) reported adjusted net earnings of 7 cents per share in the
second quarter of 2013, beating the Zacks Consensus Estimate of 4
Total revenue for the reported quarter was $363.7 million, up
59.4% from $228.2 million in the year-ago quarter. LinkedIn
witnessed strong performance across all its business segments.
Segment-wise, revenues from the
(previously named Hiring Solutions) products were $205.1 million,
up 68.7% from the year-ago quarter.
Revenues from the
were $85.6 million, up 35.7% from the year-ago quarter. This
segment contributed 23.5% to the revenues in the second quarter
of 2013, as against 27.6% in the year-ago period.
recorded revenues of $72.9 million, up 67.7% from the year-ago
period. As a percentage of total revenue, the segment contributed
20.0% of the total revenue during the second quarter, up from
19.1% in the year-ago period.
In America, LinkedIn generated revenues of $251.1 million,
approximately 69.1% of the total revenue in the reported quarter.
Revenues from the Europe, Middle East & Africa (EMEA) region
was $84.7 million and constituted 23.3% of the total revenue,
while APAC revenues totaled $27.8 million, which constituted
around 7.7% of total revenue in the second quarter of 2013.
LinkedIn incurred higher sales & marketing, product
development and administrative expenses of 75.4% of total revenue
compared with 74.0% in the year-ago period. Moreover, the company
reported operating income of $8.1 million, down 40.0% from the
year-ago level of $13.5 million.
Net profit on a GAAP basis was $3.73 million or 3 cents per
share versus a profit of $2.81 million or 3 cents in the second
quarter of 2012. Excluding special items like amortization of
intangibles but including stock-based compensation, non-GAAP
earnings came at $8.0 million or 7 cents per share compared with
$16.4 million or 15 cents per in the year-ago quarter.
Balance Sheet & Cash Flow
LinkedIn ended the quarter with cash and cash equivalents of
$262.7 million versus $264.9 million in the prior quarter.
Accounts receivable in the quarter were $203.6 million down from
$212.6 million in the previous quarter. Total deferred revenues
in the quarter were $331.2 million, up from $317.1 million in the
previous quarter. The company generated $124.2 million in cash
flow from operation, up from $103.8 million reported in the
The company expects third-quarter 2013 revenues in the range
of $367.0 to $373.0. Whereas, adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization) is expected to
range between $81.0 million and $83.0 million. Depreciation and
amortization is expected in the range of $38.0 million to $40.0
For full year 2013, total
evenue is expected to range between $1.455 billion and $1.475
billion. Adjusted EBITDA is expected between $340.0 million and
$355.0 million. Moreover, depreciation and amortization is
expected between $135.0 million and $140.0 million.
LinkedIn reported decent 2Q13 results, which exceeded our
expectation. LinkedIn has benefited the most from its Talent
Solution and Premium Subscription businesses, which continues to
grow substantially. The company, which is a leader in the
emerging online professional networking segment, has gained
popularity across the globe and grown steadily over the recent
Although the operating performance of the company deteriorated
as the company was unable to control the significant increase in
the operating cost in the quarter. As a result, operating profits
In the current scenario, the company faces stiff competition
in the professional networking space from companies like
). Moreover, the emergence of companies likes
) could change the scenario rapidly over the next few years, by
introducing new services at regular interval.
Currently, LinkedIn carries a Zacks Rank #3 (Hold).
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