LinkedIn Corp (NYSE:LNKD) released its latest earnings report last night, not only beating estimates but also raising full-year guidance and offering better than expected third quarter guidance. Wall Street was thrilled with the results, and Sterne Agee analysts say they expect LinkedIn to keep expanding its addressable market.

LinkedIn

LinkedIn beats estimates

In a report dated July 31, 2014, analysts Arvind Bhatia and Brett Strauser maintained their Neutral rating on LinkedIn. They note that last night’s earnings beat was the best in the last six quarters. The social network saw a reacceleration in revenue in its Talent Solutions division. Revenue for that segment rose 57% year over year, compared to 50% in the previous quarter.

LinkedIn posted revenue of $533.9 million, adjusted EBITDA of $145.3 million and earnings of 51 cents per share. Consensus estimates averaged at $511 million in revenue, EBITDA estimates were at $122 million on average and earnings per share estimates averaged out at 39 cents per share. LinkedIn had guided for between $500 million and $505 million in revenue and between $118 million and $120 million in adjusted EBITDA.

Revenue from the company’s Marketing segment rose 24% year over year, while Premium Subscriptions saw a 44% increase.

LinkedIn to keep growing addressable market

During the quarter, the social network added 17.4 million users to its member base, hitting 313.4 million and beating Sterne Agee’s estimate of 16 million new additions. However, it did miss the average consensus estimate of 18.7 net additions.

Now that LinkedIn has about 313 million members, Bhatia and Strauser estimate that the social network has penetrated about 52% of its addressable market, which is approximately 600 million “knowledge workers,” in their view. Over time though, they expect the company to keep expanding its global addressable market by launching more and more products that are designed to appeal to the global workforce base, which they estimate at around 3.3 billion.

Member Page views declined 25 billion, a 4% sequential decline but 19% year over year increase. Unique visiting members rose 2% sequentially and 12% year over year to 84 million. Corporate Solutions customers increased to 28,080 in the quarter.

LinkedIn guides ahead

The company said it expects revenue for the next quarter to be between $543 million and $547 million and adjusted EBITDA to be between $134 million and $136 million. Consensus estimates for the next quarter suggest $540.8 million in revenue and $129.3 million in adjusted EBITDA. LinkedIn increased its revenue guidance for the full year to between $2.14 billion and $2.15 billion. The previous projection range was between $2.06 billion and $2.08 billion. Consensus estimates had suggested $2.126 billion for the quarter.

The company also increased its full year adjusted EBITDA guidance from between $505 million and $510 million to between $545 million and $550 million. Consensus is at $521 million.