EX-99.1 2 earningsreleaseq412.htm PRESS RELEASE Earnings Release Q412

Exhibit 99.1

LinkedIn Announces Fourth Quarter and Full Year 2012 Financial Results

MOUNTAIN VIEW, Calif., February 7, 2013 -- LinkedIn Corporation (NYSE: LNKD), the world's largest professional network on the Internet, with more than 200 million members, reported its financial results for the fourth quarter and full year ended December 31, 2012:

Revenue for the fourth quarter was $303.6 million, an increase of 81% compared to $167.7 million in the fourth quarter of 2011.

Net income for the fourth quarter was $11.5 million, compared to net income of $6.9 million for the fourth quarter of 2011. Non-GAAP net income for the fourth quarter was $40.2 million, compared to $13.3 million for the fourth 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 fourth quarter was $78.6 million, or 26% of revenue, compared to $34.4 million for the fourth quarter of 2011, or 21% of revenue.

GAAP diluted EPS for the fourth quarter was $0.10; Non-GAAP diluted EPS for the fourth quarter was $0.35.

For the full year 2012, revenue increased 86% to $972.3 million from $522.2 million. GAAP
diluted EPS increased to $0.19 from $0.11 and Non-GAAP diluted EPS increased to $0.89 from $0.35.  Adjusted EBITDA increased to $223.0 million from $98.7 million.

“2012 was a transformative year for LinkedIn,” said Jeff Weiner, CEO of LinkedIn. “We exited 2011 having successfully revamped our underlying development infrastructure. Based on that investment, we said that 2012 would be a year of accelerated product innovation, and it was. The products we delivered throughout the year drove member engagement and financial results to record levels in the fourth quarter.”

Fourth Quarter Financial Details and Operating Summary

Talent Solutions: Revenue from Talent Solutions products totaled $161.0 million, an increase of 90% compared to the fourth quarter of 2011. Talent Solutions revenue represented 53% of total revenue in the fourth quarter of 2012, compared to 51% in the fourth quarter of 2011.

Marketing Solutions: Revenue from Marketing Solutions products totaled $83.2 million, an increase of 68% compared to the fourth quarter of 2011. Marketing Solutions revenue represented 27% of total revenue in the fourth quarter of 2012, compared to 30% in the fourth quarter of 2011.

Premium Subscriptions: Revenue from Premium Subscriptions products totaled $59.4 million, an increase of 79% compared to the fourth quarter of 2011. Premium Subscriptions represented 20% of total revenue in the fourth quarter of 2012 and 2011.

Revenue from the U.S. totaled $189.0 million, and represented 62% of total revenue in the fourth quarter of 2012. Revenue from international markets totaled $114.6 million, and represented 38% of total revenue in the fourth quarter of 2012.




Revenue from the field sales channel totaled $178.4 million, and represented 59% of total revenue in the fourth quarter of 2012. Revenue from the online, direct sales channel totaled $125.3 million, and represented 41% of total revenue in the fourth quarter of 2012.

GAAP net income for the fourth quarter was $11.5 million, compared to net income of $6.9 million for the fourth quarter of 2011. Non-GAAP net income for the fourth quarter was $40.2 million, compared to $13.3 million in the fourth quarter of 2011.

Adjusted EBITDA for the fourth quarter was $78.6 million, or 26% of revenue, compared to $34.4 million for the fourth quarter of 2011, or 21% of revenue.

GAAP diluted EPS was $0.10 based on 114.1 million fully-diluted weighted shares outstanding compared to $0.06 for the fourth quarter of 2011 based on 108.6 million fully-diluted weighted shares outstanding. Non-GAAP diluted EPS was $0.35 based on 114.1 million fully-diluted weighted shares outstanding compared to $0.12 for the fourth quarter of 2011 based on 108.6 million fully-diluted weighted shares outstanding.

“Continued investment in our talent and technology infrastructure drove momentum in both product and monetization, resulting in record revenue, profitability, and cash flow,” said Steve Sordello, CFO of LinkedIn. “As we look forward to 2013, we remain excited about the value LinkedIn will create for members and customers in the coming year.”

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

Fourth Quarter Highlights and Strategic Announcements

In the fourth quarter of 2012, LinkedIn:

Passed the 200 million member milestone, ending the year with approximately 202 million members, and grew cumulative membership 39% year over year. We continue to add approximately two members per second, and over 64% of LinkedIn members now come from international markets.

Launched the new LinkedIn profile, designed to make it easier for members to build their professional brands, discover new people and opportunities, and engage their networks. In the fourth quarter, on average, the number of members updating their profiles doubled versus the fourth quarter of 2011.

Introduced LinkedIn Influencers, furthering the development of LinkedIn as a professional publishing platform. The success of the Influencer program has helped drive an eight-fold increase to traffic associated with LinkedIn Today content over the last year.

Business Outlook

LinkedIn is providing guidance for the first quarter and full year of 2013:

Q1 2013 Guidance: Revenue is expected to range between $305 million and $310 million. Adjusted EBITDA is expected to range between $67 million and $69 million. The company expects depreciation and amortization in the range of $25 million to $27 million, and stock-based compensation in the range of $32 million to $34 million. 





Full Year 2013 Guidance: Revenue is expected to range between $1.41 billion and $1.44 billion. Adjusted EBITDA is expected to range between $315 million and $330 million. The company expects depreciation and amortization in the range of $130 million to $135 million, and stock-based compensation in the range of $160 million to $165 million.

Quarterly Conference Call

LinkedIn will host a webcast/conference call to discuss its fourth quarter 2012 financial results and business outlook today at 2:00 p.m. Pacific Time. Jeff Weiner and Steve Sordello will host the webcast, which can be viewed on the investor relations section of the LinkedIn website at http://investors.linkedin.com/. This call will contain forward-looking statements and other material information regarding the company's financial and operating results. Following completion of the call, a recorded replay of the webcast will be available on the website. For those without access to the Internet, a replay of the call will be available beginning at 8:00 p.m. Pacific Time on February 7, 2013 through February 14, 2013 at 11:59 p.m. Pacific Time. To listen to the telephone replay, call (855) 859-2056 within the US or (404) 537-3406 Internationally, access code 87304593.

Upcoming Events

Management will participate in upcoming financial Q&A discussions at industry events on February 13th and 25th, as well as March 6th and 12th. LinkedIn will furnish a link to these events on its investor relations website, http://investors.linkedin.com/ for both the live and archived webcasts.

About LinkedIn 

Founded in 2003, LinkedIn connects the world's professionals to make them more productive and successful. With more than 200 million members worldwide, including executives from every Fortune 500 company, LinkedIn is the world's largest professional network on the Internet. The company has a diversified business model with revenue coming from Talent Solutions, Marketing Solutions and Premium Subscriptions. Headquartered in Silicon Valley, LinkedIn also has offices across the globe.

Non-GAAP Financial Measures
To supplement its consolidated financial statements, which are prepared and presented in accordance with GAAP, the company uses the following non-GAAP financial measures: adjusted EBITDA, non-GAAP net income, and non-GAAP diluted EPS (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

The company excludes the following items from one or more of its non-GAAP measures:

Stock-based compensation. The company excludes stock-based compensation because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. The company further believes this measure is useful to investors in that



it allows for greater transparency to certain line items in its financial statements and facilitates comparisons to competitors' operating results.

Amortization of acquired intangible assets. The company excludes amortization of acquired intangible assets because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from various non-GAAP measures facilitates internal comparisons to historical operating results and comparisons to competitors' operating results.

Income tax effect of non-GAAP adjustments. The company adjusts non-GAAP net income by including the income tax effects of excluding stock-based compensation and the amortization of acquired intangible assets.  The company believes that the inclusion of the income tax effects provides additional transparency to the overall or “after tax” effects of excluding these items from non-GAAP net income.

For more information on the non-GAAP financial measures, please see the “Reconciliation of GAAP to non-GAAP Financial Measures” table in this press release.  This accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures. Additionally, the company has not reconciled adjusted EBITDA guidance to net income guidance because it does not provide guidance for either other income (expense), net, or provision for income taxes, which are reconciling items between net income and adjusted EBITDA. As items that impact net income are out of the company's control and/or cannot be reasonably predicted, the company is unable to provide such guidance. Accordingly, a reconciliation to net income is not available without unreasonable effort.

Safe Harbor Statement

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release and the accompanying conference call contain forward-looking statements about our products, including our investments in products, technology and other 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 first quarter of 2013 and the full fiscal year 2013. 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: our 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 mobile products and features; security measures and the risk that they may not be sufficient to secure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to access our solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability to maintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our key metrics internally; members and customers curtailing or ceasing to use our solutions; our core value of putting members first, which may conflict with the short-term interests of the business; privacy and changes in regulations in the United States, Europe or elsewhere, which could impact our ability to serve our members or curtail our monetization



efforts; litigation and regulatory issues; increasing competition; our ability to manage our growth; our ability to recruit and retain our employees; the application of US and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may make in the future; and the dual class structure of our 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, as well as the company's most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, and additional information will also be set forth in our Form 10-K that will be filed for the year ended December 31, 2012, which should be read in conjunction with these financial results.  These documents are available on the SEC Filings section of the Investor Relations page of the company's website at http://investors.linkedin.com/. All information provided in this release and in the attachments is as of February 7, 2013, and LinkedIn undertakes no duty to update this information.

































LINKEDIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
 
 
December 31,
 
December 31,
 
2012
 
2011
ASSETS
 
 
 
CURRENT ASSETS:
 
 
 
  Cash and cash equivalents
$
270,408

 
$
339,048

  Short-term investments
479,141

 
238,456

  Accounts receivable, net
203,607

 
111,372

  Deferred commissions
30,232

 
13,594

  Prepaid expenses
14,344

 
10,799

  Other current assets
21,065

 
12,658

           Total current assets
1,018,797

 
725,927

  Property and equipment, net
186,677

 
114,850

  Goodwill
115,214

 
12,249

  Intangible assets, net
32,780

 
8,095

  Other assets
28,862

 
12,576

TOTAL ASSETS
$
1,382,330

 
$
873,697

LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
CURRENT LIABILITIES:
 
 
 
  Accounts payable
$
53,559

 
$
28,217

  Accrued liabilities
104,077

 
58,644

  Deferred revenue
257,743

 
139,798

           Total current liabilities
415,379

 
226,659

DEFERRED TAX LIABILITIES
27,717

 
18,551

OTHER LONG TERM LIABILITIES
30,810

 
3,508

          Total liabilities
473,906

 
248,718

COMMITMENTS AND CONTINGENCIES
 
 
 
STOCKHOLDERS' EQUITY:
 
 
 
  Class A and Class B common stock
11

 
10

  Additional paid-in capital
879,303

 
617,629

  Accumulated other comprehensive income
260

 
100

  Accumulated earnings
28,850

 
7,240

           Total stockholders’ equity
908,424

 
624,979

  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
1,382,330

 
$
873,697






LINKEDIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
 
December 31,
 
December 31,
 
 
 
2012
 
2011
 
2012
 
2011
 
 
 
 
 
 
 
 
 
 
Net revenue
 
$
303,618

 
$
167,741

 
$
972,309

 
$
522,189

Costs and expenses:
 
 
 
 
 
 
 
 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
 
36,243

 
24,166

 
125,521

 
81,448

  Sales and marketing
 
100,104

 
53,249

 
324,896

 
164,703

  Product development
 
77,276

 
42,051

 
257,179

 
132,222

  General and administrative
 
38,980

 
24,463

 
128,002

 
74,871

  Depreciation and amortization
 
24,297

 
13,784

 
79,849

 
43,100

           Total costs and expenses
 
276,900

 
157,713

 
915,447

 
496,344

Income from operations
 
26,718

 
10,028

 
56,862

 
25,845

Other income (expense), net
 
24

 
(1,575
)
 
252

 
(2,903
)
Income before income taxes
 
26,742

 
8,453

 
57,114

 
22,942

Provision for income taxes
 
15,234

 
1,534

 
35,504

 
11,030

Net income
 
$
11,508

 
$
6,919

 
$
21,610

 
$
11,912

Net income per share of common stock:
 
 
 
 
 
 
 
 
      Basic
 
$
0.11

 
$
0.07

 
$
0.21

 
$
0.15

      Diluted
 
$
0.10

 
$
0.06

 
$
0.19

 
$
0.11

Weighted-average shares used to compute net income per share:
 
 
 
 
 
 
 
 
      Basic
 
107,924

 
98,531

 
105,166

 
77,185

      Diluted
 
114,095

 
108,612

 
112,844

 
104,118











LINKEDIN CORPORATION
SUPPLEMENTAL REVENUE INFORMATION
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
 
 
 
 
 
 
 
 
 
Revenue by product:
 
 
 
 
 
 
 
 
   Talent Solutions
 
$
160,997

 
$
84,937

 
$
523,582

 
$
260,885

   Marketing Solutions
 
83,187

 
49,523

 
258,278

 
155,848

   Premium Subscriptions
 
59,434

 
33,281

 
190,449

 
105,456

      Total
 
$
303,618

 
$
167,741

 
$
972,309

 
$
522,189

Revenue by geographic region:
 
 
 
 
 
 
 
 
   United States
 
$
189,006

 
$
111,970

 
$
619,485

 
$
353,834

   Other Americas (1)
 
21,909

 
10,144

 
66,099

 
28,800

Total Americas
 
210,915

 
122,114

 
685,584

 
382,634

EMEA (2)
 
69,910

 
35,494

 
217,342

 
109,995

APAC (3)
 
22,793

 
10,133

 
69,383

 
29,560

     Total
 
$
303,618

 
$
167,741

 
$
972,309

 
$
522,189

Revenue by channel:
 
 
 
 
 
 
 
 
   Field sales
 
$
178,364

 
$
95,842

 
$
552,459

 
$
287,634

   Online sales
 
125,254

 
71,899

 
419,850

 
234,555

      Total
 
$
303,618

 
$
167,741

 
$
972,309

 
$
522,189

______________
 
 
 
 
 
 
 
 
 
(1) Canada, Latin America and South America
(2) Europe, the Middle East and Africa (“EMEA”)
(3) Asia-Pacific (“APAC”)






LINKEDIN CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
Three Months Ended
 
Twelve Months Ended
 
 
December 31,
 
December 31,
 
 
2012
 
2011
 
2012
 
2011
 
 
 
 
 
 
 
 
 
Non-GAAP net income and net income per share:
 
 
 
 
 
 
 
 
   GAAP net income
 
$
11,508

 
$
6,919

 
$
21,610

 
$
11,912

   Add back: stock-based compensation
 
27,572

 
10,612

 
86,319

 
29,768

   Add back: amortization of intangible assets
 
2,943

 
1,155

 
9,872

 
3,635

   Income tax effect of non-GAAP adjustments
 
(1,809
)
 
(5,358
)
 
(17,464
)
 
(8,827
)
NON-GAAP NET INCOME
 
$
40,214

 
$
13,328

 
$
100,337

 
$
36,488

GAAP AND NON-GAAP DILUTED SHARES
 
114,095

 
108,612

 
112,844

 
104,118

NON-GAAP DILUTED NET INCOME PER SHARE
 
$
0.35

 
$
0.12

 
$
0.89

 
$
0.35

Adjusted EBITDA:
 
 
 
 
 
 
 
 
   Net income
 
$
11,508

 
$
6,919

 
$
21,610

 
$
11,912

   Provision for income taxes
 
15,234

 
1,534

 
35,504

 
11,030

   Other (income) expense, net
 
(24
)
 
1,575

 
(252
)
 
2,903

   Depreciation and amortization
 
24,297

 
13,784

 
79,849

 
43,100

   Stock-based compensation
 
27,572

 
10,612

 
86,319

 
29,768

ADJUSTED EBITDA
 
$
78,587

 
$
34,424

 
$
223,030

 
$
98,713