LinkedIn posts strong second quarter results
Amid broad market strength, social media giant LinkedIn (NYSE:LNKD) reported its second quarter results after the market close on Thursday. Shares traded higher by 4.52% going into the announcement, however, positive results help propel the company even higher during the after hours session. Second quarter profit rose 32% on a year over year basis to $3.7 million, powered by a 59% increase in revenues to $363.7 million as the professional networking service gained in popularity and developed an actionable plan for monetizing its user base.
Since its initial public offering back in 2011, analysts and investors alike have raised many concerns regarding to valuation and monetization. Yet, LinkedIn continues to outperform the market, rising a whopping 80% this year alone. The company’s membership grew by 37% to 238 million as its users interacted more often with the website, helping advertising revenues. The number of page views on the site rose to 11.7 billion, up 25% from the year-ago period, according to data cited by LinkedIn on its website.
Unlike its social media competition, the company has placed great importance on ensuring its revenues aren’t entirely dependent upon advertising data. Revenues from the company’s recruiting tools increased 69% from a year earlier to $205.1 million. Moreover, its marketing solutions business, popped 36% to $85.6 million. If you have been noticing an increase in the number of premium connections, you’re not alone. Sales of premium subscriptions grew 68% to $73.0 million.
LinkedIn’s strong second quarter results have followed a slew of positive reports from its online competitors including Facebook (NASDAQ:FB) and Yelp (NYSE:YELP) . All three of these companies have felt monetization pressures from the street and at this point in time it appears these companies now have the ability to profit from their incredible traffic levels. Going forward, I would expect a number of analysts to upgrade the stock following the results over the course of next week. Following the report, shares traded even further to the upside by an additional 7.03%, or $14.98, to finish at $227.98.
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