LinkedIn Gets a Boost From Lynda.com as Q2 Revenue, Earnings Beat Estimates

By Markets Fool.com

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LinkedIn should have plenty to say about newer products such as Sales Navigator (pictured) on today's earnings conference call. Credit: LinkedIn.

Shares of LinkedIn soared more than 7% briefly, and then settled to up just more than 2% in Thursday late trading, as investors cheered results and guidance that outperformed estimates. Here's a closer look at the Q2 totals versus Wall Street's projections:

LNKD Revenue YOY Growth EPS YOY Growth
Consensus estimate $680.08 million 27.4% $0.30 (41.2%)
Q2 actual $711.74 million 33.3% $0.55 7.8%
DIFFERENCE $31.66 million 5.9% $0.25 49%

Sources: S&P Capital IQand LinkedIn press release.

Commenting on the results, CEO Jeff Weiner said in prepared remarks for today's call with analysts:

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Q2 cumulative members grew 21%, to 380 million, unique visiting members grew 16%, to an average of 97 million per month, and member page views grew 37%, an acceleration over Q1's growth rate and well ahead of unique member growth. Mobile continues to grow at double the rate of overall member activity, and now represents 52% of all traffic to LinkedIn.

What went right:Weiner also credited the lynda.com learning platform as a catalyst during the quarter, saying that LinkedIn is adding "more than 150 courses per month." He also noted that one promotional campaign outperformed expectations by 7x in terms of generating new subscribers. As a business unit, lynda.com added $17.6 million in revenue in the second quarter, pushing overall Talent Solutions sales up 37.6% year over year.

What went wrong:Premium subscriptions still remains the weakest part of LinkedIn's business, up just 22% over last year's Q2. Marketing Solutions revenue grew 31.5% over the same period as advertising-driven Sponsored Updates more than doubled to account for nearly 50% of segment sales. Helping publishers find their audience is proving to be good business for LinkedIn.

What's next:Looking ahead, LinkedIn expects $745 to $750 million in third-quarter revenue, resulting in $146 to $148 million in adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, and $0.43 a share of profitafter accounting for stock-based compensation and other noncash items.

Analysts tracked by S&P Capital IQ had the company generating $744.44 million in revenue and $0.42 a share in adjusted earnings. That compares with $568.27 million and $0.52 a share in last year's Q3. Longer term, analysts have LinkedIn growing earnings by an average of 41.67%annuallyduring the next three to five years.

In the meantime, investors shouldn't worry too much about the Premium Subscriptions group. So long as engagement remains high, the underlying business should continue to perform well. (In Q2, users engaged 60% more with LinkedIn feeds while jobs-related pages attracted 40% more unique visitors.)

The article LinkedIn Gets a Boost From Lynda.com as Q2 Revenue, Earnings Beat Estimates originally appeared on Fool.com.

Tim Beyersis usually linked into multiple projects at once. He's also a member of theMotley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission but didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim'sweb homeandportfolio holdingsor connect with him onGoogle+,Tumblr, or Twitter, where he goes by@milehighfool.The Motley Fool recommends LinkedIn. The Motley Fool owns shares of LinkedIn. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.