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Surprise! LinkedIn Doubles Revenue, Turns a Profit

Aug 4, 2011
This article is part of a series called Financial.

Wall Street may have tanked. The global markets may be in a shambles. But LinkedIn is proving you can roll uphill.

Fresh off its May IPO, the company surprised almost everyone, reporting it more than doubled revenue in the second quarter and turned a 7 cent a diluted share profit. After hours, investors rewarded the company’s performance, bidding up its stock price by almost 10 percent in the minutes after the numbers were released.

Analysts had predicted the company would lose 3 cents a share on revenue of $104.73 million. Looking ahead to the third quarter, the consensus was for a 4 cent a share loss on revenue of $111.82 million.

Now LinkedIn estimates it will bring in between $121 million and $125 million.

Since the initial euphoria, LinkedIn’s after-hours trading is lower, but still up over its New York close of $95.52. The stock lost $10.13 during Wednesday’s bloodbath. At early evening in New York, the stock is trading at $99.00 a share.

Company CEO Jeff Weiner, speaking at the company’s first financial results conference call, reported that on every metric LinkedIn’s second quarter performance showed growth. Besides the dollars and cents, Weiner said LinkedIn is growing at the rate of 2 members every second and now has 121 million members. Engagement with the site also continues to grow; pageviews are up 80 percent over the same quarter last year and unique visitors now average 81.8 million monthly.

“Talent is the driving force,” Weiner said, both on the site and in the company itself.

He and CFO Steve Sordello attributed some of the growth to the excitement around the company’s May IPO. The halo effect from all the publicity and interest will wane, and, said Sordello, the company’s financial performance will “normalize” during the current quarter.

New products are being developed, both men said, and will roll out over the next several months, but they offered no specifics. For instance, Weiner  mentioned mobile as one of the fastest growing components, up 400 percent over the same quarter last year, saying LinkedIn is concentrating some development resources there. He also said some additions to the homepage would be forthcoming, but didn’t tip his hand as to what they might be.

One area where LinkedIn is going to push hard is in growing its international business, especially in recruitment. In the coming months, said Sordello, there will be “more and more focus on a global scale.”

This article is part of a series called Financial.
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