LinkedIn Q3 2013 Earnings Call
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LinkedIn Q3 2013 Earnings Call

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Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q3 2013 Earnings Call. For more information, check out http://investors.linkedin.com/.

Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q3 2013 Earnings Call. For more information, check out http://investors.linkedin.com/.

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LinkedIn Q3 2013 Earnings Call LinkedIn Q3 2013 Earnings Call Presentation Transcript

  • Q3’13 Earnings October 2013 2
  • Safe harbor “Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation contains 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 fourth 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 shortterm 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, 2012, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended September 30, 2013, which should be read in conjunction with these financial results.  These documents are or will be 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 October 29, 2013, and LinkedIn undertakes no duty to update this information. 3
  • Who we are 4
  • Our mission Connect the world’s professionals to make them more productive and successful 5
  • Our vision Create economic opportunity for every member of the global workforce 6
  • What we do 7
  • The value we create for our members Identity Insights Everywhere The professional profile of record The definitive professional publishing platform Work wherever our members work 8
  • Growing global network 1 259M+ >2 New Members worldwide Members per second 1 184M 2 Monthly unique visitors 1 As of 9/30/13 based on internal estimates | 2 Average monthly number of unique visitors for Q3’13 according to comScore using LinkedIn + SlideShare 9
  • The value we create for our customers Hire Market Sell Enable passive recruiting at massive scale Most effective way for companies to engage with professionals Transform cold calls into warm prospects 10
  • Our operating priorities Talent Technology Product Monetization Build a world class team Create data driven development at scale Develop products our members love Scale profitable business lines 11
  • Key metrics and results 12
  • Engagement metrics 259 143 142 238 132 218 11.711.6 11.1 202 116 187 174 103 161 145 88 131 106 110 9.8 9.4 9.3 8.9 92 82 7.6 7.6 75 116 7.1 7.1 Members (mn) Unique visitors, comScore (mn) 1 1 comScore metrics reflect LinkedIn site only, not including SlideShare Page views, comScore (bn) Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 102 1 13
  • Revenue $393 $364 160% 140% $325 $304 120% $252 100% $228 $168 $121 $45 $55 $62 $82 80% $188 60% $139 40% $94 20% Net revenue ($mn) Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q4’10 Q3’10 Q2’10 Q1’10 0% % Y/Y 14
  • Revenue by product $393 $364 $325 $304 20% 20% 20% $252 $228 $188 Talent Solutions 57% 53% 51% 54% Marketing Solutions 53% 55% Q3’13 49% 56% Q1’13 44% 51% 57% Q4’12 44% 48% 25% Q3’12 40% Q4’10 30% 27% 30% 32% 29% 23% 28% Q1’12 34% 20% 25% Q4’11 25% 27% 33% 29% Q3’11 22% 21% 20% 20% Q2’11 $62 Q3’10 Q1’10 30% 32% 38% $55 Q2’10 $45 $94 Q1’11 $82 20% 20% 24% 19% Q2’12 $121 $139 23% Q2’13 $168 20% Premium Subscriptions 15
  • Revenue by geography $393 $364 $325 $304 7% $252 $228 $188 $168 US 8% 23% 23% 23% 22% 22% 62% 62% 62% 62% 64% EMEA APAC Q3’13 Q2’13 Q1’13 Q4’12 67% 65% Q3’12 67% 64% Q2’12 74% 68% 8% 23% 8% 23% Q1’12 73% 69% 7% 7% 21% Q4’11 73% 71% Q4’10 20% Q3’10 18% Q2’10 20% $62 Q1’10 20% $55 5% 5% 21% Q2’11 $45 $94 Q1’11 $82 5% 5% 21% 6% 6% 21% Q3’11 $121 $139 6% 6% 6% 7% 7% 7% 7% 7% 7% 7% Other Americas 16
  • Revenue by channel $393 $364 $325 $304 42% 42% $252 43% $228 41% $188 43% $168 45% Field Q3’13 Q2’13 Q1’13 Q4’10 Q3’12 Q3’10 57% 57% Q2’12 54% 53% 54% Q1’12 55% 55% Q2’11 53% 54% 57% 57% 46% 46% 59% 59% Q4’11 41% Q2’10 45% $62 Q1’10 47% $55 58% 47% Q1’11 $45 $94 46% 43% Q3’11 $82 58% Q4’12 $121 $139 43% Online 17
  • 1 Adjusted EBITDA $89 $79 $93 30% $83 $56 20% $50 $34 $26 $16 $9 $11 $11 $38 10% $25 $13 Adj EBITDA ($mn) Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q4’10 Q3’10 Q2’10 Q1’10 0% % of revenue 1 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income please see slide 21. 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 18
  • Net income (loss) & cash flow Q3 2013 Non-GAAP net income GAAP EPS 2 Non-GAAP EPS Operating cash flow Free cash flow 1 1, 3 Cash, cash equivalents & short-term investments 1 $2.3 $47 $44 $25 $0.03 $0.02 $0.38 $0.22 $124 $88 $43 2 $3.7 $126 1 ($3.4) $0.39 GAAP net income (loss) Q3 2012 ($0.03) 1 Q2 2013 $31 $54 $2,272 $873 $677 1 In millions | 2 EPS is based on fully-diluted weighted share count | 3 Free cash flow is calculated by subtracting purchases of property and equipment from operating cash flow 19
  • 1 Non-GAAP reconciliations Three Months Ended Sep 30 2013 Non-GAAP net income and net income per share GAAP net income (loss) Three Months Ended Sep 30 2012 Nine Months Ended Sep 30 2013 Nine Months Ended Sep 30 2012 ($3,363) $2,302 $22,987 $10,102 Add back: stock-based compensation 54,445 26,798 136,738 58,747 Add back: amortization of intangibles 3,832 3,770 12,350 6,929 (8,120) (7,732) (28,422) (15,655) NON-GAAP NET INCOME $46,794 $25,138 $143,653 $60,123 GAAP diluted shares 113,940 113,618 117,090 112,420 119,188 113,618 117,090 112,420 $0.39 $0.22 $1.23 $0.53 ($3,363) $2,302 $22,987 $10,102 Provision for income taxes 8,155 4,406 12,982 20,270 Other (income) expense, net (156) (672) 404 (228) Depreciation and amortization 33,767 23,122 91,766 55,552 Stock-based compensation 54,445 26,798 136,738 58,747 $92,848 $55,956 $264,877 $144,443 Income tax effect of non-GAAP adj. Add back: dilutive shares under treasury stock method NON-GAAP DILUTED SHARES NON-GAAP DILUTED NET INCOME PER SHARE 5,248 Adjusted EBITDA GAAP net income (loss) Adjusted EBITDA 1 In thousands, except per share data 20
  • 1 Non-GAAP adjusted EBITDA reconciliation (In millions) (Unaudited) Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 $1.8 $4.3 $4.0 $5.3 $2.1 $4.5 ($1.6) $6.9 $5.0 $2.8 $2.3 $11.5 $22.6 $3.7 ($3.4) Provision for income taxes 1.0 0.7 0.5 1.4 (0.3) 5.4 4.4 1.5 5.8 10.0 4.4 15.2 0.7 4.1 8.2 Other (income) expense, net 0.3 0.4 (0.4) 0.3 (0.4) 0.0 1.8 1.6 (0.2) 0.7 (0.7) 0.0 0.3 0.3 (0.2) Depreciation and amortization 3.9 4.2 4.8 6.6 8.2 9.6 11.6 13.8 14.9 17.5 23.1 24.3 25.8 32.2 33.8 Stock-based compensation 1.9 2.0 2.2 2.7 3.8 6.8 8.5 10.6 12.6 19.3 26.8 27.6 33.9 48.4 54.4 GAAP net income (loss) Adjusted EBITDA $9.1 $11.5 $11.1 $16.3 $13.3 $26.3 $24.7 $34.4 $38.1 $50.4 $56.0 $78.6 $83.4 $88.6 $92.8 1 Adjusted EBITDA is a Non-GAAP financial measure. 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 21
  • Guidance 1, 2 Q4 2013 FY 2013 Revenue $415-420 ~$1,500 Adjusted EBITDA $98-100 ~$364 Depreciation & amortization $43-45 ~$136 Stock-based compensation $55-57 ~$193 1 All guidance figures are approximate values | 2 In millions 22
  • Thank you 23
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