LinkedIn Corp. (LNKD) Q1 2014 Earnings Call Corrected Transcript: 01-May-2014
Matt Sonefeldt - Head-Investor Relations, LinkedIn Corp.
Jeffrey Weiner - Chief Executive Officer & Director, LinkedIn Corp.Steven J. Sordello - Chief Financial Officer & Senior Vice President, LinkedIn Corp. Other Participants Tom White - Analyst, Macquarie Capital (USA), Inc. Justin Post - Analyst, Merrill Lynch, Pierce, Fenner & Smith, Inc. Bob S. Peck - Analyst, SunTrust Robinson Humphrey Brian T. Nowak - Analyst, Susquehanna Financial Group LLLP Ken Sena - Analyst, Evercore Partners (Securities) James Lee - Analyst, CLSA Americas LLC Arvind Bhatia - Analyst, Sterne, Agee & Leach, Inc. Neil A. Doshi - Analyst, CRT Capital Group LLC Diana R. Kluger - Analyst, JPMorgan Securities LLC Stephen Ju - Analyst, Credit Suisse Securities (USA) LLC (Broker) Dan Salmon - Analyst, BMO Capital Markets (United States) John Peter Egbert - Analyst, Morgan Stanley & Co. LLC MANAGEMENT DISCUSSION SECTION Operator: Good day, and welcome to the LinkedIn First Quarter 2014 Earnings Conference Call. [Operator Instructions] I will now turn the call over to Mr. Matt Sonefeldt, Head of Investor Relations. Please go ahead, sir. Matt Sonefeldt, Head-Investor Relations Good afternoon. Welcome to LinkedIn's first quarter of 2014 results call. Joining me today to discuss our results are CEO, Jeff Weiner; and CFO, Steve Sordello. Before we begin, I would like to remind you that during the course of this conference call, management will make forward-looking statements, which are subject to various risks and uncertainties. These include statements relating to expected member growth and engagement; our product offerings including mobile; and our product deployment process; results of our R&D efforts, revenue including revenue growth rates of our three product lines; Talent Solutions, Marketing Solutions and Premium Subscriptions; adjusted EBITDA, depreciation and amortization, stock-based compensation; share dilution; taxes, the product mix between Online and Field sales; churn rate; and expenses. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. A discussion of risks and uncertainties related to our business is contained in our filings with the Securities and Exchange Commission, in particular, the section entitled Risk Factors in our quarterly and annual reports and we refer you to these filings. Also, I would like to remind you that during the course of today's call, we may discuss some non-GAAP measures in talking about the company's performance. Reconciliations to the most directly comparable GAAP financial measures are provided in the tables in our earnings release. This conference call is also being broadcast on the Internet, and is available through the Investor Relations section of the LinkedIn website. With that, I will turn the call over to our CEO, Jeff Weiner. Jeffrey Weiner, Chief Executive Officer & Director Thank you, Matt, and welcome to today's conference call. I'll start by summarizing the operating results for the first quarter of 2014, and I'll recap some of the key milestones that highlight the success of our strategy. I'll then turn it over to Steve for a more detailed look at the numbers and outlook. Q1 was a strong quarter for LinkedIn across both member engagement and financial results. We made significant progress against several key strategic priorities, such as international expansion via China, professional publishing, and the shift to content marketing. For Q1, overall revenues grew 46% to $473 million. We delivered adjusted EBITDA of $117 million, and non-GAAP EPS of $0.38. At the end of Q1, cumulative members grew 36% year over year to 296 million, and in April, we crossed the 300 million member threshold, including 100 million in the United States. As measured by comScore, which excludes mobile, LinkedIn and SlideShare combined for an average of 186 million monthly unique visitors in Q1. When excluding SlideShare, we averaged 142 million monthly unique visitors and totaled 11.5 billion page views during Q1. When measuring these metrics internally, which include mobile, we remain encouraged by strong member engagement. Internally measured unique visiting members grew approximately 26% year over year, and total member page views grew 43% in Q1. Going back two years to Q1 2012, when we began a period of accelerated product innovation, engagement per visiting member has increased more than 40%. Mobile continues to be the fastest growing channel for member engagement, growing nearly 3x the rate of overall member uniques to represent 43% of our monthly unique visitors in Q1. In anticipation of our expectation that mobile will exceed half of total traffic later this year, mobilizing our technology infrastructure, engineering team, and products remains one of LinkedIn's most important priorities.