LinkedIn Revenue Soars, While Stock Sinks

recruitment revenue q2 2015In sharp contrast to the so-so financial results of the other publicly held careers publishers, LinkedIn today released numbers so far above expectations that one news service said the results “crushes” the estimates.

Where the average of financial forecasts put the earnings per share at 30 cents on $679.8 million of revenue, LinkedIn reported earning 55 cents on $712 million in revenue. When expenses typically excluded from the earnings forecast are included, LinkedIn lost $68 million or 53 cents a share. Wall Street was expecting a GAPP loss of more than twice that amount.

The stock initially was up in after-hours trading, but gave it all back and more within two hours of the financial release.

More than half the second-quarter revenue came from LinkedIn’s Talent Solutions group, which included $18 million from the company’s $1.5 billion acquisition in May of the learning and development site, Lynda.com.

In prepared remarks accompanying the financial announcement, CFO Steve Sordello said the talent segment of LinkedIn’s business grew during the quarter following a restructuring of the recruitment products salesforce that took place at the beginning of the year. Sordello said LinkedIn now has 37,000 recruitment accounts.

“Our online channel is where small companies turn to LinkedIn on a self-serve basis, and in Q2 we began to achieve more stable growth. Job Seeker and Recruiter Lite subscriptions showed strength, powered by the broader changes we’ve made to the premium subscription platform,” Sordello said.

(LinkedIn has four premium levels. In addition to the monthly subscription plans for job seekers and recruiters who don’t want or need the full-featured service, there are two more plans aimed at salespeople and at business networkers.)

Sordello and CEO Jeff Weiner both said the company was preparing improvements and new products to its recruitment and hiring segments that will be rolled out in October. No details were included in the financial report, but Weiner offered some hints during the Q&A conference call with analysts.

He said an improved recruiter search tool will more precisely surface relevant candidates. It will “take it to a new level,” he said. Also in the works are refinements to the job and candidate referral.

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Discussing the metrics, Weiner said LinkedIn membership has grown to 380 million; 10 million from China, which is the second largest market for new signups behind the U.S. Monthly unique visitors grew 16 percent to 97 million. Mobile, he said, grows at double the rate of overall member activity, and now represents 52 percent of all LinkedIn traffic.

Earlier today, Monster Worldwide reported losing $1 million or 1 cent a share in the second quarter, but, after excluding certain expenses which analysts typically discount, the careers publisher earned 10 cents a share, better than Wall Street expected.

DHI Group, publishers of several niche job boards including the tech site Dice.com also bested analysts’ earnings estimate. It reported its second-quarter financial results Wednesday, and said then it would sell two sites it acquired in 2012.

CareerBuilder, which typically volunteers its North American revenue, has not yet provided the numbers. It’s privately owned by TEGNA, the broadcast and digital company that was previously Gannett. Now exclusively a newspaper group, Gannett was spun off at the end of June.

In a press release announcing second-quarter financial results, TEGNA said CareerBuilder revenue had “a low-single percentage decline” in the quarter.

“The revenue decline at CareerBuilder reflects year-over-year declines in foreign exchange rates as well as the previously discussed strategic decision to accelerate the reduction of transactional advertising and focus on more lucrative long-term recurring software deals,” according to the press release.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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3 Comments on “LinkedIn Revenue Soars, While Stock Sinks

  1. Honestly I’ve tried LI Recruiter twice, and twice abandoned it. It’s nice to have access to the people, but the cost per contact is ridiculous for the return you get, in my opinion and the opinion of others I’ve spoken to. And the search function, while it makes a great play at being very precise, can’t seem to understand that while everyone within a 12 million square mile radius of a certain zip code might, by LI’s rules, live in the Greater Such and Such area, it doesn’t mean they’re commutable to the area you’re trying to look in. When they gave the BS line about their change in InMail payment policies being as ‘to promote more effective messaging,’ that’s when I decided to cut out. When companies start handing you blatant BS lines to cover blatant money grabs, at the root of which is the monetization of the ineffectiveness of their own system, it’s time to leave.

    1. “12 million square mile radius” would equal an actual radius of 1954 miles…. I think that LinkedIn is more accurate than that (usually within 10-20 miles). Still, the point is well-taken, especially since there are so many bogus profiles on LinkedIn. I’m still trying to recruit “Bella Swan” for a job as a ‘Slayer’, for example, and I think she’s the best candidate, but I also suspect her profile is fictitious.

  2. Medieval Recruiter speaks truth and that is unusual for the Fordyce Letter. He is correct that LinkedIn is a very hard investment to justify, despite John Zappe’s extremely erroneous claims that I endorsed it, which he expressed in an article from November 1 of 2013. I have asked for a retraction from Zappe and the Fordyce Letter multiple times, but they refused to admit their extremely blatant and stupid errors, despite absolute proof that they were incorrect.

    LinkedIn renewed my subscription without asking my permission, which I why I still have an account, but the value of the service has diminished by 100-fold from what it was originally worth. The claims about improving Inmail response rates were utterly false, and at least my current sales rep admits that.

    By the way, I have been accused of being Medieval Recruiter, but I certainly am not, although we have shared some very similar opinions. Kudos!

    Here’s the piece of crap article written by the moron which mostly resembles a letter from a stalker or a hate crime: https://staging.eremedia.com/fordyce/memo-to-tech-recruiters-they-really-dont-like-you/

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