Illumina Inc. (NASDAQ:ILMN) Q2 2015 Earnings Conference Call - Final Transcript
Jul 21, 2015 • 05:00 pm ET
Jay T. Flatley
at whether, at some point in time we want to introduce that on the HiSeq 4000, but right now, we're not actively working on that feature.
Okay. Thanks. I'll hop back in the queue.
Our next question comes from the line of Doug Schenkel from Cowen & Company.
Hey, good afternoon, guys. So I think the first thing I want to do is just try to align order and placement commentary with the Q2 revenue model. Were there any timing dynamics that impacted the pacing of placements such as, but not limited to, funding? Really I guess what I'm getting at is were there some issues where customers wanted instruments but maybe weren't able to pay for them based on the timing of, say, when NIH funding becomes more available? And I guess related to that, the 20 to 30 instrument order rate guidance that you provided on a quarterly basis, I think that's new. You talked about shipment timing lumpiness. Would you be willing to say if you were in the 20 to 30 placement range this quarter?
Jay T. Flatley
Yeah, I'd say we were in that ballpark during the quarter, Doug. And we think that's going to be the rough range. Some quarters will be a bit higher, some might be a bit lower and that's why we've made the lumpy comment in the script. In terms of customer buying patterns, customers always want to buy more sequencers if they had infinite money and so it is the case that people who don't have money would want to get a sequencer earlier if they could. But that's not a unique thing to the second quarter.
I think what we saw in the second quarter was very strong orders but some labs are not ready to take delivery, and that was true in fact in some X's where we received orders for complete X systems, X Tens in fact, but the labs aren't ready to take those instruments, and so some of those shipments will be spread out over the next two to four quarters. That was true in the array business as well. We got some large array contracts that will ship over time, and I think that's why you see a pretty big gap between the order receipt rate and where the revenue wound up.
Okay. And then I guess the follow-up is really just sort of a simple guidance question. If you beat your internal expectations for Q2, if order backlog is now at a record level and if momentum built over the course of the quarter, I guess I'm just curious if you contemplated increasing full-year guidance, and if not, why? Thank you.
Jay T. Flatley
Well, we always contemplate what we do with the guidance, keeping it the same, raising it or lowering it based on what our expectations are. We do have a rich backlog, as we cited in the script, but we don't know exactly when these labs are going to be ready to take delivery and