LinkedIn Q1 2014 Earnings Call
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LinkedIn Q1 2014 Earnings Call

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Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q1 2014 Earnings Call. For more information, check out http://investors.linkedin.com/.

Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q1 2014 Earnings Call. For more information, check out http://investors.linkedin.com/.

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LinkedIn Q1 2014 Earnings Call Presentation Transcript

  • 1. Q1’14 Results May 2014 2
  • 2. Safe harbor 3 “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 customer and member growth and engagement, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the second quarter of 2014 and the full fiscal year 2014. 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 short-term interests of the business; privacy and changes in regulations in the United States, Europe, Asia and 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 international operations; 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 for the year ended December 31, 2013, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended March 31, 2014, 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 presentation is as of May 1, 2014, and LinkedIn undertakes no duty to update this information.
  • 3. Who we are 4
  • 4. Connect the world’s professionals to make them more productive and successful Our mission 5
  • 5. Create economic opportunity for every member of the global workforce Our vision 6
  • 6. What we do 7
  • 7. Our member value propositions Professional Identity Be the professional profile of record Network Connect all of the world's professionals Knowledge Be the definitive professional publishing platform 8
  • 8. Growing global network 300M Members worldwide >2 New Members per second 186M Monthly unique visitors 1 As of 4/18/2014 based on internal estimates | 2 Average monthly number of unique visitors for Q1’14 according to comScore using LinkedIn + SlideShare 1 2 3 9
  • 9. Hire Power 50% of the world’s hires Market Be the most effective platform with marketers to engage with Sell Be the start of every sales opportunity Our customer value propositions 10
  • 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
  • 11. Key metrics and results 12
  • 12. Engagement metricsQ1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 296 277 259 238 218 202 187 174 161 145 131 116 102 Members (mn) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 142 139 142143 132 116 110 106 103 92 88 82 75 Unique visitors, comScore (mn) Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 11.5 10.6 11.611.7 11.1 9.8 8.9 9.39.4 7.67.6 7.17.1 Page views, comScore (bn) 1 As of 3/31/14 based on internal metrics | 2 comScore metrics reflect LinkedIn.com desktop traffic only, not including SlideShare and mobile traffic 13 2 21
  • 13. Revenue 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 Q4’13 Q1’14 $473 $447 $393 $364 $325 $304 $252 $228 $188 $168 $139 $121 $94 $82 $62$55$45 % Y/YNet revenue ($mn) 0% 20% 40% 60% 80% 100% 120% 140% 14 160%
  • 14. Revenue by product 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 Q4’13 Q1’14 Talent Solutions Marketing Solutions Premium Subscriptions 38% 32% 30% 40% 33% 27% 44% 30% 25% 44% 34% 22% 49% 29% 21% 48% 32% 20% 51% 29% 20% 51% 30% 20% 54% 25% 20% 53% 28% 19% 55% 25% 20% 53% 27% 20% 57% 23% 20% 56% 24% 20% 57% 23% 20% $45 $55 $62 $82 $94 $121 $139 $168 $188 $228 $252 $304 $325 $364 $393 15 55% 25% 20% $447 58% 22% 20% $473
  • 15. Revenue by geography 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 Q4’13 Q1’14 US EMEA APAC Other Americas 73% 20% 73% 20% 74% 18% 71% 20% 69% 21% 68% 21% 5% 67% 21% 6% 67% 21% 6% 64% 23% 7% 65% 22% 7% 64% 22% 7% 62% 23% 8% 62% 23% 7% 62% 23% 8% 62% 23% 8% $45 $55 $62 $82 $94 $121 $139 $168 $188 $228 $252 $304 $325 $364 $393 5% 5% 5% 6% 6% 6% 7% 7% 7% 7% 7% 7% 16 61% 24% 8% $447 7% $473 60% 25% 8% 7%
  • 16. Revenue by channel 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 Q4’13 Q1’14 Field Online 53% 47% 55% 45% 54% 46% 59% 41% 54% 46% 55% 45% 53% 47% 57% 43% 54% 46% 57% 43% 57% 43% 59% 41% 57% 43% 58% 42% 58% 42% $45 $55 $62 $82 $94 $121 $139 $168 $188 $228 $252 $304 $325 $364 $393 17 61% 39% $447 58% 42% $473
  • 17. 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 Q3’13 Q4’13 Q1’14 $117 $111 $93 $89 $83 $79 $56 $50 $38 $34 $25$26 $13 $16 $11$11$9 % of revenueAdj EBITDA ($mn) 0% 10% 20% 30% 18 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 1
  • 18. Net income (loss) & cash flow Q1 2014 Q4 2013 Q1 2013 GAAP net income (loss) ($13.4) $3.8 $22.6 Non-GAAP net income $47 $48 $52 GAAP EPS ($0.11) $0.03 $0.20 Non-GAAP EPS $0.38 $0.39 $0.45 Operating cash flow $129 $82 $104 Free cash flow $40 $25 $60 Cash, cash equivalents & marketable securities $2,306 $2,329 $830 1 In $ millions | 2 Attributable to common stockholders | 3 EPS is based on fully-diluted weighted share count | 4 Free cash flow is calculated by subtracting purchases of property and equipment from operating cash flow 19 4 3 3 , 1 1 1 1 1 2,
  • 19. Non-GAAP reconciliations 1 Three months Three months ended mar 31 ended mar 31 2014 2013 Non-GAAP net income and net income per share GAAP net income (loss) attributable to common stockholders ($13,445) $22,616 Add back: accretion of redeemable noncontrolling interest 126 -- Add back: stock-based compensation 67,769 33,939 Add back: amortization of intangibles 4,813 2,841 Income tax effect of non-GAAP adj. (11,914) (6,995) Non-GAAP NET INCOME $47,349 $52,401 GAAP diluted shares 120,967 115,398 Add back: dilutive shares under the treasury stock method 3,884 -- NON-GAAP diluted shares 124,851 115,398 NON-GAAP DILUTED NET INCOME PER SHARE $0.38 $0.45 Adjusted EBITDA GAAP net income ($13,319) $22,616 Provision for income taxes 13,581 718 Other (income) expense, net (1,026) 308 Depreciation and amortization 49,740 25,806 Stock-based compensation 67,769 33,939 ADJUSTED EBITDA $116,745 $83,387 201 In thousands, except per share data
  • 20. 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 Q4’13 Q1’14 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 ($3.4) $3.8 ($13.3) Provision (benefit) 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 9.5 13.6 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) (1.8) (1.0) 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 42.8 49.7 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 57.2 67.8 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 $111.4 $116.7 21 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
  • 21. Guidance Q2 2014 FY 2014 Revenue $500-505 $2,060-2,080 Adjusted EBITDA $118-120 $505-510 Depreciation & amortization ~$53 ~$225 Stock-based compensation ~$75 ~$305 22 1 1 All guidance figures are approximate values | 2 Values are in $ millions , 2
  • 22. Thank you 23
  • 23. ©2014 LinkedIn Corporation. All Rights Reserved.