LinkedIn Crushes Estimates But The Stock Falls Off A Cliff On Weak Guidance

LinkedIn ’s shares fell more than 10% in the aftermath of its first quarter earnings report on Thursday after posting disappointing guidance.  The professional social network managed to beat revenue and profit estimates as it grew its user base, but investors weren’t pleased with the company’s guidance.

In the first quarter, LinkedIn saw non-GAAP net income surge an impressive 210% to $52.4 million.  In a per share basis, the company earned 45 cents, beating the consensus 30 cent estimate by a wide margin.

Revenue jumped 72% to $324.7 million, also beating Wall Street’s consensus forecast which called for $315 million.  LinkedIn grew its member base to 218 million, an 8% increase sequentially.

Premium subscription revenue grew 73% to $65.6 million, while marketing solutions saw a 56% increase to $74.8 million, the professional social network derived the lion’s share of its sales from talent solutions, which was also the fastest growing channel, up 80% to $184.3 million.

The company announced 62% of revenue, or $201.4 million, came from the U.S., while the remaining $123.3 million were derived from overseas operations.

LinkedIn’s revenue growth was substantially higher than Facebook ’s, which reported earnings on Wednesday.  The social network founded by Mark Zuckerberg saw its total sales gain 38%.  Yet, while Facebook fell slightly in the wake of its report, shares in LinkedIn fell off a cliff.

The problem appears to be guidance.  While analysts were expecting second quarter revenues estimates to come in at $358 million, LinkedIn guided between $342 to $347 million; management expects adjusted EBITDA between $77 and $79 million.  For the full year, LinkedIn raised its revenue forecast to $1.43 to $1.46 billion and its EBITDA estimate to $330 to $345 million.

Stocks in the social media and tech sector haven’t performed well over the past few trading sessions.  While Facebook managed to reverse post-market losses in the wake of its earnings release, Zynga and Groupon are down over the past five trading days.

In the wake of its earnings, LinkedIn tumbled more than 10%.  By 4:33 PM in New York, the professional social network cut some of those losses but was still down 9.3% to $183.01.

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