LinkedIn Blows the Doors off Earnings Expectations

February 7, 2013 by Jon C. Ogg

LinkedIn Corp. (NYSE: LNKD) closed down ahead of earnings on Thursday. The professional social media network reported earnings of $0.35 in non-GAAP earnings per share ($40.2 million net income) and its sales grew by 81% to $303.6 million in revenue. The Thomson Reuters consensus estimates were $0.19 EPS and $279.5 million in revenue. We had already seen that LinkedIn had grown to more than 200 million users in January.

We would note that shares hit a new high but we would also note that investors need to pay close attention to the 2013 guidance below. Here is a breakdown of each of the three revenue centers:

  • Revenue from Talent Solutions grew 90% to $161.0 million. This represented 53% of total revenue in the fourth quarter of 2012, compared to 51% in the fourth quarter of 2011.
  • Revenue from Marketing Solutions products rose by 68% to $83.2 million. This represented 27% of total revenue in the fourth quarter of 2012, compared to 30% in the fourth quarter of 2011.
  • Revenue from Premium Subscriptions rose by 79% to $59.4 million. This represented 20% of total revenue in the fourth quarter of 2012 and 2011.
  • Revenue from the U.S. totaled $189.0 million and represented 62% of total revenue, while international markets totaled $114.6 million and represented 38% of total revenue in the fourth quarter of 2012.

Here is the guidance and the outlook for the first quarter and into the full year 2013:

  • Revenue is expected to range between $305 million and $310 million in the first quarter, while Thomson Reuters is at $301.1 million in sales. Adjusted EBITDA is expected to range between $67 million and $69 million.
  • Revenue for all of 2013 is now expected to rise to between $1.41 billion and $1.44 billion, while Thomson Reuters has a consensus of $1.44 billion. Adjusted EBITDA is expected to range between $315 million and $330 million.

Shares closed down 1.3% at $124.09 against a 52-week trading range of $74.32 to $127.45. As a reminder, its closing bell balance was $13.3 billion. The after-hours reaction has shares up 10% at $136.88, so if this holds then count this a new high for LinkedIn shares.

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