Linkedin Corporation : LinkedIn Announces First Quarter 2012 Financial Results
05/04/2012 | 12:48am CET
Mountain View, Calif. -- May 3, 2012 -- LinkedIn
Revenue for the first quarter was $188.5 million, an
increase of 101% compared to $93.9 million in the first
quarter of 2011.
Net income for the first quarter was $5.0 million,
compared to net income of $2.1 million for the first
quarter 2011. Non-GAAP net income for the first
quarter was $16.9 million, compared to $5.8 million for
the first quarter of 2011. Non-GAAP measures
exclude tax-affected stock-based compensation expense and
tax-affected amortization of acquired intangible assets.
Adjusted EBITDA for the first quarter was $38.1 million,
or 20% of revenue, compared to $13.3 million for the
first quarter of 2011, or 14% of revenue.
GAAP EPS for the first quarter was $0.04; Non-GAAP EPS
for the first quarter was $0.15.
"LinkedIn's solid performance in the first quarter built on
the company's momentum in 2011," said Jeff Weiner, CEO of
LinkedIn. "We saw strength across all key metrics from
member signups and engagement to significant revenue growth
across our three product lines."
First Quarter Financial Details and Operating Summary
LinkedIn reported revenue of $188.5 million for the first
quarter ended March 31, 2012, an increase of 101% compared
to the first quarter of 2011, and the 7th straight quarter
of greater than 100% year-over-year growth.
Hiring Solutions: Revenue from Hiring Solutions products
totaled $102.6 million, an increase of 121% compared to
the first quarter of 2011. Hiring Solutions revenue
represented 54% of total revenue in the first quarter of
2012, compared to 49% in the first quarter of 2011.
Marketing Solutions: Revenue from Marketing Solutions
products totaled $48.0 million, an increase of 73%
compared to the first quarter of 2011. Marketing
Solutions revenue represented 26% of total revenue in the
first quarter of 2012, compared to 30% in the first
quarter of 2011.
Premium Subscriptions: Revenue from Premium Subscriptions
products totaled $37.9 million, an increase of 91%
compared to the first quarter of 2011. Premium
Subscriptions represented 20% of total revenue in the
first quarter of 2012, compared to 21% of revenue in the
first quarter of 2011.
Revenue from the U.S. totaled $120.8 million, and
represented 64% of total revenue in the first quarter of
2012. Revenue from international markets totaled
$67.6 million, and represented 36% of total revenue in the
first quarter of 2012.
Revenue from the field sales channel totaled $101.5
million, and represented 54% of total revenue in the first
quarter of 2012. Revenue from the online, direct
sales channel totaled $87.0 million, and represented 46% of
total revenue in the first quarter of 2012.
GAAP net income for the first quarter was $5.0 million,
compared to net income of $2.1 million for the first
quarter of 2011. Non-GAAP net income for the first
quarter was $16.9 million, compared to $5.8 million in the
first quarter of 2011.
Adjusted EBITDA was $38.1 million for the first quarter of
2012, or 20% of revenue, compared to $13.3 million for the
first quarter of 2011, or 14% of revenue.
GAAP EPS was $0.04 based on 111.3 million fully-diluted
weighted shares outstanding compared to $0.00 for the first
quarter of 2011 based on 51.5 million fully-diluted
weighted shares outstanding. Non-GAAP EPS was $0.15
based on 111.3 million fully-diluted weighted shares
outstanding compared to $0.06 for the first quarter of 2011
based on 97.1 million fully-diluted weighted shares
"LinkedIn grew over 100% for the seventh consecutive
quarter and achieved records for adjusted EBITDA, operating
and free cash flow," said Steve Sordello, CFO of LinkedIn.
"We remain focused on investing in our technology and
product platform as well as expanding our business in new
international markets and customer segments."
For additional information, please see the "Selected
Company Metrics and Financials" page on LinkedIn's Investor
First Quarter Highlights and Strategic Announcements
In January, LinkedIn began an early rollout of Talent
Pipeline with five charter customers including PepsiCo,
Pfizer, Red Hat, Netflix, and First Citizens Bank.
Available to all Recruiter customers in Q2, Talent
Pipeline allows recruiters and hiring managers to manage,
track, and stay in touch with all their target candidates
regardless of source.
In February, LinkedIn launched the Follow Company button
for the more than two million companies with active
LinkedIn company pages, making it easier for
professionals to follow those companies on LinkedIn from
anywhere on the web.
In March, LinkedIn introduced a new version of People You
May Know. This new streamlined tool makes it even easier
for professionals to grow their networks through a
simpler, more visual user experience.
In the first quarter, LinkedIn continued its global
growth strategy by adding two new languages (Czech and
Dutch) to the LinkedIn platform, and an office in Madrid.
LinkedIn is providing guidance for the second quarter of
2012, and revising guidance for the full year 2012 on
revenue, adjusted EBITDA, depreciation and amortization,
and stock-based compensation.
Q2 2012 Guidance: Revenue for the second quarter of 2012
is projected to range between $210 million to $215
million. The company expects adjusted EBITDA to
range between $40 million and $42 million. The
company expects depreciation and amortization to range
between $18.5 million and $19.5 million, and stock-based
compensation to range between $18 million and $19
Full Year 2012 Guidance: The company has revised upward
its expected revenue range to $880 million to $900
million from the prior range of $840 million to $860
million. The company has also revised upward its
expected adjusted EBITDA range to $170 million to $175
million from the prior range of $155 million to $165
million. The projected range for 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.
Quarterly Conference Call
LinkedIn will host a webcast/conference call to discuss its
first quarter 2012 financial results and business outlook
today at 2:00 p.m. Pacific Time. Jeff Weiner and Steve
Sordello will host the webcast, which can be viewed on the
investor relations section of the LinkedIn website at http://investors.linkedin.com/.
This call will contain forward-looking statements and other
material information regarding the company's financial
and operating results. Following completion of the call, a
recorded replay of the webcast will be available on the
website. For those without access to the Internet, a replay
of the call will be available beginning at 5:00 p.m.
Pacific Time on May 3, 2012 through May 10, 2012 at 9:00
p.m. Pacific Time. To listen to the telephone replay, call
(855) 859-2056, access code 70674424.
Management will participate in upcoming financial Q&A
discussions at an investment industry event on May
9th. LinkedIn will furnish a link to this event on
its investor relations website, http://investors.linkedin.com/
for both the live and archived webcasts.
Founded in 2003, LinkedIn connects the world's
professionals to make them more productive and successful.
With 161 million members worldwide, including executives
from every Fortune 500 company, LinkedIn is the world's
largest professional network on the Internet. The company
has a diversified business model with revenue coming from
member subscriptions, marketing solutions and hiring
solutions. Headquartered in Silicon Valley, LinkedIn also
has offices across the Americas, Europe, and the
Non-GAAP Financial Measures
To supplement its consolidated financial statements, which
are prepared and presented in accordance with GAAP, the
company uses the following non-GAAP financial measures:
adjusted EBITDA, non-GAAP net income, and non-GAAP EPS
(collectively the "non-GAAP financial measures"). The
presentation of this financial information is not intended
to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and
presented in accordance with GAAP. The company uses these
non-GAAP financial measures for financial and operational
decision making and as a means to evaluate period-to-period
comparisons. The company believes that they provide useful
information about operating results, enhance the overall
understanding of past financial performance and future
prospects, and allow for greater transparency with respect
to key metrics used by management in its financial and
operational decision making.
The company excludes the following items from one or more
of its non-GAAP measures:
Stock-based compensation. The company excludes stock-based
compensation because it is non-cash in nature and because
the company believes that the non-GAAP financial measures
excluding this item provide meaningful supplemental
information regarding operational performance and
liquidity. The company further believes this measure is
useful to investors in that it allows for greater
transparency to certain line items in its financial
statements and facilitates comparisons to competitors'
Amortization of acquired intangible assets. The company
excludes amortization of acquired intangible assets because
it is non-cash in nature and because the company believes
that the non-GAAP financial measures excluding this item
provide meaningful supplemental information regarding
operational performance and liquidity. In addition,
excluding this item from various non-GAAP measures
facilitates internal comparisons to historical operating
results and comparisons to competitors' operating
Income tax effect of non-GAAP adjustments. Excluding the
income tax effect of non-GAAP adjustments from the
provision for income taxes assists investors in
understanding the tax provision related to those
adjustments and the effective tax rate related to ongoing
Assumed preferred stock conversion. As a result of the
company's initial public offering, all outstanding shares
of preferred stock were automatically converted into shares
of Class B common stock. Consequently, non-GAAP diluted net
income per share has been calculated assuming the
conversion of all outstanding shares of preferred stock
into shares of Class B common stock.
For more information on the non-GAAP financial measures,
please see the "Reconciliation of GAAP to non-GAAP
Financial Measures" table in this press release. This
accompanying table has more details on the GAAP financial
measures that are most directly comparable to non-GAAP
financial measures and the related reconciliations between
these financial measures. Additionally, the company has not
reconciled adjusted EBITDA guidance to net income guidance
because it does not provide guidance for other income , net
and provision (benefit) for income taxes, which are
reconciling items between net income and adjusted EBITDA.
As items that impact net income are out of the company's
control and/or cannot be reasonably predicted, the company
is unable to provide such guidance. Accordingly, a
reconciliation to net income is not available without
Safe Harbor Statement
"Safe Harbor" statement under the Private Securities
Litigation Reform Act of 1995: This press release and the
accompanying conference call contain forward-looking
statements about our products, including our planned
investments in key strategic areas, certain non-financial
metrics, such as member growth and engagement, and our
expected financial metrics such as revenue, adjusted
EBITDA, depreciation and amortization and stock-based
compensation for the second quarter of 2012 and the full
fiscal year 2012. The achievement of the matters covered by
such forward-looking statements involves risks,
uncertainties and assumptions. If any of these risks
or uncertainties materialize or if any of the assumptions
prove incorrect, the company's results could differ
materially from the results expressed or implied by the
forward-looking statements the company makes.
The risks and uncertainties referred to above include - but
are not limited to - risks associated with: the company's
limited operating history in a new and unproven market;
engagement of our members; the price volatility of our
Class A common stock; general economic conditions;
expectations regarding the return on our strategic
investments; execution of our plans and strategies,
including with respect to acquisitions of other companies;
expectations regarding the company's ability to timely and
effectively scale and adapt existing technology and network
infrastructure to ensure that its website is accessible at
all times with short or no perceptible load times; security
measures and the risk that the company's website may be
subject to attacks that degrade or deny the ability of
members to access the company's solutions; our ability to
maintain our rate of revenue growth; our ability to
accurately track our key metrics internally; members and
customers curtailing or ceasing to use the company's
solutions; the company's core value of putting members
first, which may conflict with the short-term interests of
the business; privacy issues; increasing competition; our
ability to manage our growth and retain our employees; and
the dual class structure of the company's common stock.
Further information on these and other factors that could
affect the company's financial results is included in
filings it makes with the Securities and Exchange
Commission from time to time, including the section
entitled "Risk Factors" in the company's Annual Report on
Form 10-K that was filed for the year ended December 31,
2011, and additional information will also be set forth in
our Form 10-Q that will be filed for the quarter ended
March 31, 2012, which should read in conjunction with these
financial results. These documents are available on
the SEC Filings section of the Investor Information section
of the company's website at http://investors.linkedin.com/.
All information provided in this release and in the
attachments is as of May 3, 2012, and LinkedIn undertakes
no duty to update this information.
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