LinkedIn Q3 2014 Earnings Call

Investor Relations

linkedin
  • 1. Q3’14 ResultsOctober 2014
  • 2. Safe harbor2“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation and the accompanyingconference call contain forward-looking statements about our products, including our investments in products, technologyand other key strategic areas, certain non-financial metrics, such as customer and member growth and engagement, and ourexpected financial metrics such as revenue, adjusted EBITDA, non-GAAP EPS, depreciation and amortization and stock-basedcompensation for the fourth quarter of 2014 and the full fiscal year 2014. The achievement of the matters covered by suchforward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or ifany of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied bythe forward-looking statements the company makes.The risks and uncertainties referred to above include - but are not limited to - risks associated with: our limited operatinghistory in a new and unproven market; engagement of our members; the price volatility of our Class A common stock; generaleconomic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies,including with respect to mobile products and features; security measures and the risk that they may not be sufficient tosecure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to accessour solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and networkinfrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability tomaintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our keymetrics internally; members and customers curtailing or ceasing to use our solutions; our core value of putting members first,which may conflict with the short-term interests of the business; privacy and changes in regulations, which could impact ourability to serve our members or curtail our monetization efforts; litigation and regulatory issues; increasing competition; ourability to manage our growth; our international operations; our ability to recruit and retain our employees; the application ofU.S. and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may makein the future; and the dual class structure of our common stock.Further information on these and other factors that could affect the company’s financial results is included in filings it makeswith the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’sAnnual Report on Form 10-K for the year ended December 31, 2013, and additional information will also be set forth in ourForm 10-Q that will be filed for the quarter ended September 30, 2014, which should be read in conjunction with thesefinancial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of thecompany's website at http://investors.linkedin.com/. All information provided in this presentation is as of October 30, 2014,and LinkedIn undertakes no duty to update this information.
  • 3. Our member value propositionsProfessional IdentityBe the professionalprofile of recordNetworkConnect all of theworld's professionalsKnowledgeBe the definitive professionalpublishing platform3
  • 4. Member metrics332313296277259238218202187174161Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2’14Q3'14Members (mn)908482767875655850 51 52Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14Q3'141 2 3Unique visiting members (mn)2826 2522 2221181512 1311Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14Q3'14Member page views (bn)1 as of quarter end | 2 monthly average during the quarter | 3 total during the quarter 4
  • 5. Our customer value propositionsHirePower the world’s hiresMarketBe the most effectiveplatform with marketers toengage withSellBe the start of everysales opportunity5
  • 6. RevenueQ1’11Q2’11Q3’11Q4’11Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2’14$568Q3'14$534$473$447$393$364$325$304$252$228$188$168$139$121$94Net revenue ($mn) % Y/Y160%140%120%100%80%60%40%20%0%6
  • 7. 1Adjusted EBITDAQ1’11Q2’11Q3’11Q4’11Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14$151Q3'14$145$117$111$89 $93$79 $83$56$50$34 $38$26 $25$13Adj EBITDA ($mn) % of revenue30%20%10%0%71 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income (loss) please see slide 9.The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial informationprepared and presented in accordance with GAAP
  • 8. Guidance1, 2Q4 2014 FY 2014Revenue $600-605 $2,175-2,180Adjusted EBITDA $153-155 $566-568Non-GAAP EPS ~$0.49 ~$1.891 All guidance figures are approximate values | 2 Values are in $ millions except for non-GAAP EPS | 3 Q4’14 Adj EBITDA guidance assumes depreciation of ~$59m, amortizationof ~12m, and stock-based comp of ~$96m & FY Adj EBITDA guidance assumes depreciation of ~$203m, amortization of ~34m, and stock-based comp of ~$321m83
  • 9. Non-GAAP adjusted EBITDA reconciliation(In millions) (Unaudited)Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14GAAP net income (loss) $2 $5 ($2) $7 $5 $3 $2 $12 $23 $4 ($3) $4 ($13) ($1) ($4)Provision (benefit) forincome taxes (0) 5 4 2 6 10 4 15 1 4 8 10 14 16 13Other (income) expense,net (0) 0 2 2 (0) 1 (1) 0 0 0 (0) (2) (1) (1) 0Depreciation andamortization 8 10 12 14 15 18 23 24 26 32 34 43 50 56 60Stock-based compensation 4 7 9 11 13 19 27 28 34 48 54 57 68 75 83Adjusted EBITDA $13 $26 $25 $34 $38 $50 $56 $79 $83 $89 $93 $111 $117 $145 $1511 Adjusted EBITDA is a Non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as asubstitute for, or superior to, the financial information prepared and presented in accordance with GAAP19
  • 10. ©2014 LinkedIn Corporation. All Rights Reserved.
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    Description
    Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q3 2014 Earnings Call. For more information, check out http://investors.linkedin.com/.
    Text
    • 1. Q3’14 ResultsOctober 2014
  • 2. Safe harbor2“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation and the accompanyingconference call contain forward-looking statements about our products, including our investments in products, technologyand other key strategic areas, certain non-financial metrics, such as customer and member growth and engagement, and ourexpected financial metrics such as revenue, adjusted EBITDA, non-GAAP EPS, depreciation and amortization and stock-basedcompensation for the fourth quarter of 2014 and the full fiscal year 2014. The achievement of the matters covered by suchforward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or ifany of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied bythe forward-looking statements the company makes.The risks and uncertainties referred to above include - but are not limited to - risks associated with: our limited operatinghistory in a new and unproven market; engagement of our members; the price volatility of our Class A common stock; generaleconomic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies,including with respect to mobile products and features; security measures and the risk that they may not be sufficient tosecure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to accessour solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and networkinfrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability tomaintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our keymetrics internally; members and customers curtailing or ceasing to use our solutions; our core value of putting members first,which may conflict with the short-term interests of the business; privacy and changes in regulations, which could impact ourability to serve our members or curtail our monetization efforts; litigation and regulatory issues; increasing competition; ourability to manage our growth; our international operations; our ability to recruit and retain our employees; the application ofU.S. and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may makein the future; and the dual class structure of our common stock.Further information on these and other factors that could affect the company’s financial results is included in filings it makeswith the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’sAnnual Report on Form 10-K for the year ended December 31, 2013, and additional information will also be set forth in ourForm 10-Q that will be filed for the quarter ended September 30, 2014, which should be read in conjunction with thesefinancial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of thecompany's website at http://investors.linkedin.com/. All information provided in this presentation is as of October 30, 2014,and LinkedIn undertakes no duty to update this information.
  • 3. Our member value propositionsProfessional IdentityBe the professionalprofile of recordNetworkConnect all of theworld's professionalsKnowledgeBe the definitive professionalpublishing platform3
  • 4. Member metrics332313296277259238218202187174161Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2’14Q3'14Members (mn)908482767875655850 51 52Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14Q3'141 2 3Unique visiting members (mn)2826 2522 2221181512 1311Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14Q3'14Member page views (bn)1 as of quarter end | 2 monthly average during the quarter | 3 total during the quarter 4
  • 5. Our customer value propositionsHirePower the world’s hiresMarketBe the most effectiveplatform with marketers toengage withSellBe the start of everysales opportunity5
  • 6. RevenueQ1’11Q2’11Q3’11Q4’11Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2’14$568Q3'14$534$473$447$393$364$325$304$252$228$188$168$139$121$94Net revenue ($mn) % Y/Y160%140%120%100%80%60%40%20%0%6
  • 7. 1Adjusted EBITDAQ1’11Q2’11Q3’11Q4’11Q1’12Q2’12Q3’12Q4’12Q1’13Q2’13Q3’13Q4’13Q1’14Q2'14$151Q3'14$145$117$111$89 $93$79 $83$56$50$34 $38$26 $25$13Adj EBITDA ($mn) % of revenue30%20%10%0%71 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income (loss) please see slide 9.The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial informationprepared and presented in accordance with GAAP
  • 8. Guidance1, 2Q4 2014 FY 2014Revenue $600-605 $2,175-2,180Adjusted EBITDA $153-155 $566-568Non-GAAP EPS ~$0.49 ~$1.891 All guidance figures are approximate values | 2 Values are in $ millions except for non-GAAP EPS | 3 Q4’14 Adj EBITDA guidance assumes depreciation of ~$59m, amortizationof ~12m, and stock-based comp of ~$96m & FY Adj EBITDA guidance assumes depreciation of ~$203m, amortization of ~34m, and stock-based comp of ~$321m83
  • 9. Non-GAAP adjusted EBITDA reconciliation(In millions) (Unaudited)Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14 Q3’14GAAP net income (loss) $2 $5 ($2) $7 $5 $3 $2 $12 $23 $4 ($3) $4 ($13) ($1) ($4)Provision (benefit) forincome taxes (0) 5 4 2 6 10 4 15 1 4 8 10 14 16 13Other (income) expense,net (0) 0 2 2 (0) 1 (1) 0 0 0 (0) (2) (1) (1) 0Depreciation andamortization 8 10 12 14 15 18 23 24 26 32 34 43 50 56 60Stock-based compensation 4 7 9 11 13 19 27 28 34 48 54 57 68 75 83Adjusted EBITDA $13 $26 $25 $34 $38 $50 $56 $79 $83 $89 $93 $111 $117 $145 $1511 Adjusted EBITDA is a Non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as asubstitute for, or superior to, the financial information prepared and presented in accordance with GAAP19
  • 10. ©2014 LinkedIn Corporation. All Rights Reserved.
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