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Presentation given by CEO Jeff Weiner, and CFO Steve Sordello, at LinkedIn Q3 2013 Earnings Call. For more information, check out http://investors.linkedin.com/.
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Q3’13 EarningsOctober 2013
2
Safe harbor
“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This presentation contains forward-looking statements about our products, including our investments in products, technology and other key strategic areas, certain non-financial metrics, such as member growth and engagement, and our expected financial metrics such as revenue, adjusted EBITDA, depreciation and amortization and stock-based compensation for the fourth quarter of 2013 and the full fiscal year 2013. The achievement of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements the company makes.
The risks and uncertainties referred to above include - but are not limited to - risks associated with: our limited operating history in a new and unproven market; engagement of our members; the price volatility of our Class A common stock; general economic 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 to secure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to access our solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability to maintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our key metrics 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 in the United States, Europe or elsewhere, which could impact our ability to serve our members or curtail our monetization efforts; litigation and regulatory issues; increasing competition; our ability to manage our growth; our ability to recruit and retain our employees; the application of US and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may make in 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 makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Annual Report on Form 10-K that was filed for the year ended December 31, 2012, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended September 30, 2013, which should be read in conjunction with these financial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of the company's website at http://investors.linkedin.com/. All information provided in this release and in the attachments is as of October 29, 2013, and LinkedIn undertakes no duty to update this information.
3
Who we are
4
Connect the world’s professionals to make them more productive
and successful
Our mission
5
Create economic opportunity for every member of the global
workforce
Our vision
6
What we do
7
IdentityThe professional profile of record
InsightsThe definitive
professional publishing platform
EverywhereWork wherever our
members work
The value we create for our members
8
Growing global network
259M+Members worldwide
>2 NewMembers per second
184MMonthly unique visitors
1 As of 9/30/13 based on internal estimates | 2 Average monthly number of unique visitors for Q3’13 according to comScore using LinkedIn + SlideShare
1 1 2
9
HireEnable passive recruiting
at massive scale
MarketMost effective way for companies to engage
with professionals
SellTransform cold calls into warm prospects
The value we create for our customers
10
Our operating priorities
TalentBuild a world
class team
TechnologyCreate data driven
development at scale
ProductDevelop products our members love
MonetizationScale profitable business lines
11
Key metrics and results
12
Engagement metricsQ
1’11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
259
238
218
202
187
174
161
145
131
116
102
Members (mn)
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
142143
132
116110
106103
9288
82
75
Unique visitors, comScore (mn)
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
11.611.7
11.1
9.8
8.99.39.4
7.67.67.17.1
Page views, comScore (bn)
1 comScore metrics reflect LinkedIn site only, not including SlideShare 13
1 1
Revenue
Q1’
10
Q2’
10
Q3’
10
Q4’
10
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
$393
$364
$325$304
$252$228
$188$168
$139$121
$94$82
$62$55$45
% Y/YNet revenue ($mn)
0%
20%
40%
60%
80%
100%
120%
140%
14
160%
Revenue by productQ
1’10
Q2’
10
Q3’
10
Q4’
10
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
Talent Solutions Marketing Solutions Premium Subscriptions
38%32%30%
40%
33%27%
44%
30%
25%
44%
34%
22%
49%
29%
21%
48%
32%
20%
51%
29%
20%
51%
30%
20%
54%
25%
20%
53%
28%
19%
55%
25%
20%
53%
27%
20%
57%
23%
20%
56%
24%
20%
57%
23%
20%
$45 $55 $62$82 $94
$121$139
$168$188
$228$252
$304$325
$364
$393
15
Revenue by geographyQ
1’10
Q2’
10
Q3’
10
Q4’
10
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
US EMEA APAC Other Americas
73%
20%73%
20%
74%
18%
71%
20%
69%
21%
68%
21%5%
67%
21%6%
67%
21%
6%
64%
23%
7%
65%
22%
7%
64%
22%
7%
62%
23%
8%
62%
23%
7%
62%
23%
8%
62%
23%
8%
$45 $55 $62$82
$94$121
$139
$168$188
$228$252
$304$325
$364
$393
5%
5%5%
6%
6%
6%
7%
7%
7%
7%
7%
7%
16
Revenue by channelQ
1’10
Q2’
10
Q3’
10
Q4’
10
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
Field Online
53%
47%
55%
45%
54%
46%
59%
41%
54%
46%
55%
45%
53%
47%
57%
43%
54%
46%
57%
43%
57%
43%
59%
41%
57%
43%
58%
42%
58%
42%
$45 $55 $62$82
$94$121
$139
$168$188
$228$252
$304$325
$364
$393
17
Adjusted EBITDA
Q1’
10
Q2’
10
Q3’
10
Q4’
10
Q1’
11
Q2’
11
Q3’
11
Q4’
11
Q1’
12
Q2’
12
Q3’
12
Q4’
12
Q1’
13
Q2’
13
Q3’
13
$93$89
$83$79
$56$50
$38$34
$25$26
$13$16
$11$11$9
% of revenueAdj EBITDA ($mn)
0%
10%
20%
30%
181 Adjusted EBITDA is a Non-GAAP financial measure. For a reconciliation of Adjusted EBITDA to net income please see slide 21.
The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP
1
Net income (loss) & cash flow
Q3 2013 Q2 2013 Q3 2012
GAAP net income (loss) ($3.4) $3.7 $2.3
Non-GAAP net income $47 $44 $25
GAAP EPS ($0.03) $0.03 $0.02
Non-GAAP EPS $0.39 $0.38 $0.22
Operating cash flow $126 $124 $88
Free cash flow $43 $31 $54
Cash, cash equivalents & short-term investments $2,272 $873 $677
1 In millions | 2 EPS is based on fully-diluted weighted share count | 3 Free cash flow is calculated by subtracting purchases of property and equipment from operating cash flow 19
3
2
2
,
1
1
1
1
1
Non-GAAP reconciliations1
Three Months Three Months Nine Months Nine MonthsEnded Sep 30 Ended Sep 30 Ended Sep 30 Ended Sep 30
2013 2012 2013 2012Non-GAAP net income and net income per share
GAAP net income (loss) ($3,363) $2,302 $22,987 $10,102Add back: stock-based compensation 54,445 26,798 136,738 58,747Add back: amortization of intangibles 3,832 3,770 12,350 6,929Income tax effect of non-GAAP adj. (8,120) (7,732) (28,422) (15,655)NON-GAAP NET INCOME $46,794 $25,138 $143,653 $60,123
GAAP diluted shares 113,940 113,618 117,090 112,420Add back: dilutive shares under treasury stock method 5,248
- - -NON-GAAP DILUTED SHARES 119,188 113,618 117,090 112,420NON-GAAP DILUTED NET INCOME PER SHARE $0.39 $0.22 $1.23 $0.53
Adjusted EBITDA
GAAP net income (loss) ($3,363) $2,302 $22,987 $10,102Provision for income taxes 8,155 4,406 12,982 20,270Other (income) expense, net (156) (672) 404 (228)Depreciation and amortization 33,767 23,122 91,766 55,552Stock-based compensation 54,445 26,798 136,738 58,747
Adjusted EBITDA $92,848 $55,956 $264,877 $144,443
201 In thousands, except per share data
Non-GAAP adjusted EBITDA reconciliation(In millions) (Unaudited)
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13
GAAP net income (loss) $1.8 $4.3 $4.0 $5.3 $2.1 $4.5 ($1.6) $6.9 $5.0 $2.8 $2.3 $11.5 $22.6 $3.7 ($3.4)
Provision for income taxes 1.0 0.7 0.5 1.4 (0.3) 5.4 4.4 1.5 5.8 10.0 4.4 15.2 0.7 4.1 8.2
Other (income) expense, net 0.3 0.4 (0.4) 0.3 (0.4) 0.0 1.8 1.6 (0.2) 0.7 (0.7) 0.0 0.3 0.3 (0.2)
Depreciation and amortization 3.9 4.2 4.8 6.6 8.2 9.6 11.6 13.8 14.9 17.5 23.1 24.3 25.8 32.2 33.8
Stock-based compensation 1.9 2.0 2.2 2.7 3.8 6.8 8.5 10.6 12.6 19.3 26.8 27.6 33.9 48.4 54.4
Adjusted EBITDA $9.1 $11.5 $11.1 $16.3 $13.3 $26.3 $24.7 $34.4 $38.1 $50.4 $56.0 $78.6 $83.4 $88.6 $92.8
211 Adjusted EBITDA is a Non-GAAP financial measure. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP
1
Guidance
Q4 2013 FY 2013
Revenue $415-420 ~$1,500
Adjusted EBITDA $98-100 ~$364
Depreciation & amortization $43-45 ~$136
Stock-based compensation $55-57 ~$193
22
1
1 All guidance figures are approximate values | 2 In millions
, 2
Thank you
23
©2013 LinkedIn Corporation. All Rights Reserved.
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