LinkedIn Q2 Earnings Preview: Expect Continued Strength In International Markets; Mobile Monetization In Focus

| About: LinkedIn (LNKD)

LinkedIn (NYSE:LNKD) reports Q2 results on August 2nd.

The Street expects:

  • Revenue: $216 million
  • EPS: $0.17 per share
  • Q3 revenue guide: $235

In Q1, LinkedIn reported solid result across all segments, with Hiring Solution revenue up 121% YOY to $102.6 million, Marketing Solutions revenue up 73% YOY to $48 million, and Premium Subscriptions revenue up 91% YOY to $37.9 million. As a result, net revenue was up 101% for the quarter. The company also had 160.6 million members, of which 102.5 million were unique visitors who generated over 9.4 billion page views. In addition, the company acquired the file sharing website, SlideShare, for $119 million in cash.

Heading into Q2 earnings, investors should look for additional color on LinkedIn's mobile monetization strategy. As of Q1, mobile accounted for 22% of its total unique visitors. Additionally, the recent introduction of the iPad app paves the way for bigger mobile monetization opportunity, as LinkedIn is the second most downloaded social networking app in the iOS. What is more, user engagement on the iPad is usually higher than that of other mobile devices.

iOS Social Networking App Ranking










ooVoo Video Chat











Source: AppData June 2012, Jiang Zhang

We could also see continued momentum from international markets. In Q1, 60% of LinkedIn's hires were focused on international markets, and the company now boasts a platform that supports 17 languages and offices in 25 cities around the world. In my view, LinkedIn is well positioned to become a truly globalized social networking platform because its products and services are gaining widespread adoption among human resources and global-minded professionals. LinkedIn's presence in China gives it a distinctive advantage over Facebook (NASDAQ:FB), which is blocked there by the government.

Finally, user engagement will be another key focus. LinkedIn's acquisition of SlideShare last quarter was an attempt to increase user engagement. By integrating SlideShare into their profiles, users can create a more robust and presentable homepage, and share content with other users and recruiters. This will be accretive to user engagement on top of the 60% page view growth in Q1, when the company incorporated content sharing and headline articles into user profiles.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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Tagged: , Internet Information Providers, Earnings
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