We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
LinkedIn Corporation reported better-than-expected results for the second quarter of 2016. The professional networking company posted adjusted earnings (excluding accretion of redeemable non-controlling interest, amortization of intangible assets and non-cash interest expense but including stock-based compensation) on a proportionate tax basis of 6 cents. The Zacks Consensus Estimate was pegged at a loss of 6 cents, while in the year-ago quarter, the company had incurred a loss of 30 cents.
On a GAAP basis, however, LinkedIn incurred a loss of 89 cents per share, wider than the prior-year quarter loss of 53 cents.
Nevertheless, LinkedIn’s second-quarter revenues surged 31% year over year to $932.7 million and came ahead of both management’s guidance range of $885 million to $890 million and the Zacks Consensus Estimate of $897 million. The year-over-year upside was backed by the company’s ongoing investments in mobile, global expansion of content and jobs, and the acquisitions of lynda.com and Connectifier to a large extent.
Segment-wise, revenues at Talent Solutions surged 35% from the year-ago quarter to $597 million. Revenues at Marketing Solutions jumped 29% to $181 million driven primarily by higher sponsored updates. LinkedIn garnered $155 million in revenues from Premium Subscriptions, up 21%.
LinkedIn’s cumulative member count rose 18% to 450 million at the second quarter end. The company witnessed a 9% increase in unique visiting members and a 32% surge in member page views.
Geographically, LinkedIn’s revenues from the U.S. increased 27.8% on a year-over-year basis. International revenues, which comprise Other Americas (Canada, Latin America and South America), the Europe, Middle East & Africa (EMEA), and Asia-Pacific (APAC) regions, jumped 36.4% to $364.6 million. Meanwhile, revenues from Other Americas, EMEA and APAC increased 19.4%, 41.8% and 32.7%, respectively.
Total costs and expenses in the quarter rose 18.3% to $938.3 million. As a percentage of revenues, total costs and expenses were 100.6%, compared with 111.4% a year ago.
On an adjusted basis (excluding amortization of intangible assets but including stock-based compensation), the company posted an operating income of $52.4 million in the quarter under review. In the year-ago quarter, it had incurred operating loss of 51.7 million.
Balance Sheet & Cash Flow
LinkedIn ended the quarter with cash, cash equivalents and marketable securities of $3.312 billion, compared with $3.160 billion in the preceding quarter. During the quarter, the company generated approximately $332.4 million in cash flow from operations, while that for the first half of 2016 was $584.6 million.
LinkedIn, a leader in the emerging online professional networking segment, enjoys increasing popularity and steady growth worldwide. The company posted better-than-expected results in the second quarter and witnessed a strong year-over-year improvement on both fronts. Moreover, the company witnessed an impressive 19% increase in its cumulative member count. Additionally, we are encouraged by top-line growth of 30–50% that was recorded over the past few quarters by this Zacks Rank #3 (Hold) company.
However, the company did not update its outlook for 2016 and did not held conference call in light of the pending Merger with Microsoft Corp. (MSFT - Free Report) . Notably, the two companies entered into a merger agreement on Jun 11, under which Microsoft will acquire LinkedIn for a total cash consideration of approximately $26.2 billion.
LinkedIn’s traction in the mobile segment is particularly impressive, owing primarily to the launch of its applications for Apple’s (AAPL - Free Report) iPhones and Android-based smartphones. Synergies from its acquisitions — Lynda.com, Newsle and Bizo — are also expected to garner additional earnings through targeted marketing strategies over the long term, apart from enhancing user experience.
We believe that LinkedIn’s initiatives to boost advertising revenues through product launches and partnership programs are noteworthy. Meanwhile, advertisers are also taking note of the company’s growing user base, in our view.
LinkedIn’s investments in strategic products are essential as its peers like Facebook and Twitter have started looking for opportunities to expand in the professional networking space.
On the flip side, continued investments in new and improved products and services might dent LinkedIn’s profits in the short term, even though over the long run, these investments will drive member growth and user engagement.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
LinkedIn's (LNKD) Q2 Earnings & Revenues Tops Estimates
LinkedIn Corporation reported better-than-expected results for the second quarter of 2016. The professional networking company posted adjusted earnings (excluding accretion of redeemable non-controlling interest, amortization of intangible assets and non-cash interest expense but including stock-based compensation) on a proportionate tax basis of 6 cents. The Zacks Consensus Estimate was pegged at a loss of 6 cents, while in the year-ago quarter, the company had incurred a loss of 30 cents.
On a GAAP basis, however, LinkedIn incurred a loss of 89 cents per share, wider than the prior-year quarter loss of 53 cents.
Nevertheless, LinkedIn’s second-quarter revenues surged 31% year over year to $932.7 million and came ahead of both management’s guidance range of $885 million to $890 million and the Zacks Consensus Estimate of $897 million. The year-over-year upside was backed by the company’s ongoing investments in mobile, global expansion of content and jobs, and the acquisitions of lynda.com and Connectifier to a large extent.
Segment-wise, revenues at Talent Solutions surged 35% from the year-ago quarter to $597 million. Revenues at Marketing Solutions jumped 29% to $181 million driven primarily by higher sponsored updates. LinkedIn garnered $155 million in revenues from Premium Subscriptions, up 21%.
LinkedIn’s cumulative member count rose 18% to 450 million at the second quarter end. The company witnessed a 9% increase in unique visiting members and a 32% surge in member page views.
Geographically, LinkedIn’s revenues from the U.S. increased 27.8% on a year-over-year basis. International revenues, which comprise Other Americas (Canada, Latin America and South America), the Europe, Middle East & Africa (EMEA), and Asia-Pacific (APAC) regions, jumped 36.4% to $364.6 million. Meanwhile, revenues from Other Americas, EMEA and APAC increased 19.4%, 41.8% and 32.7%, respectively.
Total costs and expenses in the quarter rose 18.3% to $938.3 million. As a percentage of revenues, total costs and expenses were 100.6%, compared with 111.4% a year ago.
On an adjusted basis (excluding amortization of intangible assets but including stock-based compensation), the company posted an operating income of $52.4 million in the quarter under review. In the year-ago quarter, it had incurred operating loss of 51.7 million.
Balance Sheet & Cash Flow
LinkedIn ended the quarter with cash, cash equivalents and marketable securities of $3.312 billion, compared with $3.160 billion in the preceding quarter. During the quarter, the company generated approximately $332.4 million in cash flow from operations, while that for the first half of 2016 was $584.6 million.
LINKEDIN CORP-A Price, Consensus and EPS Surprise
LINKEDIN CORP-A Price, Consensus and EPS Surprise | LINKEDIN CORP-A Quote
Our Take
LinkedIn, a leader in the emerging online professional networking segment, enjoys increasing popularity and steady growth worldwide. The company posted better-than-expected results in the second quarter and witnessed a strong year-over-year improvement on both fronts. Moreover, the company witnessed an impressive 19% increase in its cumulative member count. Additionally, we are encouraged by top-line growth of 30–50% that was recorded over the past few quarters by this Zacks Rank #3 (Hold) company.
However, the company did not update its outlook for 2016 and did not held conference call in light of the pending Merger with Microsoft Corp. (MSFT - Free Report) . Notably, the two companies entered into a merger agreement on Jun 11, under which Microsoft will acquire LinkedIn for a total cash consideration of approximately $26.2 billion.
LinkedIn’s traction in the mobile segment is particularly impressive, owing primarily to the launch of its applications for Apple’s (AAPL - Free Report) iPhones and Android-based smartphones. Synergies from its acquisitions — Lynda.com, Newsle and Bizo — are also expected to garner additional earnings through targeted marketing strategies over the long term, apart from enhancing user experience.
We believe that LinkedIn’s initiatives to boost advertising revenues through product launches and partnership programs are noteworthy. Meanwhile, advertisers are also taking note of the company’s growing user base, in our view.
LinkedIn’s investments in strategic products are essential as its peers like Facebook and Twitter have started looking for opportunities to expand in the professional networking space.
On the flip side, continued investments in new and improved products and services might dent LinkedIn’s profits in the short term, even though over the long run, these investments will drive member growth and user engagement.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>