LinkedIn Rallies As Revenue and Profit Soar
LinkedIn shares rallied to a record high as its revenue and profits soared. The biggest online professional-networking service also said it is raising subscription prices as more job seekers flock to its site.
LinkedIn’s revenue jumped 81 percent to $303.6 million, ahead of analyst estimates of $279.7 million. Profit rose to 35 cents per share, excluding some items, beating estimates of 19 cents per share.
The company sold more subscriptions and software for recruiters as it continues to be one of the most popular sites for job seekers. LinkedIn’s revenue from talent solutions or its recruiting software jumped 90 percent to $161 million, accounting for over half of the company’s total sales.
LinkedIn’s business model is unique compared with other web companies because most of its revenue comes from subscriptions, unlike companies such as Facebook, which relies on ads or one-time transactions.
LinkedIn said it now has 202 million users, a 39% gain from the prior year, and is adding two members every second. While most of those members use the service free, LinkedIn sells premium subscription accounts and ads and recruitment services to businesses.
The company said it would raise subscription prices starting in the second quarter for products targeting recruiters and promoting job openings. The price hike would be a “mid-single digits” percentage increase and will take place in the U.S. and some other regions.
Recruiters currently pay between $39.95 and $499.95 per month for a LinkedIn subscription that allows them to import profiles or track candidate activity. LinkedIn users can join for free to get basic access or pay for a premium subscription to help them network and find jobs.
The stock rallied more than 20 percent on the news to an all-time high of $148.90, more than triple its IPO price of $45 per share.