LinkedIn Corporation Stock Surges After Smashing Earnings Estimates

LinkedIn Corporation Stock Surges After Smashing Earnings Estimates
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LinkedIn released the earnings results from its third quarter after closing bell tonight, posting adjusted earnings of 78 cents per share and revenue of $780 million, a 37% year over year increase. The revenue includes $41 million in revenue from the acquisition.

Analysts had been expecting the social network to report earnings of 46 cents per share and $755.6 million in revenue. In last year’s third quarter, LinkedIn reported earnings of 52 cents per share and $568 million in revenue. It should be noted that LinkedIn management has historically guided conservatively and so has a long history of beating guidance.

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Revenue in all segments rises

GAAP net losses were $41 million or 31 cents per share, compared to last year’s loss of 3 cents per share. Adjusted EBITDA was $208 million, compared to the $153 million analysts wanted to see.

Talent Solutions revenue rose 46% to $502 million, with Hiring contributing $461 million of the revenue and Learning and Development contributing $41 million. Revenue from Marketing Solutions climbed 28% to $140 million, compared to the previous quarter’s 140 million. The Sponsored Updates segment within Marketing Solutions again surpassed 100% growth. Revenue from Premium Subscriptions climbed 21% to $138 million.

“Q3 cumulative members grew 20% to 396 million, and last week reached the 400 million member milestone,” said LinkedIn CEO Jeff Weiner in a statement. “Unique visiting members grew 11% to an average of 100 million per month, and member page views grew 33%. This has yielded 20% year over year growth in page views per unique visiting member, continuing a pattern of accelerated growth throughout 2015.”

Weiner added that mobile is growing at twice the rate of total member activity and now makes up 55% of their traffic.

LinkedIn provides guidance

For the fourth quarter, LinkedIn management expects revenue of between $845 million and $850 million. They expect adjusted EBITDA to be about $210 million and non-GAAP earnings to be about 74 cents per share.

For the full year, management projects between $2.975 billion and $2.98 billion in revenue and adjusted EBITDA of about $740 million. They expect about $2.63 per share in non-GAAP earnings. Wedbush analysts want to see about $2.9 billion in revenue, adjusted earnings of $2.19 per share, and adjusted EBITDA of $655 million for the full year.

As of this writing, shares of LinkedIn were up 10.16% at $239.10 per share in after-hours trades.


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