More news on LinkedIn after it released last Thursday its quarterly earnings, for the first time as a publicly traded company since its debut on stock market in May.
The professional network is doing great: revenues were up to $121M from $54.9M in the same period of previous year (+120%), and profit went from $4.3M last year to $4.5M (4 cents a share); this all compares with analysts’ forecasts of $104.7M and corresponding loss of 3 cents a share.
How did the professional networking site achieve these results? The main source of growth was the sharp increase in users: 61% compared to one year ago, for a total of 115.8 million users today. This resulted in a huge increase in traffic (81.8 monthly visitors, +83% vs. previous year) and in page views (7.1 billion, +80%).
This resulted in a strong increase in revenues, since LinkedIn makes its money basically from subscriptions and fees generated by hiring services that allow companies to recruit candidates through the site: revenues from hiring solutions grew 170% vs. previous year, and are now $58.6M (48% of overall shares).
On the other hand, subscription revenues increased 60% to $23.9M (20% of total sales) and advertising sales more than doubled, increasing 111% vs. previous year and representing 32% of total revenue.
Company projections for the next (third) quarter are for $121-125M revenues, for total yearly revenues reaching $475-485M. New initiatives that will support the growth include a plug-in that will allow users to directly apply for jobs on third party sites using information from their LinkedIn profiles, in addition to the recently introduced Apply with LinkedIn button and LinkedIn Today, a sort of Twitter-style tool through which users can stay on top of trending news about particular industries or networks.
Since LinkedIn stock continues to trade more than twice its initial offering price of $45, it seems like the market trusts the professional networking site’s growth potential. I should have invested in that, too.
1 comment:
I wonder if the IPO filing actually generated a lot more interest and extra buzz which caused many more users to sign and further increase the size of their user base? When you sign up for LinkedIN, you enter in your entire address book which shoots out requests to all of your contacts.This can have an exponential effect on the amount of number of users who are getting exposed to LinkedIN and therefore further increasing the number of users.
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