LinkedIn beats, but shares down 4% on weak guidance

Steven Loeb · May 1, 2014 · Short URL:

LinkedIn posted revenue of $473.2 million on 46 cents EPS

Weaker than expected guidance is sending shares of LinkedIn down over 4% in after hours trading, even though the company posted better-than-expected revenue and EPS in its first-quarter earnings, released on Thursday.

Shares had risen 5.05%, or $7.75, to $161.22 a share during regular trading. Now it is almost giving all of that back.

In the earnings report, LinkedIn stated that it is expecteing Q2 2014 to see revenue between $500 and $505 million, with adjusted EBITDA expected to range between $118 million and $120 million. 

For the full year 2014, revenue is expected to range between $2.06 billion and $2.08 billion. Adjusted EBITDA is expected to be between $505 and $510 million.

Both numbers are below analyst expectations, who are forecasting a $505.1 million Q2, and 2014 revenue of $2.11 billion.

LinkedIn posted non-GAAP earnings per share of 45 cents on revenue of $473.2 million, an increase of 46% compared to $324.7 million in the first quarter of 2013. 

Analysts had been expecting EPS of 34 cents a share on revenue of $466.6 million. 

Net loss for the first quarter was $13.4 million, compared to net income of $22.6 million for the first quarter of 2013. Non-GAAP net income for the first quarter was $47.3 million, compared to $52.4 million for the first quarter of 2013.

Adjusted EBITDA for the first quarter was $116.7 million, or 25% of revenue, compared to $83.4 million for the first quarter of 2013, or 26% of revenue. 

These numbers also beat LinkedIn's own estimates which had been to see revenue in the range of $455 million and $460 million for the first quarter, while adjusted EBITDA was expected to range between $106 million and $108 million. 

"The first quarter was strong for LinkedIn in terms of our member engagement and financial results," Jeff Weiner, CEO of LinkedIn, said in a statement.

"We made significant progress against several strategic priorities including expanding internationally with our China launch, extending our shift to content marketing, and furthering our goal to make LinkedIn the definitive professional publishing platform by giving members the ability to publish long-form content."

Talent Solutions took in $275.9 million, up 50% year to year. This sector represented 58% of the company's quarterly revenue, compared to 57% a year ago.

Revenue from Marketing Solutions was $101.8 million during the quarter, an increase of 36% year to year. It accounted for 22% of total revenue, compared to 23% in Q1 2013. 

Meanwhile, Premium Subscriptions saw a big bump, bringing in $95.5 million, a 46% year to year increase. It totaled 20% of the company's revenue, the same as it did last year at this time. 

A total of $284.9 million, or 60% of LinkedIn’s revenue, came from the U.S., while $188.3 million, or 40%, came from international markets.

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