LinkedIn Q2 Profit Up 138%, Shares Pop

Investor's Business Daily

LinkedIn (LNKD) to Facebook (FB): Leave real growth to the professionals. A week after the world's largest social network blew out quarterly forecasts, the social site for job seekers and employee hunters late Thursday reported even faster earnings and revenue growth.

The professionals' site's revenue jumped 59% to $363.7 million, beating estimates of $354 million. Its string of double- or triple-digit revenue growth goes back more than four years.

Earnings per share, minus items, rose 138% to 38 cents, the fourth straight triple-digit gain and 7 cents above the consensus of analysts polled by Thomson Reuters.

Membership reached 238 million members, up 37% vs. a year earlier. LinkedIn said that was the first acceleration since Q3 2011, which it attributed to "product optimization.

CEO Jeff Weiner, in a post-earnings conference call, hailed "engagement at record levels." The site gets more than 45 million user profile views each day.

"We also saw strong demand for our mobile products, our fastest growing service," he said.

LinkedIn sees Q3 revenue at $367 million to $373 million, below estimates for $384 million.

But investors, perhaps recalling LinkedIn's cautious Q2 guid ance after its Q1 report, shrugged that off. Shares rose nearly 8% in late trading after closing up 4.5% to 213, hitting a record high.

LinkedIn shares have risen 373% since their May 2011 IPO.

The Social Elite

Meanwhile, Facebook remains below its May 2012 IPO price of $38, even after its 41% run since last week's strong Q2 results. Facebook enjoyed its best growth for EPS (58%) and revenue (53%) in several quarters, but both lagged LinkedIn's performance.

LinkedIn's monthly unique visitors rose 8% vs. Q1 to 143 million, according to ComScore data.

LinkedIn has three revenue sources. The largest is Talent Solutions, which gets fees from companies and headhunters trying to find new hires. Revenue rose a better-than-expected 69% to $205.1 milllion, though that was a slowdown from Q1's 80% annual pace.

Marketing Solutions, which sells ads, saw revenue up 36% to $85.6 million. That was down from Q1's 56%.

Revenue from Premium Subscriptions rose 68% to $73 million but slower than the 73% growth seen in Q1.

The U.S. market accounted for $224 million, or 62% of total revenue. International markets totaled $139.4 million, and accounted for 38% of revenue, the same as last quarter.

During the quarter LinkedIn revamped its mobile phone platform with new Apple (AAPL) iPhone and Google (GOOG) Android apps. Its mobile home page engagement rose more than 40%, with "increasing levels of social actions, article views, and mobile profile edits," when compared to its older mobile app platform.

About 33% of LinkedIn members access the site from mobile platforms vs. 21% a year earlier.

A revamped Recruiter platform for Talent Solutions customers boosted engagement, said LinkedIn. In Q2 it also launched CheckIn, which lets student members engage with recruiters at on-campus hiring events.

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