LinkedIn Business Update
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LinkedIn Business Update

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Learn more: http://investors.linkedin.com/events.cfm

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LinkedIn Business Update LinkedIn Business Update Presentation Transcript

  • Business update September 2013
  • 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 market opportunity, our investments in products, technology and other key strategic areas, certain non-financial metrics, such as member growth and engagement, and our long-term Non-GAAP operating model including Adjusted EBITDA. 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 t 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 short-term 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” included in the prospectus relating to this offering, 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 filed for the quarter ended June 30, 2013, which should be read in conjunction with these financial results. These documents are 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 presentation and in the attachments is as of September 3, 2013, and LinkedIn undertakes no duty to update this information, except as required by applicable law LinkedIn has filed an automatically effective registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and other documents the issuer has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov . Alternatively, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling toll free 1-866-803-9204.
  • Who we are
  • Connect the world’s professionals to make them more productive and successful Our mission 2
  • Create economic opportunity for every member of the global workforce Our vision 3
  • Mapping every global connection between: Opportunities Skills Companies Educational institutions People Professional knowledge Translating vision to reality—The Economic Graph 4
  • What we do
  • Identity The professional profile of record Insights The definitive professional publishing platform Everywhere Work wherever our members work The value we create for our members 6
  • 1 Growing global network 238M+ Members worldwide >2 New Members per second 189M Monthly unique visitors 1 238M members is registered members, which is higher than actual members | 2 238M & >2 member per second rate of growth as of 6/30/13 based on internal estimates | 3 189m monthly unique visitors using comScore average for Q2’13 using LinkedIn + SlideShare 7 1 2 2 3,
  • 1 LinkedIn members as of 6/30/2013 | 2 Source: 2011 International Planning & Research Members Large global opportunity LinkedIn members Global professionals Global workforce 3B+ 2 600M+ 2 238M+ 1 8
  • 1 LinkedIn estimates | 2 Source: IDC, 4/13 for Talent Acquisition; 7/13 for Digital Ad Spend | 3 2013 IDC est. vs 2010 IDC estimate illustrated in prior presentations showing $69B total and $25B B2B Monetization Large global market opportunity Global talent acquisition and staffing services Global internet advertising spend Total B2B Total $85B+ 2 Addressable today $27B+ 1 $113B+ 2 $39B+ 1 9 3
  • Hire Enable passive recruiting at massive scale Market Most effective way for companies to engage with professionals Sell Transform cold calls into warm prospects The value we create for our customers 10
  • Our operating priorities Talent Build a world class team Technology Create data driven development at scale Product Develop products our members love Monetization Scale profitable business lines 11
  • Key metrics and results
  • Engagement metricsQ1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 238 218 202 187 174 161 145 131 116 102 Members (mm) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 143 132 116 110 106 103 92 88 82 75 Unique visitors, comScore (mm) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 11.7 11.1 9.8 8.9 9.39.4 7.67.6 7.17.1 Page views, comScore (bn) 1 comScore metrics reflect LinkedIn site only, not including SlideShare 13 1 1
  • Revenue growth 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 $364 $325 $304 $252 $228 $188 $168 $139 $121 $94 $82 $62$55$45 % Y/YNet revenue ($mm) 0% 20% 40% 60% 80% 100% 120% 140% 14 160%
  • Adjusted EBITDA 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 $89 $83 $79 $56 $50 $38 $34 $25$26 $13 $16 $11$11$9 % of revenueAdj EBITDA ($mm) 0% 10% 20% 30% 15 1 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income, see Appendix page 18. 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 1
  • Long-term target Non-GAAP operating model FY 2011 FY 2012 LT target model Non-GAAP cost of revenue as % of revenue 15% 12% 10-14% Non-GAAP S&M as % of revenue 30% 32% 28-32% Non-GAAP R&D as % of revenue 23% 22% 17-19% Non-GAAP G&A as % of revenue 13% 12% 9-11% Adjusted EBITDA as % of revenue 19% 23% 30%+ 1 Non-GAAP measures exclude stock-based compensation and depreciation & amortization | 2 For historic reconciliation of Adjusted EBITDA to net income, see Appendix page 19 | 3 The company has not reconciled adjusted EBITDA to net income in its long-term target non-GAAP operating model, nor any of the Non-GAAP measures referenced above, because items such as other income (expense) net, and provision for income taxes, that impact net income, are out of the company's control and/or cannot be reasonably predicted. Accordingly, a reconciliation of adjusted EBITDA to net income is not available without unreasonable effort. 1 16 2 3,
  • Thank you
  • Non-GAAP reconciliation LINKEDIN CORPORATION RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (In thousands, except per share data) (Unaudited) $mm 1Q’10 2Q’10 3Q’10 4Q’10 1Q’11 2Q’11 3Q’11 4Q’11 1Q’12 2Q’12 3Q’12 4Q’12 1Q’13 2Q’13 GAAP Net Income (Loss) 1.8 4.3 4.0 5.3 2.1 4.5 (1.6) 6.9 5.0 2.8 2.3 11.5 22.6 3.7 Provision for income taxes 1.0 0.7 0.5 1.4 (0.3) 5.4 4.4 1.5 5.8 10.0 4.4 15.2 0.7 4.1 Other income (expense) 0.3 0.4 (0.4) 0.3 (0.4) 0.0 1.8 1.6 (0.2) 0.7 (0.7) 0.0 0.3 0.3 Depreciation and amortization 3.9 4.2 4.8 6.6 8.2 9.6 11.6 13.8 14.9 17.5 23.1 24.3 25.8 32.2 Stock-based compensation 1.9 2.0 2.2 2.7 3.8 6.8 8.5 10.6 12.6 19.3 26.8 27.6 33.9 48.4 Adjusted EBITDA 9.1 11.5 11.1 16.3 13.3 26.3 24.7 34.4 38.1 50.4 56.0 78.6 83.4 88.6 18 1 Adjusted EBITDA is a Non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP 1 1
  • Long-term target model reconciliation Non-GAAP reconciliation FY 2011 FY 2012 Cost of Revenue 81.4 125.5 Stock-based compensation 1.7 6.4 Non-GAAP Cost of Revenue 79.8 119.1 % of revenue 15% 12% GAAP Sales & Marketing 164.7 324.9 Stock-based compensation 8.1 17.7 Non-GAAP Sales & Marketing 156.6 307.2 % of revenue 30% 32% GAAP Product Development 132.2 257.2 Stock-based compensation 13.6 46.0 Non-GAAP Product Development 118.6 211.2 % of revenue 23% 22% GAAP General & Administrative 74.9 128.0 Stock-based compensation 6.4 16.2 Non-GAAP General & Administrative 68.5 111.9 % of revenue 13% 12% GAAP Income from Operations 25.8 56.9 Stock-based compensation 29.8 86.3 Amortization of intangible assets 3.6 9.9 Non-GAAP Operating Income 59.2 153.1 % of revenue 11% 16% Depreciation 39.5 70.0 ADJUSTED EBITDA RECONCILIATION ($MM) GAAP Net Income 11.9 21.6 Provision for income taxes 11.0 35.5 Other income (expenses), net 2.9 (0.3) Depreciation & amortization 43.1 79.8 Stock-based compensation 29.8 86.3 Adjusted EBITDA 98.7 223.0 % of revenue 19% 23% 19
  • ©2013 LinkedIn Corporation. All Rights Reserved.