LinkedIn reports Q2 earnings: Revenues of $228 million, earnings per share of $0.16

Today LinkedIn reported its second quarter financial performance, which included revenues of $228 million, and earnings per share of $0.16. Analysts had expected revenues of $216 million, and earnings per share of $0.16. Essentially, LinkedIn outperformed on its top line, and met expectations on its bottom.

Year over year, its revenues were up some 89%. GAAP earnings per share was $0.03. LinkedIn was down just over 2% in normal trading, and is now rising in after hours trading. LinkedIn reported that it has some 175 million members, making it one of the world’s largest digital relationship networks. US Revenues comprised some 65% of total revenues for the firm’s quarter.

Non-GAAP net income for the quarter was $18.1 million. For comparison, you can read TNW’s coverage of LinkedIn’s last quarterly report here.

Given the market’s reaction, and the fact that LinkedIn did manage to best expectations on one metric, the company performed well. Still, the company is richly valued. According to Google Finance, before this report and its recent stock uptick, LinkedIn’s PE ratio was over 575. LinkedIn’s performance today may buoy its Beauregard Internet brethren, Facebook.

Finally, LinkedIn has boosted its full year fiscal expectations “upward to $915 million to $925 million from the prior range of $880 million to $900 million.” Full speed ahead.

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What follows is LinkedIn’s full earnings release:

Mountain View, Calif., — August 2, 2012 —LinkedIn Corporation (NYSE: LNKD), the world’s largest professional network on the Internet, currently with more than 175 million members, reported its financial results for the second quarter ended June 30, 2012:

• Revenue for the second quarter was $228.2 million, an increase of 89% compared to $121.0 million in the second quarter of 2011.

• Net income for the second quarter was $2.8 million, compared to net income of $4.5 million for the second quarter of 2011.  Non-GAAP net income for the second quarter was $18.1 million, compared to $10.8 million for the second quarter of 2011.  Non-GAAP measures exclude tax-affected stock-based compensation expense and tax-affected amortization of acquired intangible assets.

• Adjusted EBITDA for the second quarter was $50.4 million, or 22% of revenue, compared to $26.3 million for the second quarter of 2011, or 22% of revenue.

• GAAP EPS for the second quarter was $0.03; Non-GAAP EPS for the second quarter was $0.16.

“LinkedIn had a strong second quarter with all of our key operating and financial metrics showing solid performance,” said Jeff Weiner, CEO of LinkedIn. “Our ongoing investment in product innovation drove healthy engagement as measured by unique visiting members and member page views, and our three revenue streams all experienced significant growth.”

Second Quarter Financial Details and Operating Summary

• Hiring Solutions: Revenue from Hiring Solutions products totaled $121.6 million, an increase of 107% compared to the second quarter of 2011.  Hiring Solutions revenue represented 53% of total revenue in the second quarter of 2012, compared to 48% in the second quarter of 2011.

• Marketing Solutions: Revenue from Marketing Solutions products totaled $63.1 million, an increase of 64% compared to the second quarter of 2011.  Marketing Solutions revenue represented 28% of total revenue in the second quarter of 2012, compared to 32% in the second quarter of 2011.

• Premium Subscriptions: Revenue from Premium Subscriptions products totaled $43.5 million, an increase of 82% compared to the second quarter of 2011. Premium Subscriptions represented 19% of total revenue in the second quarter of 2012, compared to 20% of revenue in the second quarter of 2011.

Revenue from the U.S. totaled $147.3 million, and represented 65% of total revenue in the second quarter of 2012.  Revenue from international markets totaled $81.0 million, and represented 35% of total revenue in the second quarter of 2012.

Revenue from the field sales channel totaled $129.4 million, and represented 57% of total revenue in the second quarter of 2012.  Revenue from the online, direct sales channel totaled $98.8 million, and represented 43% of total revenue in the second quarter of 2012.

GAAP net income for the second quarter was $2.8 million, compared to net income of $4.5 million for the second quarter of 2011.  Non-GAAP net income for the second quarter was $18.1 million, compared to $10.8 million in the second quarter of 2011.

Adjusted EBITDA for the second quarter was $50.4 million, or 22% of revenue, compared to $26.3 million for the second quarter of 2011, or 22% of revenue.

GAAP EPS was $0.03 based on 112.3 million fully-diluted weighted shares outstanding compared to $0.04 for the second quarter of 2011 based on 103.1 million fully-diluted weighted shares outstanding.  Non-GAAP EPS was $0.16 based on 112.3 million fully-diluted weighted shares outstanding compared to $0.10 for the second quarter of 2011 based on 103.1 million fully-diluted weighted shares outstanding.

“Strong performance across our three product lines drove record levels of revenue and adjusted EBITDA,” said Steve Sordello, CFO of LinkedIn.  “As we continue to invest aggressively in technology, product, and our businesses, we remain focused on achieving our long-term goals.”

For additional information, please see the “Selected Company Metrics and Financials” page on LinkedIn’s Investor Relations site.

Second Quarter Highlights and Strategic Announcements

In the second quarter, LinkedIn:

• Launched its first app designed for the iPad. The app was received positively, and engagement trends are encouraging as more than half of page views on the app are being generated by content-focused products such as updates, news and groups.

• Simplified the design of its flagship social news product LinkedIn Today and added deeper integration into the homepage.  Engagement on LinkedIn Today is now up more than 150% since the introduction of these new features.

• Released Targeted Status Updates and Follower Statistics to all of the more than two million organizations on LinkedIn with active Company Profiles.

• Completed the rollout of Talent Pipeline to the entire universe of LinkedIn Recruiter customers. In less than three months, Recruiter customers have already added more than one million prospective candidates into Talent Pipeline, enhancing their ability to quickly identify and hire new talent for their organizations.

Additionally, in July LinkedIn began rolling out a significant redesign to the homepage, enabling members to discover, share, and discuss the professional information that is most important to them.  The redesign has begun to positively impact engagement metrics; for example, shares originating on LinkedIn, including status updates, are now at all-time highs.

Business Outlook

LinkedIn is providing guidance for the third quarter of 2012, and revising guidance upward for the full year of 2012 on revenue, adjusted EBITDA, and stock-based compensation, while narrowing the full-year outlook for depreciation and amortization.

• Q3 2012 Guidance: Revenue for the third quarter of 2012 is projected to range between $235 million to $240 million.  The company expects adjusted EBITDA to range between $42 million and $45 million.  The company expects stock-based compensation to range between $27 and $28 million and depreciation and amortization to range between $20 million and $22 million.

• Full Year 2012 Guidance: The company has revised its expected revenue range upward to $915 million to $925 million from the prior range of $880 million to $900 million.  The company has also revised upward its expected adjusted EBITDA range to $185 million to $190 million from the prior range of $170 million to $175 million.  The company now expects stock-based compensation to range between $85 million and $95 million, while the range for depreciation and amortization is now $75 million to $80 million.

Top Image Credit: Zak Greant