Amid a market correction that has seen many tech stocks lose value, LinkedIn, the social network for the working world, today reported Q1 earnings that beat analyst estimates. Sales came in at $473 million, with EPS of $0.38.
Those sales beat both First Call and its own guidance — $467 million and $455-$460 million, respectively.
“The first quarter was strong for LinkedIn in terms of our member engagement and financial results,” said Jeff Weiner, CEO of LinkedIn, in a statement. “We made significant progress against several strategic priorities, including expanding internationally with our China launch, extending our shift to content marketing, and furthering our goal to make LinkedIn the definitive professional publishing platform by giving members the ability to publish long-form content.”
LinkedIn is incidentally now publishing a transcript of the conference call before the call takes place — although in my experience with these things the really good stuff only ever usually comes in the unscripted Q&A portions of these calls.
Last month the company reported hitting 300 million members, a milestone as it looks to widen its reach to segments of the market beyond the white-collar professionals that it has traditionally targeted. LinkedIn estimates the global workforce numbers to be some 3.3 billion people.
At the time, it noted that some 100 million members were coming from the U.S. But when it comes to revenues, as with comparable businesses like Facebook and Twitter, those U.S. users remain the chief revenue drivers. LinkedIn says that sales from the U.S. were $284.9 million or 60 percent of total revenue. Conversely, revenue from international markets was $188.3 million, or 40 percent of total revenue in Q1.
That push has seen the company expand its platform in a number of directions in the last quarter, including expanding its recruitment to volunteer job openings, mobile usage, and expanding its publishing platform, which had originally been limited only to selected users.
Mobile is a significant part of the company’s strategy going forward. In the previous quarter mobile devices accounted for 41 percent of the site’s unique visitors. As it looks to expand in countries like China, where PCs play second fiddle to smartphones and tablets, it will push mobile even more so.
In terms of how the company’s different business lines performed, the basic message is growth, but also stability: that is to say, no single division is suddenly breaking out as an unexpected revenue driver, but remaining much in the same proportions as before.
Talent Solutions, which includes the company’s job recruitment business, brought in $275.9 million in revenues, up 50 percent on a year ago. Talent Solutions is the biggest part of the company’s revenues, at 58 percent of total revenue, up one percentage point over a year ago. I’d argue that this is a sign that the recruitment expansions that LinkedIn has made have yet to bear fruit, however.
Marketing Solutions, at 22 percent of revenues, brought in $101.8 million. That’s down slightly on a year ago one percentage point — a sign that advertising is also still something the company will need to work on longer term.
Premium subscriptions remained stable at 20 percent of the company’s revenues; it brought in $95.5 million, up 46 percent on a year ago.
Premium subscriptions, for the average user, are perhaps one of the most noticeable aspects of the company: LinkedIn, as one irritated user pointed out yesterday, has been reining in full data access to users who are not premium members but regular enough visitors for the site to recognise them — a way of making a bet that if you’re finding the site useful enough to visit regularly, you may be someone potentially interested in upgrading.
The company gave some brighter guidance also for the next quarter: It expects Q2 to see sales of between $500 million and $505 million and full-year revenues of between $2.06 billion and $2.08 billion. As a point of comparison, the company’s previous full-year estimates were between $2.02 billion and $2.05 billion — an indication of its optimistic outlook.
Still, perhaps given the general trend with tech stocks at the moment, LinkedIn’s share price is currently trading at just above $161 per share, at the lower end of its 52-week range.
More to come.