LinkedIn Announces Fourth Quarter and Full Year 2012 Financial Results

LinkedIn Announces Fourth Quarter and Full Year 2012 Financial Results

MOUNTAIN VIEW, Calif., Feb. 7, 2013 (GLOBE NEWSWIRE) -- LinkedIn Corporation
(NYSE:LNKD), the world's largest professional network on the Internet, with
more than 200 million members, reported its financial results for the fourth
quarter and full year ended December 31, 2012:

  *Revenue for the fourth quarter was $303.6 million, an increase of 81%
    compared to $167.7 million in the fourth quarter of 2011.
    
  *Net income for the fourth quarter was $11.5 million, compared to net
    income of $6.9 million for the fourth quarter of 2011. Non-GAAP net income
    for the fourth quarter was $40.2 million, compared to $13.3 million for
    the fourth 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 fourth quarter was $78.6 million, or 26% of
    revenue, compared to $34.4 million for the fourth quarter of 2011, or 21%
    of revenue.
    
  *GAAP diluted EPS for the fourth quarter was $0.10; Non-GAAP diluted EPS
    for the fourth quarter was $0.35.
    
  *For the full year 2012, revenue increased 86% to $972.3 million from
    $522.2 million. GAAP diluted EPS increased to $0.19 from $0.11 and
    Non-GAAP diluted EPS increased to $0.89 from $0.35. Adjusted EBITDA
    increased to $223.0 million from $98.7 million.

"2012 was a transformative year for LinkedIn," said Jeff Weiner, CEO of
LinkedIn. "We exited 2011 having successfully revamped our underlying
development infrastructure. Based on that investment, we said that 2012 would
be a year of accelerated product innovation, and it was. The products we
delivered throughout the year drove member engagement and financial results to
record levels in the fourth quarter."

Fourth Quarter Financial Details and Operating Summary

  *Talent Solutions: Revenue from Talent Solutions products totaled $161.0
    million, an increase of 90% compared to the fourth quarter of 2011. Talent
    Solutions revenue represented 53% of total revenue in the fourth quarter
    of 2012, compared to 51% in the fourth quarter of 2011.
    
  *Marketing Solutions: Revenue from Marketing Solutions products totaled
    $83.2 million, an increase of 68% compared to the fourth quarter of 2011.
    Marketing Solutions revenue represented 27% of total revenue in the fourth
    quarter of 2012, compared to 30% in the fourth quarter of 2011.
    
  *Premium Subscriptions: Revenue from Premium Subscriptions products totaled
    $59.4 million, an increase of 79% compared to the fourth quarter of 2011.
    Premium Subscriptions 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 in the fourth quarter of 2012. Revenue from international markets
totaled $114.6 million, and represented 38% of total revenue in the fourth
quarter of 2012.

Revenue from the field sales channel totaled $178.4 million, and represented
59% of total revenue in the fourth quarter of 2012. Revenue from the online,
direct sales channel totaled $125.3 million, and represented 41% of total
revenue in the fourth quarter of 2012.

GAAP net income for the fourth quarter was $11.5 million, compared to net
income of $6.9 million for the fourth quarter of 2011. Non-GAAP net income for
the fourth quarter was $40.2 million, compared to $13.3 million in the fourth
quarter of 2011.

Adjusted EBITDA for the fourth quarter was $78.6 million, or 26% of revenue,
compared to $34.4 million for the fourth quarter of 2011, or 21% of revenue.

GAAP diluted EPS was $0.10 based on 114.1 million fully-diluted weighted
shares outstanding compared to $0.06 for the fourth quarter of 2011 based on
108.6 million fully-diluted weighted shares outstanding. Non-GAAP diluted EPS
was $0.35 based on 114.1 million fully-diluted weighted shares outstanding
compared to $0.12 for the fourth quarter of 2011 based on 108.6 million
fully-diluted weighted shares outstanding.

"Continued investment in our talent and technology infrastructure drove
momentum in both product and monetization, resulting in record revenue,
profitability, and cash flow," said Steve Sordello, CFO of LinkedIn. "As we
look forward to 2013, we remain excited about the value LinkedIn will create
for members and customers in the coming year."

For additional information, please see the "Selected Company Metrics and
Financials" page on LinkedIn's Investor Relations site.

Fourth Quarter Highlights and Strategic Announcements

In the fourth quarter of 2012, LinkedIn:

  *Passed the 200 million member milestone, ending the year with
    approximately 202 million members, and grew cumulative membership 39% year
    over year. We continue to add approximately two members per second, and
    over 64% of LinkedIn members now come from international markets.
    
  *Launched the new LinkedIn profile, designed to make it easier for members
    to build their professional brands, discover new people and opportunities,
    and engage their networks. In the fourth quarter, on average, the number
    of members updating their profiles doubled versus the fourth quarter of
    2011.
    
  *Introduced LinkedIn Influencers, furthering the development of LinkedIn as
    a professional publishing platform. The success of the Influencer program
    has helped drive an eight-fold increase to traffic associated with
    LinkedIn Today content over the last year.

Business Outlook

LinkedIn is providing guidance for the first quarter and full year of 2013:

  *Q1 2013 Guidance: Revenue is expected to range between $305 million and
    $310 million. Adjusted EBITDA is expected to range between $67 million and
    $69 million. The company expects depreciation and amortization in the
    range of $25 million to $27 million, and stock-based compensation in the
    range of $32 million to $34 million.

  *Full Year 2013 Guidance: Revenue is expected to range between $1.41
    billion and $1.44 billion. Adjusted EBITDA is expected to range between
    $315 million and $330 million. The company expects depreciation and
    amortization in the range of $130 million to $135 million, and stock-based
    compensation in the range of $160 million to $165 million.

Quarterly Conference Call

LinkedIn will host a webcast/conference call to discuss its fourth 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 8:00 p.m.
Pacific Time on February 7, 2013 through February 14, 2013 at 11:59 p.m.
Pacific Time. To listen to the telephone replay, call (855) 859-2056 within
the US or (404) 537-3406 Internationally, access code 87304593.

Upcoming Events

Management will participate in upcoming financial Q&A discussions at industry
events on February 13^th and 25^th, as well as March 6^th and 12^th. LinkedIn
will furnish a link to these events on its investor relations website,
http://investors.linkedin.com/ for both the live and archived webcasts.

About LinkedIn

Founded in 2003, LinkedIn connects the world's professionals to make them more
productive and successful. With more than 200 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 Talent Solutions, Marketing Solutions
and Premium Subscriptions. Headquartered in Silicon Valley, LinkedIn also has
offices across the globe.

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 diluted
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.

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 investments in
products, technology and other 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 first quarter of 2013 and the full fiscal
year 2013. 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: our 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 mobile products and features; security measures and the risk that
they may not be sufficient to secure our member data adequately or that we are
subject to attacks that degrade or deny the ability of members to access our
solutions; expectations regarding our ability to timely and effectively scale
and adapt existing technology and network infrastructure to ensure that our
solutions are accessible at all times with short or no perceptible load times;
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 our solutions; our core
value of putting members first, which may conflict with the short-term
interests of the business; privacy and changes in regulations in the United
States, Europe or elsewhere, which could impact our ability to serve our
members or curtail our monetization efforts; litigation and regulatory issues;
increasing competition; our ability to manage our growth; our ability to
recruit and retain our employees; the application of US and international tax
laws on our tax structure and any changes to such tax laws; acquisitions we
have made or may make in the future; and the dual class structure of our
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, as well as the company's most recent Quarterly
Report on Form 10-Q for the quarter ended September 30, 2012, and additional
information will also be set forth in our Form 10-K that will be filed for the
year ended December 31, 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 February 7, 2013, and LinkedIn undertakes no duty
to update this information.

                                                      
LINKEDIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
                                          December 31, December 31,
                                          2012         2011
ASSETS                                                 
CURRENT ASSETS:                                        
Cash and cash equivalents                  $270,408   $339,048
Short-term investments                     479,141     238,456
Accounts receivable, net                   203,607     111,372
Deferred commissions                       30,232      13,594
Prepaid expenses                           14,344      10,799
Other current assets                       21,065      12,658
Total current assets                       1,018,797   725,927
Property and equipment, net                186,677     114,850
Goodwill                                   115,214     12,249
Intangible assets, net                     32,780      8,095
Other assets                               28,862      12,576
TOTAL ASSETS                               $1,382,330 $873,697
                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY                   
CURRENT LIABILITIES:                                   
Accounts payable                           $53,559    $28,217
Accrued liabilities                        104,077     58,644
Deferred revenue                           257,743     139,798
Total current liabilities                  415,379     226,659
DEFERRED TAX LIABILITIES                   27,717      18,551
OTHER LONG TERM LIABILITIES                30,810      3,508
Total liabilities                          473,906     248,718
COMMITMENTS AND CONTINGENCIES                          
                                                      
STOCKHOLDERS' EQUITY:                                  
Class A and Class B common stock           11          10
Additional paid-in capital                 879,303     617,629
Accumulated other comprehensive income     260         100
Accumulated earnings                       28,850      7,240
Total stockholders' equity                 908,424     624,979
                                                      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,382,330 $873,697



                                                                
LINKEDIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
                                                                
                                  Three Months Ended    Twelve Months Ended
                                  December 31,          December 31,
                                  2012       2011       2012       2011
                                                                
Net revenue                        $303,618 $167,741 $972,309 $522,189
                                                                
Costs and expenses:                                              
Cost of revenue (exclusive of
depreciation and amortization      36,243    24,166    125,521   81,448
shown separately below)
Sales and marketing                100,104   53,249    324,896   164,703
Product development                77,276    42,051    257,179   132,222
General and administrative         38,980    24,463    128,002   74,871
Depreciation and amortization      24,297    13,784    79,849    43,100
Total costs and expenses           276,900   157,713   915,447   496,344
                                                                
Income from operations             26,718    10,028    56,862    25,845
                                                                
Other income (expense), net        24        (1,575)   252       (2,903)
Income before income taxes         26,742    8,453     57,114    22,942
Provision for income taxes         15,234    1,534     35,504    11,030
Net income                         $11,508  $6,919   $21,610  $11,912
                                                                
Net income per share of common                                   
stock:
Basic                              $0.11   $0.07   $0.21   $0.15
Diluted                            $0.10   $0.06   $0.19   $0.11
                                                                
Weighted-average shares used to                                  
compute net income per share:
Basic                              107,924   98,531    105,166   77,185
Diluted                            114,095   108,612   112,844   104,118
                                                                



                                                                
LINKEDIN CORPORATION
SUPPLEMENTAL REVENUE INFORMATION
(In thousands)
(Unaudited)
                                                                
                   Three Months Ended                Twelve Months Ended
                   December 31,                     December 31,
                   2012                2011          2012          2011
                                                                
Revenue by product:                                              
Talent Solutions    $160,997          $84,937     $523,582    $260,885
Marketing Solutions 83,187             49,523       258,278      155,848
Premium             59,434             33,281       190,449      105,456
Subscriptions
Total               $303,618          $167,741    $972,309    $522,189
                                                                
Revenue by geographic region:                                     
United States       $189,006          $111,970    $619,485    $353,834
Other Americas ^(1) 21,909             10,144       66,099       28,800
Total Americas      210,915            122,114      685,584      382,634
EMEA ^(2)           69,910             35,494       217,342      109,995
APAC ^(3)           22,793             10,133       69,383       29,560
Total               $303,618          $167,741    $972,309    $522,189
                                                                
Revenue by channel:                                              
Field sales         $178,364          $95,842     $552,459    $287,634
Online sales        125,254            71,899       419,850      234,555
Total               $303,618          $167,741    $972,309    $522,189
                                                                
                   _____________                                
                   ^(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  Twelve Months Ended
                                     December 31,        December 31,
                                     2012      2011      2012       2011
                                                                 
Non-GAAP net income and net income                                
per share:
GAAP net income                       $11,508 $6,919  $21,610  $11,912
Add back: stock-based compensation    27,572   10,612   86,319    29,768
Add back: amortization of intangible  2,943    1,155    9,872     3,635
assets
Income tax effect of non-GAAP         (1,809)  (5,358)  (17,464)  (8,827)
adjustments
NON-GAAP NET INCOME                   $40,214 $13,328 $100,337 $36,488
                                                                 
GAAP AND NON-GAAP DILUTED SHARES      114,095  108,612  112,844   104,118
                                                                 
NON-GAAP DILUTED NET INCOME PER SHARE $0.35   $0.12   $0.89    $0.35
                                                                 
Adjusted EBITDA:                                                  
Net income                            $11,508 $6,919  $21,610  $11,912
Provision for income taxes            15,234   1,534    35,504    11,030
Other (income) expense, net           (24)     1,575    (252)     2,903
Depreciation and amortization         24,297   13,784   79,849    43,100
Stock-based compensation              27,572   10,612   86,319    29,768
ADJUSTED EBITDA                       $78,587 $34,424 $223,030 $98,713
                                                                 

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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