LinkedIn Delivers Robust 1Q Numbers - Analyst Blog
May 04 2012 - 8:45AM
Zacks
LinkedIn Corporation (LNKD) reported adjusted
net earnings of 5 cents per share in the first quarter of 2012,
much better than the Zacks Consensus Estimate of 2 cents.
Revenues
Revenues in the quarter stood at $188.5 million, up 100.6% from
$93.9 million in the first quarter of 2012. The company witnessed
stupendous revenue growth across all three product segments.
Segment wise, Hiring Solutions products totaled
$102.6 million, up a massive 121.3% year over year. This segment
represented 54.4% of the total revenue in the first quarter of
2012.
Marketing Solutions products increased 73.2%
year over year to $47.5 million. Marketing Solutions revenue
represented 25.2% of the total revenue.
Premium Subscriptions products totaled $37.9
million, an increase of 91.0% year over year. Premium Subscriptions
represented 20.0% of the total revenue in the reported quarter.
Geographically, U.S. revenues totaled $120.8 million, and
represented 64.0% of revenues in the first quarter of 2012. Revenue
from the international market amounted to $67.6 million, and
represented 36.0% of the total revenue in first quarter 2012.
Operating Results
The company reported operating income of $10.6 million, up from
the year-ago level of $1.3 million. Operating income increased as
revenue grew at a higher rate than cost and expenses.
Net profit on a GAAP basis in the first quarter was $5.0 million
versus $2.1 million in the first quarter of 2011. Excluding special
items like amortization of intangibles, non-GAAP earnings per share
was 5 cents compared with 3 cents per share earned in the first
quarter of 2011.
Balance Sheet
LinkedIn Corporation ended the quarter with cash and cash
equivalents of $342.3 million versus $339.0 million in the prior
quarter. Accounts receivable in the quarter was $116.3 million
compared with $111.4 million in the previous quarter, and there was
no long-term debt. Total deferred revenue in the quarter was $174.8
million, up from $139.8 million in the previous quarter.
Guidance
The company expects revenue in the range of $210.0 million to
$215.0 million for the second quarter of 2012. Adjusted EBITDA is
expected in the range of $40.0 million to $42.0 million. Moreover,
depreciation and amortization is projected in the range of $18.5
million and $19.5 million, and stock-based compensation is expected
in the range of $18.0 million to $19.0 million.
The company expects full-year 2012 revenue in the range of
$880.0 million to $900.0 million. Adjusted EBITDA is expected
between $170.0 million and $175.0 million. The company expects
depreciation and amortization in the range of $75.0 million to
$85.0 million, and stock-based compensation in the range of $80.0
million to $90.0 million.
Conclusion
LinkedIn commands a leadership position in the emerging online
professional networking segment. The company has attained worldwide
popularity and has grown steadily over the last few quarters.
LinkedIn reported impressive first quarter numbers, and witnessed
considerable revenue upside across segments. The company did
particularly well in the Hiring solution segment (up 121.3%
y/y).
The company reported consistent top-line growth, and effectively
implemented certain cost control measures to improve its bottom
line. Currently, competition is not severe in the professional
networking space, but IT majors like Facebook,
Google (GOOG) and Microsoft
(MSFT) are expected to enter the market soon. Hence, the
competitive scenario could change rapidly over the next few
years.
The company has a Zacks #3 Rank (implying a Hold rating).
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