LinkedIn posted strong fourth quarter earnings on Thursday, reporting revenue of $303.6 million, which beat analyst estimates of $280 million and was 81 percent higher than Q4 2011 revenue. Earnings per share were $0.35, much higher than analyst expectations of $0.19. Fourth quarter net income was $11.5 million, compared to fourth quarter 2011 net income of $6.9 million.
The company has so far demonstrated that its combination of subscriptions and advertising revenue can work, although whether it can keep engagement up and continue to grow its international base remains to be seen.
“We exited 2011 having successfully revamped our underlying development infrastructure,” said CEO Jeff Weiner in a released statement. ”Based on that investment, we said that 2012 would be a year of accelerated product innovation, and it was. The products we delivered throughout the year drove member engagement and financial results to record levels in the fourth quarter.”
The company has made a strong international push this year, although 62 percent of fourth quarter revenue still comes from the U.S. The company ended the year with 202 million registered users and strong growth on mobile, along with everyone else.
Mike Isaac for AllThingsD wrote about the issues the company will have to overcome: “The biggest question going forward, however, is if LinkedIn can keep those 200 million-plus users on its platform actively engaged on a regular basis. As I argued previously, one of LinkedIn’s major challenges is to convince its users that it’s a daily destination site to return to for business insights, updates and opinion, not just a repository for one’s online resume.”
Tim Bradshaw for the Financial Times wrote that the company’s influencer program could play into future bets: “Changes included a revamp of its profile pages and a new blogging platform called “LinkedIn Influencers,” which is used by prominent members such as President Barack Obama and Sir Richard Branson, the prominent UK businessman, which boosted traffic.”
Bloomberg’s Ari Levy noted that the company’s stock rose as high as 12 percent in late trading on Thursday, and a Bloomberg analyst spoke to the reasons LinkedIn posted such strong earnings: “Investors clearly like LinkedIn’s mix of advertising and fee revenue, both of which are experiencing exceptional growth,” said Paul Sweeney, a Bloomberg Industries analyst.