DNA sequencing pioneer Illumina typically takes advantage of the annual J.P. Morgan Healthcare Conference to make its most important hardware announcements of the year. Investors are hoping for news that foreshadows revived growth of sequencer sales.
Although two-thirds of Illumina's sales are comprised of consumables, sales of the sequencing instruments themselves are critical for sustaining the growth of the entire business. Each sequencer sold pulls through supply sales during the life of the product, so slower growth of instrument sales eventually leads to slower growth of supplies revenue. Some products in the line will deliver enough supply sales after only two years of use to equal the entire initial cost of the sequencer, so a lost instrument sale could have a delayed impact on company revenue of two or more times the price of the hardware itself.
Although two-thirds of Illumina's sales are comprised of consumables, sales of the sequencing instruments themselves are critical for sustaining the growth of the entire business. Each sequencer sold pulls through supply sales during the life of the product, so slower growth of instrument sales eventually leads to slower growth of supplies revenue. Some products in the line will deliver enough supply sales after only two years of use to equal the entire initial cost of the sequencer, so a lost instrument sale could have a delayed impact on company revenue of two or more times the price of the hardware itself.
