LinkedIn Soars After Blowing Past Earnings and Raising Guidance (LNKD)

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LinkedIn Corporation (NYSE: LNKD) has reported its latest earnings report and investors are going to be watching closely for valuation concerns versus growth. The professional social network reported some 161 million members. It also turned in revenue growth of 101% year-over-year to $188.5 million. GAAP EPS for the first quarter was $0.04; Non-GAAP EPS for the first quarter was $0.15. Thomson Reuters had estimates of $0.09 EPS on non-GAAP earnings and $178.6 million in revenue.

Net income was up over 100% to $5.0 million for the first quarter; and the non-GAAP net income for the first quarter was up closer to 200% to $16.9 million (versus $5.8 million for the first quarter of 2011). LinkedIn’s adjusted EBITDA was $38.1 million in the first quarter, or 20% of revenue, compared to $13.3 million for the first quarter of 2011, or 14% of revenue. Revenue from Hiring Solutions rose 121% to $102.6 million, or 54% of total revenue in the first quarter of 2012 versus 49% in the first quarter of 2011.

Revenue from Marketing Solutions rose 73% to $48.0 million, or 26% of total revenue in the first quarter of 2012 versus 30% in the first quarter of 2011.

Revenue from Premium Subscriptions rose 91% to $37.9 million, or 20% of total revenue in the first quarter of 2012 versus 21% of revenue in the first quarter of 2011.

Revenue from the U.S. was $120.8 million and represented 64% of total revenue in the first quarter; Revenue from international markets was $67.6 million and represented 36% of total revenue in the first quarter.

Q2-2012 Guidance: Revenue for the second quarter of 2012 is projected to range between $210 million to $215 million and Thomson Reuters has an estimate of $207.93 million. Other targets as follows: adjusted EBITDA between $40 million and $42 million; Depreciation and amortization between $18.5 million and $19.5 million; and stock-based compensation between $18 million and $19 million.

Full Year 2012 Guidance: Raised revenues to a new range of $880 million to $900 million from the prior range of $840 million to $860 million; Thomson Reuters has estimates of $876.8 million. LinkedIn sees the following adjustment as well: revised its expected adjusted EBITDA range to $170 million to $175 million from the prior range of $155 million to $165 million; depreciation and amortization has increased to $75 million to $85 million from $70 million to $80 million; and stock-based compensation has increased to $80 million to $90 million from $65 million to $75 million.

LinkedIn shares closed up 2.8% at $109.41 and the post-IPO range of less than the last year has been $55.98 to $122.70. It also has a market cap of $11.2 billion. At the current consensus estimate from Thomson Reuters for 2012, LinkedIn’s closing price generates a forward valuation of 173-times earnings. Admittedly, that is a bit out of whack considering that LinkedIn has beat on earnings and guided most other metrics higher.

LinkedIn shares are now up 10% or so at $121.00 in the after-hours session. If this level remains, it seems that another opportunity for shareholders to sell more shares may come about.

JON C. OGG

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