LinkedIn Announces Third Quarter 2012 Financial Results

LinkedIn Announces Third Quarter 2012 Financial Results

MOUNTAIN VIEW, Calif., Nov. 1, 2012 (GLOBE NEWSWIRE) -- LinkedIn Corporation
(NYSE:LNKD), the world's largest professional network on the Internet with
more than 187 million members, reported its financial results for the third
quarter ended September 30, 2012:

  *Revenue for the third quarter was $252.0 million, an increase of 81%
    compared to $139.5 million in the third quarter of 2011.
    
  *Net income for the third quarter was $2.3 million, compared to a net loss
    of $1.6 million for the third quarter of 2011.Non-GAAP net income for the
    third quarter was $25.1 million, compared to $6.6 million for the third
    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 third quarter was $56.0 million, or 22% of
    revenue, compared to $24.7 million for the third quarter of 2011, or 18%
    of revenue.
    
  *GAAP diluted EPS for the third quarter was $0.02; Non-GAAP diluted EPS for
    the third quarter was $0.22.

"LinkedIn had a strong third quarter with all of our key operating and
financial metrics showing solid growth," said Jeff Weiner, CEO of LinkedIn.
"The last few months mark the most significant period of product development
in the company's history. This accelerated pace of innovation is fundamental
to our goal of driving greater engagement on the LinkedIn platform."

Third Quarter Financial Details and Operating Summary

  *Talent Solutions: Revenue from Talent Solutions (previously named Hiring
    Solutions) products totaled $138.4 million, an increase of 95% compared to
    the third quarter of 2011.Talent Solutions revenue represented 55% of
    total revenue in the third quarter of 2012, compared to 51% in the third
    quarter of 2011.
    
  *Marketing Solutions: Revenue from Marketing Solutions products totaled
    $64.0 million, an increase of 60% compared to the third quarter of
    2011.Marketing Solutions revenue represented 25% of total revenue in the
    third quarter of 2012, compared to 29% in the third quarter of 2011.
    
  *Premium Subscriptions: Revenue from Premium Subscriptions products totaled
    $49.6 million, an increase of 74% compared to the third quarter of 2011.
    Premium Subscriptions represented 20% of total revenue in the third
    quarter of 2012 and 2011.

Revenue from the U.S. totaled $162.4 million, and represented 64% of total
revenue in the third quarter of 2012.Revenue from international markets
totaled $89.7 million, and represented 36% of total revenue in the third
quarter of 2012.

Revenue from the field sales channel totaled $143.2 million, and represented
57% of total revenue in the third quarter of 2012.Revenue from the online,
direct sales channel totaled $108.9 million, and represented 43% of total
revenue in the third quarter of 2012.

GAAP net income for the third quarter was $2.3 million, compared to a net loss
of $1.6 million for the third quarter of 2011.Non-GAAP net income for the
third quarter was $25.1 million, compared to $6.6 million in the third quarter
of 2011.

Adjusted EBITDA for the third quarter was $56.0 million, or 22% of revenue,
compared to $24.7 million for the third quarter of 2011, or 18% of revenue.

GAAP diluted EPS was $0.02 based on 113.6 million fully-diluted weighted
shares outstanding compared to ($0.02) for the third quarter of 2011 based on
96.3 million fully-diluted weighted shares outstanding. Non-GAAP diluted EPS
was $0.22 based on 113.6 million fully-diluted weighted shares outstanding
compared to $0.06 for the third quarter of 2011 based on 107.5 million
fully-diluted weighted shares outstanding.

"Increased member activity led to sustained growth across our talent,
marketing, and premium product lines, resulting in record levels of adjusted
EBITDA as well as record operating and free cash flow," said Steve Sordello,
CFO of LinkedIn."We expect a strong finish to the year behind momentum in
both our engagement and monetization platforms."

For additional information, including new detail on the calculation of GAAP
and non-GAAP tax rates, please see the "Selected Company Metrics and
Financials" page on LinkedIn's Investor Relations site.

Third Quarter Highlights and Strategic Announcements

In the third quarter, LinkedIn:

  *Redesigned and simplified the Homepage to deliver a more social and
    relevant experience for our members. Homepage traffic has increased more
    than 60% since its introduction.
    
  *Introduced Notifications, which alerts members to activity relevant to
    their experiences on LinkedIn.The rollouts of Notifications and the new
    Homepage have resulted in record levels of comments, likes, and
    shares.Comments specifically have increased more than four times since
    June.
    
  *Launched Endorsements, a new and easy way for members to recognize
    colleagues for specific skills. Since the introduction in late September,
    LinkedIn members have generated more than 200 million endorsements to
    their colleagues, and the number of members editing their profiles has
    more than doubled versus last year.
    
  *Revamped Company Pages, at the center of the LinkedIn follower ecosystem,
    enable companies to engage with the professional audiences most valuable
    to them. In early October, we made the new Company Pages available to the
    more than 2.6 million organizations with an active company profile on
    LinkedIn.

Additionally, in October, LinkedIn unveiled new Profile pages and added two
new significant features to the LinkedIn content ecosystem -- the ability to
follow thought leaders on LinkedIn, and the ability for those luminaries to
publish longform content on the site.

Business Outlook

LinkedIn is providing guidance for the fourth quarter of 2012, and updating
guidance for the full year of 2012 on revenue, adjusted EBITDA, stock-based
compensation, and depreciation and amortization.

  *Q4 2012 Guidance: Revenue for the fourth quarter of 2012 is projected to
    range between $270 to $275 million.The company expects adjusted EBITDA to
    range between $58 and $60 million.The company expects stock-based
    compensation to range between $28 and $30 million and depreciation and
    amortization to range between $23 and $25 million.
    
  *Full Year 2012 Guidance: The company has revised its expected revenue
    range upward to $939 to $944 million from the prior range of $915 to $925
    million.The company has also revised upward its expected adjusted EBITDA
    range to $202 to $204 million from the prior range of $185 to $190
    million.The company now expects stock-based compensation to range between
    $87 and $89 million, while the range for depreciation and amortization is
    now $79 to $81 million.

Quarterly Conference Call

LinkedIn will host a webcast/conference call to discuss its third 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
athttp://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 8:00 p.m.
Pacific Time on November 1, 2012 through November 8, 2012 at 11:59 p.m.
Pacific Time. To listen to the telephone replay, call (855) 859-2056, access
code 37153422.

About LinkedIn

Founded in 2003, LinkedIn connects the world's professionals to make them more
productive and successful. With more than 187 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 revenues coming from talent solutions, marketing
solutions, and premium subscriptions. Headquartered in Silicon Valley,
LinkedIn has offices across theglobe.

The LinkedIn logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11096

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. The company adjusts non-GAAP net
income by including the income tax effects of excluding stock-based
compensation and the amortization of acquired intangible assets. The company
believes that the inclusion of the income tax effects provides additional
transparency to the overall or "after tax" effects of excluding these items
from non-GAAP net income.

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 either other income (expense), net,
or provision 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 unreasonable effort.

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 fourth 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 products, services
and solutions are accessible at all times with short or no perceptible load
times; security measures and the risk that the company may be subject to
attacks that degrade or deny the ability of members to access the company's
solutions or that our security measures may not be sufficient to prevent
unauthorized access to our member data; our ability to maintain our rate of
revenue growth and manage our expenses and investment plans; 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, litigation and regulatory issues; increasing competition;
our ability to manage our growth and retain our employees; the application of
US and international tax laws on our tax structure and any changes to such tax
laws; 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 September 30,
2012, which should be read in conjunction with these financial results. These
documents are available on the SEC Filings section of the Investor Relations
page of the company's website at http://investors.linkedin.com/. All
information provided in this release and in the attachments is as of November
1, 2012, and LinkedIn undertakes no duty to update this information.

LINKEDIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                                  September 30, December 31,
                                                  2012          2011
ASSETS                                                          
CURRENT ASSETS:                                                 
Cash and cash equivalents                          $270,853    $339,048
Short-term investments                             405,792      238,456
Accounts receivable (net of allowance for doubtful
accounts of $3,478 and $5,460at September 30,     156,404      111,372
2012 and December 31, 2011, respectively)
Deferred commissions                               15,583       13,594
Prepaid expenses                                  17,547       10,799
Other current assets                               18,924       12,658
Total current assets                               885,103      725,927
Property and equipment, net                        163,825      114,850
Goodwill                                           115,501      12,249
Intangible assets, net                             35,723       8,095
Other assets                                       28,480       12,576
TOTAL ASSETS                                       $1,228,632  $873,697
                                                               
                                                               
LIABILITIES AND STOCKHOLDERS' EQUITY                            
CURRENT LIABILITIES:                                            
Accounts payable                                   $48,904     $28,217
Accrued liabilities                                80,825       58,644
Deferred revenue                                   209,047      139,798
Total current liabilities                          338,776      226,659
DEFERRED TAX LIABILITIES                           42,420       18,551
OTHER LONG TERM LIABILITIES                        18,374       3,508
Total liabilities                                  399,570      248,718
COMMITMENTS AND CONTINGENCIES                                  
                                                               
STOCKHOLDERS' EQUITY:                                          
Class A and Class B common stock                   11           10
Additional paid-in capital                         811,412      617,629
Accumulated other comprehensive income            297          100
Accumulated earnings                              17,342       7,240
Total stockholders' equity                         829,062      624,979
                                                               
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $1,228,632  $873,697
                                                               

LINKEDIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                                                
                                  Three Months Ended    Nine Months Ended
                                  September 30,        September 30,
                                  2012       2011       2012       2011
                                                                
Net revenue                        $252,028 $139,476 $668,691 $354,448
                                                                
Costs and expenses:                                              
Cost of revenue (exclusive of
depreciation and amortization      33,778    22,096    89,278    57,282
shown separately below)
Sales and marketing                83,168    46,074    224,792   111,454
Product development                72,730    35,022    179,903   90,171
General and administrative         33,194    20,121    89,022    50,408
Depreciation and amortization      23,122    11,555    55,552    29,316
Total costs and expenses           245,992   134,868   638,547   338,631
                                                                
Income from operations             6,036     4,608     30,144    15,817
                                                                
Other income (expense), net        672       (1,788)   228       (1,328)
Income before income taxes         6,708     2,820     30,372    14,489
Provision for income taxes         4,406     4,418     20,270    9,496
Net income (loss)                  $2,302   $(1,598) $10,102  $4,993
                                                                
Net income (loss) per share of                                   
common stock:
Basic                              $0.02   $(0.02)  $0.10   $0.07
Diluted                            $0.02   $(0.02)  $0.09   $0.05
                                                                
Weighted-average shares used to
compute netincome (loss) per                                    
share:
Basic                              106,304   96,276    104,241   69,992
Diluted                            113,618   96,276    112,420   102,613
                                                                 

LINKEDIN CORPORATION
SUPPLEMENTAL REVENUE INFORMATION
(In thousands)
(Unaudited)
                                                            
                            Three Months Ended      Nine Months Ended
                            September 30,          September 30,
                            2012        2011        2012       2011
                                                            
Revenue by product:                                          
Talent Solutions             $138,433  $70,995   $362,585 $175,948
Marketing Solutions          64,036     40,072     175,091   106,325
Premium Subscriptions        49,559     28,409     131,015   72,175
Total                        $252,028  $139,476  $668,691 $354,448
                                                            
Revenue by geographic                              
region:
United States                $162,377  $94,005   $430,479 $241,864
Other Americas ^(1)          17,134     7,911      44,190    18,656
Total Americas               179,511    101,916    474,669   260,520
EMEA ^(2)                    54,530     28,911     147,432   74,501
APAC ^(3)                    17,987     8,649      46,590    19,427
Total                        $252,028  $139,476  $668,691 $354,448
                                                            
Revenue by channel:                                          
Field sales                  $143,176  $74,465   $374,095 $191,792
Online sales                 108,852    65,011     294,596   162,656
Total                        $252,028  $139,476  $668,691 $354,448
                                                            
                                                            
                            (1) Canada, Latin America and South America     
                            (2) Europe, the Middle East and Africa ("EMEA") 
                            (3) Asia-Pacific ("APAC")                    
                                                            

LINKEDIN CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
                                                                 
                                    Three Months Ended   Nine Months Ended
                                    September 30,        September 30,
                                    2012      2011       2012       2011
                                                                 
Non-GAAP net income and net income                                
per share:
GAAP net income (loss)               $2,302  $(1,598) $10,102  $4,993
Add back: stock-based compensation   26,798   8,498     58,747    19,156
Add back: amortization of intangible 3,770    809       6,929     2,480
assets
Income tax effect of non-GAAP        (7,732)  (1,077)   (15,655)  (3,469)
adjustments
NON-GAAP NET INCOME                  $25,138 $6,632   $60,123  $23,160
                                                                 
GAAP diluted shares                  113,618  96,276    112,420   102,613
Add back: dilutive shares under the  --      11,208    --       --
treasury stock method
NON-GAAP DILUTED SHARES              113,618  107,484   112,420   102,613
                                                                 
NON-GAAP DILUTED NET INCOME PER      $0.22   $0.06    $0.53    $0.23
SHARE
                                                                 
Adjusted EBITDA:                                                  
Net income (loss)                    $2,302  $(1,598) $10,102  $4,993
Provision for income taxes           4,406    4,418     20,270    9,496
Other (income) expense, net          (672)    1,788     (228)     1,328
Depreciation and amortization        23,122   11,555    55,552    29,316
Stock-based compensation             26,798   8,498     58,747    19,156
ADJUSTED EBITDA                      $55,956 $24,661  $144,443 $64,289
                                                                 

CONTACT: Press contact
         Hani Durzy
         hdurzy@linkedin.com
         650-605-0829

         Investor contact
         Matt Sonefeldt
         msonefeldt@linkedin.com
         650-605-0861

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