While LinkedIn is gearing up to close its massive $26.2 billion acquisition by Microsoft by the end of this year, it has quietly posted its final quarterly earnings report as an individual entity. The enterprise company has topped Wall Street expectations but the growth of the platform still continues to decelerate.
For the third quarter, LinkedIn has reported earnings of $1.18 per share and revenues of $960 million as compared to earnings-per-share of $0.78 and revenue of $780 million during the same quarter last year. The revenues for the company have increased 23 percent on a yearly basis. The analysts were expecting steeper results due to its ongoing acquisition and predicted revenues of $959 million and EPS of $0.91.
In addition, the company reported a non-GAAP net income of $163 million — excluding $2 million spent on merger transactions. One of the prominent metrics for a community or social platform is the userbase and LinkedIn posted an 18 percent increase in membership numbers to 467 million on a year-over-year basis. It also added that mobile now accounts for 60 percent of all traffic on LinkedIn and is growing at double the rate of its desktop service.
Commenting on this earning report, Jeff Weiner, CEO of LinkedIn, says,
In Q3, continued product investments across our platform drove another quarter of strong engagement and financial performance. As we look forward, our combination with Microsoft creates the opportunity for us to dramatically increase the impact and scale with which we deliver value to our members and customers.
The overall revenue can further be broken down into three primary categories which were navigators of growth for the company this quarter.
Firstly, the talent solutions revenue, which comprises of hiring and learning business, of LinkedIn surged 24 percent and amounted to $623 million on a year-over-year basis. Most of the contribution to the same was supported by the hiring business as compared to learning one. But, the company is now focusing on improving its development and learning products and has just recently launched LinkedIn Learning. It has finally put its acquisition of lynda.com to use and provided a unified library of content for professionals to learn and grow.
The other two categories which constitute towards the overall revenue includes marketing solutions and premium subscriptions. The marketing business, driven by sponsored content, saw a 26 percent increase in revenues while the subscriptions business, driven by sales navigator, increased by 17 percent on a year-over-year basis. These combined added over $335 million to the overall revenue figure.
Since the company will be joining Redmond’s team in the coming quarter, thus it has not posted a forecast for the next(or fourth) quarter. Under the merger agreement, Microsoft will pay $196.00 per share to acquire LinkedIn in an all-cash transaction — including its net cash asset. We’ll now have to wait and see the changes and partnerships Redmond introduces to induce growth in this social enterprise platform.