Company Update (NYSE:LNKD): LinkedIn Corp Announces Fourth Quarter and Full Year 2015 Results


LinkedIn Corp (NYSE:LNKD), the world’s largest professional network on the Internet, reported results for the fourth quarter and full year 2015.

“Q4 was a strong quarter for LinkedIn, bringing to a close a successful year of growth and innovation against our long-term roadmap,” said Jeff Weiner, CEO of LinkedIn. “We enter 2016 with increased focus on core initiatives that will drive leverage across our portfolio of products.”

During the quarter, LinkedIn made solid progress against its long-term product strategy to create value for members by connecting them to opportunity. We launched our reimagined flagship app in December, created a more streamlined experience for members to follow personalized and relevant content in the feed, and continued to scale the number of jobs on the platform to now more than six million open listings.

Revenue increased 34% year-over-year in the fourth quarter to $862 million and increased 35% in 2015 to $2,991 million.

Talent Solutions revenue (inclusive of Learning & Development) increased 45% year-over-year in the fourth quarter to $535 million and increased 41% year-over-year to $1,877 million in 2015.

  • Hiring revenue contributed $487 million and $1,770 million in the fourth quarter and 2015, respectively, which represents increases of 32% and 33% compared to the same periods last year. These increases were driven by strength in new account performance within field sales and continued strength in online subscriptions.
  • Learning & Development revenue contributed $49 million and $107 million in the fourth quarter and 2015, respectively.

Marketing Solutions revenue increased 20% year-over-year in the fourth quarter to $183 million and increased 28% to $581 million in 2015.

  • Sponsored Updates performance was the primary driver of growth, surpassing 50% of total Marketing Solutions revenue for the first time, while premium display faced secular-driven headwinds similar to prior quarters.

Premium Subscriptions revenue increased 19% year-over-year in the fourth quarter to $144 million and increased 22% year-over-year to $532 million in 2015.

  • Sales Navigator remained the faster growing component of Premium Subscriptions with continued  improvement in customer satisfaction and product usage.

Adjusted EBITDA was $249 million in the fourth quarter, or 29% of revenue. Adjusted EBITDA was $780 million in 2015, or 26% of revenue.

GAAP net loss attributable to common stockholders was $8 million in the fourth quarter and $166 million in 2015. Non-GAAP net income was $126 million in the fourth quarter and $373 million in 2015.

GAAP diluted EPS was $(0.06) in the fourth quarter compared to $0.02 in the same period last year. GAAP diluted EPS was $(1.29) in 2015 compared to $(0.13) in 2014.

Non-GAAP diluted EPS was $0.94 in the fourth quarter compared to $0.61 in the same period last year. Non-GAAP diluted EPS was $2.84 in 2015 compared to $2.02 in 2014.

“LinkedIn delivered a strong end to 2015,” said Steve Sordello, CFO of LinkedIn. “As we look towards 2016, our focus is on investing intelligently in our core member and customer value propositions to capture the large, addressable opportunity ahead of us.”

Business Outlook

LinkedIn is providing guidance for the first quarter and full year 2016.

  • Q1 2016 Guidance: Revenue is expected to be approximately $820 million. Adjusted EBITDA is expected to be approximately $190 million. Non-GAAP EPS is expected to be approximately $0.55. The company expects depreciation of approximately $85 million, amortization of approximately $48 million, and stock-based compensation of approximately $153 million. The company also expects approximately 133 million GAAP fully-diluted weighted shares and 135 million non-GAAP fully-diluted weighted shares.
  • Full Year 2016 Guidance: Revenue is expected to range between $3.6 billion and $3.65 billion. Adjusted EBITDA is expected to be approximately $950 – 975 million. Non-GAAP EPS is expected to be approximately $3.05 – $3.20. The company expects depreciation of approximately $380 million, amortization of approximately $180 million, and stock-based compensation of approximately $630 million. The company also expects approximately 135 million GAAP fully-diluted weighted shares and 137 million non-GAAP fully-diluted weighted shares. (Original Source)

Shares of LinkedIn are down nearly 30% in after-hours trading. LNKD has a 1-year high of $276.18 and a 1-year low of $165.57. The stock’s 50-day moving average is $211.39 and its 200-day moving average is $211.17.

On the ratings front, LinkedIn has been the subject of a number of recent research reports. In a report issued on February 1, Cantor Fitzgerald analyst Youssef Squali maintained a Buy rating on LNKD, with a price target of $300, which represents a potential upside of 56.0% from where the stock is currently trading. Separately, on January 21, Suntrust Robinson Humphrey’s Robert Peck maintained a Buy rating on the stock and has a price target of $250.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Youssef Squali and Robert Peck have a total average return of 12.8% and 1.3% respectively. Squali has a success rate of 55.9% and is ranked #32 out of 3612 analysts, while Peck has a success rate of 44.8% and is ranked #1073.

Overall, 4 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $261.67 which is 36.1% above where the stock opened today.

LinkedIn Corp operates a social networking website used for professional networking. The Company’s website allows members to post a profile of their professional expertise and accomplishments.