Omnicell, Inc. (NASDAQ:OMCL) Q2 2015 Earnings Conference Call - Final Transcript
Jul 30, 2015 • 04:30 pm ET
our orders for first time installations were back to a more normal mix of new customers and therefore, our forecast for the rest of the year indicates we will return to a more normal mix of customers installing our solutions.
While revenue was lower than expected, the third major I wanted to highlight non-GAAP earnings per share is meeting our internal expectations due to the strong product margin mix we had in Q1 and our internal management of costs and expenses.
But here too, we expect earnings for the balance of the year to be consistent with our previous annual growth guidance. So many times we're asked about external forces affecting our customers' propensity to install such as distraction with other IT projects or customers efforts to conserve cash.
We have not detected any external forces affecting our customers. We simply have more very large competitive conversions and those customers are planning their projects very carefully, which takes time. While we do help our customers actively manage projects to completion, we mostly tried and installed at our customers' own pace.
If our customers' pace is slower as it was in Q2, then the installations take longer. We also get asked if there are any actions by competitors that slows the installation cycle. The deals in our backlog are fully contracted with us and the competitive part of the sales cycle is over.
The installation cycle is driven by our customers' organizational capacity, not by our competitors. We often talk about the backlog giving us very good visibility. And having seven months to nine months of forward revenue and backlog for our Automation and Analytics segment does give us good visibility.
The last two quarters have demonstrated that even with that visibility we cannot always accurately forecast when large multi-hostile systems will complete their installation cycles. So Randy and I will both discuss this morning our prepared remarks. At this point let me turn the call over to Randy to cover more about the business.
Thanks, Rob. While Q2 revenue was lighter than expected, the fundamentals of our business have not changed. The business indicator is that we continue to close a solid mix of competitive wins and our existing customers continue to expand their implementations. 31% of second quarter orders in Automation and Analytics segment were from customers making first time installations of Omnicell systems, underscoring the competitiveness of our solutions.
Over three-fourth of those were competitive conversions and the remainder was from Greenfield customers who have never automated before. These new customers are often attracted to us because of our differentiated solutions, which comprise the first leg of our growth strategy.
For example, we announced LCMC system has selected Omnicell for their new University Medical Center New Orleans hospital.
Working collaboratively, LCMC Health and Omnicell seek to bring industry-leading levels of quality and safety to medication management and the new facility through Omnicell's medication Automation and Analytics offering that helped to improve workflow in the central pharmacy and clinical