Seeking Alpha

Linkedn offers light Q2, full-year guidance

  • LinkedIn (LNKD) expects Q2 revenue of $500M-$505M, below a $505.1M consensus, and 2014 revenue of $2.06B-$2.08B, below a $2.11B consensus.
  • The company expects Q2 adjusted EBITDA of $118M-$120M, up from Q1's $116.7M, which beat guidance of $106M-$108M. Full-year adjusted EBITDA guidance has been raised to $505M-$510M from $490M.
  • Talent Solutions (jobs, 58% of revenue) revenue rose 50% Y/Y in Q1 after growing 53% in Q4. Marketing solutions (ads, 22% of revenue) rose 36% vs. 38% in Q4, and subscriptions (20% of revenue) rose 46% vs. 48%.
  • The U.S. produced 60% of revenue vs. 61% in Q4. Costs/expenses rose 57% Y/Y (above rev. growth of 46%) to $474M on the back of big increases in sales/marketing and R&D spend.
  • LNKD -1.9% AH. Some bad news has been priced in over the last few months.
  • Q1 results, PR
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Comments (13)
  • Mark Krieger
    , contributor
    Comments (4155) | Send Message
     
    absolute horrific report-
    1 May 2014, 06:11 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1132) | Send Message
     
    The drop in LNKD after hours seem subdued considering how horribly they missed earnings expectations. Article 1 says they were expecting earnings of $.34 a share. Article 2 says they lost $.11 a share, the first loss in the companies history. With this huge discrepancy between expectations and reality, on top of LNKD's sky high valuation, I would have thought the stock would be down 20% after hours in heavy trading. It is not even down below yesterday's closing price! Maybe crap floats on snake oil. Look out below tomorrow.

     

    http://bit.ly/R5mcIQ

     

    http://abcn.ws/R5mcIS
    1 May 2014, 06:27 PM Reply Like
  • matthew fitzpatrick
    , contributor
    Comments (2) | Send Message
     
    @Glenway Fripp,

     

    $.34 a share earnings expectations was Non-GAAP EPS, in which they actually had $.38 and beat the expectations. The problem is with GAAP EPS it turns into a loss, which is worrisome.
    1 May 2014, 09:17 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11302) | Send Message
     
    Salesforce etc. preaching non-GAAP as important are confusing investors and hiding the truth. non-GAAP is basically not really accounting at all. In reality the SEC and accountants should ban such tom foolery. Why have accounting and accounting principals when those in the market cook their books with non-GAAP and tell investors to look the other way. why have accounting at all? Look at the tremendous profit we make if we don't follow general accounting principals and don't depreciate. Look at the huge profits we'd make if we had no debt and pay our employees nothing. Look at the EPS if you don't think about the 10% dilution annually in stock options? What a load of rubbish.

     

    The second management preaches non-GAAP look for the exit and start running. However, make sure to look out for the investment bankers and consultants who try to trip you as you're leaving.
    1 May 2014, 11:58 PM Reply Like
  • Keith_69
    , contributor
    Comments (175) | Send Message
     
    Hey $TSLA gets away with it, why not LNKD ?
    2 May 2014, 08:26 AM Reply Like
  • llkeith
    , contributor
    Comments (13) | Send Message
     
    Kil-Woong, I'm pretty new to all of this, but I've had some of the same thoughts. One thing that bothers me is that the headlines don't even bother to state that non-GAAP reporting is being used. You just see something like "LNKD beats by .04 on EPS." Many people don't even bother to add the non-GAAP caveat any more.

     

    Or you'll notice a report stating that LNKD beat revenue estimates. The author often won't even mention that those revenue increases were outpaced by increases in expenses. If a company grows revenues by 46%, but does so by increasing expenses by 57% - that doesn't seem to be a slam dunk to me.

     

    I understand that a company might ramp up its expenses when investing in the future, but LNKD has been around for over ten years now. This is not a brand new company. Losing money (according to GAAP) after you've been around this long - doesn't seem like a good sign for a company with a PE ratio of 700. Am I missing something?
    2 May 2014, 08:36 AM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1132) | Send Message
     
    Because Tesla Builds sex cars. Linkedin ........ What is is they make?
    4 May 2014, 10:36 AM Reply Like
  • Mark Krieger
    , contributor
    Comments (4155) | Send Message
     
    bloodbath tomorrow?
    1 May 2014, 09:52 PM Reply Like
  • James Sands
    , contributor
    Comments (2143) | Send Message
     
    Profits are worrisome, at today's closing price, I've modeled LinkedIn potentially returning 8% per year to investors through 2023. Problem is, they need 20% profit margins to justify this return. Put a 10% profit margin in there and the rate of annual return drops to 1% per year.

     

    TTM free cash flow is down 2% from year-end 2011. Despite being overvalued as well, at least Facebook has grown profit margins to 25% as of Q1 2014.
    1 May 2014, 09:53 PM Reply Like
  • Zeus2012
    , contributor
    Comments (707) | Send Message
     
    Tomorrow should be interesting. Let's see how close this thing finishes to the Jan 2013 earnings gap.
    1 May 2014, 11:50 PM Reply Like
  • Mark Krieger
    , contributor
    Comments (4155) | Send Message
     
    some bad news has been priced in, but not all of it. Another $10 of downside is likely in the cards
    2 May 2014, 12:51 AM Reply Like
  • Glenway Fripp
    , contributor
    Comments (1132) | Send Message
     
    I think that LNKD was engineered as a bubble from the very beginning. If the Institutions that engineered the IPO ever let the stock run it's coarse instead of hoarding most of the shares in bank vaults, hoping for justifiable metrics in a far flung future, the stock would have stayed near it's opening price of $75. It surely isn't worth more than that. Never was, never will be. Once the creators of this charade start selling their shares, LNKD will plummet like a house of cards. Check out Cramer on the subject here!
    http://cnb.cx/1fz21OW
    2 May 2014, 12:53 AM Reply Like
  • 123123
    , contributor
    Comments (47) | Send Message
     
    i would never listen to cramer, and considering it didnt close below the low, i would expect a run up for a few days
    2 May 2014, 01:11 AM Reply Like
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