LinkedIn Q4 2013 Earnings Call
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LinkedIn Q4 2013 Earnings Call

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Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q4 2013 Earnings Call. For more information, check out http://investors.linkedin.com/.

Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q4 2013 Earnings Call. For more information, check out http://investors.linkedin.com/.

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  • 1. Q4’13 Results February 2014 2
  • 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 first 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 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 for the year ended December 31, 2012, as well as the company’s most recent Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, and additional information will also be set forth in our Form 10-K that will be filed for the year ended December 31, 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 presentation is as of February 6, 2014, and LinkedIn undertakes no duty to update this information. 3
  • 3. Who we are 4
  • 4. Our mission Connect the world’s professionals to make them more productive and successful 5
  • 5. Our vision Create economic opportunity for every member of the global workforce 6
  • 6. What we do 7
  • 7. Our member value propositions Professional Identity Network Knowledge Be the professional profile of record Connect all of the world's professionals Be the definitive professional publishing platform
  • 8. Growing global network 1 >2 New Members worldwide Members per second 277M 1 187M 2 Monthly unique visitors 1 As of 12/31/13 based on internal estimates | 2 Average monthly number of unique visitors for Q4’13 according to comScore using LinkedIn + SlideShare 9
  • 9. Our customer value propositions Hire Market Sell Power 50% of the world’s hires Be the most effective platform with marketers to engage with Be the start of every sales opportunity 10
  • 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
  • 11. Key metrics and results 12
  • 12. Engagement metrics 277 259 143 142 238 139 132 218 11.711.6 11.1 202 10.6 116 187 174 103 106 110 9.8 9.4 9.3 161 145 88 8.9 92 82 131 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) Q4’13 Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q4’13 Q3’13 Q2’13 Q1’13 Q4’12 Q3’12 Q2’12 Q1’12 Q4’11 Q3’11 Q2’11 Q1’11 Q4’13 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
  • 13. Revenue $447 $393 160% 140% $364 $304 120% $325 100% $252 $228 $168 $121 $45 $55 $62 $82 80% $188 60% $139 40% $94 20% Net revenue ($mn) Q4’13 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
  • 14. Revenue by product $447 $393 20% $364 $304 $325 20% 20% 25% 20% Talent Solutions 54% Marketing Solutions 57% 55% Q3’13 51% 51% 53% Q4’12 48% 30% 53% 55% 56% Q3’12 44% 49% 57% 25% Q2’12 29% 27% 28% Q1’12 Q3’10 29% Q3’11 Q2’10 34% 32% Q2’11 44% 25% 30% 21% Q1’11 30% 32% 38% 27% 33% 40% 22% 20% Q4’10 $45 $55 Q1’10 $62 $82 $94 20% 23% 25% 20% 20% Q4’11 $121 $139 19% Q1’13 $168 20% Q2’13 $188 24% Q4’13 $228 $252 23% 20% Premium Subscriptions 15
  • 15. Revenue by geography $447 7% $393 $364 $304 $252 $228 EMEA 7% 7% 8% 24% 8% 23% 23% 23% 23% 61% 22% 62% 62% 23% 21% 62% 62% 64% APAC Q4’13 Q3’13 Q2’13 Q1’13 65% Q4’12 67% 64% Q3’12 Q3’10 Q4’10 US 68% 8% $325 22% Q2’12 74% 69% 6% 7% Q1’12 73% 71% 67% Q3’11 20% Q1’11 20% 73% Q2’10 20% 18% Q1’10 $62 $45 $55 5% 5% 21% 5% 5% 21% Q2’11 $82 $94 6% 6% 21% 6% 6% Q4’11 $121 $139 $168 $188 7% 7% 7% 7% 7% 7% 7% 8% Other Americas 16
  • 16. Revenue by channel $447 $393 $364 $304 $325 42% 39% 42% $252 $228 $168 Field Q4’13 Q3’13 Q2’13 57% Q1’13 Q1’11 57% 54% Q4’12 Q4’10 55% 57% 57% Q2’12 54% 53% 61% 58% 47% Q1’12 55% 59% 58% 59% Q4’11 53% 54% 43% 43% Q3’11 46% Q2’11 45% 47% 45% 43% 46% 46% Q3’10 41% Q2’10 $62 $94 Q1’10 $45 $55 $82 41% Q3’12 $121 $139 $188 43% Online 17
  • 17. 1 Adjusted EBITDA $111 $89 $79 30% $93 $83 20% $56 $50 $34 $26 $9 $11 $11 $16 $38 10% $25 $13 Adj EBITDA ($mn) Q4’13 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
  • 18. Net income (loss) & cash flow Q4 2013 GAAP EPS 2 2 Non-GAAP EPS Operating cash flow Free cash flow 1 1, 3 Cash, cash equivalents & marketable securities 1 $11.5 $48 $47 $40 ($0.03) $0.10 $0.39 $0.35 $126 $69 $25 1 ($3.4) $82 Non-GAAP net income $3.8 $0.39 GAAP net income (loss) Q4 2012 $0.03 1 Q3 2013 $43 $37 $2,329 $2,272 $750 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
  • 19. 1 Non-GAAP reconciliations Three months Three months Twelve months Twelve months ended dec 31 2013 ended dec 31 2012 ended dec 31 2013 ended dec 31 2012 $3,782 $11,508 $26,769 $21,610 Add back: stock-based compensation 57,177 27,572 193,915 86,319 Add back: amortization of intangibles 4,056 2,943 16,406 9,872 (16,776) (1,809) (45,198) (17,464) Non-GAAP NET INCOME $48,239 $40,214 $191,892 $100,337 GAAP and NON-GAAP DILUTED SHARES 124,438 114,095 118,944 112,844 $0.39 $0.35 $1.61 $0.89 $3,782 $11,508 $26,769 $21,610 9,477 15,234 22,459 35,504 Other income, net (1,820) (24) (1,416) (252) Depreciation and amortization 42,750 24,297 134,516 79,849 Stock-based compensation 57,177 27,572 193,915 86,319 $111,366 $78,587 $376,243 $223,030 Non-GAAP net income and net income per share GAAP net income Income tax effect of non-GAAP adj. NON-GAAP DILUTED NET INCOME PER SHARE Adjusted EBITDA GAAP net income Provision for income taxes ADJUSTED EBITDA 1 In thousands, except per share data 20
  • 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 Q4’13 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 ($3.4) $3.8 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 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) 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 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 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 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
  • 21. Guidance 1, 2 Q1 2014 FY 2014 Revenue $455-460 $2,020-2,050 Adjusted EBITDA $106-108 ~$490 Depreciation & amortization ~$48 ~$225 Stock-based compensation ~$68 ~$325 1 All guidance figures are approximate values | 2 Values are in $ millions 22
  • 22. Thank you 23
  • 23. ©2013 LinkedIn Corporation. All Rights Reserved.