Social media stocks may be taking a beating, but the world’s biggest online professional network, LinkedIn, is faring rather well. According to comScore, this June, LinkedIn reported 131 million unique visitors, making the site the 26th most visited web property in the world. During the previous quarter, LinkedIn generated 9.3 billion page views to report growth of 31% over the year.
LinkedIn’s Financials
LinkedIn (NYSE:LNKD) Q2 revenues grew 89% over the year to $228 million, ahead of the market’s expectations of $216 million. During the quarter, the company added 14 million members to end with 175 million members. More than 1,600 corporate customers were added in the quarter, ahead of LinkedIn’s estimate of 1,425 customers. Adjusted EPS of $0.16 was in line with the market’s expectations.
By segment, revenues from hiring solutions grew 107% over the year to $121.6 million. Revenues from marketing solutions grew 64% over the year to $63.1 million, and premium subscriptions grew 82% over the year to $43.5 million. Domestic revenues accounted for 71% of revenues at $162.3 million.
During the quarter, user engagement levels continued to grow from an average of 19 minutes per user to 21 minutes per user per month. Average advertising revenue per unique visitor grew 26% over the year to $2.38. LinkedIn plans to double the revenue per visitor over the next four to five years. For the current year, LinkedIn projected revenues of $915 million-$925 million, ahead of the Street’s target of $910 million. It expects current quarter revenues of $235 million-$240 million, compared with market projections of $236.3 million.
Embarrassing Password Theft Results in Security Changes
Earlier this quarter, LinkedIn was hit by a password theft that was labeled the highest-profile password leaks of the year thus far. Passwords of more than 6.5 million users were hacked into and put up on a Russian web site. Following the theft, LinkedIn hashed the disabled accounts of members whom they assessed were at greatest risk; this hashing had not been done earlier as a protective measure, which drew criticism. LinkedIn claimed that though email addresses associated with the passwords had been published, the company hadn’t detected any unauthorized attempts to access members’ accounts. In the coming quarters, LinkedIn is increasing spend on their data security to prevent such mishaps from happening again.
LinkedIn’s Growth Plan
LinkedIn is working hard to increase user engagement and expand market reach. Last quarter, the company simplified the design of LinkedIn Today, its social news product. It also added integration features into the new homepage so as to simplify the ability of users to create social actions on stories.
As part of its growth plan, LinkedIn remained focus on mobile usage and international growth. During the quarter, it optimized its registration flow on mobile devices to make it easier for professionals to join LinkedIn. Today more than 15% of new member registrations originate on mobile devices, compared with 10% a quarter ago. During the quarter 27% of unique visiting members used either mobile apps or a mobile device to visit the website. The company is also working on developing monetization strategies for its mobile apps that will add value to members and customers across product lines, hiring, marketing, and subscriptions. It did not divulge details of the monetization plan.
Finally, the company added services in Polish and Norwegian to its offerings. LinkedIn is now available in 18 languages and plans to add more by the end of the year. During the quarter the company completed the roll-out of Talent pipeline to its recruiter customers. Within the first quarter of its launch, the service has seen profiles of more than a million perspective candidates being uploaded into the product.
The stock is trading at $111.55 with a market capitalization of $11.52 billion. It touched a high of $120.63 in May 2012.