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LinkedIn Announces Third Quarter 2013 Financial Results

Further information on these and other factors that could affect the company's financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled "Risk Factors" in the company's Annual Report on Form 10-K that was filed for the year ended December 31, 2012, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended September 30, 2013, which should be read in conjunction with these financial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of the company's website at http://investors.linkedin.com/ . All information provided in this release and in the attachments is as of October 29, 2013, and LinkedIn undertakes no duty to update this information.

LINKEDIN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
     
  September 30, December 31,
  2013 2012
ASSETS    
CURRENT ASSETS:    
Cash and cash equivalents  $ 1,396,292  $ 270,408
Short-term investments 875,993 479,141
Accounts receivable, net 208,956 203,607
Deferred commissions 28,507 30,232
Prepaid expenses 33,831 14,344
Other current assets 28,259 21,065
Total current assets 2,571,838 1,018,797
Property and equipment, net 336,656 186,677
Goodwill 150,831 115,214
Intangible assets, net 43,209 32,780
Other assets 41,744 28,862
TOTAL ASSETS  $ 3,144,278  $ 1,382,330
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES:    
Accounts payable  $ 70,340  $ 53,559
Accrued liabilities 139,898 104,077
Deferred revenue 335,700 257,743
Total current liabilities 545,938 415,379
DEFERRED TAX LIABILITIES 15,861 27,717
OTHER LONG TERM LIABILITIES 51,347 30,810
Total liabilities 613,146 473,906
COMMITMENTS AND CONTINGENCIES    
STOCKHOLDERS' EQUITY:    
Class A and Class B common stock 12 11
Additional paid-in capital 2,478,813 879,303
Accumulated other comprehensive income 470 260
Accumulated earnings 51,837 28,850
Total stockholders' equity 2,531,132 908,424
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $ 3,144,278  $ 1,382,330
         
LINKEDIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 2013 2012
Net revenue  $ 392,960  $ 252,028  $ 1,081,326  $ 668,691
Costs and expenses:        
Cost of revenue (exclusive of depreciation and amortization shown separately below) 53,395 33,778 145,043 89,278
Sales and marketing 133,172 83,168 364,865 224,792
Product development 106,223 72,730 282,503 179,903
General and administrative 61,767 33,194 160,776 89,022
Depreciation and amortization 33,767 23,122 91,766 55,552
Total costs and expenses 388,324 245,992 1,044,953 638,547
Income from operations 4,636 6,036 36,373 30,144
Other income (expense), net 156 672 (404) 228
Income before income taxes 4,792 6,708 35,969 30,372
Provision for income taxes 8,155 4,406 12,982 20,270
Net income (loss) $ (3,363)  $ 2,302  $ 22,987  $ 10,102
         
Net income (loss) per share of common stock:        
Basic $ (0.03)  $ 0.02  $ 0.21  $ 0.10
Diluted $ (0.03)  $ 0.02  $ 0.20  $ 0.09
Weighted-average shares used to compute net income (loss) per share:        
Basic 113,940 106,304 111,552 104,241
Diluted 113,940 113,618 117,090 112,420
         
LINKEDIN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
         
  Three Months Ended September 30, Nine Months Ended September 30,
  2013 2012 2013 2012
OPERATING ACTIVITIES:        
Net income (loss) $ (3,363)  $ 2,302  $ 22,987  $ 10,102
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation and amortization 33,767 23,122 91,766 55,552
Provision (benefit) for doubtful accounts and sales returns 568 145 3,521 (145)
Stock-based compensation 54,445 26,798 136,738 58,747
Excess income tax benefit from stock-based compensation (10,188) (2,888) (27,747) (13,255)
Changes in operating assets and liabilities:        
Accounts receivable (7,719) (20,827) (7,991) (43,284)
Deferred commissions 1,236 150 1,779 (1,923)
Prepaid expenses and other assets 3,707 7,787 (14,139) (12,487)
Accounts payable and other liabilities 49,591 30,474 70,406 57,290
Income taxes, net (531) 3,486 (1,257) 17,970
Deferred revenue 4,513 17,054 77,957 69,249
Net cash provided by operating activities 126,026 87,603 354,020 197,816
INVESTING ACTIVITIES:        
Purchases of property and equipment (83,158) (33,614) (220,625) (93,305)
Purchases of investments (385,517) (83,685) (642,442) (263,062)
Sales of investments 34,937 1,500 111,357 25,804
Maturities of investments 83,652 6,247 128,779 66,973
Payments for intangible assets and acquisitions, net of cash acquired (8,756) (9,055) (15,303) (56,955)
Changes in deposits and restricted cash (1,355) (418) (4,898) (3,120)
Net cash used in investing activities (360,197) (119,025) (643,132) (323,665)
FINANCING ACTIVITIES:        
Proceeds from follow-on offering, net of offering costs 1,348,419 1,348,419
Proceeds from issuance of common stock from employee stock options 7,408 12,205 27,146 36,096
Proceeds from issuance of common stock from employee stock purchase plan 11,500 7,718
Excess income tax benefit from stock-based compensation 10,188 2,888 27,747 13,255
Other financing activities (2) (8) 811 (148)
Net cash provided by financing activities 1,366,013 15,085 1,415,623 56,921
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 1,780 814 (627) 733
CHANGE IN CASH AND CASH EQUIVALENTS 1,133,622 (15,523) 1,125,884 (68,195)
CASH AND CASH EQUIVALENTS—Beginning of period 262,670 286,376 270,408 339,048
CASH AND CASH EQUIVALENTS—End of period  $ 1,396,292  $ 270,853  $ 1,396,292  $270,853
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:        
Purchases of property and equipment recorded in accounts payable and accrued liabilities  $ 24,196  $ 13,481  $ 24,196  $ 13,481
Offering costs not yet paid  $ 360 $ —  $ 360 $ —
Vesting of early exercised stock options  $ 216  $ 405  $ 763  $ 3,035
Issuance of Class A common stock and stock options for business combinations $ — $ —  $ 40,927  $ 72,461
         
LINKEDIN CORPORATION
SUPPLEMENTAL REVENUE INFORMATION
(In thousands)
(Unaudited)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 2013 2012
Revenue by product:        
Talent Solutions  $ 224,676  $ 138,433  $ 614,052  $ 362,585
Marketing Solutions 88,502 64,036 248,891 175,091
Premium Subscriptions 79,782 49,559 218,383 131,015
Total  $ 392,960  $ 252,028  $ 1,081,326  $ 668,691
         
Revenue by geographic region:        
United States  $ 245,302  $ 162,377  $ 670,982  $ 430,479
Other Americas (1) 27,027 17,134 78,060 44,190
Total Americas 272,329 179,511 749,042 474,669
EMEA (2) 90,087 54,530 249,935 147,432
APAC (3) 30,544 17,987 82,349 46,590
Total  $ 392,960  $ 252,028  $ 1,081,326  $ 668,691
         
Revenue by channel:        
Field sales  $ 227,588  $ 143,176  $ 620,786  $ 374,095
Online sales 165,372 108,852 460,540 294,596
Total  $ 392,960  $ 252,028  $ 1,081,326  $ 668,691
______________        
(1) Canada, Latin America and South America
(2) Europe, the Middle East and Africa ("EMEA")
(3) Asia-Pacific ("APAC")
         
LINKEDIN CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(In thousands, except per share data)
(Unaudited)
         
  Three Months Ended Nine Months Ended
  September 30, September 30,
  2013 2012 2013 2012
Non-GAAP net income and net income per share:        
GAAP net income (loss) $ (3,363)  $ 2,302  $ 22,987  $ 10,102
Add back: stock-based compensation 54,445 26,798 136,738 58,747
Add back: amortization of intangible assets 3,832 3,770 12,350 6,929
Income tax effect of non-GAAP adjustments (8,120) (7,732) (28,422) (15,655)
NON-GAAP NET INCOME  $ 46,794  $ 25,138  $ 143,653  $ 60,123
         
GAAP diluted shares 113,940 113,618 117,090 112,420
Add back: dilutive shares under the treasury stock method 5,248
NON-GAAP DILUTED SHARES 119,188 113,618 117,090 112,420
         
NON-GAAP DILUTED NET INCOME PER SHARE  $ 0.39  $ 0.22  $ 1.23  $ 0.53
         
Adjusted EBITDA:        
Net income (loss) $ (3,363)  $ 2,302  $ 22,987  $ 10,102
Provision for income taxes 8,155 4,406 12,982 20,270
Other (income) expense, net (156) (672) 404 (228)
Depreciation and amortization 33,767 23,122 91,766 55,552
Stock-based compensation 54,445 26,798 136,738 58,747
ADJUSTED EBITDA  $ 92,848  $ 55,956  $ 264,877  $ 144,443
CONTACT: LinkedIn Corporate Communications Team
         press@linkedin.com

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