LinkedIn posts strong Q4, shares rocket 17%

Nathan Pensky · February 10, 2012 · Short URL:

Unlike Groupon, LinkedIn has only gotten stronger since going public

While Groupon has continued to struggle since its IPO, another company that recently went public, LinkedIn, has experienced consistent growth.

Shares of LinkedIn rocketed 17%, or $13, to $89.59, a day after LinkedIn announced late Thursday its Q4 2011 earnings and revenue report that handily exceeded expectations.

“LinkedIn grew over 100% for the sixth consecutive quarter,” said LinkedIn CFO Steve Sordello, in the company's release.

LinkedIn reported Q4 earnings of $6.9 million, 6 cents a share, as compared to $5.3 million for Q4 2010.

Non-GAAP earnings, which exclude tax-affected stock-based compensation expense and tax-affected amortization of acquired intangible assets, were at 12 cents a share, or $13.3 million, beating analyst consensus estimates of 6 cents a share.

Q4 revenue of $167.7 million was an increase of 105% from Q4 2010, which was $81.7 million, also beating analyst projections which were at $160 million.

Since announcing its earnings report this morning, LinkedIn stock (LNKD) has jumped 13 points as of the time of this article's publication.

For the full year 2011, LinkedIn revenue increased 115% to $522.2 million, from $243.1 million in the previous year, also beating analyst projections which were at $514 million.

Analyst Doug Anmuth of JP Morgan indicated in an email sent to VatorNews that LinkedIn's revenue was driven by continued strong engagement, specifically the company's hiring solutions and their premium subscriptions. "Hiring Solutions revenue of $84.9M (+136%) was above our $80.8M (+125%) est., driven by better than expected enterprise customer additions as well as an acceleration in add-ons and renewal growth," said Anmuth.

"We believe the returns on LCS seats remain compelling..." continued Anmuth. "LNKD is also seeing strong growth in its Premium Subs rev (+87% Y/Y), as members paying for premium subscriptions doubled Y/Y and continued to grow at a faster rate than overall membership."

Analyst Mark S Mahaney of Citi Investment Research & Analysis agreed with Anmuth that LinkedIn made a strong showing in Q4, but was slightly more cautious, giving the company a neutral rating.

"We like the LNKD asset," said Mahaney, in an email to VatorNews. "But, we don’t find current valuation compelling. We would consider becoming more constructive on a material share price pullback or on signs of material upside to our estimates, most likely driven by usage and monetization improvements."

LinkedIn added another 14 million membership profiles during the last three months of 2011, bringing their total membership to 145 million. The company projects revenue for the first quarter of 2012 in the range of $170 million to $175 million. Revenue for the full year of 2012 is projected to be in the range of $840 million to $860 million.

Moving into 2012, LinkedIn is completing a re-architecture initiative of its software development and deployment process, known internally as InVersion. LinkedIn is also expanding internationally with the addition of three new offices in Tokyo, Bangalore, and Sao Paulo, and five new languages (Japanese, Swedish, Indonesian, Malay, and Korean).

“LinkedIn grew over 100% for the sixth consecutive quarter,” said LinkedIn CFO Steve Sordello, in the company's release.

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