairs. He joins us from Microsoft, where he was there for over 20 years, including in roles like, you know, heading government affairs for them in EMEA and deputy general counsel. This strong team, combined with our huge underpenetrated markets as well as our strategy and innovation flywheel, form the foundation for us meeting our long-term targets. Joydeep will talk about our long-term targets in his section. Now please join me in welcoming Alex Aravanis, who will discuss our recent launches and share more about our innovation roadmap. Okay. All right. Hello, everyone. Welcome. Just a little bit more about my background. As Francis mentioned, trained as a physician scientist, spent a lot of time at Stanford in academics. Started several companies that got acquired by larger companies. Then I came to my first tenure at Illumina, led a lot of the significant research and development projects there, launched several products. Then spent five years as co-founder, leading the development of the Galleri test, and then I've been back at Illumina for several years now. My function, research and development, oversees everything from the very early breakthroughs all the way through development, through product launches and through on-market support. It includes all aspects of our technology, so engineering, chemistry, bioinformatics, and software. A really incredible team and really a dream job. Okay. Some key messages that I want to impart to you in this meeting. Look, today we have the leading products. I hope you'll agree after seeing what we presented last week that we're gonna have the leading products for a long time. We're also investing in things already that are gonna be equally exciting in the years to come. It's really this product leadership that, as Francis said, has positioned us commercially with such a broad set of customers, and the rapid growth. I also want to talk about our R&D leadership, and I'll go more into that. I believe we have the best innovation engine in the world, both in the people, our culture, our processes, and products like the NovaSeq X really speak to that kind of success. I also wanna talk about, I'm gonna go into more depth about how we think about developing products to create long-term differentiation. It's this type of differentiation and very hard-to-replicate technology and products that have given us these leading products that customers prefer and that will prefer long term. The last point I want to also touch upon is how we think about getting the most out of our R&D dollars. You know, we spend a significant amount of shareholder you know investments on the innovations, and we think deeply about how to make big innovations that we can leverage across multiple products and kind of sell multiple times. I wanna share that thinking with you. Okay. You're gonna hear these numbers several times about the unique position we are in with so many customers, so many installed systems. From my point of view, this gives us the opportunity to really see what's going on in the way that perhaps no other company can, right? I and my team, we regularly meet with our customers, we understand the challenges they're having at times, where they wanna go, what are the new applications, what are the new features. We feed all that in a very customer and market-backed way into how we think about the innovations that will be exciting products that our customers will wanna buy, that they'll want to adopt, in greater and greater numbers. These key stats around R&D are really important. We have over 2,200 people in our core R&D team, and again, that's kind of every major discipline of science, engineering, and software. We produce about 400 invention disclosures a year, and that's a testament just to the amount of, you know, the incredible amount of innovation that we're constantly doing. You know about the hundreds of thousands of patents, right? And again, that's also a demonstration of the wide use of our technology. We have over 1,000 issued patents and then many, many more pending applications. We work hard to protect all of those innovations that we're constantly producing around our differentiated products. A few more things. One is, we think a lot about the culture of the R&D team, the composition of it. Very proud of the diversity, which has gotten significantly better in recent years. This has allowed us to draw on a deeper talent base and really, an advantage in how we do R&D. We have very low turnover relative to our industry. I think that speaks to how exciting a place Illumina is to be, when you're working on new technology and developing the new science. You know, we have about a 90% acceptance rate in people coming to Illumina when we give them an offer, right? When I ask them about why they come, and this is very conscious in how we think about it, you know, if they wanna work on the products that are gonna change the industry, that are used by the majority of people, they wanna have access to the resources to make those big game-changing investments, and that's what you get at Illumina, and that's why I think we get the best talent in the industry. We retain it. We also have a very senior team. I have about 20 vice presidents and distinguished scientists and engineers that help me lead the function. The average tenure of that group is 10 years at Illumina, and then many of them even have broader experience in the industry. The benefit of that is these are people who literally built everything both at Illumina and, you know, the largest parts of the genomics industry. That is a unique asset in how we think about where we're gonna go that I think is unparalleled. Okay. I wanna give you some insight into a few different ways that we think about how to innovate to create this really enduring differentiated value. The first is what we'll call enhancing value beyond just cost per sequencing or dollar per gigabase. Now, I don't want you to leave for a second thinking that we're not committed to that. As you just saw, we did a huge price reduction in the cost of sequencing, and that is through massive innovation, right? Over time, we are exceptional about learning how to scale technologies and make innovations that allow us to produce the technology at ever-decreasing costs, and then we can pass that on to our customers, and then we enjoy the elasticity of that. We think much broader about that. I'm gonna use NovaSeq X as an example to talk about this. Again, I believe we have the underlying technology and infrastructure to produce sequencing technology at lower cost than anyone else. You know, that's a huge advantage. Beyond that, we also scale, right? That allows people to do much bigger projects, much bigger cohorts, right? You see that in NovaSeq X with a 3x increase in output and 2x the speed and the cost reductions. Because of our experience, our deep experience working with customers, we understand what can slow them down, what can limit adoption, what could lead to inefficiencies or waste in their workflows, and we address that very explicitly. NovaSeq has a huge amount of technology packed in to address that. As an example, we do clustering on board, right? One of the few instrument providers that does that. We also have addressable lanes. It makes the fluidics more complex, but it gives tremendous workflow flexibility that customers value. It used to be that you would have to manually load individual sequencing lanes, and if you wanna do large numbers of samples, there's a lot of complexity up front of the sequencer. We've automated that, and now it's eliminated from the customer's hands, and they love that. We've also made the instrument incredibly easy to use, and after the session, we're gonna spend some time for those who wanna get up close with the instrument, and you'll see how beautiful and elegant it is. What all this means for our customers is that they can do more sequencing, it's easier to use, and that's, you know, great for the discoveries, that's great for their patients, and, you know, great for our business. I also wanna talk about us as a trusted partner to customers, right? We have 24/7 support through Susan's team. It's worldwide, and we support everything, right? It's not just the instrument, but if you have a problem upstream, you have to call, you know, some other company, or you have a problem with the software, you have to call, you know, yet another company, figure out how to put all that together. No. With Illumina, when you're part of our ecosystem, you get supported across the board, and we do it quickly so that you can get back to sequencing. I think having the full portfolio of products and having that kind of service is something that our customers value, and we're committed to that, you know, even in the research and development group by supporting that. We also have a huge menu of applications, and so whether or not you're doing tumor sequencing or you're doing germline sequencing or single cell or even spatial, we support that, particularly on the software side. That means that a customer who wants to get into these new areas, they get that menu on day one, right? They get it from us, and they don't have to pay extra for it. This, again, allows them to get into new applications very quickly. Then the last thing I wanna touch upon is the sustainability and how important that is to customers. You know, because of our innovations and the uniqueness of XLEAP chemistry and our packaging, we can now ship ambient. Huge value to customers there, not just in achieving their ESG goals, but dramatic reduction in the complexity of how they can use sequencer and cold chain logistics. I'm gonna use NovaSeq X to also talk about very specific technology innovations and then how those translated into big product benefits. The first is the ultra-high density flow cells. The new flow cells for NovaSeq X are over 300% denser than NovaSeq 6000. This is why, you know, you now get effectively, you know, three NovaSeq 6000s in a single instrument because of these incredibly dense flow cells. Now, to make flow cells this dense, the technology and manufacturing processes did not previously exist. It was a very long-term research, ultimately development, and then, you know, scaling operation to do this, you know, for the product, and to meet the demand. Again, an example of something, you know, didn't exist, very challenging to do. We made huge investments, had hundreds of people work on it. We not only made the breakthroughs in the basic science and materials about how to do that, we then figured out how to scale it and how to automate it. Now with those increased densities and the reduced costs, we can now bring that to customers and pass it on to them. Similarly with XLEAP-SBS, right? The previous generation of SBS has been amazing, and it built our industry. You know, improving on it was no small feat, right? Maybe a testament to that is you know, all the new participants in the market that have had to you know, use our original version of SBS. Our team, you know, they went back, and this is the team that invented SBS and developed thousands of new chemical structures and discovered an SBS that's even better, more stable, and that is what allowed us then to use it on the high-density flow cells to achieve ultimately longer read lengths, to achieve higher quality and ambient chemistry. We're very proud of that innovation, and customers are extremely excited about it. There's a whole new set of compute hardware and algorithms in NovaSeq X. We have large teams that we've been developing this for years also. It's hard to overstate how important this is to customers. Number one is with all this additional data, you would have a big problem, processing the data, which would make the run length long, delaying when customers could get their outputs. We've solved all of that through those innovations. By having accelerated hardware, better algorithms, now you're actually getting your answers faster, even though the system is producing more data. We also included DRAGEN onboard, and now all the secondary analysis for the first time ever on a high throughput sequencer is included as part of the cost, and with a huge benefit in speed. A few other things, and again, when we innovate, for example, on a high throughput sequencer, and you make a better chemistry to fully take advantage of that new engine, you then have to, you know, invent and innovate across the board. That's how we think about it. When we did these innovations, we had to do them all so that we could have a product that could fully take advantage of any individual one of them. Last one I'll mention is the optics. Again, no cameras and no objectives and materials existed that could scan at these speeds to create the 300% increase in output. Multiple inventions, multiple years working with leading partners on the materials, the optics, to create those, and again, proud to bring those to the market before anyone else so that our customers can benefit from that. Again, I hope you're appreciating here that this is not easy to do. It takes a company like Illumina, which is unique in terms of the scale, the number of people, our ability to make these investments over years and years, make those breakthroughs, protect them with IP, and then also figure out how to commercialize them in a robust way. I want to take a little bit of time to talk more about the benefits of the ambient shipping, the environmental benefits, and then also the customer logistics. After we, Francis and I announced this product, at IGF, I had several customers come up to me, some of them in tears, about how excited they are about this, that they thought this would never come. They thought it was, you know, a scientific impossibility. What it means that now, you know, instead of filling dumpsters with, you know, cardboard and waste and having big teams that have to manage all of this, a single person can pick up a 10-pound box from UPS. They can load the world's most powerful sequencer, they can process, you know, over 100 genomes, and they don't have to fill up a landfill, and they don't have to manage complex cold chains. The other thing I wanna point out is that this is impossible to do with the original version of SBS. The chemistry is just incompatible with ambient shipping. Without XLEAP-SBS, its new bonds and many other new inventions, you can't achieve this. Again, long-term dream of ours to do this, and we couldn't be more thrilled about finally getting this into customers' hands, and the initial response is just over the moon. Now these innovations, as I mentioned, we leverage across multiple platforms, right? By making farsighted investments very big, not incremental, very big leaps in technology, and then doing it in a way where we can use it in multiple platforms over time, that gives us a big return on our investment dollar. It also allows. It's one of the reasons we can do more products faster than anyone else in the industry, because of this concept of leverage. We think about that day one in research, right? We don't wanna make something that will have to be done in an artisanal way. We wanna make something that we can scale through semiconductor manufacturing, right? We've worked with vendors very early on, for example, with our operations group around thinking through all of that, so that when we get to the point we wanna scale it, we can do it rapidly, we can do it at low cost, and it has the flexibility to use for years and years across multiple product lines. A great example of this is bringing the new XLEAP chemistry to the NextSeq 2000. This wasn't an accident. This was around as we were launching NextSeq 2000 several years ago, thinking about, you know, knowing about what we had in development, even though it wasn't perfected yet, and saying, "Look, there's gonna be an opportunity for customers that'll be really exciting, where when we have a chemistry and a flow cell technology that can go even denser, we could offer it to our NextSeq 2000 customers." This is when, you know, you're thinking over five, 10 years, and you're working on all the segments, thinking very deeply about this. NextSeq 2000 has optics and it has engineering that allows it to go, at launch, to a density that didn't even exist in terms of the chemistry that was needed. Now with the investments in perfection of XLEAP-SBS and NovaSeq X, we can now bring that to the NextSeq 2000. This is super exciting for our customers that they're gonna get an even deeper roadmap through their existing investment in this exceptional mid-throughput platform. Wanna remind you also that we've gone to longer read lengths with SBS, both with the original SBS, for example, our recent announcement of the 600-cycle kit for NextSeq 2000, and that's 2 x 300. For those customers who wanted to do much deeper sequencing of TCRs and BCRs, T-cell receptors, B-cell receptors, this is a great product for them. To my knowledge, this is very difficult to do on any other type of SBS, which is why you'll see them tend to be limited to shorter read lengths, but a unique capability. XLEAP-SBS has even more of this potential to go to longer reads, and we're excited about the roadmap there around that. I wanna highlight another benefit for customers when they buy one of their systems, which is they've come to appreciate that they're getting a great product at launch, then they're getting, you know, extensions which give increased output over time, reduced cost over time, and now we're even showing that they even get things that were beyond the roadmap that they expected, which is, you know, longer read lengths or even access to a next generation of chemistry. We also had another important announcement at IGF, was the launch of our NovaSeq 6000 Dx. This is the world's first FDA-cleared high-throughput sequencer that's, you know, that's IVD compliant. A great product for those customers that need or prefer a cleared instrument, either in their geography or their type of lab environment. Very good initial response to this. It's also a product that has improved features for these types of lab environments. It has streamlined workflows, it has additional automation, and has the ability to switch between RUO and Dx. So a lot of thought here about how to make, you know, about making this product exciting for customers that want the Dx version. One other important point is that when we develop our instrument platforms, we develop them in a way that we can make anything DX. Okay? It's additional cost and expense to do that, but you have to do a lot of upfront work in how you're developing the system, how you're documenting it, how you're qualifying it, and just a different level of quality. We forward think about that so that for those segments where it makes sense or for particular platforms or at the right time, we can bring a DX mark to market. That required a huge investment in infrastructure to be able to do that. You know, your average RUO instrument cannot be turned into a DX instrument. Want to point out that now with the NovaSeq 6000Dx, we now have the only portfolio of a Dx instrument in every single segment. The lower throughput desktop, the higher throughput desktop, and now the high throughput. For customers who are using the Dx platforms, this is a great opportunity for them because it allows them to scale Dx workflows, you know, and stay on a cleared instrument the whole way. A couple other areas that we are very important when we think about innovation, creating more value for customers. We call this delivering the kind of the best and most complete view of the genome. If you take a step back, and you think about the people who use our machines, whether or not it's for scientific breakthroughs or clinical applications, you know, in the end of the day, to them, it's about getting the insights. They learn something new about the science, and that gives them the opportunity to publish and share it with the world. Or they found something they can use to help a patient, get them on a therapy, give a parent an explanation for a developmental disorder. The easier that is to do, the faster it is to do, and the more those insights, well, that makes the technology more valuable. Over time, it allows our customers to justify making even bigger investments in our products and our technology. We've been working for years to automate this and add more and more value to cover more of the genome, to cover more variant types more accurately, excuse me, and to add more medically relevant ones. Okay. I also wanna touch on the amount of data coming off our system. In 2021, it was 280 PB. To put that in context, that's about 100x the complete Netflix library of content. This is, you know, every year, and in fact, it's almost doubling every year. It is a lot of data. When we think about our customers, this is a huge call to action, right? Which is they want innovation here, and they value innovation, and it affects not only what they can do with our sequencers, but it affects how they think about which sequencers they wanna buy, right? They want this to not only stay the same, they actually want it to get faster, even though there's more data coming out. They want it to be more accurate, they wanna be able to do it with fewer experts, and they wanna get to the insights quickly, not the intermediate complex data processes. We now have a complete technology stack to do that all for them, and in the case of the NovaSeq X, there really is a supercomputer on board now. That's never been the case in the past, with DRAGEN 4.0. With this informatics, we've now increased the accuracy of the genome to 99.83%, and that's in the recent PrecisionFDA Truth Challenge. This is independently, you know, tested in those FDA challenges in their competitions. This makes it overall the most accurate genome, right? That's short read, long read, the most accurate overall. Then the graphs on the right are to highlight the massive improvements we've made to speed and cost reduction. This is through accelerated hardware that's much more efficient at processing this type of data. It requires a lot of engineering to do it, but once we do it, then if you're using DRAGEN and our unique systems, then you can get these answers much faster, and you can get them at much lower cost than anywhere else. Those benefits go straight to our customers. Also want to highlight Illumina Complete Long- Reads. At IGF, we talked about the fact that there is now a platform where you can get both short and long read information, and that really is true. Illumina Complete Long- Reads is not a synthetic long read technology. It is a way of preparing the DNA, then going through one of our sequencers, like a NovaSeq 6000 or a NovaSeq X, and getting true long- read information. These are complete contiguous long reads. It's the original single molecule represented. There's no strobing, there's no dropout. For, you know, key hard regions of the genome that have historically been hard, which is about 5%, you get the information you need or we're looking for to make a complex rare disease diagnosis, or you know, new science that you're interested in. Now not only is it incredible that you can do this on the existing platform you own or if you're buying a NovaSeq X, the workflow is actually also incredibly easy. It's a single-day workflow, very straightforward, doesn't require any specialized equipment, so we worked a lot to make it really, you know, really easy to do. It also doesn't use a lot of DNA. Most long read workflows, legacy ones require a lot of DNA, very limiting. We heard that from customers. We wanted to make sure that this was a low input workflow. Importantly, the accuracy is even better when you combine this with, let's call it the standard, you know, whole genome. Now we're at 99.87%. Hands down the most accurate human genome in the world, and one you can do at reasonable cost, and one you can do at scale. That point eight seven, that point eight three to point eight seven, that may not sound a lot, that additional point zero four, but what that represents is, in some cases, you know, a very particular gene that could be relevant to a pharmacogenomics study. It could be, you know, a child with a developmental disorder, and this, you know, gives you insight into that, say, repetitive region. Not a lot in totality of the genome, but, you know, tens of additionally important genes, for certain customers and certain applications. Wanna talk about another aspect of innovation, and that is we think a lot about not only making, you know, our existing and still early applications successful, like tumor sequencing, like whole genome sequencing for rare disease, but all the new applications that people are developing, but that use the sequencer kind of as the center of the genomics universe, right? We've come to appreciate that our sequencers, as we increase throughput, as we reduce cost, they're really a universal biology information, you know, machine because they allow you to count billions of molecules very accurately. By attaching those DNA molecules to other things, you can do pretty much anything, right? You know, you can do proteomics. You can do spatial sequencing. There's really no limit to it. You can see the applications here in our ecosystem. You know, all the ones that, again, we're working hard to continue to grow with customers, like somatic and germline. We've done a lot in transcriptome, but still a lot of new, exciting stuff there. Single cell spatial proteomics, you know, epigenetics, gene editing. This whole ecosystem of new applications. Each one of these, we're very close to partners and customers who are doing these. We have, in some cases, joint commercial arrangements to accelerate these to, you know, and make it easy for customers to adopt these, and scale them. In some cases, for example, proteomics, we appreciated we could do something unique by making a full integrated workflow ourselves. That's the partnership with SomaLogic. Now, you know, we're very excited, and you can imagine running that new workflow on the NovaSeq X, for example, where you could run, you know, many hundreds of samples on a single run to do proteomics. You could do 10,000 targets with 10 logs of dynamic range, and you can do it at the lowest price point, right? We think that will really help take proteomics to where we've brought genomics. The last is end-to-end workflows. That's another place where we create a lot of value for customers. By and through our innovations and investments around the sequencer, we've created end-to-end workflows for some major applications, right? Today, we have automation software. We have laboratory and information management software, which customers would need if they're doing kind of large sample volumes, particularly in clinical environments. We have the world's leading secondary analysis, right? Through DRAGEN, which has won all the FDA competitions, not just in germline, but now in somatic analysis also. We have an ever-growing portfolio of tertiary analysis, which helps customers with that last mile of going from variant calls all the way to reports, and all the way to interpretation. Then you can see these horizontal here is where we take advantage of our investments, right? So whether or not it's rare disease or oncology, infectious disease, we use these components, and then we make complete workflows. Over 2,600 customers have adopted one or more of these complete workflows. And so the feedback from them is they want more of this. They want more of, they can buy a single solution, and they can get into one of these applications very quickly. They you know really want to avoid scenarios where they have to get these pieces from different vendors, kludge them together, then you know make them work, have a much larger staff to do all this kind of construction and piecing these things together versus applying their R&D dollars or their other dollars to running samples and doing what is perhaps you know their core business. Again, we think very carefully, it's a large investment when you do one of these about where it's big enough where we can do something unique enough to create a lot of value, but when we do, it's tremendously appreciated. Also point out here, it's not only a way to, you know, kind of drive more business to our sequencers, it's also a way to create, you know, more value, right? These other components are things that, you know, customers will also invest in. Okay. All right. Well, I'm gonna end there. So hope I was successful in helping you appreciate that, you know, innovation is, you know, core to our success, right? 'Cause innovation gives us enduring product leadership, which we've had historically, which I think with products like NovaSeq X, you know, the NovaSeq 6000Dx, bringing XLEAP to the NextSeq 2000, Illumina Connected, Complete Long- Reads, our commitment to, kind of, you know, again, product leadership for years and years to come. hope to give you some insight into how we do that by having the world's largest, and I think most successful culture of innovation in the space, how we think about making investments that can be leveraged over many years, unique technology components that are protected by significant IP, how challenging these things are to do, and just our repeated success in making, you know, these breakthroughs and small miracles happen, and then bringing them to customer hands. Lastly, you know, appreciate all of your support, and the investor dollars that make this possible, and that we try to be very good stewards of how to use this money to do these investments, not only where we make breakthroughs and great products, but we do it in a way where we're efficient about our use of this capital. All right, I'll stop there. I'd like to introduce Phil Febbo, our Chief Medical Officer. Thanks, Phil. All right. Well, thank you, Alex, and it's great to be here with all of you and have the opportunity to talk to some of you. Some of you I've worked with almost a decade in my two roles in industry, and you know me quite well. For those of you who don't, I'm Phil Febbo. I'm the Chief Medical Officer. I'm a medical oncologist and physician scientist who spent the first 20 years of my career as a physician in academia, first in Boston at the Dana-Farber, where I did my training and was on faculty as a physician scientist, bringing genomic insights into understanding the biology and clinical behavior of prostate cancer. I moved to Duke University for six years and then to UCSF, where I finished my academic time as Professor of Medicine and Urology. Transitioned to industry because I really, my career is really focused on bringing insights from a cancer's biology and genetics to care. Whereas in academia, the initial insights and translation is fabulous, it's really moving to industry, I felt like I could have the impact and really make sure that these insights translate into changing care and improved care. I spent first five years of my academic career at Genomic Health as Chief Medical Officer, helping build the evidence and reimbursement for proprietary expression-based tests with our Oncotype DX test, and transitioned to Illumina because at the end of the day, I am strongly biased, and you could argue I'm biased 'cause I'm at Illumina, but I'm actually at Illumina because I am biased that, individual's genome and genomic insight should be foundational to health and healthcare. That's what drew me to Illumina, what makes me so excited to be their Chief Medical Officer. I also serve on the foundation boards for the FDA and the American College of Medical Genetics and Genomics. Let's get into it because at Illumina, we've built a Clinical Playbook. Alex has spoken about our incredible technologies, and increasingly those technologies are being brought into the clinic. What I'd like you to take away from today as far as my key messages are talk about that Clinical Playbook and walk you through the incredible team and infrastructure we've built to deliver to clinical customers, and demonstrate that investment is a good use of investment dollars to drive our business. Also talk you through where we see our key clinical segments driving the business. Francis already talked about some of the market opportunity, and Joydeep will follow up on that, but I'm gonna walk you through the key clinical segments and where we see real opportunity to drive an improvement in health and healthcare. That's my role as Chief Medical Officer, but it's also a big driver for our business. Let's talk about the Clinical Playbook that we've had built and that we've really accelerated over the past five years since I've been at Illumina. You've heard about our products, and our products are foundational to our playbook, and I'll walk through why that is. Not only our sequencers, but the fact that we're embedded in all the clinical leaders that are bringing genomics to healthcare, and that gives us insight that we need to have both sequencers and menu on those sequencers. Again, you also have to have the right to operate. We'll talk about moving to regulatory approval and the infrastructure we've built to have that right to operate globally. You move to the why. Of course, it's one thing to have a sequencer and be able to do testing, but what's the utility? What is the benefit to the patient? What is the benefit to the healthcare system? Once you demonstrate that benefit, you drive to reimbursement so that our customers move genomics from a cost center to a revenue-generating activity, and that really further drives our business. We then partner with them broadly to ensure that every patient has access and that these tests are adopted. This evolution takes time. It takes time in each segment with each type of testing. It's furthest along in oncology with therapy decision, comprehensive genomic profiling, now the standard of care in the United States and Germany and many countries for patients with non-small cell lung cancer. That's because the providers are there, the clinical tests are there, they're available, they're reimbursed, and now they're being progressively adopted. We've seen that same evolution in NIPT, and we'll touch upon that incredible success, the fastest adopted and penetrated diagnostic test ever. We're earlier in genetic disease where we have evidence, but we've just recently performed a study with Optum showing that whereas there's evidence and guidelines, only 5% of newborns suspected of a genetic disease actually get genetic disease testing. We have more work to do there. With the pandemic, infectious disease is moving out of the research into surveillance and indeed into clinical testing. I'll walk through some of those. Let's start with the Playbook. Of course, we're very proud of the sequencers that we have across the markets. You know, just like in research, in clinical labs, one size does not fit all. It is incredibly important as a clinical lab begins as an entity and then scales as an entity, as Alex said, that they have a company that can grow with them, that can support that scale, that has products across. Of course, we've built our products focused on research use only, and the vast majority of our clinical business right now is supported by our customers taking research use only products and making their own tests. The evolution in healthcare is moving towards a more regulated and an environment where you have to move on to cleared or approved products. That's why we're really proud to have built the MiSeqDx initially, the NextSeq Dx, and indeed, the announcements of the NovaSeq on Thursday that Francis deSouza and Alex Aravanis made is an incredible event because it completes our low, mid, and high throughput portfolio and to both serve RUO and diagnostic machines. What are companies doing on these machines? I think starting with on the right side of this test, the laboratory developed tests have been a model for innovators, and we are the platform of choice across all the clinical innovators. We are embedded, they're using our sequencers, and we will continue to be the platform of choice. I think the announcement of the NovaSeq X takes it to the next step, offers them the next level of scalability and for their business. The other element is that as we've become more global and as genomic testing has moved outside of early adopting countries and laboratories, it has to move to more content and in vitro diagnostic content. Given the diversity of the world and the different evolutions of healthcare systems across the world, one company cannot produce all that clinical menu. We've taken an open platform approach and worked with innovators to create IVD content on our platform and provided the support so that they could do that. Of course, in areas where we see our internal team and our knowledge of sequencing can further accelerate a field and where we can participate more in the value chain, we do develop our own content. We've done that in oncology with our very first cutting of our teeth with the Praxis test, working with Amgen for RAS testing. You know, we've recently released the TSO Comprehensive in Europe under a CE-IVD mark. We've released content in genetic disease, reproductive health, and infectious disease during COVID with the COVIDSeq, which has been a backbone of genomic surveillance across the globe and accounts for between 40%-50% of submitted sequences to GISAID. The importance there is once with our established install base and with our growing established install base in DX machines, it's very clear to pharma partners that if they want to identify the most number of patients with a variant that can benefit from their drug, Illumina becomes a partner of choice. We haven't been that traditionally, but over the past five years, we really built the teams and the infrastructure to support that, and we have the products that are foundational upon which the analytic products, upon which CDX claims can be placed. We have the products as far as the sequencers, we're growing the content through partnerships and directly. You have to have the right to operate. Over the past 10 years, Illumina's worked to make that transition from a strictly research-serving company to a research and clinical-serving company. It's really been working with leaders of product development, Susan Tousi, before Alex Aravanis, and now Alex Aravanis, as well as leadership in our operations, Kevin Pegels, our Chief Operations Officer, together with medical, to have a culture of quality. Everyone comes to work at Illumina dedicated to quality. When you're moving into the clinical markets, you have to document that commitment to quality through processes, documentation, and certifications. Across the globe, we have ISO certifications, MDSAP, IVDR, in three labs in the United States, in the U.K., Netherlands, and Singapore, so that we have access to global markets through those certifications and that commitment to quality. That becomes incredibly important. It's resulted in some of the numbers that Francis talked about with 72 approvals from regulatory authorities, over 1,000 products that are registered across the globe, giving us that right to operate. That's the how. What about the why? Why should these tests be ordered? That's the clinical utility. As Chief Medical Officer, that's where I focus. Like, how do we demonstrate that these tests improve patient outcomes? In today's super strained health systems across the globe, you also have to say, not only to help the individuals, but they help find healthcare efficiencies. You do that through evidence. The coin of the realm is what is the evidence for these in peer-reviewed journals that there's clinical utility, that patients benefit. In our key segments, we have, you know, hundreds of papers, over 800 in reproductive health, oncology, genetic disease testing, and infectious disease, focused on our products and our technology improving outcomes. This is across the globe. We're not just focused in the United States, obviously. 'Cause in each environment, that utility equation is not the same. Payers in specific healthcare systems wanna see evidence within their systems for the populations they cover. We've done that in spades. We're highly efficient with this. We're very careful with the dollars that we spend here, and we collaborate with the best medical societies, the best academic centers. There's incredible interest in using our technology to understand how to improve outcomes, and we can partner very efficiently to generate studies that are incredibly powerful. I wanna talk through just a few of those. For comprehensive genomic profiling, we've worked with Amy Compton-Phillips in her role at Providence, formerly known as Providence St. Joseph Health, and worked with her to facilitate their commitment to internalize CGP and then offer it to every patient with advanced cancer in their system. This is an integrated healthcare system. They're in charge of that patient, of all the costs associated with that patient. That interaction, that activity, over 10,000 patients have received that test. We have eight abstracts we've worked together. I was just at ESMO, where we had the opportunity to present a few more, three manuscripts in development that'll drive the evidence showing how it's good for patients, because you identify, for example, every patient with an NTRK fusion where the benefit of getting larotrectinib or entrectinib is incredible, as well as for the healthcare system efficiency to internalize that and have that so they're not doing test send out. Another study is the BALAI study, and Francis mentioned this. This is our interaction in Belgium. What's incredible is that Belgium is a single-payer system, and we've worked with 12 hospitals and nine Belgian NGS Labs to provide comprehensive genomic profiling in collaboration to 960 patients with solid tumors. I met with a Birgit Meys, the PI of the program, in her small center outside of Brussels, just about six months ago. It's incredible. She has a real-time dashboard leveraging all the informatics that that Alex talked about. In real-time, she can tell me how many patients have specific variants, NTRK, RAS mutations. That's incredibly powerful because not only does it make sure everyone gets standard of care, but now they're a great site for additional clinical trials where pharma companies increasingly wanna know that these centers already know what variants their patients have to facilitate accrual. In the genetic disease, we saw a big opportunity to move from single center evidence where it was becoming more and more clear that children suspected of genetic disease who are in the NICU and sick benefited from whole genome sequencing rapidly, work from Stephen Kingsmore, Children's Mercy in Kansas City, and others. There was no level one randomized controlled study showing that benefit. We took on that with key leaders like CHOP in Philadelphia, and we performed a randomized control study, the first one for NICU patients, demonstrating that whole-genome sequencing doubles the diagnosis when provided immediately and doubles the opportunity to change management and doubles the change in management when provided earlier. Highest level of evidence to continue to drive towards coverage. Those are some examples. We also extended from our Baby Bear activities in California that opened up WGS for infants in California. We're doing that in Germany with the Baby Lion. We're doing that in Israel with Baby Bambi. We also have a growing team to collaborate within China and perform collaborations bringing whole-genome sequencing and insights around that to that country. They're just a few select. We have, you know, over hundreds of these collaborations that are very efficient and performed through our teams. Why do we do that? Well, at Illumina, our business grows together with our clinical customers. While we drive our business through driving the success of our customers, and that evidence drives towards reimbursement. We're very proud that we played a significant and strategic role in getting to 1 billion lives covered. We're committed to getting to one billion lives covered to continue to help our customers, and we do that through meaningful collaborations with key payers and evidence bodies across the globe, and we're just listing some of them here. That's because, as Sean Tunis says, you know, when you have coverage from one payer, you have coverage from one payer. Achieving reimbursement is not a passive, it's an active game, and you have to engage. You have to provide the dossiers in the language that they understand to move it forward. We rise all boats. Certainly, where we have tests that are directly affected, we benefit disproportionately. But because our sequences are in all clinical leaders, by raising reimbursement, we benefit from that. When there are particular challenges, we'll engage in risk-sharing projects like we did with Harvard Pilgrim, now known as Point32Health, where we said, "Let's. If you opened up NIPT to all comers, and there we'll measure the health utilization during the year when you open it up, not just to high-risk pregnancies, to all pregnancies, and we'll look at the year before where it was just used in high risk. We'll backstop any increased financial burden in that utilization." What happened is there was a slight incremental cost that we covered, but when they folded it into their covered lives, it was only $0.02 per member per month, which is one of the measures they used. Their decision was to continue that coverage because they felt the quality and utilization supported its utilization. That's where we dig in. We have creative programs like that across. Who's doing this work? You know, whereas Alex talks about the tenure because Illumina has really built the sequencing world, so we have people who built this. Illumina has entered the clinical world because of the transition of our tests to the clinical utilization, and we've drawn talent from clinical leaders across the industry to build a medical team that is now 1,000 strong across the globe and driving the incredible work that we've talked about as far as engaging with collaborations, driving evidence, bringing dossiers to payers, bringing applications for registrations in regulated areas, and also partnering with Susan's team that you'll hear about in commercial, Kathryne Reeves' team, our Chief Commercial, oh, sorry, Chief Marketing Officer, to work as a team with our clinical customers. It's taken a commitment on Francis's and all of our part to build that investment. Because each time we're choosing to build someone on the medical team, be it a medical affairs person engaging with collaborations or peer-to-peer education or regulatory person in a region working on those applications, you know, you're choosing between boots on the ground selling and the support. That's why we work so closely to make this decision and have built over time. It doesn't happen quickly. Money doesn't solve it, because they have to come in and be integrated. It's really a pleasure to lead this incredible team as we drive our clinical business. As we transition to segments, you'll have to just recognize as a medical oncologist, I think about the bigger why. AJ is an incredible person and someone I've gotten a chance to get to know, and we featured him last week at our IGF, and I've had several opportunities to talk with him and interview him and meet him. He's a 40-year-old gentleman. He's now close to 50, but non-smoker, started having some throat-clearing cough, went to doctors when there was a little blood in his mucus, and that really scared him. Subsequently went through diagnosis, chest X-ray first, suspicious for mass. CT had metastatic non-small cell lung cancer. He was shocked. He's not a smoker, takes great care of himself. How could that happen? Of course, 10% of lung cancers are in non-smokers, but he didn't know that. He did not have enough tissue for comprehensive genomic profiling at diagnosis. He did have cranial mets, and they were limited and resectable. Together with his doctors, made the hard decision to get a craniotomy, and those mets resected because, you know, that's one path of minimizing the impact of those, but also because more tissue is needed. The tissue was used for comprehensive genomic profiling, and he was still recovering from the craniotomy when the results came back. It's really interesting. His doctor gave him a rather robust hug, which was a little uncomfortable, but they had found a ROS1 fusion, which is gonna be treated with crizotinib, and that was 12 years ago. For those of you know, the average life expectancy for someone traditionally, when I trained, was with non-small cell lung cancer, cranial mets, nine- months. He's alive 12 years later because of matching his disease. It was really interesting when I, you know, sent a note to him saying, "Look, I'm gonna be talking to our investors. I'd like to share your story. Is that okay?" He said, and I quote, "You and Illumina are absolutely welcome to use any aspect of my story. Illumina is why I am here today." That's the why, and that's the opportunity we have to impact lives. We've chosen segments that we see the biggest impact to patients and the biggest markets: oncology, reproductive health, genetic disease, infectious disease. We're gonna walk through those. Francis has already touched upon it. Joydeep will go into it. I am Chief Medical Officer. I focus on patients, but I am an officer and have to be a good steward of our company. These are incredible markets, so that by driving improvement in care, we're driving company growth. Oncology is the biggest opportunity and a lot of what I've talked about so far with AJ and others, is using genomics to inform treatment decision. We've seen the movement, and I'll talk a lot about this at my last slide, a movement from single genes to panels to comprehensive genomic profiling, and that's where we are for standard of care in the United States, Germany, Netherlands, Belgium, and a growing number of countries. We've had incredible early innovators build that market using RUO, and now it's maturing so that increasingly they're looking for IVD products to decentralize and get into regions across the globe that aren't well-served by LDT. Now, while that's the most mature market, it is not the biggest market. The bigger markets are in the screening, and Francis spoke about our enthusiasm for screening. If you were at IGF last week, that is going to be using sequencing for early cancer detection through multi-cancer early detection tests, will be one of the ways we achieve the moonshot's goal of halving mortality in the next 25 years. Earlier diagnosis will save lives, and it's incredible that we can now pick up on the cell-free DNA signal in circulating blood to detect cancers earlier, move away from just detecting, screening for five cancers to as many as 50 cancers. That is an incredible market, and if you look at the basic science, it's very clear sequencing is front and center. It's gonna be the lion's share of every product. It's certainly the foundational to GRAIL's product Galleri. For those that are moving into single-cell screening, like Freenome for colon cancer, moving to blood-based testing, it's all about sequencing. Monitoring is another very exciting area that we'll see grow over time. Natera's been out there doing whole exome on the tumor and then doing a specific PCR-based assay. As we have breakthroughs like the NovaSeq X, as the cost of sequencing comes down, it's just math and statistics that comprehensive sequencing of the tumor and the cell-free DNA will provide an operationally efficient path to diagnostics that are driving monitoring after definitive local therapy and recurrence. Those are gonna be major impact on the care of oncology patients. NIPT is another more mature market, and Francis has walked through how we participated by buying Verinata, by performing a service, using that service to build a product like VeriSeq NIPT, and using data that we've helped through collaborations to build evidence and then driving reimbursement. If you look at reimbursement, very positive in AMR, EMEA, and China. APJ is a little behind. There's a lot of out-of-pocket utilization and payment, but we're seeing really good activity in Japan, South Korea, where there are already mechanisms, where there is some support, but it's not nationalized reimbursement, so we don't count it. We expect to move in that direction over the next few years with our team. Germany is a great example because we worked very hard with the authorities in Germany to get to both reimbursement and, super important, drive to a reimbursement price that could help our customers in region make a, you know, have a meaningful business. We achieved both. We achieved the reimbursement decision last year, and this year we had the price set. That was very favorable. Importantly, also in the tender, by being engaged, we made sure that the requirements for reimbursed tests met expectations for patients, but they were also perfectly aligned with our product, VeriSeq version two. Genetic disease testing is a really exciting place where this is the opportunity, and with the NovaSeq X, we will see the genomes becoming foundational to human health. As we stated, it started with children suspected of genetic disease and demonstrating whole genome as the best way to identify the variants causing their disease. We have health economic studies showing that a whole genome at time of birth is not only best for the children, as I talked about, NICUSeq, it's also the most economic. It avoids a series of testing and delays in management that puts a big burden on healthcare systems. We will see a transition from people suspected of having genetic disease, both NICU and pediatric population, transition to what are the genetic drivers of common disease. Cardiovascular is first up. We know that there are indeed Mendelian genes that drive risk of cardiovascular health, be it cardiovascular disease, atherosclerosis, cardiomyopathies, arrhythmias. Increasingly, people are incorporating that into assessment of cardiac patients. Polygenic risk scores are becoming incredibly exciting because you can identify 5%-10% of patients with no other history of cardiovascular disease who have as high a risk as an individual who inherits a mutation in familial hypercholesterolemia genes. That's just the start because when you look at where industry, where the pharma industry is going, if you ask the question, how many drugs in development have a variant in the germline that are needed in order for that drug to be beneficial? We looked at this deeply. There are 38 trials in cardiovascular disease, 66 in neurology, 62 in metabolic, and 38 in auto. That means that just like oncology, where therapy has moved from all comers to identifying groups where therapy can be very beneficial based on identifying the variant, that's moving into genetic disease. What we've seen in oncology is drug development can be 50% more efficient and more likely to be successful when you have that kind of targeted approach. I think that's why we're seeing this movement. It's very exciting because in the same way that we're a platform of choice in oncology, by having an analytically robust whole genome that we're expecting next year, we're gonna be the platform upon which those companion diagnostics can be placed. Finally, I'm gonna talk about infectious disease. We put this into our research group for the longest time, and it has been robust. With the pandemic, we've been very proud with how our sequencing technology has sequenced and identified this variant, the virus, back in January of 2020, and then tracked the virus as it spread across the country. It was incredible that Moderna never had to have live virus in their lab. They just needed the sequence of the spike protein, and they were off to the races generating a vaccine that was proven effective through the randomized controlled trials by November 2020. With the emergence of Alpha variant, the world became attuned to the variants and the evolution, and sequencing in 2021 took off as far as pathogen surveillance. That's continued, and I was just at the UN General Assembly last two weeks ago, where a lot of discussion with the WHO is how do we continue to remain vigilant with pathogen surveillance. The Gates Foundation is focused on this. Rockefeller Foundation are focused on this. The Biden administration has started up, spun up a group. We're gonna move forward and see that. We've seen a transition in the segments from research, which will continue with the microbiome and deeply embedded in research. We'll also see pandemic surveillance continue with the install base like never before, driven by the current pandemic. We'll see increasingly with this understanding of variants, people are more likely to ask the question, "What is the sequence of the pathogen?" Not only am I infected with something, but what's the sequence? That's incredibly important for tuberculosis, HIV, and areas where we see resistance. We see that as an incredible. I'm going to end on one slide that we talk about a little bit as far as elasticity. Illumina has benefited from elasticity in the research markets for years. I often get asked, "Is there elasticity in clinical markets?" There is. It's just a little different. I'm using this walk in testing for cancer to demonstrate that a little bit. Cancer testing does go from single gene to small panels to comprehensive genomic profiling, and let's say that's where we are today. What drives that is the utility builds, but clinical labs have to fit the cost of their sequencing and the cost of their goods required in testing, and sequencing is one element of that, but it's been an important element, and it's been a constraining part of that, into a likely reimbursed test. Those of you in the diagnostic world, as I've been, there's some realistic ceilings to that reimbursed test. If your cost of sequencing is above your expected price, there's no way you can do testing for that. It's not gonna happen. As we bring sequencing down, you can now fit costs into that price envelope. The more we bring it down, the more margin that a test, a testing clinical lab gets. You could argue, well, if you just bring it down, they're gonna just get more margin. The challenge is that these clinical testing have to stay competitive. They have to win the orders from healthcare providers. The way they do that is offer increasing value, more comprehensive testing, deeper testing, better performance testing. That's where you get. Every time we bring down the price, it opens up opportunities, and sometimes it opens up incredible opportunities like screening. Screening using cell-free DNA, not possible five years ago. Would never fit into a reasonable price. Full stop. It's now very possible and fits into a reasonable price, especially with the NovaSeq X. You have those dynamics, which means you get more opportunity, deeper sequencing because of the competitive prices, and we'll keep moving. I'm really excited because, for example, in cancer, of course, a complete understanding of a cancer will lead to the best treatment of that patient. We will get to whole genomes for cancers. It's happening in acute myeloid leukemia. It's going to happen for solid tumors over time. Again, the cost has to come down to fit into that envelope. We will get to multi-ome and repeated multi-ome. That's how the dynamics play out with respect to laboratory testing, clinical testing, and elasticity. I wanna thank you for your attention, and hopefully have shown you that we have a Clinical Playbook. It's an incredibly powerful playbook. It helps drive our business and the business of our customers. That we have made investments across the playbook to build the team, to drive the clinical markets, fully leverage the incredible insights coming out of Alex's teams, the technologies coming out of Alex's team, to be the leader in clinical genomics and give you a sense for the different markets we're looking at. Now, as Chief Medical Officer, after listening to Sally, Francis, Alex, and myself for the past 90 minutes to 100 minutes, I'm sure we all need a bio break. We're gonna go on a break for about 10 minutes, and then Sally will welcome you back, and we'll hear from Susan and Joydeep. Thank you very much. Good morning. Please take your seats and silence your mobile devices. Our program is about to begin. To dream the impossible. Well, that's what dreams are for, right? If your impossible dream could become a reality, would you dream even bigger? Would you dream of finding the cure for cancer if you could sequence thousands to millions of human genomes? Imagine revolutionizing treatments for heart disease or diabetes. If you could see the genomes, transcriptomes, and epigenomes of more and more people all at once. Envision giving every child with a genetic disease the long life they deserve. If one sample could lead to more data, that leads to more breakthroughs. To solve life's most complex problems, the dreams of our greatest minds have to come together with world-changing tools. Introducing the NovaSeq X Series. Our most innovative sequencer is here. This is the genome era. Please welcome back to the stage Vice President of Investor Relations, Salli Schwartz. Welcome back, everyone. Let's get started with the second half of today's program. A reminder for all of you that are joining us via webcast, you're welcome to submit your questions at any time, using the Q&A function that's on the right-hand side of your screen. I'd now like to introduce Susan Tousi, Illumina's Chief Commercial Officer, for this next session. Susan. Salli. It's such a pleasure to be here and coming off our genomics forum so, you know, this is a perfect time to give you an update about our commercial excellence. A little bit about me. I am an engineer by training, inducted into the National Academy of Engineering. I also hold an MBA. Prior to coming to Illumina, I spent decades in the high-tech industry. Started as an engineer at HP, came up through the ranks and, you know, ended up leading businesses based on technologies that I helped to create. Really the pinnacle of my career has been the last 10 years here at Illumina. I spent about nine of those years running product development. There, you know, I had the benefit of working with our incredible scientists and engineers, always driving innovation, but also bringing everything I'd learned in the consumer electronics industry, which is about cost reduction and integration, scalability, and manufacturability and, user design. It's been a pleasure to be able to bring, you know, some of my knowledge to expanding our product portfolio. When Francis asked me to take on as chief commercial officer last year, it was really kind of the opportunity of a lifetime because being able to spend more time with our customers, helping them understand about our products and technology and really kinda exploring the impossible with them. Our customers really are the change makers, the drivers. It's been fantastic, and look forward to telling you a little bit more about that. You know, as far as our commercial organization goes, we are very unrivaled in terms of our scale, our depth of expertise, our experience in taking these transformative technologies and getting them into the hands of our customers in every corner of the world. In fact, as we were launching the product at the Genomics Forum last week, we had members of our commercial team getting trained on all of the, you know, specific elements and features and functions and the services and support of our instruments. Now, they're setting off on what will be, you know, tens of workshops and roadshows throughout every corner of the world. You know, the engine is now in place, and we're gonna get this technology into the hands of our customers. We are really the market makers of the industry, and I don't, you know, say that lightly. If you look at the major inflection points in genomics that have driven growth and, you know, scale and samples and new applications and really have come with the launch of our products. Here we are kind of doing that again with the NovaSeq X series. Last week, as you heard, we had a sold-out event at our Genomics Forum. We also had a sold-out event at our Genomics Health Strategy Summit, which is kind of our next Pop Gen Summit with everyone in person. We had about 130 people there. Our customers ask us to make introductions for them to other people who are running big projects or running new applications. They trust us. They see us as the center of the ecosystem. I had the absolute pleasure of making the first calls to, you know, some of our biggest and most prestigious customers and tell them about the NovaSeq X. I was doing that in just the days leading up to the formal announcement. With those customers, as we always do, we were kind of discussing what would they do with this new capability, what new applications, how can we grow samples, you know, what's next on their kinda vision for their institution. All of those first conversations led to sales, and I can't wait to share some of the quotes from them, but really kind of seeing, you know, their minds wide open on what is a possibility now that they have this incredible horsepower and this incredible performance at a cost structure that makes their dreams come true. We're also now leading into kind of this next generation of a multi-year adoption cycle of this new technology. We've seen this, and I'll show you the comparison with kind of how we saw NovaSeq 6000. We actually think this will be more accretive and kind of a bigger benefit to our business than ever before because we still have clinical customers who will be adopting and scaling NovaSeq 6000s and now the 6000Dx on the applications that they already have validated. They may not take the, you know, expense and time to validate them on a new instrument. We'll keep cranking away on, you know, current set of applications, keep scaling those, and our clinical customers will then bring on the NovaSeq X for new assays, new applications, ones that have much deeper depth and, you know, have kind of broader multi-omics content, and it will grow the adoption cycle in that way. Typically, research customers go first. Clinical customers will bring it on for new assays, new menu, new tests, and then there will be a whole new range of applications. These are the large-scale projects that we're waiting for, you know, us to release our next major offering. These will be sample sizes in the millions. You know, at the end of this adoption cycle, the high throughput market will be bigger than ever, and we will have created kind of that next major inflection point in the industry. How do we do this? Well, we have a huge organization across the world. We've invested billions of dollars. You could think about, you know, what does it take to create the commercial reach that we have with more than 2,000 members of our commercial organization? What does it take to create all the factories and the scale? We have 6 factories around the world. We have more than 500,000 square feet of ISO-accredited, kinda FDA-certified factories where we can produce our clinical products. We have 19 distribution centers across the world, so we can get that last mile closer to a customer. You know, that was really beneficial because when, you know, Shanghai was shut down, for instance, during the lockdowns in China, we were able to get product into Beijing and get distribution through the country through that channel. Our, you know, commercial reach and our footprint has come through the investment of $1.4 billion. That's not just in the factory space, but if you think about all the precision tooling that it takes to create our flow cells and all the components of our products, our reagents, scale up our FFN, we have verified, validated, clinical grade technology across all these factories to produce our products at scale. That's how we can ship more than, you know, 1 million kits a year. We can ship thousands of instruments a year with high quality and continuous supply to every, you know, region of the world. I should mention also that we are increasingly opening up what are more kind of commercial sites, and we call them solution centers. These are in geographies where we see the opportunity to expand the commercial footprint to be closer to our customers. They typically, although they're, you know, mostly commercial offices, we have labs where we feature every single one of our instruments and our workflows, and we train customers on the technology. It's a big deal when we open up a solution center. Recently, we've opened them in Brazil and Dubai and, you know, recently in Milan, because it shows our commitment to customers in the area. We have, like, big launch events where we open up our doors, and I had the benefit of being in Brazil when we opened our office there. We had more than 100, actually near 150 customers show up for our launch event, and they were thrilled to see our investment and our kind of staying power in the region. We have more than 9,000 customers and, you know, the sentiment from our customers, as shown by our net promoter score, is that they trust us. Customers trust us. They buy into their technology. They buy up our product line. Our net promoter score at 54 is excellent, not just in our industry, but across any industry, and it keeps getting better. We're highly invested in being a customer-centric organization and having that trust and that you know loyalty with our customers, and it shows. Our customer growth has been very significant. We've had 45% growth in our customer base since 2019. Our instrument install base today is more than 20,000 instruments across the world. Those instruments are increasingly going into clinical applications, as you heard, from my colleague, Phil Febbo. 6,800 of them are used in clinical applications. The high throughput consumables going into our clinical applications are also growing. If you look at kind of who's purchasing, that you know incredible franchise of our high throughput consumables, just five years ago, it was less than 30% clinical, and now it's 43% clinical. Those clinical customers typically have much more kind of sustained needs. They're growing their tests, you know, not only the number of tests they do, but their test menu. We see them as a big growth driver of the future. Our customers also want to have a relationship with us. That was true, as I mentioned, in our customer event, and, you know, if you looked at the tweets and the social media and how excited they are to be, you know, part of the Illumina ecosystem, but also in the fact that they connect to us through our proactive kind of connectivity, which means that we can be monitoring the performance of their instruments and ensuring 100% uptime. It also means that we can see if they are stalled in runs or if there's something going on, and it gives us a you know very good understanding of kind of continuity of our business and where we might have issues and need to put more focus. It was certainly very useful to us during the pandemic when we saw kind of the downturn in runs, and we could see exactly when they were coming back up. It is not only you know a great tool for us to kind of drive our business, but also a feature for our customers. Customers are you know that rate of customers connecting to us keeps getting higher. Next year, we're also gonna look at auto-replenishment through you know this means 'cause customers wanna have a continuous supply. Sometimes they don't wanna carry the inventory, but they wanna know they get consumables when they need it. For us, that, you know, makes all the sense in the world. It drives efficiency, and we can, you know, kind of count on that consumable stream with those customers. If you look at the quotes, you know, oftentimes I visit customers all the time, I'm on the road all the time. Last week was great because they came to us so I saw all of our customers without having to leave San Diego. Typically when I'm on their sites, they are so excited to introduce me to our field application scientists and field service engineers who are resident at many of our, you know, largest customers. Actually have our employees sitting with them in their labs, making sure their instruments are running and that consumables are flowing. They introduce them as kind of part of their company. They really, you know, appear like an employee of the customer, but you know, they are well loved. That level of intimacy with our customers is something that we really value and cherish. We're really proud to be, you know, part of the first of programs around the world. I mentioned last week we had our Genomics Health Strategy Summit, you know, about 130 people. We were gonna cap it at 100, but it grew to 130 people around the world who are running the big population scale, nation-scale projects for sequencing, driving precision medicine in their countries. If you think about the very first one, which was Genomics England, that did 100,000 samples, I mean, we were with them at the table from the very start, scoping the program, looking at the strategy, how is it gonna work? How are you gonna manage data? How do you bring in clinical samples? How are you gonna get, you know, subscription into participants into this study? Increasingly, you know, providing them not only all of the genotyping, but also the sequencing. We're the only partner who does genotyping and sequencing at the scale that these projects need. Of course, they count on us to help raise funds for driving samples, bringing foundations and other bodies and, you know, increasingly pharma companies to the table who wanna fund these studies. They count on us for the technology. They count on us making sure the technology works and building the infrastructure. Even for Genomics England, we ran the samples, and we ran the lab. Increasingly, our data management is very important for this scale of genomics. If you look at the big programs around the world, GEL used the DRAGEN technology for their 100,000 samples. UK Biobank used DRAGEN to run their 500,000+ samples at this point. All of Us, the 1 million sample project in the US, our precision medicine project, we partnered with Broad and did DRAGEN GATK, and DRAGEN was used for that study as well. DRAGEN is increasingly becoming the standard for secondary analysis, and you heard all from Alex about why DRAGEN has, you know, highest accuracy, and you can understand why it would be adopted. If it was even gonna be a question, we've now built it into the NovaSeq X platform, so customers were delighted to hear about that. It reduces the complexity of the data management, the cost structure of data management. Oftentimes, it costs as much to manage the data as it did to sequence a sample. Now we can kind of reduce that barrier, reduce that cost, and drive more value and more samples into sequencing. Increasingly, they're looking for ways of doing the data sharing and the data management across all the people that they want to share data with. These studies that they do, investing in running 100,000 samples or 500 or a million or millions in the future, they really benefit from making these databases open to researchers across the world who drive new insights and findings, new drug targets, you know, things that, you know, add value to this asset that they now created. They're looking for secure data management, and, you know, our Illumina Connected Analytics product is fairly new on the scene. Singapore PRECISE is a first to implement our Illumina Connected Analytics for their federated data and data sharing, with other, you know, population scale programs. We see Illumina Connected Analytics being an incredible asset for these projects in the future and, you know, Singapore PRECISE being the first one to do that. You know, we're driving not only the easy data sharing by having a common bioinformatics platform with DRAGEN, but then by having a common data infrastructure platform of secure data sharing around the globe, we're gonna, you know, drive more insights and more value out of projects like this. We're really excited. The next scale of projects is even bigger. We're enabling that with the introduction of NovaSeq X. If you think about Our Future Health, that's a study of 5 million samples. Now, you know, with NovaSeq X, they can think about not starting as an exome project, but growing directly to genomes. We had great conversations. In fact, you know, we had a wrap-up with the Genomics Health Strategy Summit participants after the introduction of the NovaSeq X and really challenging them to think bigger. There are studies, for instance, one across Africa, that would be 3 million samples across the continent of Africa. That would move the needle in a major way in what is today a lack of diversity in samples that are, you know, available to the public. We're really excited about, you know, what this new introduction is gonna mean for the next scale of these programs. I wanna talk a little bit about why, you know, our success in, you know, the adoption of our products, not only the development of our products, but ultimately the adoption of our products, and they, those becoming kind of the gold standard in the industry, is really driven by this deep intimacy we have with customers. Our more than 9,000 customers, and as I told you know, we have, you know, our employees even at customer sites. We listen to our customers, we're talking to them all the time. We convene them in like the Genomics Forum. And so we have great voice of customer really informing what we do next. An example of that is in our mid-throughput range. In our mid-throughput platforms, we have the NextSeq 500 and the NextSeq 550Dx. What customers kept telling us is they wanted more horsepower. Multi-omics is really growing. They want to be able to run multi-omics samples and really understand kind of the biology to a greater depth. They want to have higher output per sample, because if you're doing multi-omics, and if you're doing any clinical application, you need to have more output. They wanted reduced cost per G, they wanted faster turnaround time, and all of these things led to the NextSeq 1000/2000 platform. The NextSeq 1000/2000 was also the first in which we built the DRAGEN technology directly into the box, reducing all that overhead of data processing. The NextSeq 1000/2000, as a result, has allowed us to grow our mid-throughput offering. In fact, you know, it didn't really replace the NextSeq 500, 'cause especially the 500, the 550Dx, has a huge clinical menu now built on it. We keep scaling in the NextSeq 550Dx, while adding the NextSeq 1000/2000, which has really been the fastest adopted mid-throughput platform in the industry. You can see, you know, ways that we do that, not only kind of building the product based on voice of customer, but also kind of convening customers into really understanding how to utilize the technology. We held a multi-omics symposium. We had, like, leaders in the field, the most respected and prestigious, you know, researchers who talked about how to do multi-omics studies. We had 4,000 participants who kind of partook in those studies in those webinars. Really, you know, it's that, you know, loop of building what customers want, training them on the technology, building the application space, and kind of then growing the adoption of the technology. I think the mid-throughput has been a great example of that. They also wanna know that the investment that they're making has longevity. You know, introducing new offerings based on the capital that they've invested in, like we did with the long-read kits for the NextSeq 1000/2000, this was a huge and popular product for that community. Many customers who were holding on to their MiSeqs, 'cause that was the only platform that did the 2 by 300 long reads, are now able to step up into 1000/2000 and to have the horsepower that comes with our mid-throughput series. The offerings for the long reads, and then we just announced that we're gonna take the XLEAP-SBS chemistry and put it on the 1000/2000. This will be available in the first half of 2024. This was met with, like, a great applause from our customers who have invested in the one K two K or are on the crux of investing into this platform. It gives them the ability to have 500 G of data on the same system that they purchased that, you know, was capped at 360 G. It gives them a whole another range of applications that they can bring onto the one K two K. Of course, our biggest announcement which we made recently, and that is the NovaSeq X. You know, once again, customer intimacy, the voice of customer, we delivered something that was truly beyond what customers expected. They expect us to deliver, you know, higher throughput and you know get to kind of higher levels of output per run and lower costs. To address all the sustainability issues, you know, I think it kind of blew them away, and that, you know, that is what we heard from them. Talking about more flexibility, the NovaSeq X Series has two flow cells. The NovaSeq X Plus has two flow cells, and there's the NovaSeq X model, which has one flow cell, can later be upgraded to have a two flow cell version, which is in the NovaSeq X Plus. Each of those flow cells, the highest output flow cell has eight lanes. Each of those eight lanes can be addressed separately, which is, you know, huge flexibility for our customers 'cause they can kind of pool libraries, you know, for any one lane of the flow cell, means they need fewer indexes and, you know, can kind of manage it a lot easier for their workflow, run different applications in each lane of the flow cell. Huge flexibility, huge kudos for that. Of course, customers asked all of last week, "So is it locked for applications like the X Ten was, we could only do whole genomes?" The answer is no. You can run any application. Any application you can load onto the flow cell. If you wanna do millions of microbes, go for it. The other question was, you know, because our SBS chemistry is absolutely the standard in the industry, the entire ecosystem of applications, as you saw from Alex's slide, all of these multi-omics applications, many of them from partners, have been built on SBS chemistry. The question was, can our libraries work on the new XLEAP chemistry? Will our adapters work? Will our indexes work? And the answer is yes. You can port over all the applications that you run today, all the applications that the world of genomics has built, you can port them over to our NovaSeq X, and that was a huge kudos as well. Of course, you know, kind of maximizing their ROI and making sure this is gonna be efficient and scalable and help them run their business, they were pretty blown away by the fact that we built in, as you heard, a supercomputer, we built in the DRAGEN FPGA, three times the horsepower, a lot more flexibility, and yet it's the same size and footprint as a NovaSeq 6000. It has the same power requirements, the same heat management and venting requirements. Literally, they can do a one-for-one replacement in their infrastructure of something that has three times the horsepower. This is huge because, you know, having to think about new connections and new venting, if you visited any of our customers that have 20 NovaSeq or 30 or 40, you know, they had a substantial investment in that infrastructure. Having to control the environment differently or building a whole new facility is a slowdown and a, you know, a cost and a hassle that, you know, is very difficult. Being able to do drop-in replacement was huge for them. Then, of course, you know, building in the bioinformatics. When you're talking about doing data processing, when you're cranking out 16 terabases of data, it's huge. Even if they don't use the DRAGEN pipelines that we're going to have available, and we'll be regularly updating on the product, just being able to do BCL to FASTQ conversion and then taking a FASTQ and doing compression on it automated in the system is incredible. All of a sudden, like, all of the complexities it has, when we were talking to, you know, programs that were conceiving of millions of samples, they kept saying, "Well, we're going to have needs like football fields of NovaSeq 6000s. It's, like, unachievable. It can't be done. Just operationally, we can't get to it." All of a sudden, you know, once again, we've solved that problem. We should see these sample sizes increasing, people being able to dream big on what they can do. Of course, the sustainability. They did not expect us to reduce, like, the entire cold chain requirement in shipping our consumables to them. Our customers that have fleets of NovaSeq 6000s, when they receive consumables for us, it's a big event. They have to stop what they're doing. They have to take the entire team that runs the lab, and they're receiving boxes and unpacking them and, like, dealing with dry ice. Now we've reduced all of that. It is a huge efficiency for them. It allows them to scale faster. It's a huge cost reduction. It allows them to keep their staff busy doing what they do best, and that is to kind of run genomics and run our multi-omics applications. Of course, our customers are, you know, scientists, they're physicians, they care about the environment, so reducing the environmental impact of doing big science and doing big precision medicine is incredibly meaningful and important to them. When does it launch? When is it available, and in what models? I mentioned the NovaSeq X, which is gonna have a list price of $985K. It's basically what NovaSeq 6000 is. NovaSeq X Plus, which is $1.25 million. The first product that we'll launch is a NovaSeq X Plus in Q1 of next year, next year. We expect about February when we're shipping product. The NovaSeq X will come in the second half of the year. All the flow cells, the first flow cell that's available is in Q1, and that is comparable at three- terabases of output. It's comparable to our high output flow cell or S4 flow cell on the NovaSeq 6000. Comparable, but it runs twice as fast. That run for six- terabases takes 24 hours compared to, like, 44 hours on the NovaSeq 6000, so twice as fast, so they can turn around a lot more samples and be efficient. It's about 35% less cost per G. Across the lineup, customers are going to get between 30%-60% cost reduction if they're adopting the high output flow cell on the NovaSeq X Plus. That is the eight-terabase flow cell. They're going to be able to get to $2 per G, which is a 60% cost reduction from what they have on the high output of NovaSeq 6000 today. Incredible offering, incredibly compelling price points, and you know, customers were asking all the right questions last week and thinking about how they adopt this technology. We are very confident that we're going to catalyze this next wave of new samples and growth in the industry. We're hearing it already, all the things that we, you know, were thinking about internally in our four walls before we started to have the first customer conversations. Things like, you know, driving from exomes to genomes, we're making that completely feasible, cost-effective, efficient to do from a data standpoint. Going from bulk RNA experiments to single-cell experiments and to kind of scale up the number of cells. Going from single method applications to every sample really being a multi-omic sample that gives much richer understanding of the biological content of that sample. For clinical applications, getting to greater depth and all of these things, you know, greater depth, allowing for going to genomes, allowing for going to multi-omic study, adding proteomics, for instance, in clinical samples, adding methylation, all of the things that lead to greater clinical utility, greater evidence generation, all of the new applications that, you know, Phil so eloquently talked about that are going to make a difference in patient success and patient impact. Then, of course, new types of samples. We have a number of customers in the pharma space that want to do high throughput screening studies. They want them to be statistically powered. Now they can get to higher and higher powers of statistical confidence, build their models, build their imputation engines, and do that, you know, efficiently on the NovaSeq X Series. Of course, I talked about the population studies that are going to get to bigger and bigger sample sizes. If you think about where we are in this industry, we really are still at the very beginning. I know we show these numbers all the time, but you know, we live it and breathe it. We hear it from customers. We are at the very beginning. If you think about the number of species that are sequenced, it's thousands. If you take your gut microbiome alone, it's millions of species, and we wanna understand that for better health. If you look at the number of human genomes that have been done, it's less than 4 million. Now we're talking about projects, each one alone that's gonna be in the 4 or 5 million sample size. If you look at the number of variants characterized, today it's less than 1%. We need to get as close to 100%, at least of the known variants today, characterized for us to lead to the health applications that all of us want for the future. We think there are massive projects on the horizon. We're gonna drive this incredible inflection point once again in the industry, and this is the start with the introduction of NovaSeq X. We are confident, having done this time and time again, that there is an elasticity model that we, that we really experience every time we have one of these introductions. We bring the cost down, but the growth of output far outweighs the cost reduction, and we see a financial growth and a business growth based on that action. This is the experience with the NovaSeq 6000, which we launched in early 2017. We brought the cost of sequencing down by 70% over this period. At the same time, we had a 500% increase in the amount of data that was produced. We're confident that we're gonna experience another cycle just like this with the cost reduction that we made with the X Plus and of course the just kind of the complexity reduction that we made. Just talking about the adoption cycle and comparing it to the adoption of the NovaSeq 6000, we think it will be similar to that, but I think we're gonna have a longer tail of high throughput, you know, volume usage of our 6000s and our 6000 Pluses. In the first year, we see the research customers. They all want access to the new technology. They're applying for grants. They wanna be competitive. They wanna get more for their research dollar. They're the first to kind of make those purchases, but our critical customers will also be interested in getting their hands on it to do tech dev, to start building their next, you know, series of apps, assays on the new technology. Then over the course of several years, in fact, you know, we're year six in NovaSeq 6000, and we still see customers even in as of last week scaling in 6000s and now in our NovaSeq 6000 Dx's. We'll see kind of a long cycle here, where the consumables for 6000 will continue to be strong, especially, you know, in the clinical applications, while we're ramping up into the NovaSeq X Plus for, you know, several years to come. Our customers agree, and here you see the first customers that have placed orders with us. Once again, these were just the personal conversations that the reach outs that I made over the course of several weeks. Eric Lefkofsky, who's CEO of Tempus, who absolutely wants to get hands on this technology, and once again, this is kind of for future applications and scaling their clinical operation. Kári Stefánsson, I love his quote. He's the founder and CEO of deCODE genetics, now owned by Amgen. You know, going from sequencing populations to sequencing whole nations. We're absolutely gonna see that with this introduction. You know, Professor Seo from Macrogen, who has been a proponent of whole genome sequencing really since the start of the industry, and he was blown away by this capability and the introduction and what it's gonna mean for the growth of Macrogen, their ability to bring whole genomes throughout the world. Aris Baras and John Overton from Regeneron, once again, they have an incredibly efficient engine, insight engine that's driving to new, you know, drug discovery, new drug targets, and they can't wait to get their hands on the NovaSeq X and be able to kind of power their statistical studies. Of course, Stacey Gabriel from the Broad, and the Broad is a launch partner as well. All of these are launch partners with us, and of course, the Broad will scale their research applications. They're looking at how they take exomes to genomes and get to that next level of scale in their, you know, incredibly respected institution around the world. With that, I hope I've convinced you that we have an unrivaled, incredibly powerful commercial engine that's going to take this technology like we've done time and time again and drive adoption around every corner of the globe, that we are the market makers. Here again, you know, the market is abuzz because of our introduction and that we are going to be sitting down with all the change makers in this industry and talking about how we drive the growth of samples and the growth of clinical applications. Of course, this new technology, this new chemistry, this new capability is gonna drive another inflection point in growth in our industry. With that, thank you very much. It is my pleasure to introduce my colleague, Joydeep. Joydeep is not only the head of strategy at our company, but he's also our interim CFO. Joydeep, thank you. Good morning, everybody. Pleasure to see you, and thank you again for your time. Susan mentioned I've been here for about three years. I really came to Illumina, attracted by the potential of our technologies and our infrastructure to impact human health in the next decade or more. Prior to Illumina, I served with Thermo Fisher for about 16 years, so really a long time in the life sciences industry. At Thermo Fisher, I led P&Ls for various businesses, including the clinical oncology division, and also several geographies, including the Asia Pacific region. Prior to that, I was a consultant at McKinsey & Company for about five years, really focusing on pharmaceutical R&D, and R&D productivity and several large private equity deals where we were assisting these clients. I wanna take the next 25 minutes or so to weave together the various themes that you have heard from my colleagues into our long-term financial picture. In terms of my key messages, as you've seen, we have a proven track record of delivering profitable growth, driven by our emphasis on innovation and, of course, on operational excellence. As we look forward, we see significant opportunities in several large, growing, and under-penetrated markets. Coupled with our leading technology, we expect to deliver mid-teens revenue growth over the long term. In addition, we expect to deliver high teens operating profit growth, really driving towards disciplined pricing, capturing economies of scale, and of course, continuing on our discipline around strategic cost management. Lastly, our disciplined capital allocation framework will allow us to make investments on both organic and inorganic fronts to build our sustainable market leadership and unlock new applications for genomics. Turning a little bit to our past track records, as you've seen, we've delivered strong revenue growth on the back of our launches, such as NovaSeq and our entry into clinical markets, and all of this despite the headwinds that were provided by the pandemic. On the gross margin front, we have continued to deliver gross margins in the 68%-71% range, really delivering, again, very disciplined pricing, consistent innovations that drive down our cost of goods sold, and continuing to deliver manufacturing productivity, while at the same time continuing to reduce prices for our customers. We have delivered operating profit growth that has exceeded our revenue growth, again, focusing on economies of scale and continuing to extract operating leverage while being very deliberate and continuing to invest in our R&D and our commercial and clinical infrastructure. Now, turning to our overall customer base, as several speakers have mentioned, we have a large and diversified customer base. About 50% of our revenues now come from outside the United States. On our end markets, we continue to drive greater participation into these clinical markets, where our products are increasingly spec'd into our customer workflow. These include our instruments, our consumables and reagents, and our software, and these have led to our clinical business growing at almost 25%. Our install base, again, driven by our innovative technologies, has continued to expand rapidly, and this coupled by strong pull-through in our instruments has led to a recurring revenue that today accounts for about 80% of our total revenues. Now, for the long term, we expect to deliver mid-teens revenue growth, really driven by our innovation and continuous expansion into large growing markets. In the short term, though, in 2023, we do expect some moderation of this growth, driven by some of the macroeconomic headwinds that we are seeing and some expected typical supply constraints on our NovaSeq instruments for the first few quarters. Again, as I mentioned, this is very typical of large instrument launches as we see initial interest and demand in these outstripping our ability to supply them. We expect, though, that these headwinds will be overcome by the end of 2023. Turning to gross margins, we expect to continue to deliver gross margins in the high 60s-low 70s% range, again, driven by economies of scale, continued focus on innovations that drive down cost of goods sold, and in terms of leveraging manufacturing efficiencies. On the operating profit side, we expect to continue to deliver high teens% operating profit growth, again, driven by capturing economies of scale while maintaining our ability to invest in R&D and commercial infrastructure. Let me dive a little bit deeper into each of these elements. As Francis and others have mentioned, we participate in several very large, growing, and under-penetrated markets. Our technology innovations that Alex and Phil and Susan talked about enable us to drive the adoption of NGS into these markets. I want to emphasize this penetration is not just on genomics, but increasingly in the multi-omics arena, where NGS is now delivering the ability to assess not only DNA, but RNA and proteins and methylation at scale. It's really the innovation, the change that we're driving. We expect that these markets, by 2027, will reach about $120 billion in size. I guess this is a chart which a lot of you have been waiting for, so let me spend a little bit more time on it. It's a path to our mid-teens growth. Really we look at four different components to it. Not surprisingly, the first part of that is really around consumables demand elasticity. The second component is an expansion around the workflow participation. The few areas in terms of mitigation of to growth that we will talk about. Then lastly, you have to adjust it for growth on instruments, services, and arrays. Let me click through some of these in turn. On the consumables demand elasticity, we see three areas here. The first one is, of course, the increase in number of samples. Again, this should be familiar to you by now because participation in some of these large markets, especially around clinical demand, driven by markets such as MRD and minimal residual disease screening and early disease screening, including oncology, really are driving a demand for more samples, but longitudinal testing of the same patients multiple times over their lifetime. Other areas that are increasing the number of samples include, as Susan was mentioning, right, a demand for larger population genomics cohorts and larger clinical cohorts, which are often driven by the increased interest of pharmaceutical and biotech companies in using genomics, and of course, increasingly multi-omics into their drug discovery and development processes. Of course, new technologies or new techniques such as single cell and spatial are also increasing the number of samples that are analyzed through our instruments. Number two on the consumables demand elasticity is really an increase in number of samples per analysis, or rather number of analyses per sample. I'm sorry. This is really being driven by a move towards multi-omic analysis of the same sample. Again, that in turn is being facilitated and enabled by improvements in our technology. Of course, one clear aspect of this is a reduction in the amount of sample that is required for each of these analyses. Alex talked a little bit about that, which then allows you to do more analyses of the same often limited sample. The other place that our innovations are driving more multi-omic analysis, capability to do multi-omic analysis, is innovations that are built into our instruments and consumables, right? Alex, I think, talked about the ability to run the same sample with different multi-omic analysis and the same sample on the same chip at the same time, right? This is impossible to do with any other technology existing in the market. This, you can see how it enables you to open up these markets now, and drive towards this. You're gonna start seeing things moving from just analyzing DNA to simultaneously analyzing DNA plus RNA plus protein and so on. We do expect a strong increase in the analyses per sample. The third area is really around increasing intensity of sequencing, right? As you move, as you drive down the price of sequencing, as you enable more sequencing at scale, you are going to see more gigabase of output per analysis. Let me give you a few examples of this, right? As you move from, you know, small panel to a complete genomic profile, a genomic profile of a sample, the intensity of that analysis, the intensity of output increases by about five-fold. As you move from this comprehensive genomic analysis to whole genome sequencing, which Susan pointed out is increasingly what customers are looking at, that output per sample increases by another 40x, right? Then if you move from, you know, solid tumor DNA towards liquid biopsy, which is again a very big transition in the field, and you're hearing it from a lot of our customers, that's about a 12-15-fold increase in the output from a sequencing run. All right, moving towards greater workflow participation. A lot of the investments that we are making in addition to our core technology, as Alex was pointing out, is really to provide more value and more options for our customers around the workflow, so upstream and downstream of the sequencing. The upstream side, there are developments in library prep that are making it easier for our customers to accurately prepare their samples for sequencing. Downstream, there's been a lot of work around software, around bioinformatics, which is making it easier to extract insights from the sequencing that comes off our instruments. In particular, as Alex mentioned, we are focusing on a few key end-to-end workflows that really will enable our customers to do a lot more from their sequencers. This includes the examples that we have pointed out on proteomics, which is really bringing proteomics, multiplex proteomics to our customers at scale, and products such as TSO 500, which allow therapy selection for a distributed customer base, again, at scale. Touching on a few of the headwinds that will moderate our overall revenue growth. Of course, probably the most important of these is price, but here, as you have seen, we will maintain our commitment to drive price down for our customers and continue to drive demand elasticity for our customers. We also expect, given the attractive market we are playing in, that there will continue to be new entrants coming into the marketplace. We intend to stay ahead and lead the market in new technology, though, with our investments in R&D. We also expect our customers to continue to drive productivity in their own operations, right? This will reduce the amount of reagents they use per experiment. Lastly, as I've talked about, some macroeconomic headwinds. Moving to the non-sequencing consumable part of our business, we expect high single-digit growth for our instruments, arrays, and services over the long term. All right, let me hit a few things around the operational excellence and you know, our gross margin and our operating margin. As I mentioned, we intend to maintain and expect to maintain our gross margins in the high 60s%-low 70s% range. We will achieve this through disciplined pricing, innovation that continues to drive less expensive materials, improved processes, and greater productivity. Some of these include things like automation, process automation and standardization that will continue to drive costs down through lower rework costs and lower standard costs. We will continue to capture economies of scale in our operation and continue to drive a more diversified manufacturing base and more insourcing that allow us to further reduce our factor costs. On the operating margin side, we're committed to delivering high teens growth in our operating profit by capturing economies of scale while maintaining our investments in industry-leading R&D and commercial infrastructure, especially around clinical and solution selling. We intend to capture or reduce our cost to serve through our highly connected instruments that Susan mentioned, and also through investments in e-commerce. Of course, we will continue to drive scale in our G&A expenses. Let me move to capital allocation. The three areas we are focused on in capital allocation, and of course our primary focus continues to be on organic investments in R&D and commercial infrastructure, and I'll come to this in a little bit more detail in a little while. On the M&A or inorganic front, we intend to continue our investments in key licenses and bolt-on acquisitions that will allow us to continue to deliver IP-protected, differentiated technologies faster to our customers. Lastly, we continue to intend to use share repurchases as the preferred mechanism to return capital to our shareholders while maintaining an investment-grade debt rating. We focus a little bit more on our organic investments and, you know, reiterate some of the things I've said earlier. First of all, on the organic investment side, we intend to continue to maintain a high degree of investment as a percentage of revenue on our R&D infrastructure. This will allow us to continue to accelerate the frequency of our new platform introductions, as Alex had mentioned, to continue to advance our innovation roadmap with a focus on sustainable IP protection, and of course, then it will enable a continued investment in our clinical and medical infrastructure that are necessary to drive adoption into the clinical markets. Oops, sorry. On the sales and marketing front, again, our intent here is to continue to maintain the strong investment that we have had here to develop the kind of differentiated infrastructure that Phil and Susan talked about, while continuing to extract economies of scale and reduce the cost to serve. In particular, the investments that we are focused on here are around geographical expansion into fast-growing emerging markets, continuing to expand the investments in our clinical and in our infrastructure to serve pharma and biotech customers who are increasingly adopting genomics into their drug discovery and development processes. Lastly, continue to invest in areas such as e-commerce, instrument utilization tracking, auto replenishment, et cetera, to continue to reduce our cost to serve. With that, let me wrap up with leaving you with a few key messages. You know, we definitely play in very large, growing and under-penetrated markets, which then coupled with our technology leadership and our commercial infrastructure leadership, will allow us to deliver mid-teens growth in the long term. We will deliver high teens operating profit growth in the long term, really focusing on economies of scale, and, you know, strong strategic cost management while continuing to invest in our R&D and commercial capabilities. Lastly, our disciplined capital allocation framework will allow us to provide both organic and inorganic investments to build sustainable market leadership and to unlock new sequencing applications. With that, I will conclude my presentation here and ask Salli to come up and set us up for Q&A. Thank you. Thank you, Joydeep. While we're assembling everything up here, let me just give a few updates to you here. First of all, we're gonna post the slides from today's presentation, so you don't have to write down everything that you saw or remember it. It'll be on our website at investor.illumina.com. We've also included for your reference a glossary at the back of the deck for all the many acronyms that we've used here today. For Q&A, a few instructions. For everybody here in the room, if I could just ask if you would please just raise your hand if you have a question, and then if you could wait for the microphone to get to you so that everyone on the webcast can hear your question as well. For those that are participating virtually, through our webcast, you can submit your questions on the Q&A box that's on the right-hand side of your screen, and we're gonna try to work in some of those questions as we go. We're gonna do our best to get to as many questions as possible here. I will ask that you please just limit yourself to one question without multiple parts, so that we can give more attendees a chance to ask questions. With that, we're gonna go ahead and get started, and I'd like to first just welcome our speakers to the stage. All right. We're gonna go back here right here with these two gentlemen here with their hand raised in the middle. To your left, Natalie. Thank you. Luke Sergott, Barclays. Just start out here, when we're thinking about, I know we're not talking that much about GRAIL, but, can you just update us with the litigation roadmap, when you expect the timing of the EC, whether you're gonna hear the trial, and then how that framework works within your nine-18 months? More strategically, as you guys have done vertical and horizontal M&A, and both of those have been blocked, you know, give us an update on how you're thinking about that strategy and continuing to unlock these overall markets. Sure. Let me take a cut at that. Let me start by laying out the timeframe. We expect the next step to be from the European Commission. We got the prohibition order. We expect the divestiture order to come out at either the end of this year or very early next year. That'll lay out a timeframe for the divestiture. You know, we're waiting to see what they come up with. You know, you can expect it to be. They want it to be in an orderly way, and it'll be you know sometime six to 12 to 18-month kinda timeframe. But again, it'll be laid out in the divestiture order. We also have in parallel going on our appeals to the European Court of Justice around the jurisdiction order, and we're appealing the prohibition order. We expect the appeal for the jurisdiction to play out in the back half of next year. It'll go on in parallel. What I was talking about was, you know, in parallel we have started our own work stream to evaluate strategic options for GRAIL. The timeframe I laid out was just based on our observation on the typical time that kind of process takes. That's sort of what's playing out in terms of timeframe. In terms of our M&A, you know, we have seen obviously the regulatory challenges around GRAIL, and then a few years ago when we did PacBio, we saw similar regulatory challenges. In between, however, we've done around five deals that we've been able to close. What we're seeing is that, we're able to do the technology tuck-in type of deals that we've now built into our products. The lossless data compression, for example, that's built into our NovaSeq X came from an acquisition. We're seeing success with technology sort of tuck-ins and that kind of M&A. Obviously there's more scrutiny now on bigger deals, would be our observation going forward. Great. This is Dan Brennan from Cowen. Thanks for taking the questions. Just on a near-term question on 2023, since you commented slightly below, just wanted to understand what slightly means or moderately. Then when we think about the comments that you made on the kind of on the product cycle, could you give us a little more flavor kind of what's baked into that long-term growth rate in terms of NGS consumable growth, which I think will help us get a sense on this demand elasticity. The level of upgrades is it gonna be similar to how we saw the NovaSeq upgrade in terms of existing customers? I know you gave a lot of color at the time. Then also share loss. Are you assuming any share loss in these long-term assumptions? I can. Let me start off on that. Right. When we, you know, we're still obviously this is not the time to give exact budget guidelines on 2023, right? We're gonna do that in February. We do see, you know, the macroeconomic headwinds that we all are seeing in the markets, right? That we're assuming will take a few points of our growth for next year if they continue, right, and they continue to worsen. Again, I think that is a temporary thing. We've gone through these cycles before, right? In the perspective of the long term, for 2023, we wanted to clarify that that was one of the things. The other thing that we mentioned as well was the initial, you know, maybe a few quarters where the interest that Susan mentioned on NovaSeq X would outstrip the initial ability to serve and service that backlog. Again, what we typically see is by the end of the first year, so by the end of 2023, we'll have outrun that and, you know, we'll be back in control delivering the demand that our customers have quarter over quarter, right? That was the first part of your question, I think, right? The second part you talked about in terms of elasticity of demand, right? There, I think it's important to remember the three things that we talked about, which are driving that elasticity of demand, right? We do, and we are starting to see and have continued to see, right, that these new applications are driving the number of samples that are being analyzed. One of the first things we saw with multiple of our customers was also that second piece, right, where the number of analyses per sample, so this drive towards multi-omics that you're seeing not only from us, but from other companies in our space, right, really being enabled by some of the innovations that we're doing. We are expecting an acceleration, actually, in the amount of number of analyses per sample. The last component of that was what Susan had pointed out, right, that throughout the history of sequencing, we are seeing that as price comes down, as people get more comfortable with sequencing, the output per analysis continues to increase, right? If you take a look at those, and I put up some numbers in terms of the fold increase expected in that, right? Those are well within the kind of increases you're expecting on each, you know, each customer kind of moving towards more analysis for samples or having a higher output as they move towards things that give them an even bigger insight on the biology of what's going on in that sample or that patient. The other thing I'd add is, you should expect a similar sort of multi-year upgrade path like we saw with the NovaSeq 6000. Yeah. You know, because this is gonna be one of the largest upgrade cycles in the history of high-throughput sequencing, and we have a big installed base of NovaSeq 6000s and still some HiSeq X. You should see this be that sort of five-year upgrade cycle that we saw last time, initially led by the large genome centers and research institutes, and then, you know, we'll activate the clinical part of the market, you know, in the following years. All right. I'm gonna quickly take a question that we've had come in from online. This is from Vijay Kumar at Evercore ISI around margins. So he's asking, margins have come down from the high 20s%, excuse me, to the low teens%. What's gonna get them back to historical levels for Core Illumina? And then will the rollout of NovaSeq X have any gross margin implications for 2023? On margins, right? In the long term, we have seen margins come down. A part of this was investing. We retooled our R&D investments to allow us to deliver ever-faster product innovation introductions, right? We do expect that, as we complete that, economies of scale, both on the R&D side, but also on our G&A and our commercial side, will drive, coupled with growth, right, the operating margins higher. As we model this into our subsequent years, we do expect the high teens operating margin growth that I talked about earlier. I'm sorry, I'm forgetting the second part of the question. The second part was NovaSeq X, any impact on gross margins for 2023. Yeah. I think on that front, right, as Alex talked about and you know, we have driven a lot of innovation to make sure that, and as we traditionally have done, right, that our ability to deliver lower prices to our customers are underpinned by innovations in our COGS and all four of the specific instruments. One specific example that Alex referred to was you know, the ability that we have taken a chip that was already pretty efficient with NovaSeq 6000, and we've tripled the capacity of that chip, the same chip, and even made it smaller. Things like that allow us to reduce the amount of cost plus the standardization of processes that we have talked about. We do expect to maintain our gross margins at high 60s%-low 70s% as we transition to NovaSeq X. All right. Year-over-year, mix also drives the margins. In years in which there are more instruments sold than consumables, relatively, you will see a small dip in margins, but, you know, that quickly corrects as the consumables demand catches up. Okay. Let me come here, Patrick. Let's see. Thank you. Patrick Donnelly from Citi. Maybe a follow-up on that margin question. You guys talked a lot about the R&D engine. Francis, you called out, I think just short of $900 million of spend last year on R&D. I guess, given, you know, NovaSeq X is coming out, I know you didn't call it out as an opportunity on the margin side, but how do you think about that spend going forward? Is there opportunity to refine, optimize that? Maybe just talk about kind of what goes into that spend, how you think about the ROI. I just wanted to follow up on Luke's question on the GRAIL piece. You kind of mentioned the divestment order could come in a month or two, the appeal is another year. During that time in between, is it more just kind of wait and see, and you're gonna play out the appeal process, or is there an opportunity to divest GRAIL kind of during that period as well? Thank you. Sure. Let me take the first question first. I'd say, you know, we are continually looking across our spend profile to identify opportunities to optimize costs. That's a continual process. There are periods when, you know, we do scale up investment, and certainly coming into these launches, you know, was a period of scaling up investment into R&D. Because at the same time, we were retooling our development process to make sure that we could, you know, have future launches more quickly. You know, that some of that work is now behind us. We will also balance that with the work that we are putting into the pipeline around future launches. You know, we are the beginning of a lot of S-curves on technology between the flow cells, the optics, the chemistry, the compute. There's an opportunity for us to continue to drive new releases based on these new components across our portfolio. You know, at Illumina, we build out ten-year roadmaps, and so every year we sort of reassess the ten-year roadmap. What's in the ten-year roadmap are looking for opportunities for future instrument upgrades that are, you know, better, faster, cheaper, more accurate. So there's some of that work going on. We're looking for opportunities to deliver end-to-end solutions that'll catalyze markets. You heard about some of them today. And we're also looking at sort of, you know, sort of, next gen technology. So that's the mix we constantly look at to see, you know, are we set up for the future that, you know, we know our customers want. We also look across the company, though, for opportunities to optimize costs. There we continue to find new opportunities around G&A, for example, as we scale to get more efficiencies. That's the mix that leads us to chart a course where we can see expanding margins that even as our revenues scale, our costs won't scale as high, and you should see expanding margins going forward. In terms of GRAIL, we are gonna treat these as parallel paths. Some of our path forward is gonna be dependent on what comes out in the divestiture order for the European Commission, and that will sort of lay out, you know, the parameters around what is or isn't possible at the time. That may be in parallel with this, with a potential appeal. But again, a lot of it is dependent around how the next couple of months bear. The way we are approaching it right now is there are two separate work streams. There is a work stream around divestiture that we're looking at that is independent of, that's an independent path on its own, and we'll follow the guidelines laid out by the divestiture order. I think, you know, just to emphasize as well, right, on GRAIL, we are taking a pragmatic approach. I think there is nothing that, you know, is causing us to elongate the time. We'll get that resolved as efficiently as possible, but you know, taking care that we maintain shareholder value and GRAIL's value to succeed, right? Just wanted to assure you, this is not us looking for an opportunity to elongate the process. Yeah, we want to get it resolved as quickly as possible. Maybe I'll make a comment on the R&D spend, which is that the investments are not just to have the next NovaSeq X and similar type products in other categories. As Joydeep and I think I said, is to have more product introductions faster, right? And to drive growth. It's not just to maintain kind of a similar type of kind of new upgrades, but it's getting more expensive. It's actually to get more products over time and actually do it in a way where, you know, each of those is less cost because we're doing more and we're doing it faster. Go up front here. We'll go to Dan. Thank you. A follow-up to Dan Brennan's question from earlier. I was hoping to get more color on how you're thinking about the layered adoption cycle on the high-throughput instrument side. When you launched the NovaSeq initially, you shared that there were 500, I'm sorry, 800 high-throughput customers. Where does that number stand today? How many are research that would want the latest and greatest technology and how many are clinical that will be scaling up the last generation of the technology? Thank you. Sure. Maybe Susan will turn it over to you. Sure. Our customer base for high throughput has grown, as you can imagine. I don't know if we put the actual numbers out there, Salli, if you're okay with me sharing some of them, but about 1,500 customers in high throughput today. We have about 40% of those are clinical customers, so that growing that base of clinical customers. In terms of how we see that impacting the adoption cycle, as I mentioned, I think that for many of our clinical customers who will start to take on maybe a few sequencers in the kind of immediately because they want tech dev of new assays, they already had in mind they're gonna do a ctDNA assay. They're not gonna develop that directly on a 6000 at this point. They'll probably, 'cause they wanna have kinda higher depth, they wanna have multi-omics, they'll kind of target that on the new instrument. They'll bring the new instrument in, as you saw with Tempus, to you know, really kind of road test and understand the performance on the new chemistry. The thought of moving applications, and we have customers today that are asking us to continue HiSeq consumables because of, you know, applications they had validated. I think there will be a, you know, a long tail of usage of the NovaSeq 6000s, and we just introduced the NovaSeq 6000 Dx. For many of our markets overseas, it's going to be important to have a Dx product to meet the regulatory requirements of IVDR or others. They'll, you know, continue to adopt and scale the NovaSeq 6000 Dx. There's gonna be a deep interest in getting to the new technology for new applications as soon as possible because the new clinical applications are driving to higher intensity, to multi-omics. In general, I see the pull-through on NovaSeq 6000s and NovaSeq 6000Dx being, you know, robust because these are clinical applications that they've already validated. You know, they've done a site-specific PMA or other, and they're growing those tests as they bring on kind of the next generation of applications. I see it as being, you know, once again, a multi-year, but I, you know, like we're seeing with the NovaSeq 6000, even in year six, I think in Q1 of this year, we had, like, the highest number of 6000s ever sold in year six of the instrument. We'll go right up. We'll stay up front here for a minute, and then I promise I'll get around. Great. Thanks, Puneet. SVB Securities. Rather simple but an important question I know the demand is talked about quite a bit. If I could boil it down to, what is your expectation for pull-through for NovaSeq X Plus at the steady state? Because if I look back 15 years from the GA days, the pull-through has gone from, you know, sort of sub-$100,000 to $100,000 to now $1.3 million on NovaSeq 6000. Where do you expect with a 25B flow cell, where you can be on the pull-through? Because I think the question really is that with the subsequent lowering of cost per gigabase, how much leverage do you have in trying to drive the pull-through higher? If pull-through is not gonna go as higher, then is it the instrumentation install base that's gonna drive the growth more longer term? This is, you know, longer term, and then just one clarification for maybe Joydeep is, you know, does the GRAIL, I mean, does the guide include GRAIL in it, the long-term guide? And is the mid-teens% off of a lower 2023 base or, you know, inclusive off of it? Yeah. Let me start by talking about pull-through. I'll start by saying, well, initially, of course, when we first launched it, as you know with our other instruments, it takes a few quarters for pull-through to normalize to a steady state. Because we have, you know, small installed base at the beginning, the pull-through will sort of bounce around a bit, but it will get to a steady state. When it does, we do expect the pull-through to be higher, to continue that trend, as you've been saying, from the GA. Every time we've launched a newer, bigger instrument, the pull-through per instrument has gone up from the previous instrument. Our expectation is that we will continue that trend with the X once we get to a steady state. It takes a while to get to a steady state with a new instrument. That'll be driven partly by the elasticity we talked about, you know, that will be enabled by the X, as people do more sequencing, bigger cohorts, and run those machines harder than they have historically. We also do expect, though, to see, as we saw with the NovaSeq, that the X will fundamentally enable new use cases which will bring new customers to the fold. As you recall, one of the upside surprises around the 6,000 was how many new customers, new to high-throughput customers, were coming to Illumina and starting with the 6,000. What we're hearing from customers already around the X is the new use cases that it enables, and we expect that trend to continue, too, as we get to the X. To your point, it'll be both. It'll be, we do have an expectation on a higher throughput per instrument, and we do expect new customers to come out and open up the number of customers that are accessing high-throughput sequencing because of what the X enables. I'll turn it over to Joydeep to talk a little bit. Yeah, and maybe just to add one other thing, right? Remember Alex said that, and both Alex and Susan mentioned, right? This is also about twice as fast. If you're thinking about, you know, number of runs that can be done per unit time, we are actually accelerating that, right? We do expect throughput in the long term to continue to accelerate for all the reasons Francis mentioned, and that speed piece is an important piece to keep in mind. You asked me about two things there. First, does the mid-teens? No, it doesn't, right? We're talking primarily about our core business today, and really a lot of the discussion here, or most of the discussion here, has been about the core business and our confidence in that business and the markets we play in. Then in terms of the growth, whether that you know takes into account a lower 2023, the confidence we wanna project to you was really on, you know, the capability for growth in the mid-teens% area. We're not trying to game it by one year or the other, right? We do expect that in the long term, we will, given the elasticity, given some of the innovations we're putting out in the market that really allow us to pull in new customers to open up new applications, will drive our growth rate in that range. I promised to go over here, so I will do that. We'll go right here. Hi, Derik De Bruin from Bank of America. I'm gonna squeeze in a couple. I guess the first one, you mentioned the IP of GRAIL, and I'm just sort of curious, does GRAIL have IP that's blocking of some of the other people doing early-stage multi-cancer detection? And I guess how would you sort of think about that? And if you're forced to divest GRAIL, how does that sort of IP arrangement work? And then the second follow-up is, like, what is sort of the trade in economics on people going to up, you know, going from a NovaSeq 6000? I mean, so if people just bought one and they do it, what's the economics? And is it possible? I mean, we talked to some scientists, I think they were interested in you know, are. Would you ever make the NovaSeq 6000 backwards compatible as well? Yes. All right, a bunch of questions there. Let's go through it. First of all, again, today's intended to be around Core Illumina, but I will quickly answer the GRAIL question as well. GRAIL has a huge IP portfolio around their methylation-based approach to multi-cancer early detection. 230 patents issued, 170 pending, really robust patent portfolio. At this point, they're the only company in the world doing multi-cancer early detection for 50 cancers. It depends on, I guess, what the other companies, you know, decide to do and what approaches they had to sort of land on. And they'll have to navigate the IP portfolio that exists with GRAIL and other players. What we are seeing right now is other players show up with single cancer tests like, you know, colorectal cancer and so on. I guess they have a very rich portfolio, but since there's nobody else doing it, we'll wait to see how that plays out over time. If we do spin it out, you know, their IP is around their tests for early detection. That's not something Illumina does. It doesn't sort of play out on our sequencers. We have all the IP we need for the existing sequencers we have and for the roadmap going forward, so it really shouldn't have an impact, you know, on us at all. I'm trying to think about the second and third part of your question. Trade-in economics for upgrading NovaSeq 6000 to the X, and then would you consider making the 6000 backward compatible? Susan, maybe you can talk to us about the trade-in programs and. Sure. Remember that, you know, many of our clinical customers are not going to wanna trade in because they're utilizing their 6000s on their current applications. We do have trade-in value depending on when you purchase the instrument and how many you're kind of trading up for. I think they're in the range of 15% if, you know, you've bought kind of six- months or previously before, and maybe 20% if you're, like, trading in a fleet. If you're nearer term, then it really depends kinda customer by customer. We want to make sure our customers are happy if they've purchased very fairly recently, and if they should have been in the NovaSeq X, we want to, you know, kind of make a streamlined path to do that. This is a very similar approach to what we've done historically, right? Yes. Every time, whether we launched the NovaSeq, taking a very similar approach to trade-ins. In terms of making XLEAP-SBS or XLEAP-SBS chemistry available, you know, on the NovaSeq 6000, you know, we'll listen to feedback on that, but it's unclear, you know, whether there'd be a need for that given now that we've launched the NovaSeq X. You know, the NovaSeq 6000 was five years ago now. Again, we're open to feedback, but it's unlikely I think people would want us to go back and make it on the NovaSeq 6000. Let me go over this way to Dan. Hi, guys. Dan Arias from Stifel. Wanted to ask a question about population sequencing, which I think is something that Susan touched on in her presentation. I'm curious, you know, how you view that going forward. There were just a slew of those projects that were sitting out there pre-COVID. COVID obviously threw a pretty big wrench in the work there, so I'm wondering whether, as COVID subsides or hopefully subsides, we should expect a lower price point to sort of reinvigorate the momentum there when we think about some of those coming up as press-releasable, big needle-moving type projects. Good question. Susan, maybe. Yeah. We really believe that the launch of the NovaSeq X is a catalyzing event for those population scale projects, and even, you know, Kári's deCODE has been a sequencing provider for a lot of these projects, so you know, he's seeing the opportunity to be nation scale. We actually convened, as I mentioned, you know, a lot of the kind of leaders of those projects last week, and many of them just wanna meet each other. They wanna learn from other projects that have gone before. We had the opportunity to sit down with Indonesia, UAE, Singapore, of course, that, you know, they're kind of in the phase of, they're gonna do 100,000 genomes in Singapore Precise, but their vision is to get to then a million, and then they eventually wanna get to 5 million, 5 million plus, which is the entire population of Singapore. So that would be a nation-scale project. We talked to, you know, Patrick Tsai from Taiwan, who, you know, really sees the opportunity for Taiwan to scale up their precision medicine program with a large-scale sequencing effort. When we talk to these groups, we're kind of talking to ministers of health. We're talking to, like, the highest levels of government officials. These are programs that are, you know, they're really important, they're kind of unilaterally, whatever side of the aisle of politics, kind of supported because they are driving forward, the, you know, kind of the betterment of health for the nation. We're seeing it being increasingly important coming out of COVID and everyone being alerted to having the best access to healthcare. We absolutely saw it last week as being. Another one I should mention is Novo Nordisk Foundation. Their project is actually not just one nation, but they're looking at six different cohorts that are geographically diverse. It will be funded by the foundation, but they also wanna bring in private investment as well. They're sitting down with us saying, kinda introduce us to the right people. We're absolutely, you know, we wanna work with you. Tell us how to get this going. We already have kind of the funding set aside. So I absolutely believe this will be a catalyst. The other thing I heard last week from, you know, a number of the leaders was that, well, you've taken a lot of like what was troubling us away, which is how do we deal with the data? We were gonna go through this whole analysis of like, you know, how do we do the bioinformatics and who do we hire, and you built it in. So like that takes, you know, one complexity away. I think the other, you know, thing that was spurring last week was to see, I mean, the UK Biobank is a good example. The number, the hundreds of scientific publications that have come from kind of open, you know, data sharing of the UK Biobank 500K cohort, has been really I think it's been the most useful study so far in terms of number of publications and insights that it's driven. I think there's also the realization of value that's being generated, kind of value in terms of scientific understanding and eventually kind of better clinical application. Yes, it will. Maybe just to add to your thing. There's another piece that we're hearing loud and clear, right? That's genetic diversity. I mean, if you look at what's been cataloged and sequenced right now, right? I think something like 95% or so is, you know, Caucasian populations, et cetera. I might be getting, but it's a very high percentage, right? If you get to South Asian or African genomes, right? It is a very small percentage. I mean, it's definitely less than 5%. We're hearing that loud and clear. I think the Novo Nordisk Foundation, but, you know, we've heard from people in India, we've heard from people in many other countries, right? So that's definitely driving it. When you look at it, there's ways to think about it as prospective cohorts, right? Where you're gonna recruit samples. What we're hearing from pharma is also an interest in looking at retrospective cohorts, where the samples exist, but they're locked up in various academic medical centers, et cetera. MassBio is a great example of this, right? These cohorts exist, but they haven't been sequenced. You know, innovations such as NovaSeq X really allow us to unlock the samples, unlock the data on those samples. Again, that's where it's not only just genomics, right? They have longitudinal samples that can be analyzed from a multi-omic perspective. We are seeing a lot of that interest bubble up. Yeah, it's really important. We're seeing different models of how to fund it. Novo Nordisk is, you know, foundation-led initially. India, Reliance Industries is kind of a private, you know, company that's leading that. I and the point of genetic diversity is incredibly important. All right. Phil, I'm gonna take this opportunity to send a question your way that's come in, online. We've been talking about all these innovations. How vital is the NovaSeq DX to expanding the clinical market? NovaSeq DX, by completing our clinical portfolio, really provides labs, clinical labs the ability to scale to really high throughput. You know, Alex had it diagrammed in his last slide, and I've talked to it. Most clinical labs can't start at a NovaSeq DX. There are some models that do that. Most have to start at a NextSeq DX, is a nice way to enter. We have kits and menu with VeriSeq version two for NIPT, which is a sample to answer solution that really fits the needs across the globe. That's CE marked. We have the TSO Comprehensive for CGP on the NextSeq DX. What we've seen for the LDTs is they often start with the NextSeq and very quickly move to the NovaSeq as they scale their operations and the number of samples coming in. NovaSeq really allows them, the NovaSeq DX allows those clinical labs. In many areas of the globe, there is increased pressure to move away from the validation of RUO products to clinical testing. Indeed, there's even, you know, some of that pressure in the United States today. Don't think the VALID Act's going anywhere this year, but certainly continued dialogue and having the portfolio of DX to support and in parallel with our RUO is really important, and it really wasn't complete until we've launched the NovaSeq DX, which is really exciting. It's very important. Good. All right. We're gonna go back to the middle for a little while. We'll go to Kyle here. Kyle Mikson from Canaccord Genuity. I wanna talk about the, I guess like the path towards, really like repeat multi-omic testing, so clinically. Phil, you had that slide that kind of had the clinical demand elasticity, and, you know, now it was basically, it was like a separate function downward towards, you know, repeat clinical multi-omic testing. I think now we're at CGP is what you said. Maybe thinking about this two ways. First, what has to happen for us to get there, right? Does the maybe end of the NovaSeq X Series upgrade cycle kind of get us to that point, like maybe at five-seven years, 2027+? Number two, like what is Illumina's like strategy towards this type of repeat multi-omics testing? Like is this gonna be direct, like SomaLogic, those kinds of deals or the more of a, you know, partnership approach like kind of doing right now with multi-omics? Should start, Phil. Why don't I start and then hand it to Alex because it's really his teams that are kind of building the blocks to enable this. Clinically, what we are seeing, if we take oncology, for example, like already in TruSight Oncology Comprehensive, we use DNA and RNA to get to the most sensitive test to detect every patient with a potential fusion gene in their cancer. Fusion genes like NTRK, ROS1, ALK, they're incredibly powerful drivers of cancer, and we have incredibly powerful therapeutics being developed as and their companion diagnostics. Already we've gone from, you know, DNA-based small panels to DNA-based large panels to DNA and RNA based. I always think about it, while the RNA is being used to look at a DNA component, there's keen interest in moving to that RNA based as a phenotype too. You're not only looking at genotype and phenotype, and that's where you get into methylation for tissue of origin and to understand different processes going on within a tumor. You look at RNA for biologic processes, cellular composition, you know, are there T-cells infiltrating the tumor? Proteomics will be the next move to direct. With that transition, we see more connection with the different therapeutic approaches. You can just think about it, you know, RNA now for fusions, for those directed, you get into what are, you know, is PD-L1 expressed. You can now do that with a next generation sequencing-based readout. With biphasic antibodies coming, you know, strongly into therapeutic, you're going to know what are the proteins being expressed. Our vision is to make sure with the throughput allowed by the NovaSeq X and the amount of sequencing each sample can be performed because of the lower input from the nucleic acids or the proteins, it really opens that up. It's really Alex's teams that are making sure we have a pipeline coming in that for research and then moving into clinical. Maybe hand it over to Alex. Yeah. Great question, and something we think a lot about. As Phil said, I mean, the science is driving us there, right? We're seeing these combined analyses, it's adding more value. You know, it's interesting, when you do proteomic analysis and you use that to kind of annotate the genome, it actually makes the genome even more valuable. There's a real synergy. It's not just extra dimensions of biology, additional sequencing, it actually makes every layer, you know, really more valuable. In terms of our participation in it depends. There's some cases where we're doing organic things, other inorganic or some combination, right? We're looking for those opportunities where we can accelerate things. There's something holding the space back, maybe it's a piece of software. On DRAGEN now we have single cell workflows, we have spatial workflows, you know, microbiology, methylation workflows. Those are places where perhaps there was a customer, a DRAGEN customer who, you know, was having trouble getting into this field and now we've kind of broken down that barrier for them. In some places like proteomics is a great example where we feel that the science is there, but workflows that really allow you to scale, to do huge numbers of samples like our genomic customers do, we're not quite there yet. We partner with companies like Olink who are also pushing in that direction. We thought developing a product that you could run on NovaSeq X, where you could do hundreds of samples, you could do 10,000 targets a sample, and you had a DRAGEN analysis, that would be really attractive to those who we know are interested in proteomics. I hear about it from Susan all the time. Historically, most of the genomic folks haven't done proteomics, right? We wanna make it where it's kind of like doing large scale genomics, and they have all those pieces and it's straightforward to do, and the price is really attractive, which is also something we can do on for example, NovaSeq X. All right. Go straight to the back here, and then I'll come up here. Thank you. Hey, Arif Karim from Ensemble Capital Management. I've got two questions. One is on two sides of what you guys are doing. One is, you know, at last week's Illumina Genomics Forum, we heard a lot from various, you know, speakers about how in the future and really they see the value already, but they'd like to see genomics being adopted much more widely. Every newborn born would be profiled, every cancer, no matter what stage, would be profiled. What do you think it takes to get to that point from a price perspective? 'Cause obviously, you know, I think you guys have talked about, you know, demonstrating the value that comes out of it, right? Part of it is price point and the other is the value that comes out of that information. Really heading towards kind of ubiquity of profile of sequencing and then you know obviously multi-omics you know on top of that. But as you think about multi-omics on top of that and that longitudinal sort of profiling over time, you end up with that data issue, right? The fact that there's such decentralization of that data across different providers even in you know single payer systems, you may not even have the value extraction from the multitude of data and the volumes of data you'll be creating. What are you guys doing or thinking about on that end of the informatics piece, which Potentially could be just as valuable, if not more valuable, the sequencing sort of repository that could be built over time. Yeah, maybe I'll start quickly, but then I'll turn it over to you, Phil, to talk a little bit about what, you know, the acceleration and the breaking down of silos in the clinical market. I'll start by saying, though, that one of the things that was extremely exciting about the IGF last week was the participation of mainstream components of healthcare. So we had physicians there, for example. We had a minister of health, we had, you know, people who run healthcare systems. They were not only well-versed in genomics, which is different from where we were a few years ago, but they were excited about the potential for genomics. For us at least, we definitely saw a shift in the customer conversation we were having last week compared to even two years ago. I think part of it was just the education everybody got because of the pandemic around genomics. That's really exciting to see, and there was definitely momentum around the mainstream adoption of genomics into healthcare. Phil, maybe you can talk a little bit about the price points, the breaking down of the silos. Yeah. It's a great question, something we think a lot about. Certainly, I think what I hope my presentation demonstrated is that there is a walk where for our sequencing to be incorporated into the fabric of a healthcare system, it has to bring value to the patients, and it has to do so in a way that provides health economics and efficiencies. In fact, diagnostics, and I know Dan and Puneet know this, are frequently held to a higher standard where there has to be some cost savings. What I would say is that a global truth is that most healthcare systems are not burdened by, you know, a little more expensive test or an expensive therapy as much that are effective and useful. They're burdened by ineffective, expensive therapy and tests. What we also know is the world's a big place, and just like ASCO and NCCN have guidelines based on the economies of countries, high-income, middle income, low income, there will be price points that fit that elasticity that are different in different economies. What our approach has done over the past 10 years is brought sequencing down to become part of the fabric of, I'd say, high and some middle-income countries right now. What the NovaSeq X does and what Alex's team will continue to do, will bring it down into the middle and lower income countries. We'll see that notch down as the different therapies come along with it, because as long as you're increasing your ability to take better care of patients and improving the efficiencies and avoiding patients getting ineffective therapy that's expensive, that'll drive utilization of our sequencing into these healthcare systems, and that'll drive adoption. Okay. I'm gonna come right down here to the middle to Tejas and then Dave. Hey, guys. Thank you. Tejas Savant from Morgan Stanley. Two questions here, really, Francis, for you, or maybe I'll start with Joydeep. You know, just to make more sense of the consumables elasticity framework that you laid out on that slide in your growth algorithm, Joydeep, can you give us a sense for what the split looks like today for you guys between genome, exome versus- Yeah. narrower panels, either in terms of runs or, ideally both runs and revenue? Yeah, I don't think I could give you exact numbers on that. I will say, you know, as Francis and several of us mentioned, right, we are very early in that curve, right? If you look at the number of samples analyzed by smaller panels, right? By us and by us meaning our own, even TSO 500 is considered today a larger panel. It's comprehensive genomic profiling, right? We're very early in that, and that gives us that confidence that, you know, as sequencing gets cheaper, as there's more and more science that builds up on this, right? That you start to see that shift even in developed economies, right? To see that shift between more to more sequencing, to more of these multi-omic analyses of these samples. really that's using sequencing to open up a better understanding of biology and disease, right? Hopefully that gives you an answer to your question. Very early, but we see that shift, and we have seen that shift, right? From simple panels to more CGP from, you know, even before that, right? I mean, just basically doing genotyping to doing more whole exome. Then, you know, increasingly, I think Susan mentioned that on her slide, right? Even people that were very wedded to whole exome are now starting to talk about whole genome as a result of, you know, some of the innovation and the real disruption that NovaSeq X can drive. Yeah. The significant majority of our revenue is now genomes. The significant majority. That's a very small fraction. I'd say it's a small fraction of our total. It's more than 10 to one, exomes to genomes currently. There's a huge opportunity to convert and just, I think across the board for all of us, excitement and very explicit conversations about how the X, you know, can catalyze that. Panels are even bigger than exomes. Exactly. We're seeing panels then exomes, then genomes. There are only 4 million genome sequenced, so that tells you right there. Yeah. In history. Got it. That's actually super helpful. Then Francis, going back to GRAIL here. As you think about that, you know, $78 billion oncology TAM that you laid out, how much of that would continue to accrue to you if GRAIL was spun out? Is it sort of 20% of that screening TAM that you would still sort of view as in sort of the mix. Secondly, this is more really a philosophical question, when you know when the GRAIL acquisition was announced, I mean, informatics and playing in key applications in a sense was one approach to making sure that you're not in the business of selling, I don't know, mainframes or computers 10 years from today. Mm-hmm. How are you thinking about that problem, if you decide to eventually spin out GRAIL? Yeah. Let me take both of those questions. I'll say that, you know, our approach is gonna be that if we don't have GRAIL, we'll look to participate in as much of that screening TAM as we can, and there are various options. Until we pick an option, I can't give you a specific answer. Clearly, we wanna be the sequencer of choice to get the sequencer and consumable, you know, revenue across not just GRAIL, but anybody else who decides to go into the early detection space for cancer. In addition, we'd look for opportunities to participate more broadly, either through extending the workflow that we provide, you know, to those companies through informatics, library prep. We'd also look to see if there's an opportunity to create a distributable kit, for example. To say, look, we are a fantastic partner for companies that have service offerings, where we could create a distributed kit and make it available to the world through our commercial reach around the world into healthcare systems. We'd look for other opportunities to participate as much as we could into that TAM. Again, a number of models that we're looking at, you know, as we settle on them, we'll know the specifics. Our core business is a great core business though. To get to your second question, you know, we're really excited about the fact that there is a huge untapped market in front of us that is very lightly penetrated. I mean, literally 0.07% of humans have ever had their genome sequenced. We're gonna go from that to a billion humans having, you know, sequencing tests done on them multiple times over the course of. We have orders of magnitude of growth in front of us in terms of the market opportunity. We have a very strong position and our innovation flywheel is very powerful. You know, we're really excited about the opportunity in front of us as a core business to accelerate penetration into these very large TAMs. We have a good position. On top of that, we see very, very attractive adjacent markets, you know, cardiovascular, neurological, proteomics, that will continue to extend our TAM. That's what gives us the confidence as Joydeep. Joydeep Goswami, for our core business, you know, for what we do, we see an opportunity for long-term growth that is in the mid-teens%. You know, that's what we're gonna be focused on going forward. We're fortunate that we have such a strong core business. Okay. Thank you. David Westenberg from Piper Sandler. So going on to the packaging, the cold chain, all that commentary there, can you talk about if there was any actual constraints on running the like run times of the actual machine, i.e., they weren't doing as much sequencing because they were spending so much time with all this ancillary stuff? And then you also, you know, you talked about some of the labor components of that. Is there any way to quantitate any kind of impacts in terms of runtime or labor? And if there is labor impacts, I mean, do you expect that to be deployed back into sequencing? Can you just confirm that you're the leader here and your competitors also, you're not just late follower to like the cold chain and some of the excess packaging, you're actually a front runner for that. Just wanna confirm that. Let's do this quickly. Maybe you can talk about what you've heard from customers. I'm sure we can help highlight on that too, around the benefits of ambient shipping and how it, you know, will stop them from disrupting. You talked about these. Yeah. People disrupting sequencing. Maybe you'll talk about that a little bit, and then you'll talk about, you know, other players and how this stacks up and how security. Yeah. The like. Okay. Yeah. I mean, it's definitely a big deal for our customers. I mean, if you looked at those, you know, 100-pound consumables, and if you're running fleets of instruments at, you know, full tilt, then kind of taking down your operation, to, you know, receive these consumables, unpack them, get rid of the waste, is huge. We expect that to be a simplification, cost reduction, labor reduction, especially at our largest customers. And space. I mean, they tell us like, "Wow, we have like, you know, huge facility that we've built just to kind of, you know, deal with the, incoming material, of, you know, that we need to run the lab." I think that'll be a big simplification. I think secondly, building informatics into the sequencer is huge. You know, the amount of resource spent on bioinformaticians kind of, I mean, a lot of customers can't scale their operation because of access to bioinformaticians. Secondly, the cost of storage of data is one of the most, you know, highest increasing costs in their operation. It's like the storage of data is a bottleneck both in terms of cost and just, you know, either adding more servers if it's local or, you know, paying for it if it's in the cloud. I think this is a huge simplification. It's not just that we're giving them like a simplification and it's, you know, good enough. It's best in class, and it's built directly into the instrument, and the footprint of data is much smaller, so your ability to take it to the cloud or, you know, what you have to store is much less. I think the turnaround time customers are asking, they're like, "It's 24 hours, right? It's not like, is it 23 or is it 24." You know, they're really thinking about they want to turn over to like loading their sequencer again. We're telling them, "Well, we think we could, it could even be better than 24," and that's exciting for them. I think they're, you know, these customers have maximized efficiency of human capital, of, you know, space, of, you know. They're really keen on how they make the best use of their operation. Yeah, I don't know if you were watching it, but the part of the presentation on the that innovation run that got the loudest applause was when we talked about ambient shipping. Biggest surprise. You know, yeah, it was far and away the biggest, and we did get customers in tears saying, "This now enables sequencing to come to my country," right? In a way that it just couldn't before. To the question you asked, there were customers in the US who were saying. I've actually been to that customer where they have these unpacking parties. They literally will stop the lab, take everybody from the lab, go down to the docks, and then everybody in the lab is responsible for, you know, taking out the consumables, getting the consumables back up to the lab. So it does actually stop the work happening in the lab in some labs, just when they have these big deliveries show up. You know, it's, you know, less freezer space is required, which is money that can be repurposed. It's labor savings. It's space savings. I think it'll be one of the underappreciated big deals of what we delivered. Yeah. Then maybe your last question, which is around the technology, right? The XLEAP-SBS, right? Can be shipped. You know, it can be, you know, in a warehouse in the winter in Anchorage, Alaska, right? Then used immediately. It could be sitting on a truck in the desert in Dubai and be used immediately. There's no other SBS chemistry that has that capability. Nobody else can do that. That I'm aware of. It's 100% because of inventing the new chemistry. I think I also mentioned, we test it and see. I mean, if it was possible on the older chemistry, we would've done it, right? That's why it was a long-term dream, and that's why if you're using that older chemistry, I mean, it's a proven impossibility. Okay. I'm gonna ask just one quick clarifying question from Vijay Kumar at Evercore. He's just asking on the margin question you asked earlier, can operating margins get back to the high 20s% in 2024 without GRAIL? If GRAIL's not here, does that still work for the core business? The high 20s%. I don't think we've given any kind of guidance. Yes, are you asking about specific to 2024? Yeah. 2024. We haven't given Yeah s pecific dates like that, no. We've talked about long-term expansion. Everything we've talked about is without GRAIL. Yes. We haven't given a specific That's a point I think we should clarify, is just all the long-term targets are core business only, and we haven't given longer term view on GRAIL, so everything is just related to the core business. I'd like to ask one more, just to close this out and really to Francis, if this is all right. Obviously we covered a ton of ground today. There were a lot of great things to talk about. What should the audience, both here in the room and online, what are the big few things they should take away? Sure. Let me start by saying that, you know, we at Illumina are facing a very large and growing market opportunity, right? It keeps growing as new areas of research open up clinical areas for us. We're incredibly well-positioned, made, and yet even better positioned with the portfolio we released last week. That's just representative of the innovation engine that we've built and the commercial engine that we've built. Those two combined position us very well, you know, to go after that TAM. We have a number of, you know, sort of tailwinds, not just the TAM, but also our competitive position, the strength of our infrastructure around the world, the launch of an upgrade cycle right now. The accelerating penetration in the clinical cycle. That all combine to give us line of sight into a mid-teens growth opportunity, you know, over the long term for Illumina. That's incredibly exciting, and we're very fired up about that because that moves us even closer to our mission of improving human health by unlocking the power of the genome. Great. Well, I know we didn't get to everyone's questions, so if you have a burning question, please send it to me. It's sschwartz@illumina.com. Also online, we have your questions. Certainly get back to everyone that we can. I wanna thank our presenters for spending time with us today. Hopefully you had a chance to learn a great deal about Illumina. It gave you a lot more to think about. I wanna thank all of our members of the audience, both in person and online, for spending time with us today. For those in the room, we actually have lunch upstairs if you'd like to join us. For everybody online, I hope you have a great rest of the day. Thank you.