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LinkedIn's Q1 2012 Earnings

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LinkedIn
LinkedIn

LinkedIn reported strong Q1 2012 results. Revenue was $188 million, up 130% year-over-year, driven by growth in hiring solutions, premium subscriptions, and online sales. Adjusted EBITDA was $38 million, with a margin of 25%. For Q2 2012, LinkedIn expects revenue of $210-215 million and adjusted EBITDA of $40-42 million. For the full year 2012, revenue is expected to be $880-900 million and adjusted EBITDA is projected at $170-175 million.

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Q1’12 Results
Safe Harbor “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation and the accompanying conference call contain forward-looking statements about our products, including our planned investments in key strategic areas, certain non-financial metrics, such as member growth and engagement, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the second quarter of 2012 and the full fiscal year 2012. The achievement of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements the company makes. The risks and uncertainties referred to above include - but are not limited to - risks associated with: the company’s limited operating history in a new and unproven market; engagement of our members; the price volatility of our Class A common stock; general economic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies, including with respect to acquisitions of other companies; expectations regarding the company’s ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that its website is accessible at all times with short or no perceptible load times; security measures and the risk that the company’s website may be subject to attacks that degrade or deny the ability of members to access the company’s solutions; our ability to maintain our rate of revenue growth; our ability to accurately track our key metrics internally; members and customers curtailing or ceasing to use the company’s solutions; the company’s core value of putting members first, which may conflict with the short-term interests of the business; privacy issues; increasing competition; our ability to manage our growth and retain our employees; and the dual class structure of the company’s common stock. Further information on these and other factors that could affect the company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Annual Report on Form 10-K that was filed for the year ended December 31, 2011, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended March 31, 2012, which should read in conjunction with these financial results. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at http://investors.linkedin.com/. All information provided in this presentation is as of May 3, 2012, and LinkedIn undertakes no duty to update this information. 2
Jeff Weiner 1st Chief Executive Officer at LinkedIn San Francisco Bay Area | Internet Send Message View Profile Steve Sordello 1st Chief Financial Officer at LinkedIn San Francisco Bay Area | Internet Send Message View Profile 3
Key Metrics (Millions) (Millions) (Billions) 103 10 9.4 161 160 100 145 92 88 140 131 8 7.6 7.6 82 7.1 7.1 80 75 120 116 102 65 6 5.5 100 5.0 90 60 81 53 3.9 80 72 4 3.6 64 46 45 60 40 2 40 20 20 0 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Members (MM) Unique Visitors, comScore (MM) Page Views, comScore (BN) 4
(Millions) Revenue $200 $188 130% $180 $168 120% $160 110% $139 $140 $121 100% $120 90% $94 $100 $82 80% $80 $62 $55 70% $60 $45 $39 $30 60% $40 $28 $23 $20 50% $0 40% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Net Revenue ($MM) % y/y 5
(Millions) Revenue by Product $200 $188 $180 $168 20% $160 $139 20% $140 $121 20% 26% $120 $94 20% 30% $100 $82 29% $80 21% $62 32% 22% $55 $60 $45 30% $39 25% 34% 54% 27% $40 $28 $30 50% $23 30% 31% 51% 32% 33% 48% $20 39% 38% 32% 49% 47% 37% 44% 32% 30% 40% 44% 26% 31% 38% 27% 29% 32% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Hiring Solutions Marketing Solutions Premium Subscriptions 6
(Millions) Revenue by Geography $200 $188 $180 $168 6% 7% $160 6% $139 6% $140 23% $121 6% 6% 21% $120 5% 5% 21% $94 $100 $82 22% 5% 5% $80 5% $62 21% $55 20% $60 $45 64% 67% $39 18% 20% 67% $40 $28 $30 68% $23 20% 22% 71% 69% 21% 19% 74% $20 20% 73% 73% 75% 72% 75% 73% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 US EMEA APAC Other Americas 7
(Millions) Revenue by Channel $200 $188 $180 $168 $160 $139 46% $140 $121 $120 43% $94 47% $100 $82 45% $80 $62 46% $55 41% $60 $45 $39 46% 57% 54% $40 $28 $30 45% $23 47% 55% 53% 43% 46% 50% 59% 54% $20 50% 54% 57% 53% 55% 50% 54% 50% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Field Sales Online Sales 8
Adjusted EBITDA & Margin (Millions) $40 $38 25% $34 $35 20% $30 $26 $25 $25 15% $20 $16 $15 $13 10% $11 $11 $9 $10 $5 5% $4 $4 $5 $1 $0 0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Adjusted EBITDA Margin% 9
Net Income & Cash Flow Highlights Q1 2012 Q4 2011 Q1 2011 Net Income $mn, GAAP $5.0 $6.9 $2.1 Net Income $mn, Non-GAAP $16.9 $13.3 $5.8 EPS, GAAP Fully-Diluted Weighted Shares * Excludes both net income attributable to preferred shareholders & $0.04 $0.06 $0.00 preferred shares in share count EPS, Non-GAAP Fully-Diluted Weighted Shares $0.15 $0.12 $0.06 Operating Cash Flow (OCF) $63.2 $24.2 $26.6 Free Cash Flow, $mn (OCF – Purchases of PPE) $41.1 $3.5 $10.4 Cash, Cash Equivalents, & ST Investments, $mn $620.8 $577.5 $106.1 For additional reconciliation of our non-GAAP measures, please see the “Selected Company Metrics and Financials” page on LinkedIn’s Investor Relations site. 10
Guidance Q2 2012 FY 2012 Revenue, $mn $210-215 $880-900 Adjusted EBITDA, $mn $40-42 $170-175 Depreciation & Amortization, $mn $18.5-19.5 $75-85 Stock-Based Compensation, $mn $18-19 $80-90 11
Non-GAAP Reconciliations 12
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LinkedIn's Q1 2012 Earnings

  • 2. Safe Harbor “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation and the accompanying conference call contain forward-looking statements about our products, including our planned investments in key strategic areas, certain non-financial metrics, such as member growth and engagement, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the second quarter of 2012 and the full fiscal year 2012. The achievement of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements the company makes. The risks and uncertainties referred to above include - but are not limited to - risks associated with: the company’s limited operating history in a new and unproven market; engagement of our members; the price volatility of our Class A common stock; general economic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies, including with respect to acquisitions of other companies; expectations regarding the company’s ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that its website is accessible at all times with short or no perceptible load times; security measures and the risk that the company’s website may be subject to attacks that degrade or deny the ability of members to access the company’s solutions; our ability to maintain our rate of revenue growth; our ability to accurately track our key metrics internally; members and customers curtailing or ceasing to use the company’s solutions; the company’s core value of putting members first, which may conflict with the short-term interests of the business; privacy issues; increasing competition; our ability to manage our growth and retain our employees; and the dual class structure of the company’s common stock. Further information on these and other factors that could affect the company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Annual Report on Form 10-K that was filed for the year ended December 31, 2011, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended March 31, 2012, which should read in conjunction with these financial results. These documents are available on the SEC Filings section of the Investor Information section of the company’s website at http://investors.linkedin.com/. All information provided in this presentation is as of May 3, 2012, and LinkedIn undertakes no duty to update this information. 2
  • 3. Jeff Weiner 1st Chief Executive Officer at LinkedIn San Francisco Bay Area | Internet Send Message View Profile Steve Sordello 1st Chief Financial Officer at LinkedIn San Francisco Bay Area | Internet Send Message View Profile 3
  • 4. Key Metrics (Millions) (Millions) (Billions) 103 10 9.4 161 160 100 145 92 88 140 131 8 7.6 7.6 82 7.1 7.1 80 75 120 116 102 65 6 5.5 100 5.0 90 60 81 53 3.9 80 72 4 3.6 64 46 45 60 40 2 40 20 20 0 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Members (MM) Unique Visitors, comScore (MM) Page Views, comScore (BN) 4
  • 5. (Millions) Revenue $200 $188 130% $180 $168 120% $160 110% $139 $140 $121 100% $120 90% $94 $100 $82 80% $80 $62 $55 70% $60 $45 $39 $30 60% $40 $28 $23 $20 50% $0 40% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Net Revenue ($MM) % y/y 5
  • 6. (Millions) Revenue by Product $200 $188 $180 $168 20% $160 $139 20% $140 $121 20% 26% $120 $94 20% 30% $100 $82 29% $80 21% $62 32% 22% $55 $60 $45 30% $39 25% 34% 54% 27% $40 $28 $30 50% $23 30% 31% 51% 32% 33% 48% $20 39% 38% 32% 49% 47% 37% 44% 32% 30% 40% 44% 26% 31% 38% 27% 29% 32% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Hiring Solutions Marketing Solutions Premium Subscriptions 6
  • 7. (Millions) Revenue by Geography $200 $188 $180 $168 6% 7% $160 6% $139 6% $140 23% $121 6% 6% 21% $120 5% 5% 21% $94 $100 $82 22% 5% 5% $80 5% $62 21% $55 20% $60 $45 64% 67% $39 18% 20% 67% $40 $28 $30 68% $23 20% 22% 71% 69% 21% 19% 74% $20 20% 73% 73% 75% 72% 75% 73% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 US EMEA APAC Other Americas 7
  • 8. (Millions) Revenue by Channel $200 $188 $180 $168 $160 $139 46% $140 $121 $120 43% $94 47% $100 $82 45% $80 $62 46% $55 41% $60 $45 $39 46% 57% 54% $40 $28 $30 45% $23 47% 55% 53% 43% 46% 50% 59% 54% $20 50% 54% 57% 53% 55% 50% 54% 50% $0 Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Field Sales Online Sales 8
  • 9. Adjusted EBITDA & Margin (Millions) $40 $38 25% $34 $35 20% $30 $26 $25 $25 15% $20 $16 $15 $13 10% $11 $11 $9 $10 $5 5% $4 $4 $5 $1 $0 0% Q1'09 Q2'09 Q3'09 Q4'09 Q1'10 Q2'10 Q3'10 Q4'10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Adjusted EBITDA Margin% 9
  • 10. Net Income & Cash Flow Highlights Q1 2012 Q4 2011 Q1 2011 Net Income $mn, GAAP $5.0 $6.9 $2.1 Net Income $mn, Non-GAAP $16.9 $13.3 $5.8 EPS, GAAP Fully-Diluted Weighted Shares * Excludes both net income attributable to preferred shareholders & $0.04 $0.06 $0.00 preferred shares in share count EPS, Non-GAAP Fully-Diluted Weighted Shares $0.15 $0.12 $0.06 Operating Cash Flow (OCF) $63.2 $24.2 $26.6 Free Cash Flow, $mn (OCF – Purchases of PPE) $41.1 $3.5 $10.4 Cash, Cash Equivalents, & ST Investments, $mn $620.8 $577.5 $106.1 For additional reconciliation of our non-GAAP measures, please see the “Selected Company Metrics and Financials” page on LinkedIn’s Investor Relations site. 10
  • 11. Guidance Q2 2012 FY 2012 Revenue, $mn $210-215 $880-900 Adjusted EBITDA, $mn $40-42 $170-175 Depreciation & Amortization, $mn $18.5-19.5 $75-85 Stock-Based Compensation, $mn $18-19 $80-90 11