LinkedIn smashes Q4 expectations after a year of ‘accelerated product innovation’

LinkedIn has surpassed Wall Street’s expectations yet again with its stellar fourth quarter.

The company just reported revenue at $303.6 million, an increase of 81 percent from the fourth quarter of the previous year.

Analysts estimate that LinkedIn would report revenue growth of 67 percent, to $280 million, with profits more than tripling to 19 cents per share. The social network for professionals has met or beat on every earnings since going public in May 2011.

As Wired Business reports, the company is on a “financial rampage,” but the big question is whether the market can support two social networks. Facebook’s annual revenue stands at about $5 billion.

Q4 Revenues

CEO Jeff Weiner revealed on today’s investors’ call that LinkedIn is the 25th most visited web property in the world.

Most of the company’s Q4 revenue came from its suite of Talent Solutions products. Revenue from that business totaled $161 million, an increase of 90 percent compared to the fourth quarter of 2011.

On today’s earnings call, the company revealed that it expects revenues to increase in Q1 2013, as it will modestly raise prices for LinkedIn job slots for its U.S. customers.

The company reported healthy growth in all three of its major product categories: its ad sales group saw a 68 percent year-on-year jump to $83.2 million, while its subscriptions service increased 79 percent year over year to $59.4 million.

Next quarter, the company expects to pull in revenues of approximately $310 million, up about $6 million from the previous quarter. “Our investment plan involves recruiting…and new strategic initiatives like mobile education and non U.S. markets,” said Steve Sordello, LinkedIn’s CFO on an earnings call. The company will also invest in expanding its data centers.

Membership at home and abroad

Annual revenues aren’t the only success story: the company is adding approximately two members to its network per second. LinkedIn recently hit the 200 million member mark, and according to today’s report, it ended the year with approximately 202 million members. LinkedIn has grown its membership 39 percent year over year.

In 64 percent of members are outside of the U.S., up four percent from the fourth quarter of 2011. The company said the gap is closing between international customers and international revenues — as it opens new offices around the world (most recently in Dubai), it is pulling in companies willing to pay for enterprise subscriptions. 

International revenues account for approximately 38 percent of overall revenues.

The company will focus its expansion on Southern Europe, where Sordello has been “surprised” by the takeoff of the service, and Brazil.

Innovative products

“2012 was a transformative year for LinkedIn,” said Weiner in a statement. “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.”

On the call, Weiner stressed how “LinkedIn Today,” the “people you may know” feature, and the new professional profiles has been an engagement driver. Last quarter, the website received record page views for the year, and the number of members updating their profile doubled.

Status updates and social gestures are at an “all time high,” said Weiner.

The company also rolled out its LinkedIn influencer program last quarter as it moves into the realm of personalized content. Richard Branson is most popular influencer with 1.3 million followers, and already, an influencer post has received over one million page views.

LinkedIn Jobs on mobile is also gaining traction, said Weiner. Mobile products remain the “fastest growing consumer service,” he said. “Given the more limited real estate [on the smartphone] we want to be thoughtful about integrating ads on that experience,” said Sordello.

Last month, Sordello said the company began a test with customers like GE and Xerox. They are taking repository of existing content like white papers, and serving it as a status update to specific followers on LinkedIn. In the coming month, the company will perform these same tests on smartphones.

LinkedIn’s stock jumped ten percent in after-hours trading this afternoon. The company is currently trading at LinkedIn is trading at $135.87 per share, an increase of 9.5 percent over its closing price today.


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