LINKEDIN REPORTS STELLAR Q4 2011 REVENUES AND EARNINGS, BEATS ANALYSTS ESTIMATES, LNKD STOCK JUMPS 17.76% TO $89.96

LinkedIn just reported fourth quarter 2011 earnings and revenue that beat Street estimates. The stock rose 17.76% to $89.96 at the end of trading on Friday, February 10, 2012. This was the highest price that LinkedIn stock has achieved since June 15, 2011 when it hit $109.97 per share.

Q4 2012 and Full-Year 2012 Highlights

• Net income -  $6.9 million, or 6 cents per share, compared to analysts’ estimates of 1 cent, according to FactSet. 
• Non-GAAP net income was $13.3 million or 12 cents per share, versus analysts’ expectations of 6 cents according to FactSet.
• Revenue came in at $167.7 million, up 105% compared to $81.7 million in the the year-ago period. Analysts had expected $160 million. 
• Adjusted EBITDA for the quarter was $34.4 million, up from $16.3 million in the year-ago period.LinkedIn previously provided fourth quarter 2011 guidance of revenue of $154 million to $158 million, with EBITDA of $19 million to $21 million.
• Full-year 2011 - LinkedIn posted revenue of $522.2 million, which beat estimates of $514 million, according to FactSet.

Q1 2012 and Full-Year 2012 Revenue Estimate

For guidance, LinkedIn expects revenue of $170 to $175 million in the first quarter of 2012 and revenue of $840 to $860 million for 2012.

Q4 2011 Revenue by Segment

• Hiring products generated $84.9 million, up 136% from a year ago, and makes up 50% of LinkedIn’s revenue, up from 44% a year ago. 
• Marketing solutions generated $49.5 million, up 77% from a year ago, and dropped slightly to 30% of total revenue from 34% a year ago. 
• Premium subscriptions generated $33.3 million, up 87% from a year ago, making up 20% of total revenue, compared to 22% a year ago.

Q4 2011 Versus Q3 2011

In its previous earnings report for the third quarter, 2011, LinkedIn beat analysts’ estimates, with non-GAAP earnings per share of 6 cents, beating First Call’s estimate of 1 cent. GAAP EPS in the third quarter was a loss of 2 cents and revenue of $139.5 million. Revenue was 139.5 million, up 126% from $61.8 million in the year-ago period.

Historical Quarterly Financials

USD In Mils (except per share items)	Q4 2011	Q3 2011	Q2 2011	Q1 2011	Q4 2010
Revenue	167.74	139.48	214.97	93.93	81.70
Other Revenue, Total	-	-	-	-	-
Total Revenue	167.74	139.48	214.97	93.93	81.70
Cost of Revenue, Total	24.17	22.10	35.19	16.78	14.84
Gross Profit	143.57	117.38	179.79	77.15	66.85
Selling/General/Admin. Expenses, Total	77.71	66.19	95.67	42.98	32.27
Research & Development	42.05	35.02	55.15	24.73	20.95
Depreciation/Amortization	13.78	11.55	17.76	8.16	6.57
Interest Expense(Income) - Net Operating	-	-	-	-	-
Unusual Expense (Income)	-	-	-	-	-
Other Operating Expenses, Total	-	-	-	-	-
Total Operating Expense	157.71	134.87	203.76	92.65	74.63
Operating Income	10.03	4.61	11.21	1.28	7.06
Interest Income(Expense), Net Non-Operating	-	-	-	-	-
Gain (Loss) on Sale of Assets	-	-	-	-	-
Other, Net	-1.57	0.00	-0.09	-0.10	0.15
Income Before Tax	8.45	2.82	11.67	1.73	6.72
Income After Tax	6.92	-1.60	6.59	2.08	5.32
Minority Interest	-	-	-	-	-
Equity In Affiliates	-	-	-	-	-
Net Income Before Extra. Items	6.92	-1.60	6.59	2.08	5.32
Accounting Change	-	-	-	-	-
Discontinued Operations	-	-	-	-	-
Extraordinary Item	-	-	-	-	-
Net Income	6.92	-1.60	6.59	2.08	5.32
Preferred Dividends	-	-	-	-	-
Income Available to Common Excl. Extra Items	6.92	-1.60	6.59	0.00	1.58
Income Available to Common Incl. Extra Items	6.92	-1.60	6.59	0.00	1.58
Basic Weighted Average Shares	-	-	-	-	-
Basic EPS Excluding Extraordinary Items	-	-	-	-	-
Basic EPS Including Extraordinary Items	-	-	-	-	-
Dilution Adjustment	-	0.00	0.00	-	-
Diluted Weighted Average Shares	108.61	96.28	94.50	94.50	94.50
Diluted EPS Excluding Extraordinary Items	0.06	-0.02	0.07	0.00	0.02

Historical Annual Financials

USD in Mils (except for per share items)	Yr Ending   12-31-11	Yr Ending    12-31-10	Yr Ending       12-31-09	Yr Ending             12-31-08
Revenue	522.19	243.10	120.13	78.77
Other Revenue, Total	-	-	-	-
Total Revenue	522.19	243.10	120.13	78.77
Cost of Revenue, Total	81.45	44.83	25.86	18.59
Gross Profit	440.74	198.27	94.27	60.18
Selling/General/Admin. Expenses, Total	239.57	94.04	46.33	29.96
Research & Development	132.22	65.10	39.44	29.37
Depreciation/Amortization	43.10	19.55	11.85	6.37
Interest Expense(Income) - Net Operating	-	-	-	-
Unusual Expense (Income)	-	-	-	-
Other Operating Expenses, Total	-	-	-	-
Total Operating Expense	496.34	223.52	123.48	84.28
Operating Income	25.84	19.58	-3.35	-5.51
Interest Income(Expense), Net Non-Operating	-	-	-	-
Gain (Loss) on Sale of Assets	-	-	-	-
Other, Net	-2.90	-0.27	-0.17	0.03
Income Before Tax	22.94	18.97	-3.12	-4.23
Income After Tax	11.91	15.38	-3.97	-4.52
Minority Interest	-	-	-	-
Equity In Affiliates	-	-	-	-
Net Income Before Extra. Items	11.91	15.38	-3.97	-4.52
Accounting Change	-	-	-	-
Discontinued Operations	-	-	-	-
Extraordinary Item	-	-	-	-
Net Income	11.91	15.38	-3.97	-4.52
Preferred Dividends	-	-	-	-
Income Available to Common Excl. Extra Items	11.91	3.43	-3.97	-4.52
Income Available to Common Incl. Extra Items	11.91	3.43	-3.97	-4.52
Basic Weighted Average Shares	-	-	-	-
Basic EPS Excluding Extraordinary Items	-	-	-	-
Basic EPS Including Extraordinary Items	-	-	-	-
Dilution Adjustment	-	0.00	0.00	0.00
Diluted Weighted Average Shares	94.50	94.50	94.50	94.50
Diluted EPS Excluding Extraordinary Items	0.13	0.04	-0.04	-0.05

Notes from LinkedIn CEO Jeff Weiner’s call with analysts:

• LinkedIn ended 2011 with more than 9,200 corporate customers, up 139% year-over-year.
• Mobile is Linkedin’s fastest growing service, with mobile page views up more than 300% year-over-year. And 15% of member visits come from mobile. Mobile products don’t cannibalize web activity, but is accretive, Weiner said.
• The company is testing mobile advertising and marketing solutions, though no details are out yet.
• In January, LinkedIn started testing Talent Pipeline, which was announced in October 2011, the company’s new recruiter product.
• LinkedIn plans to refresh its major “pillar products” soon or this year.
• More than 60 million members joined in 2011.
• International: The company has 60% of members outside of the U.S.
• New college grads and students are the company’s fastest growing demographics.

COMMENTARY:   Looks like I am going to have to eat crow when it comes to LinkedIn.  Many social experts and financial analysts, including yours truly, were were both surprised and appalled at LinkedIn's IPO pop, stock price and market capitalization at the end of trading on May 19, 2011, their IPO day.  

Everybody thought that LinkedIn's market cap, share price and PE ratio was outrageous, and not justifiable, and that the stock would eventually collapse and return to reality.  Although LinkedIn's stock did decline substantially within months after its IPO, it has since recovered most of its value and is now very close to the $94.25 per share price at the end of the day on the day of their IPO.  

I was so appalled with LinkedIn's IPO that I wrote a 9-part series on the LinkedIn IPO.  It's a worthwhile read if you have a few hours of free time.  I analyzed the stock from several different perspectives and viewpoints, and quoted many financial analysts who thought that LinkedIn could become a catalyst for a bonafide tech bubble.

The full transcript of LinkedIn's Q4 2011 Earnings Call with stock analysts can be found HERE.

Courtesy of an article dated February 9, 2012 appearing in Forbes 

Comments

[Tommy]

Beats by dr. dre,

You need to read my LinkedIn IPO 9-part series that I wrote last year to get a perspective as to why many stock analysts believed LinkedIn was over-priced and over-valued. It's a worthwhile read if you have a few hours of free time. See above link in my commentary. Tommy

[beats by dr dre]

I don't quite understand what you mean,trouble again to explain,especially...

[Tommy]

LED Lights,

Thank you for your nice compliment about my blog. I try to provide a broad spectrum of content about technology in every form, not just hardware. Hope you will continue to visit my blog on a regular basis. Look forward to your comments. Tommy

[LED Lights]

This is my first time I visit here. I found so many interesting stuff in your blog. From the tons of comments on your articles, I guess I am not the only one having all the enjoyment here! keep up the good work.