10 Key Insights from LinkedIn Q3 Results

LinkedIn announced a strong financial performance in its Q3 results, with revenue of $780m for the quarter, up a healthy 37% on the prior year. Unlike Twiiter, LinkedIn is profitable with EBITDA of $208m for the quarter.

If you want the gory details, here are links to the results announcement, investor presentation, management earnings call and detailed financials.

If you simply want the key take-outs, here are 10 summary insights:

1. LinkedIn is simplifying its messaging around the value proposition – to members (connect, stay informed, get hired) and customers (hire, market, sell)
2. User numbers grew to 396m total members (332m a year ago) but interestingly monthly “unique users” were 100m (90m a year ago). Does this mean only 25% of LinkedIn members are truly active on the platform?
3. Mobile is a less important channel for LinkedIn users than other social networks. “Only” (a sign of how far mobile has come) 55% of LinkedIn’s monthly users access via mobile (as a comparison 89% of Facebook’s daily users access via a mobile device). Clearly as a professional network focused on B2B, the desktop/laptop remains a key access point
4. Talent solutions (recruiting, learning and development) remained the key revenue generator, providing 64% of all revenue versus 18% for marketing (advertising, sponsorships) and 18% for premium subscriptions. The attempt to diversify income streams away from the reliance on recruitment thus seemed to stall in the quarter (even the company’s own press release referred to marketing solutions as “stable” rather than anything more optimistic)
5. Learning and development contributed $41m in revenue in the first full quarter post the Lynda.com (online learning business) acquisition. As integration continues this division certainly offers potential for future growth
6. Geographically USA remains by far the most important region to LinkedIn, contributing 62% of all revenue
7. Progress is being made in the key Chinese market with membership numbers there tripling to 13m from the levels in early 2014 when the local language version launched
8. LinkedIn continues to invest in its long term product roadmap – with a new mobile app and messenger platform launched and a relaunch of its recruiter product (incorporating algorithmic smart learning) pending. As Jeff Weiner said “our member facing product pipeline has never been stronger”
9. Raw engagement numbers were encouraging with member page views growing to 38bn from 28bn a year earlier
10. There are now 39,726 corporate solutions customers versus 30,314 a year earlier hence the breadth of customer base improved

All in all a very solid set of results for the worlds largest professional network. The stock market applauded the return to strong revenue growth with shares up 9% on the release of results.

The one possible weak spot was the “stable” marketing revenue division – the attempt to decrease reliance on LinkedIn as a pure recruiter platform probably still has further to run.