LinkedIn grows revenue 33% in Q2, but professional network records larger losses
Investors take stock price of company sharply down, with growth seen tied to lynda.com acquisition, not organic growth, and losses increase
The professional network LinkedIn last night posted second quarter earnings, announcing that revenue increased 33 percent. But investors today are taking the stock down – over 9 percent in morning trading – as many saw the increases as tied solely to the company’s $1.5 billion acquisition of lynda.com.
Unless the company can start generating organic growth the financial news media will start pounding on the idea that LinkedIn might be an acquisition target, though its long-term liabilities might make that a hard one to complete.
The company admits in its earning report that the lynda.com acquisition will have a 4 percent impact on earnings in the next quarter, 3 percent in the quarter after that. If so, the value of the acquisition may simply be to the overall value of the company in the event of a sale.
Like Twitter, many see LinkedIn as a social network service with a definite ceiling – one where the current users see value in the product, but where investors want Facebook styled user growth. That makes it tough for any start-up that has gone public.
Here is a very abbreviated look at LinkedIn’s Q2 2015 earnings statement:
MOUNTAIN VIEW, Calif. – July 30, 2015 — LinkedIn Corporation, the world’s largest professional network on the Internet, with approximately 380 million members, reported its results for the second quarter of 2015. The transcript with prepared remarks is contained within this release. In addition, a supplemental presentation will be made available on the investor relations section of the LinkedIn website at http://investors.linkedin.com.
- Revenue for Q2’15 was $712 million, an increase of 33% compared to the same quarter last year; and on a constant currency basis an increase of 38% compared to the same quarter last year.Talent Solutions revenue (inclusive of Learning & Development) was $443 million, an increase of 38% compared to the same quarter last year.
- Marketing Solutions revenue was $140 million, an increase of 32% compared to the same quarter last year.
- Premium Subscriptions revenue was $128 million, an increase of 22% compared to the same quarter last year.
- GAAP net loss attributable to common stockholders was $68 million; Non-GAAP net income was $71 million.
- GAAP diluted EPS was $(0.53); non-GAAP diluted EPS was $0.55.
- Adjusted EBITDA was $163 million, or 23% of revenue.
“LinkedIn continued to deliver increased member and customer value in the second quarter while delivering solid financial results,” said Jeff Weiner, CEO of LinkedIn. “We continued to invest in our long-term strategic roadmap and began integrating the acquisition of lynda.com that closed during the quarter.”