LinkedIn Corp (LNKD) reported earnings after the close Thursday which disappointed investors. Shares of the social media giant fell by as much as 28% in after hours trading on the disappointing news. As Goldman Sachs analysts state:LinkedIn reported 4Q revenue of $862mn (+34% yoy vs. +37% in 3Q), versus consensus of $857mn. FX-Neutral revenue growth was 39% vs. 43% in 3Q. Results were driven by 45% growth in Talent Solutions (+46% in 3Q). Excluding Lynda, Talent grew 32% (37% ex-FX) vs. 34% in 3Q (39% ex-FX). Adjusted EBITDA of $249mn compared to consensus of $217mn and guidance of $210mn. Adjusted EBITDA margin was 29% vs. 27% in 3Q. Non-GAAP EPS of $0.94 was above consensus of $0.78, driven by higherthan- expected EBITDA margins.
Linkedin Corp management disagreed and stated on the conference call…
Q4 was a strong quarter for LinkedIn Corp bringing to a close of successful year of growth and innovation against our long term road map.
For Q4, overall revenues grew 34% to $862 million. We delivered adjusted EBITDA of $249 million and non-GAAP EPS of $0.94. For the full year 2015, revenue was $2.99 billion up 35% and we delivered
adjusted EBITDA of $780 million and non-GAAP EPS of $2.84. In the quarter, cumulative members grew 19% to 414 million. Unique visiting members grew 7% to an average 100 million per month and member page views grew 26%. This yielded 17% year-over-year growth in page views per unique visiting member continuing a at earn of strong engagement growth over the past several quarters. Mobile in particular grew three times faster than overall member activity and now represents 57% of all traffic to LinkedIn.
Goldman Sachs opines further:
4Q results analysis. Talent Solutions revenue of $535mn (+45% yoy vs. +46% in 3Q) was above consensus of $529mn, as the company added 3.3k customers in the quarter versus 2.3k in 3Q and 3.0k in the year-ago period. Marketing Solutions revenue of $183mn (+20% yoy vs. +28% in 3Q) was slightly above consensus of $180mn. The company noted that Sponsored Updates grew 85% yoy, though continued weakness in display tempered the impact somewhat. Premium Subscription revenue of $144mn (+19% yoy vs. +21% in 3Q) compared to consensus of $145mn.
RBC analysts believe:
Intra-Quarter Data Points: 1) Neutral U.S. Multi-Platform Web Traffic Trends – Q4 Multi-platform monthly average Unique Visitors at LinkedIn.com’s U.S. Websites grew 28% Y/Y, decelerating sequentially vs.
31% growth in Q3 while on a 9-pt tougher comp. Additionally, comScore reported a 23% Y/Y increase in LinkedIn.com’s U.S. average Page Views, also decelerating vs. a 29% Y/Y increase seen in Q3 though on a materially tougher comp (25-pts). 2) Neutral To Slightly Negative Global Desktop Traffic Trends – Q4 Unique Visitor Y/Y growth at LinkedIn’s sites declined 7% Y/Y, deteriorating slightly against a 4% decline in Q3, though on a 1- pt tougher comp. 3) New Mobile App – In December, LNKD rolled out its new Mobile app experience, called Voyager, which the company believes is faster and more intuitive for its users. We believe this app could lead to greater engagement on the service and will be listening to the Q4 call for any mention of the product’s performance.
LinkedIn guided Q1 2016 revenues to $820mm (below our est. of $876mm and Street est. of $868mm), Q1 2016 Adj. EBITDA to $190mm (vs. our est. of $237mm and Street est. of $216mm) and Q1 2016 EPS to $0.55 (vs. our est. of $0.88 & Street est. of $0.75). FY2016 guidance: in FY16, management expects revenues to grow to a range of $3.6b-$3.65b (vs. our est. of $3.93b), Adj. EBITDA guidance to $950mm-$975mm
(vs. our est. of $1.07b), and Adj. EPS guidance to a range of $3.05-3.20 (vs. our est. of $4.14).