– Revenue Growth of 126%, to $139.5 million –
– GAAP EPS of $(0.02); Non-GAAP EPS of $0.06 –
– Strong Growth in Key Member Engagement Metrics –
MOUNTAIN VIEW, Calif., Nov. 3, 2011 (GLOBE NEWSWIRE) -- LinkedIn Corporation (NYSE:LNKD), the world's largest professional network on the Internet, today reported its financial results for the third quarter ended September 30, 2011:
- Revenue for the third quarter was $139.5 million, an increase of 126% compared to $61.8 million for the third quarter of 2010
- Net loss for the third quarter was $1.6 million, compared to net income of $4.0 million for the third quarter of 2010; Non-GAAP net income for the third quarter was $6.6 million, compared to $6.0 million for the third quarter of 2010. Non-GAAP measures exclude tax-effected stock-based compensation expense and tax-effected amortization of acquired intangible assets
- Adjusted EBITDA for the third quarter was $24.7 million, or 18% of revenue, compared to $11.1 million for the third quarter of 2010, or 18% of revenue
- GAAP EPS for the third quarter was $(0.02); Non-GAAP EPS for the third quarter was $0.06
- Members grew to 131.2 million, an increase of 63% from the third quarter of 2010
- Average comScore unique visitors of 87.6 million per month, an increase of 64% from the third quarter of 2010; total comScore page views of 7.6 billion, an increase of 51% from the third quarter of 2010
"LinkedIn had a strong third quarter, with significant, broad-based growth across all of our revenue streams, member engagement metrics, geographies, and sales channels," said Jeff Weiner, CEO of LinkedIn. "Our results underscore the long-term strength of our global platform and our business model."
Third Quarter Financial Details and Operating Summary
LinkedIn reported revenue of $139.5 million for the quarter ended September 30, 2011, an increase of 126% compared to the third quarter of 2010, and the 8th straight quarter of accelerated revenue growth.
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Hiring Solutions: Revenue from Hiring Solutions products totaled $71.0 million, an increase of 160% compared to the third quarter of 2010. Hiring Solutions revenue represented 51% of total revenue in the third quarter of 2011, compared to 48% in the second quarter of 2011 and 44% in the third quarter of 2010.
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Marketing Solutions: Revenue from Marketing Solutions products totaled $40.1 million, an increase of 113% compared to the third quarter of 2010. Marketing Solutions revenue represented 29% of total revenue in the third quarter of 2011, compared to 32% in the second quarter of 2011 and 31% in the third quarter of 2010.
- Premium Subscriptions: Revenue from Premium Subscriptions products totaled $28.4 million, an increase of 81% compared to the third quarter of 2010. Premium Subscriptions represented 20% of total revenue in the third quarter of 2011, compared to 20% in the second quarter of 2011 and 25% in the third quarter of 2010.
Revenue from the U.S. totaled $94.0 million, and represented 67% of total revenue in the third quarter of 2011. Revenue from international totaled $45.5 million, and represented 33% of total revenue in the third quarter of 2011.
Revenue from the field sales channel totaled $74.5 million, and represented 53% of total revenue in the third quarter of 2011. Revenue from the online, direct sales channel totaled $65.0 million, and represented 47% of total revenue in the third quarter of 2011.
GAAP net loss for the third quarter was $1.6 million, compared to net income of $4.0 million for the third quarter of 2010. Non-GAAP net income for the third quarter was $6.6 million, compared to $6.0 million in the third quarter of 2010.
Adjusted EBITDA was $24.7 million in the third quarter of 2011, or 18% of revenue, compared to $11.1 million in the third quarter of 2010, or 18% of revenue.
GAAP EPS was $(0.02) based on 96.3 million fully-diluted weighted shares outstanding compared to $0.02 for the third quarter of 2010 based on 46.6 million fully-diluted weighted shares outstanding; Non-GAAP EPS was $0.06 based on 107.5 million fully-diluted weighted shares outstanding compared to $0.07 for the third quarter of 2010 based on 92.2 million fully-diluted weighted shares outstanding.
"The company posted its eighth straight quarter of accelerated revenue growth and achieved record engagement on the LinkedIn platform," said Steve Sordello, CFO of LinkedIn. "We delivered strong adjusted EBITDA and record levels of operating and free cash flow. LinkedIn plans to maintain a long-term perspective with investment in our key strategic areas."
For additional information, please see the "Selected Company Metrics and Financials" page, updated through the end of the third quarter of 2011, on LinkedIn's Investor Relations site.
Third Quarter Highlights and Strategic Announcements
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LinkedIn unveiled revamped mobile apps for iOS and Android, as well as a new mobile web experience. Mobile page views are up more than 400% year over year, and accounted for more than 10% of total LinkedIn page views and more than 12% of total unique visits in the quarter.
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LinkedIn extended its platform with the launch of Apply with LinkedIn, which allows any company or organization to let people apply for jobs using their LinkedIn profile and leverage their LinkedIn connections. Hundreds of thousands of job applications have been submitted to date through Apply with LinkedIn.
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LinkedIn introduced new profile sections designed to enable students and recent college graduates, the site's fastest-growing demographic, to add projects, awards, and coursework experience to their professional profiles.
- LinkedIn added to its European presence with the opening of its first office in Germany. Including the opening of an office in Japan in October 2011, LinkedIn now has 14 offices outside the United States.
Business Outlook
As of today, LinkedIn is providing guidance for the fourth quarter of 2011 and updating guidance for the full year 2011 on both revenue and adjusted EBITDA. LinkedIn is also initiating guidance for depreciation & amortization and stock-based compensation.
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Q4 FY11 Guidance: Revenue for the fourth quarter of 2011 is projected to be in the range of $154 million to $158 million. For the fourth quarter of 2011, the company expects to report adjusted EBITDA of $19 million to $21 million. The company expects depreciation and amortization in the range of $14 million to $16 million, and stock-based compensation in the range of $10 million to $12 million.
- Full Year FY11 Guidance: Revenue for the full year of 2011 is projected to be in the range of $508 million to $512 million. For the full year of 2011, the company expects to report adjusted EBITDA of $83 million to $85 million. The company expects depreciation and amortization in the range of $43 million to $45 million, and stock-based compensation in the range of $29 million to $31 million.
Quarterly Conference Call
LinkedIn plans to host a webcast/conference call to discuss its third quarter 2011 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 November 3, 2011 through November 10, 2011 at 9:00 p.m. Pacific Time. To listen to the telephone replay, call (855) 859-2056, access code 18194888.
About LinkedIn
Founded in 2003, LinkedIn connects the world's professionals to make them more productive and successful. With more than 135 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 North America, as well as throughout Europe, Asia and Australia.
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' operating results.
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 results.
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 operations.
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.
Dilutive shares under the treasury stock method. During the third quarter of 2011, the company excluded certain potential common shares from its GAAP diluted shares because their effect would have been anti-dilutive. On a non-GAAP basis, these shares would have been dilutive. As a result, the company has included the impact of these shares in the calculation of its non-GAAP diluted net income per share under the treasury stock method.
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 (expense) and provision for income taxes, which are reconciling items between net income (loss) and adjusted EBITDA. As items that impact net income (loss) 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 (loss) is not available without unreasonable effort.
Safe Harbor Statement
"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This press release contains forward-looking statements about our planned investments in key strategic areas, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the fourth quarter of 2011 and the full fiscal year. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any such 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 short operating history in a new and unproven market; engagement of its members; the price volatility of its Class A common stock; 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; 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 in the market for online professional networks; 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 Form 10-Q that will be filed for the quarter ended September 30, 2011. 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 November 3, 2011, and LinkedIn undertakes no duty to update this information.
| LINKEDIN CORPORATION | ||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (In thousands) | ||
| (Unaudited) | ||
|
September 30, 2011 |
December 31, 2010 |
|
| ASSETS | ||
| CURRENT ASSETS: | ||
| Cash and cash equivalents | $ 366,806 | $ 92,951 |
| Short-term investments | 20,922 | -- |
| Accounts receivable (net of allowance for doubtful accounts of $4,022 and $2,672 at September 30, 2011 and December 31, 2010, respectively) | 74,652 | 58,263 |
| Deferred commissions | 8,412 | 8,684 |
| Prepaid expenses and other current assets | 12,356 | 5,767 |
| Income tax receivable | 3,154 | 3,090 |
| Deferred income taxes | 3,451 | 3,451 |
| Total current assets | 489,753 | 172,206 |
| Property and equipment, net | 105,070 | 56,743 |
| Goodwill | 1,564 | -- |
| Intangible assets, net | 3,769 | 5,232 |
| Other assets | 4,912 | 4,007 |
| TOTAL ASSETS | $ 605,068 | $ 238,188 |
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | ||
| CURRENT LIABILITIES: | ||
| Accounts payable | $ 7,900 | $ 2,064 |
| Accrued liabilities | 61,142 | 38,003 |
| Deferred revenue | 114,127 | 64,985 |
| Income tax payable | 752 | 420 |
| Total current liabilities | 183,921 | 105,472 |
| LONG TERM LIABILITIES | 2,015 | 1,861 |
| DEFERRED TAX LIABILITIES | 14,259 | 6,625 |
| Total liabilities | 200,195 | 113,958 |
| COMMITMENTS AND CONTINGENCIES | ||
| REDEEMABLE CONVERTIBLE PREFERRED STOCK | -- | 87,981 |
| STOCKHOLDERS' EQUITY: | ||
| Convertible preferred stock | -- | 15,846 |
| Class A and Class B common stock | 10 | 4 |
| Additional paid-in capital | 404,529 | 25,074 |
| Accumulated other comprehensive income (loss) | 13 | (3) |
| Accumulated earnings (deficit) | 321 | (4,672) |
| Total stockholders' equity | 404,873 | 36,249 |
| TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | $ 605,068 | $ 238,188 |
| LINKEDIN CORPORATION | ||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Net revenue | $ 139,476 | $ 61,792 | $ 354,448 | $ 161,403 |
| Costs and expenses: | ||||
| Cost of revenue (exclusive of depreciation and amortization shown separately below) | 22,096 | 11,835 | 57,282 | 29,982 |
| Sales and marketing | 46,074 | 14,831 | 111,454 | 38,340 |
| Product development | 35,022 | 17,188 | 90,171 | 44,151 |
| General and administrative | 20,121 | 9,092 | 50,408 | 23,431 |
| Depreciation and amortization | 11,555 | 4,845 | 29,316 | 12,986 |
| Total costs and expenses | 134,868 | 57,791 | 338,631 | 148,890 |
| Income from operations | 4,608 | 4,001 | 15,817 | 12,513 |
| Other income (expense), net | (1,788) | 434 | (1,328) | (269) |
| Income before income taxes | 2,820 | 4,435 | 14,489 | 12,244 |
| Provision for income taxes | 4,418 | 475 | 9,496 | 2,176 |
| Net income (loss) | $ (1,598) | $ 3,960 | $ 4,993 | $ 10,068 |
| Net income (loss) attributable to common stockholders | $ (1,598) | $ 915 | $ 4,993 | $ 1,853 |
| Net income (loss) per share attributable to common stockholders: | ||||
| Basic | $ (0.02) | $ 0.02 | $ 0.07 | $ 0.04 |
| Diluted | $ (0.02) | $ 0.02 | $ 0.05 | $ 0.04 |
| Weighted-average shares used to compute net income (loss) per share attributable to common stockholders: | ||||
| Basic | 96,276 | 42,515 | 69,992 | 42,239 |
| Diluted | 96,276 | 46,601 | 102,613 | 45,486 |
| LINKEDIN CORPORATION | ||||
| SUPPLEMENTAL REVENUE INFORMATION | ||||
| (In thousands) | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Revenue by product: | ||||
| Hiring Solutions | $ 70,995 | $ 27,274 | $ 175,948 | $ 65,926 |
| Marketing Solutions | 40,072 | 18,836 | 106,325 | 51,370 |
| Premium Subscriptions | 28,409 | 15,682 | 72,175 | 44,107 |
| Total | $ 139,476 | $ 61,792 | $ 354,448 | $ 161,403 |
| Revenue by geography: | ||||
| United States | $ 94,005 | $ 45,730 | $ 241,864 | $ 118,564 |
| International | 45,471 | 16,062 | 112,584 | 42,839 |
| Total | $ 139,476 | $ 61,792 | $ 354,448 | $ 161,403 |
| Revenue by channel: | ||||
| Field sales | $ 74,465 | $ 33,552 | $ 191,792 | $ 87,438 |
| Online sales | 65,011 | 28,240 | 162,656 | 73,965 |
| Total | $ 139,476 | $ 61,792 | $ 354,448 | $ 161,403 |
| LINKEDIN CORPORATION | ||||
| RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | ||||
| (In thousands, except per share data) | ||||
| (Unaudited) | ||||
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||
| 2011 | 2010 | 2011 | 2010 | |
| Non-GAAP net income and net income per share: | ||||
| GAAP net income (loss) | $ (1,598) | $ 3,960 | $ 4,993 | $ 10,068 |
| Add back: stock-based compensation | 8,498 | 2,231 | 19,156 | 6,120 |
| Add back: amortization of intangible assets | 809 | 132 | 2,480 | 239 |
| Income tax effect of non-GAAP adjustments | (1,077) | (316) | (3,469) | 219 |
| NON-GAAP NET INCOME | $ 6,632 | $ 6,007 | $ 23,160 | $ 16,646 |
| GAAP diluted shares | 96,276 | 46,601 | 102,613 | 45,486 |
| Add back: assumed preferred stock conversion | -- | 45,648 | -- | 45,645 |
| Add back: dilutive shares under the treasury stock method | 11,208 | -- | -- | -- |
| NON-GAAP DILUTED SHARES | 107,484 | 92,249 | 102,613 | 91,131 |
| NON-GAAP DILUTED NET INCOME PER SHARE | $ 0.06 | $ 0.07 | $ 0.23 | $ 0.18 |
| Adjusted EBITDA: | ||||
| Net income (loss) | $ (1,598) | $ 3,960 | $ 4,993 | $ 10,068 |
| Provision for income taxes | 4,418 | 475 | 9,496 | 2,176 |
| Other (income) expense, net | 1,788 | (434) | 1,328 | 269 |
| Depreciation and amortization | 11,555 | 4,845 | 29,316 | 12,986 |
| Stock-based compensation | 8,498 | 2,231 | 19,156 | 6,120 |
| ADJUSTED EBITDA | $ 24,661 | $ 11,077 | $ 64,289 | $ 31,619 |