1 |

LinkedIn is ready to follow Yelp and Twitter

Our recommendation for LinkedIn (NYSE: LNKD) is

UNDERPERFORM with a target price of $182. Although the

company recently reported a better-than-expected Q2’15,

the bigger-than-expected contribution of Lynda.com could

be hiding some issues related to the company’s core

business. This causes us to worry about LinkedIn’s ability to

justify its current stock price. We are expecting margins to

stay the same, if not lower than, those of 2014 due to an

increase in costs/expenses and a slight deterioration of

LinkedIn’s core business. The company now has the

challenge of unifying Lynda.com with its own platform to

create revenue-generating content for users. LinkedIn’s

ratios are higher than the industry’s, which could mean an

overvaluation of the firm and an unfair current price.

LinkedIn’s strategy of acquiring Lynda.com has already

succeeded slightly because the acquired firm provided

$18M to the quarter, up from $3M (guidance). In addition,

LinkedIn’s management raised Lynda.com’s contribution

from $40M to $90M due to a slight over-performance, an

early close, and a lower deferred revenue write-down.

However, this better-than-expected performance could

mean a poorer performance of the core business and the

continued deceleration of it.

Talent Solutions grew in revenue by 38% to $443M vs

Q2’14. Excluding the contribution of Lynda.com, this item

grew by 32% YoY, slowing down from 43% YoY. This

revenue division accounted for 62% of LinkedIn’s sales

and slower growth could strongly influence the total

revenue of the company.

Marketing Solutions and Premium Subscribers both

slowed down by 6%.

Target Price

Country

USA

Index

NASDAQ

Industry

Internet Software and Services

Peers

Monster Worldwide Inc. USA

Xing Germany

Facebook USA

Equity ratios

Shares outstanding (MM) 125,12Market Capitalization (B. USD) 24,77

Freefloat % 98,20

Book Value 26,59

Enterprise Value (B. USD) 22,86

Valuation ratios 2014 2015e

P/E -- --

Price/BookValue 8,64 9,60

EV/EBITDA 96,55 34,93

EV/Sales 11,88 7,03

EPS (0,13) (0,11)

Important dates

Q3 Earnings Release 26.10.2015

Q4 Eainings Release 04.02.2016

Profitability 2014 2015e

EBIT Margin % 1,63 2,19

EBITDA Margin % 12,31 20,12

Net Margin % (0,71) (0,42)

ROE % (0,53) (0,37)

ROA % (0,36) (0,22)

52 weeks Low High

189,51 270,76

Target prices

Worse Case 158,00

Best Case 239,00

Underperform182

185,00

200,00

215,00

230,00

245,00

260,00

275,00

Aug-14 Nov-14 Feb-15 May-15 Aug-15

2 |

360M

Users

Qualitative Analysis

Business Model

LinkedIn has over 360 million users in over 200 counties

worldwide with new members signing up at a rate of more than

two per second. More than 75% of new members in early 2015

came from outside of the United States. The fastest growing

demographic is college students and recent graduates. LinkedIn’s

business model is “Freemium” because its core offering is its free

network for users while revenue drivers are three main business

divisions. Those three divisions are Talent Solutions, Marketing

Solutions, and Premium Subscriptions. Talent Solutions is

comprised of branded corporate pages, pay per click job ads,

access to member’s usernames, and access to member’s resumes.

This accounts for around 60% of revenue. Marketing Solutions

consists of user-targeted pay per click ads that are not job specific

and account for around 20% of revenue. The Premium

Subscription includes tools sets such as LinkedIn Business Plus,

LinkedIn Recruiter, LinkedIn Jobseeker, and LinkedIn Sales

Navigator. Premium Subscriptions accounted for roughly 20% of

revenue. While Premium Subscriptions are sold solely online,

Talent Solutions and Marketing Solutions are sold on both the

Online Channel and Field Sales channel. The Online Channel

typically has lower prices, shorter selling cycles, and shorter

contracts. Field Sales are made by a combination of direct sales

force, agencies, and resellers. Field Sales contributed around 55%

of sales while the remaining 45% went to the Online Channel.

Competitive Advantage

LinkedIn outperforms all competitors with its unique idea to

“Connect the World’s Professionals.” LinkedIn’s core platform is

its main competitive advantage. Members can uniquely represent

their identities in the form of a portfolio versus a static resume

with the addition of rich media and the opportunity to add skills

and professional accomplishments. Any member can find other

professionals and connect with members relevant to their

professional network. Products such as Pulse and Slides Share

help associates establish themselves as experts, improve their

skills, and get daily news about their industry and areas of

interest. LinkedIn attained significant growth globally while

establishing operations in several regions around the world. They

continue to grow their international member base by expanding

sales, technical support operations, and by further developing the

age

18-29 23%

30-49 29%

50-64 27%

65+ 21%

of Internet

Users 12%

2 New Users per Second

44% Female 56%

Male

3 |

Bad Corporate

Governance

Dual-Class Share

Structure

Staggered Board

Limited Voting Rights

brand. LinkedIn intends to add to its competitive with the

acquisition of Lynda.com. Lynda.com could help LinkedIn

members add to and gain new professional skills if implemented

correctly. However, there is still a long way to go before

Lynda.com is incorporated into current products in anyway.

Management

LinkedIn has a strong management team that has performed

successfully in recent years. The CEO and senior executives are

experienced professionals that have rich backgrounds in the

industry. The company also hired directors who were experienced

as entrepreneurs or had been on a board of directors in related

fields before. For the past 5 years, the team of executives have

improved revenue growth, level of member activity, and platform

growth. With respect to monetization, the Net Revenue was $2.22

million in 2014, which represented an increase of 45% from 2013.

The board’s philosophy is to continue to invest in long-term

growth in United States as well as internationally, continue

upgrading technology and network infrastructure, and invest

heavily in product development, especially mobile. Mobile is the

fastest growing approach for member engagement, growing at

nearly three times the rate of all other platforms. Other important

responsibilities are regular reviews of the numbers, evaluating

the business, measuring latest performance, identifying trends

affecting the business, formulating financial projections, and

making strategic decisions.

Corporate Governance

LinkedIn has a dual-class share structure, which limits

stockholders voting rights. Shareholders of LinkedIn do not have

the right to choose the board or approve all the major structure

decisions. Instead, insiders enjoy the voting rights and the full

control of the company. Voting rights are essential to assure that

the corporate executives are acting in the best interest of the

investors. Among other things, limiting the voting rights means

that the shareholders have little power to replace the

management if their interests are misaligned. The company’s

adaption of the staggered board is another factor that puts a

negative image on its corporate governance. A staggered board

reduces the takeover risks and suggests more control from the

management so the company must maintain revenue growth to

show a strong management team.

4 |

Risk Assessment

The increasing number of members and larger scale access could

increase challenges to LinkedIn’s network infrastructure.

Challenges including negative website performance, disruptions

or outages, and cyberattacks. LinkedIn is subject to a multitude of

regulations both domestic and foreign. Many of these regulations

involve privacy, data security, data protection, and retention.

Failing to comply with any regulations or laws might lead to the

suspension of the business services.

LinkedIn has a limited operating history with no record of

accomplishment in the industry. This makes it hard to project the

future performance, especially in new and unproven markets.

Management also faces challenges to generate sufficient revenue

to maintain organic growth long term. Increasing costs in

technology, product development, sales marketing, international

expansion, and new business acquisitions (E.g. Lynda.com) makes

the current growth rate difficult to maintain. The fact that the

number of actual users is less than registered users could reflect

inaccuracy in the company’s release about the fundamental

business profitability. Therefore, it is critical for the company to

attain and retain additional visiting members in order to meet the

expected value of the company.

Industry Analysis

LinkedIn falls in the varied industry Internet Software & Services,

which contains giants such as Facebook, Google, and Yahoo! This

industry also contains smaller fast-growing web companies,

which have had incredible success in the last decade. For a fair

analysis, we must focus on a sub-sector for LinkedIn, the

Professional Network Market, which includes companies such as

Monster, XING AG, SEEK Limited, and Viadeo SA.

Customers

There are three main types of customers in the Professional

Network Market: Individuals, Enterprises and Professional

Organizations. Individuals are better separated into Professionals

(with work experience) and Students (with brief or absent work

experience). The first represents the biggest portion of individual

customers. They use LinkedIn to search, connect, and

communicate with businesses or other professionals. The second,

instead, see LinkedIn as an effective tool to start their professional

career building. The portion of Students that use professional

BusinessRisks

A Fast Changing Internet Environ

ment

Industry Regulation

Website Security

Increasing competition

Limited

Operating

History

Increasing

Costs

Operating

Risks

Rapid

International

Expansion

Technology &

Network

Infrastructure

0%

30%

60%

90%

120%

0%

13%

26%

39%

52%

65%

2011 2012 2013 2014

Customers Segments Revenue

Talent Solutions Marketing SolutionsPremium Subscriptions Rev Growth

5 |

Google.Inc49%

Facebook12%

LinkedIn2%

Twitter1%

Yahoo!.Inc4%

Monster Worldwide

1%

AOL.Inc2%

Others29%

Market Share Internet Software Services

LinkedIn58%

Monster Worldwide

20%

Xing Ag2%

Seek Limited

19%

Viadeo1%

Market Share of Professional Platforms

56%

57%

58%

59%

60%

61%

62%

0%

5%

10%

15%

20%

25%

2011 2012 2013 2014

Industry's Profitability

Operating Margin Net Income MarginROE Gross Margin

75%

76%

77%

78%

79%

80%

-1%

0%

1%

2%

3%

4%

5%

6%

2011 2012 2013 2014

LinkedIn's Profitability

Operating Margin Net Income MarginROE Gross Margin

platforms is increasing and it will represent one of the main

growth drivers in the near future. Whomever is able to better

monetize this trend will have a competitive advantage.

Enterprises and Professional Organizations represent the most

important customers for professional platforms, since they have

the highest impact on revenue and they represent the ultimate

reason individuals stay on the platform. Their needs are to

identify and acquire the right talents and to obtain the visibility

(advertising) necessary to enhance their business.

Market Share

Google with almost 50% of market share currently dominates the

industry. Facebook and Yahoo! Follow with LinkedIn behind all

three. However, LinkedIn is the leader of the Professional

Platform’s sub-sector. LinkedIn has obtained 58% market share in

last two years thanks to its farsighted growth strategy. Monster

Worldwide and Seek Limited follow with 20% and 19% of market

share respectively, with Xing and Viadeo representing only 3%

and 1%. It is important to mention that LinkedIn had 27% market

share in 2011, which was behind Monster Worldwide at 53%. This

shows incredible growth of 31% in three years. However, the

composition of the market could change drastically in future since

giants such as Microsoft, Facebook, and Google are projected to

enter the subsector seriously with improved products and

services.

Industry Growth

Industry Growth was around 20% at the end of 2014 and in the

first half of 2015. This does not mean that the industry is

performing badly or that there is a lack of demand, it means some

of the giants in the industry such as Google are starting to

normalize their growth rates and have concluded the start-up

phase of their company’s life cycle. Rates are expected to stabilize

around 18% - 20%, which is much higher than the expected GDP

(3.6% - 5%), and confirms Internet Software Services as a

valuable and growing Industry. LinkedIn has grown at a much

higher rate than the industry in last few years, because it is still in

the early stage of its life cycle. Recently it has shown a slowdown

in its growth rate, which is perfectly natural for all companies that

reach a certain size. In terms of profitability, the industry has

shown stable trends in Gross, Operating, and Net Income Margins.

High Gross Margins, due to the lack of inventory, as well as low

Operating and Net Income Margins characterizes the industry.

6 |

-40%

-30%

-20%

-10%

0%

10%

20%

30%ROIC

2011 2012

2013 2014

0%

2%

4%

6%

8%

10%

0

100

200

300

400

Q1

'12

Q2

'12

Q3

'12

Q4

'12

Q1

'13

Q2

'13

Q3

'13

Q4

'13

Q1

'14

Q2

'14

Q3

'14

Q4

'14

Q1

'15

Q2

'15

Members (in million)

Members Unique Visit Members

0%

20%

40%

60%

80%

100%

120%

140%

0

200

400

600

800

1000

1200

1400

1600

2011 2012 2013 2014

Sales (in million)

Field Sales Online Salesgrowth Field growth Online

LinkedIn has a higher Gross Margin than the industry; however, it

shows much lower Operating and Net Income Margins. This is

explained by the early stage of their business cycle and especially

by their expensive and long-term growth strategy. This is also

reflected in the company’s ROE, which is of course much lower

than the stable 13% of the industry, and it is a clear indicator of

the low ability of LinkedIn to create profitability.

LinkedIn vs Competitors

The competition in the Professional Networks Market is high and

it will increase more and more in the near future. Even if LinkedIn

is still growing faster than the industry in terms of Sales, it is facing

problems in its core business. In the last two years, the company’s

growth has seemed more inorganic than organic (ex. Lynda.com),

generating some doubts about the real ability to generate profit. If

we look at the Return on Invested Capital (ROIC), we see that only

Monster. Worldwide is doing worse than LinkedIn, whereas all the

other main competitors are better allocating their capital to

profitable investments. LinkedIn, however, still has the more

stable trend.

Company Performance

LinkedIn reached over 360 million registered members in Q2’15

as well as increased both unique visits and member page views.

LinkedIn has also increased its revenues in all areas globally,

especially in EMEA, which represents more than 25% of total

revenue and around 30% of users. However, this data does not

mean LinkedIn is doing well. There is a consistent slowdown in

growth. This creates doubts regarding its ability to attract new

customers. If we look at the growth of both Field Sales and Online

Sales, this decline in growth is apparent. The first, which has a

higher impact on revenue, has decreased by almost 50% in 3 years

and Online Sales have decreased by more than 40%. There is also

incredible growth in costs, which reflects the efforts made by the

company to sustain its long-term strategy. The strategy consists

of both an organic and a non-organic growth. This consistent

increase in operating costs is not equaled by an increase in

revenue. Both Operating Margin and Net Income Margin show a

slowdown, which ultimately affects also the Return of Equity.

7 |

-2%

0%

2%

4%

6%

0

500

1000

1500

2011 2012 2013 2014

LinkedIn Performance

SG&A R&D

D&A EBIT Margin

Quantitative Analysis

Investment Thesis

We give an UNDERPERFORM recommendation for LinkedIn with

a target price of $182, but a positive long-term outlook. The key

points underlying our thesis are: 1) LinkedIn cannot validate high

share price. 2) Concern over the traditional core business growth.

3) Lynda.com acquisition because there is no clear integration

between Lynda’s resources and the existing offerings. 4) Future

direct competition.

Multiples Evaluation

LinkedIn has the highest Valuation Ratios of the industry.

LinkedIn’s EV/EBIT is 52x Google and 22x Facebook. The

Price/Book Value is 2.4x Google and 1.4x Facebook. LinkedIn’s

Present Valuation Ratios are much higher than its peers are. Its

EV/EBITDA ratio is 6x its direct German competitor Xing, and 9x

its American rival Monster Worldwide. In addition, LinkedIn’s

Price/Sales Ratio is 2.4x Xing and 25.4x Monster Worldwide.

Compared to the industry leaders and smaller peers, LinkedIn is

overvalued.

Our average fair price for LinkedIn is strongly bearish at $125.50.

The company, in contrast to others in the sector, is trading at

prices much higher than fair. The growth of the company is

slowing down and there is not a valid argument for the company

to trade at those high prices. Our overvaluation claim is supported

also by the P/E multiple analysis. From our analysis, in 5-years,

LinkedIn will still have a P/E ratio much higher than the industry’s

average and an implicit price of $226. This higher evaluation

comes from the growth expectations, not the decline in growth,

which is the reality.

8 |

Key Revenue Divers’ Outlooks

Premium Subscription

For Premium Subscriptions, we forecast a continued decline in

growth rate. We believe future revenue will come from organic

growth of advanced LinkedIn users. Our view on Sales Navigator

is unenthusiastic. Sales Navigator allows users to search

LinkedIn’s database and provide different degree of InMail

contact. Features in Basic Premium Subscription can replicate

most of the functions in Sales Navigators. The exception is

TeamLink, which allows users to leverage co-workers network to

add a layer of potential relationship. Sales Navigator’s value

proposition seems to be unclear. The marginal improvement in

functionalities is not enough to justify the high price tag

$79.99/month.

Talent Solution

We believe the revenue from Talent Solution is sustainable.

Recruiter’s license fees account for 50% of current revenue, and

enterprise level customers are growing. Talent Solution has a high

penetration level in large corporations throughout North

American and Europe, which provides a basis for sustainable

revenue. Talent Solution has a tiered pricing model ranging from

$10k a year to $35k a year. The acquisition of Lynda.com marks

LinkedIn’s ambition in the online education marketplace.

Lynda.com has an impressive course library that systematically

covers a range of topics. Subjects related to Arts & Humanities

comprise almost half of the library, but we believe business

related subjects could generate revenue.

Marketing Solution

Marketing Solution can deliver moderate growth in the future.

Although, there is low site engagement from a typical user, it can

still be valuable for small B2B businesses. We are bullish on the

acquisition of BIZO and believe it could improve revenue. By

integrating BIZO, the company is now able to provide targeted

advertisement that is more accurate.

Valuation

Our target price for LinkedIn is $182 and is based on our DCF

Model, comparable multiples, a polynomial and EV/EBITDA

multiple of 43.81x. LinkedIn EBITDA for next 10 year has a

32.22% Compounded Annual Growth Rate.

9 |

Scenario Assumption

We created three operating scenarios to have a more

comprehensive basis for our DCF model. In our best, base, and

weak case scenarios, implied per share values are $239.82,

$194.54 and $158.12, respectively. In each scenario, we altered

key drivers in Revenue Growth, Marketing Margin, R&D Margin,

and G&A Margin to reflect our best forecast for the next 10 years.

We believe marketing and R&D are essential to LinkedIn’s

sustainable growth, therefore, in both best and base case

scenarios we grow these two at higher rates than the revenue

growth. Due to assumed operating efficiency, we grow G&A

Margin slower than the revenue growth rate. In the weak case

scenario, we assume a lower growth rate in revenue, Marketing

Margin, and R&D Margin but a higher growth rate in the G&A

Margin. Although, other factors could also influence on our DCF

model, we believe these four operating scenarios have the most

material impact on our valuation.

10 |

Fiscal year FY'14 FY'15E FY'16E FY'17 FY'18E FY'19E FY'20E FY'21E FY'22E FY'23E FY'24E

2.218,8 3.133,7 4.437,9 6.256,5 8.748,9 12.248,0 15.942,7 20.382,6 25.551,4 31.648,4 38.713,0

41% 42% 41% 40% 40% 30% 28% 25% 24% 22%

162,8 257,0 512,4 896,6 1.257,4 1.638,1 2.095,7 2.631,1 3.259,4 3.988,4

5% 6% 8% 10% 10% 10% 10% 10% 10% 10%

58% 99% 75% 40% 30% 28% 26% 24% 22%

-29,5 129,3 333,1 581,9 814,9 1.060,5 1.355,4 1.700,4 2.105,1 2.574,3

120% 50% 35% 35% 35% 35% 35% 35% 35% 35%

-16,0 -164,5 -32,1 40,1 -220,6 -233,0 -279,9 -325,9 -384,4 -445,4

928% -80% -225% -650% 6% 20% 16% 18% 16%

151,5 215,8 260,3 396,3 556,4 587,4 706,0 821,8 969,4 1.123,3

106,0 180,7 561,4 1.018,3 1.150,7 1.415,0 1.781,5 2.196,4 2.690,0 3.252,2

94,8 144,5 401,3 651,0 657,8 723,3 814,2 897,6 983,0 1.062,7

15.548,6

$21.979

$3.443

$1.082

125

194,54$

Estimated value per share sensitivity

Implied PV Terminal Value / Terminal EBITDA Multiple, 5% Growth

$9.747 $11.976 $15.549 $19.925 $26.328

0,03x 73,56x 95,50x 122,39x 161,71x

Weighted average cost of capital

194,54$ 16% 15% 14% 13% 12% 11% 10% 9% 8%

Terminal 7% 124,5 141,7 164,1 194,4 245,9 315,9 436,0 688,6 1.549,9

Growth 6% 117,9 132,8 151,6 176,1 215,8 265,7 342,4 474,2 751,5

Rate 5% 112,6 125,6 141,9 162,5 194,5 232,8 287,5 371,7 516,4

4% 108,1 119,8 134,1 151,8 178,7 209,5 251,5 311,5 403,9

3% 104,3 114,9 127,7 143,3 166,4 192,2 226,0 272,0 338,0

2% 101,1 110,8 122,4 136,4 156,6 178,7 207,0 244,1 294,7

1% 98,3 107,3 117,9 130,6 148,7 168,0 192,3 223,2 264,0

0% 95,8 104,2 114,1 125,7 142,0 159,3 180,5 207,1 241,2

Present value of terminal value

Enterprise value

Cash & cash equivalents & market securities

Debt

Common share outstanding

Estimated value per share

% effective tax rateNet capital expenditures

YoY growth

Net change in working capital

Free cash flow (FCF)

Present value of FCF

Revenue

YoY growth

EBIT

% margin

YoY growth

EBIT after tax

11 |

In Million USD FY'13 FY'14 FY'15E FY'16E FY'17E FY'18E FY'19E FY'20E FY'21E FY'22E FY'23E FY'24E

Revenues 1.528,5 2.218,8 3.133,7 4.437,9 6.256,5 8.748,9 12.248,0 15.942,7 20.382,6 25.551,4 31.648,4 38.713,0

Y/Y 57,2% 45,2% 41,2% 41,6% 41,0% 39,8% 40,0% 30,2% 27,8% 25,4% 23,9% 22,3%

Talent Solutions 910,3 1.327,7 1.911,9 2.772,3 3.992,1 5.748,7 8.278,1 10.927,1 14.205,2 18.182,7 22.910,1 28.408,6

Y/Y 66,5% 45,9% 44,0% 45,0% 44,0% 44,0% 44,0% 32,0% 30,0% 28,0% 26,0% 24,0%

Marketing Solutions 311,8 454,5 649,9 916,4 1.283,0 1.783,3 2.461,0 3.174,7 3.968,4 4.762,0 5.714,4 6.857,3

Y/Y 32,5% 45,8% 43,0% 41,0% 40,0% 39,0% 38,0% 29,0% 25,0% 20,0% 20,0% 20,0%

Premium Subscribers 306,5 436,5 571,9 749,1 981,4 1.216,9 1.508,9 1.840,9 2.209,1 2.606,7 3.023,8 3.447,1

Y/Y 60,9% 42,4% 31,0% 31,0% 31,0% 24,0% 24,0% 22,0% 20,0% 18,0% 16,0% 14,0%

Cost of Goods Sold 202,9 293,8 407,4 576,9 813,3 1.137,4 1.592,2 2.072,5 2.649,7 3.321,7 4.114,3 5.032,7

% Rev 13,3% 13,2% 13,0% 13,0% 13,0% 13,0% 13,0% 13,0% 13,0% 13,0% 13,0% 13,0%

D&A 134,5 236,9 275,9 364,3 363,5 328,2 457,3 593,9 757,9 946,1 1.171,4 1.431,4

Gross Profit 1.191,1 1.688,0 2.450,4 3.496,6 5.079,6 7.283,3 10.198,4 13.276,3 16.975,0 21.283,6 26.362,7 32.248,9

Gross margin 77,9% 76,1% 78,2% 78,8% 81,2% 83,2% 83,3% 83,3% 83,3% 83,3% 83,3% 83,3%

R&D 395,6 536,2 720,8 1.020,7 1.439,0 2.012,2 2.817,0 3.666,8 4.688,0 5.876,8 7.279,1 8.904,0

% Rev 25,9% 24,2% 23,0% 23,0% 23,0% 23,0% 23,0% 23,0% 23,0% 23,0% 23,0% 23,0%

Other SG&A 225,6 341,3 470,1 665,7 938,5 1.312,3 1.837,2 2.391,4 3.057,4 3.832,7 4.747,3 5.807,0

% Rev 14,8% 15,4% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0% 15,0%

Sales and Marketing 522,1 774,4 1.096,8 1.553,2 2.189,8 3.062,1 4.286,8 5.579,9 7.133,9 8.943,0 11.076,9 13.549,6

% Rev 34,2% 34,9% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0%

EBIT 47,8 36,1 162,8 257,0 512,4 896,6 1.257,4 1.638,1 2.095,7 2.631,1 3.259,4 3.988,4

EBIT Margin 3,1% 1,6% 5,2% 5,8% 8,2% 10,2% 10,3% 10,3% 10,3% 10,3% 10,3% 10,3%

Stock based compensation 141,4 228,6 571,9 324,0 456,7 638,7 894,1 1.163,8 1.487,9 1.865,3 2.310,3 2.826,1

% Rev 9,2% 10,3% 18,3% 7,3% 7,3% 7,3% 7,3% 7,3% 7,3% 7,3% 7,3% 7,3%

EBITDA 323,7 501,7 1.010,6 945,3 1.332,6 1.863,5 2.608,8 3.395,8 4.341,5 5.442,4 6.741,1 8.245,9

EBITDA Margin 21,2% 22,6% 32,3% 21,3% 21,3% 21,3% 21,3% 21,3% 21,3% 21,3% 21,3% 21,3%

Interest income 2,9 5,0 6,2 6,6 7,2 8,5 10,7 13,6 17,1 21,5 26,8 33,3

Inerest expense - 6,8 6,8 6,8 6,8 6,8 6,8 6,8 6,8 6,8 6,8 6,8

Other expense, net 1,5 3,1 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0

Pretax income 49,2 31,2 160,2 254,8 510,8 896,3 1.259,3 1.642,9 2.104,0 2.643,8 3.277,4 4.012,9

EBT margin 3,2% 1,4% 5,1% 5,7% 8,2% 10,2% 10,3% 10,3% 10,3% 10,3% 10,4% 10,4%

Provision for income Tax 22,5 46,5 192,3 127,4 178,8 313,7 440,8 575,0 736,4 925,3 1.147,1 1.404,5

Tax Rate 45,6% 149,1% 120,0% 50,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0% 35,0%

Net Income 26,8 - 15,3 - 32,0 127,4 332,0 582,6 818,5 1.067,9 1.367,6 1.718,5 2.130,3 2.608,4

Net Income margin 1,8% -0,7% -1,0% 2,9% 5,3% 6,7% 6,7% 6,7% 6,7% 6,7% 6,7% 6,7%

EPS (recurring) 0,24 - 0,12 - 0,26 1,02 2,65 4,66 6,54 8,53 10,93 13,73 17,03 20,85

EPS (Diluated) 0,23 - 0,12 - 0,26 1,02 2,65 4,66 6,54 8,53 10,93 13,73 17,03 20,85

Total Shares Outstanding 113,6 122,8 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1

Diluated Shares Outstanding 118,9 122,8 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1 125,1

LinkedIn Corporation's Income Statement