- Revenue - Q1 2012 revenue was $188.5 million, an increase of 101% compared to $93.9 million in the first quarter of 2011.
- Net Income - Q1 2012 net income was $5 million, compared to net income of $2.1 million for the first quarter 2011, in increase of 140%.
- Non-GAAP EPS - Q1 2012 non-GAAP earnings per share was $0.15. Analysts expected earnings of $0.09 cents per share, with quarterly revenue in at $179 million.
- Registered Members - LinkedIn now has 161 million members, adding 15 million members over the past quarter. The company is seeing the fastest growth in Latin America, Asia Pacific and Europe.
Clearly, the company blew past Wall Street expectations. Revenue for the second quarter of 2012 is projected to range between $210 million to $215 million.
Jeff Weiner, CEO of LinkedIn said.
“LinkedIn’s solid performance in the first quarter built on the company’s momentum in 2011. We saw strength across all key metrics from member signups and engagement to significant revenue growth across our three product lines.”
LinkedIn says this is the seventh consecutive quarter of revenue growth for the company.
Mr. Weiner reported LinkedIn revenues by source as follows:
- Hiring Solutions Products - Totaled $102.6 million, an increase of 121% compared to the first quarter of 2011. Hiring Solutions revenue represented 54% of total revenue in the first quarter of 2012, compared to 49% in the first quarter of 2011.
- Marketing Solutions Products - Totaled $48.0 million, an increase of 73% compared to the first quarter of 2011. Marketing Solutions revenue represented 26% of total revenue in the first quarter of 2012, compared to 30% in the first quarter of 2011.
- Premium Subscriptions Products - Totaled $37.9 million, an increase of 91% compared to the first quarter of 2011. Premium Subscriptions represented 20% of total revenue in the first quarter of 2012, compared to 21% of revenue in the first quarter of 2011.
Mr. Weiner reported LinkedIn revenues by geographical source were follows:
- U.S. Revenues - Revenue from the U.S. totaled $120.8 million, and represented 64% of total revenue in the first quarter of 2012.
- International Revenues - Revenue from international markets totaled $67.6 million, and represented 36% of total revenue in the first quarter of 2012.
For LinkedIn, it’s been nearly a year since the company’s IPO in May of 2011. And the company has been steadily increasing revenue and profits. In Q4 of 2011, LinkedIn doubled revenue and increased profit, surpassing Wall Street expectations. And the company is currently valued at over $11 billion.
From the product iteration standpoint, Q1 was a slightly slower quarter for the network.
In March, LinkedIn introduced a new version of People You May Know. LinkedIn also launched an embeddable “Follow” button that companies can add to their websites. And LinkedIn made the acquisition of contact manager Rapportive official.
The company will refresh many of its pillar products this year. LinkedIn is expected to have 5.3 billion professional searches in 2012.
Mobile continues to be the fast growing product for LinkedIn.
COMMENTARY: That's what I call a very impressive Q1 2012 earnings call, but I didn't feel this way until now.
Right after LinkedIn had its IPO in May 2011, many social media analysts believed that its incredible market valuation was not justified and that its price earnings multiple was ridiculous. It took a beating from both social media experts and Wall Street experts who thought it represented evidence of a tech bubble.
LinkedIn was of tremendous interest to me because it is the third largest U.S. social network after Facebook and Twitter, and it was the first major social media IPO, and how their IPO performed would set the standard for how future social media IPO's would be valued.
My blog post dated May 23, 2011 is Part I of a 9-Part series analyzing the LinkedIn IPO from just about every conceivable angle. Ever since that time, I have been waiting for LinkedIn's growth and revenues to hit a brick wall, but this has been to no avail.
In hindsight, you cannot treat LinkedIn like other social networks. The company does not rely on the ad-supported revenue model for its sole source of revenues. The majority of its revenues are derived from hiring solution products (54%) and premium subscriptions (20%). Combined this represents 74% of total revenues during Q1 2012. Facebook on the otherhand generates 89% of its revenues from advertising. The remaining 11% is from sales of virtual goods from social games. Twitter relies on advertising for 100% of its revenues. Both of those social giants are likely to be drastically affected by a slowdown in online advertising.
Social media is still in the "experimental stage," and advertisers are taking a wait and see attitude towards social, using it mostly to connect and engage with their fans and build brand awareness, rather than as a big revenue source. In fact, most social networks are having a real problem producing a quantifiable ROI on social media advertising for their brand customers. This issue could have a bearing on how Wall Street and Main Street value Facebook when it has its IPO on May 18, 2012.
LinkedIn has obviously benefited substantially from the boom in technology jobs. However, any softness in the U.S. economy, especially a slowdown in the nation's job growth, or a slowdown in the world economy, particularly in the Eurozone and Asiatic Pacific, could negatively impact LinkedIn's hiring solutions products and marketing products (advertising) revenues.
The U.K. has already dipped back into recession again, and the debt problems in the Eurozone are of major concern. Unemployment still remains high and GDP growth is stagnant in the Eurozone.
China is showing signs of a slowdown as well, and this could affect LinkedIn's expansion in that area of the world. For this reason, I would be cautious about LinkedIn's revenues and earnings over the next six to nine months. LinkedIn's stock (NYSE:LNKD) is now trading at its highest level during 2012, so caution should be exercised.
UPDATE: LinkedIn to acquire SlideShare
LinkedIn announced on Thursday, May 3, 2012, that it plans to buy SlideShare for $119 million.
It will be 45% cash and 55% stock.
SlideShare allows users to upload documents to the web and have them embedded all over the place.
How does it fit at LinkedIn? Here's what CEO Jeff Weiner said in a press release explaining the move:
"Presentations are one of the main ways in which professionals capture and share their experiences and knowledge, which in turn helps shape their professional identity. These presentations also enable professionals to discover new connections and gain the insights they need to become more productive and successful in their careers, aligning perfectly with LinkedIn's mission and helping us deliver even more value for our members. We're very excited to welcome the SlideShare team to LinkedIn."
It's a great outcome for the founders of SlideShare, Rashmi Sinha, Jonathan Boutelle, and Amit Ranjan. It's also a nice exit for Venrock, which was the institutional investor in the company and had a 15X return.
If you’re scratching your head on just why LinkedIn would spend all that dough on SlideShare, Eloqua offers five big reasons.
- It’s Like Pinterest for Business - We’re all hearing about Pinterest lately, the visually sticky social network for sharing your favorite links to things like wedding plans, Etsy projects and, yes, even content marketing. What makes Pinterest compelling is the way it strips sharing down to visuals. Well, SlideShare is kind of like Pinterest for business. You can’t narrate your slides when you upload them so you have to lean on your ability to speak through imagery and a conservative amount of text. It forces professionals to get a message across in a highly visual way, and as a result it’s grabbed about 29 million unique visitors. Those are decent stats for PowerPoint presentations.
- It Makes LinkedIn More Engaging - While LinkedIn started out essentially as the combo of an online resume and rolodex, it’s tried a variety of tactics to make the site itself more sticky by getting people to share content. LinkedIn would love nothing more than to have its members treat it like the Facebook of career-related content. (Pop quiz: How often do you check your Facebook newsfeed? Now, how often do you check your LinkedIn “newsfeed”?) SlideShare gives LinkedIn an incredible content-sharing platform. We’ll have to watch how the two products get integrated, but I bet LinkedIn finds a way to get people to spend more time on site as a result of this acquisition.
- The C-Level Loves It - LinkedIn not only likes to talk about the number of members it has (161 million, by the way), but also the make-up of that membership. Nearly all the companies listed on the Fortune 500 are represented. So it’s only natural that LinkedIn covets SlideShare’s influence on the C-level. According to a recent DemandGen Report article, SlideShare gets 40% more traffic from C-level executives than LinkedIn. That kind of organic prestige is hard to buy – but LinkedIn just did.
- It Inserts LinkedIn Into the Lead Management Process - LinkedIn has won over the hearts and minds of recruiters and job-seekers, but embedding social into the lead management process is more complicated. But for businesses, especially for B2B marketing, SlideShare is a natural tool for delivering leads. SlideShare’s lead capturing product, which allows users to embed forms for collecting a lead’s data, brings a well-established method for capturing prospect data to LinkedIn. Combined with LinkedIn social sign-on, the SlideShare purchase could increase LinkedIn’s presence in the sales and marketing lead management process.
- It Fits Right In with the Rapportive Buy - Just over a month ago, LinkedIn bought Rapportive, a startup that created a Gmail plug-in that ties a person’s email address to their social accounts. So if you email me on Gmail, I can see your LinkedIn profile name, Facebook name and Twitter handle and ask to connect all without leaving my email. Buying SlideShare fits right in with this strategy. LinkedIn can effectively extends its reach to all the other accounts, including email, associated with a professional’s social identity. Content is shared today through a variety of means, it’s shared on social channels (LinkedIn, Facebook, Twitter), it’s found through search (SlideShare is great for this) and we still send it through email. LinkedIn is finding a way to stretch itself across all these platforms.
I am a regular user of SlideShare, and its acquisition by LinkedIn will definitely increase stickiness. However, just how much tangible revenue the SlideShare acquisition will generate remains to be seen. If you haven't already done so, LinkedIn provides a widget so that you can embed SlideShare presentations right into your LinkedIn profile page, something I do all the time.