|The professional social networking site, LinkedIn which made its public sharemarket debut in May, reported strong growth in revenue, membership, and visitors for the second quarter.
Revenue for the quarter jumped 120 percent from last year to $121 million, membership grew 71 percent to nearly 116 million, and unique visitors climbed 83 percent to 81.8 million per month.
While the Dow experienced the biggest single-day point loss since the peak of the financial crisis in December 2008, shares in
LinkedIn gained nearly 5 percent in after-hours trading to reach 99.98.
"In the second quarter, we saw record levels of members, unique visitors, and page views, while revenue growth further accelerated," said Jeff Weiner, CEO of LinkedIn.
As the first major social media company to go public, the company has attracted considerable attention. On its first day of trading, the company's share price more than doubled from its opening price of $45. Over the past few months, as the share price has waxed and waned, many have wondered if the company is worth its valuation, or if it's merely an indication of a tech bubble in the making.
"They did a nice job, but I don't think that the results necessarily would conclusively support that current valuation," said Ken Sena, an analyst with Evercore Partners. "We still find valuation challenging, even though we do really like the story."
For a $9 billion company, LinkedIn pulled in just a few hundred million in revenue, and is just barely profitable, he said. Also, while the company reported considerable growth in the metrics it publicizes (unique visitors, page views, and membership), Sena said questions persist about engagement as measured by time spent on site.
"Relative to other social networking sites, engagement is still low on LinkedIn in terms of time spent," he said, "There's a large amount of the member base that just uses LinkedIn to post the resume and that's about it."
When asked about time spent on the site during the earnings call, Wiener said the company isn't as focused on catching up with other social networking sites on that metric as it is on creating value for its members.
"As we like to say, it's not about enabling people to pass the time, it's about enabling people to save them time," he said.
Still, while users on LinkedIn interact with the site differently than they might on Facebook, for example, Wiener said the company has rolled out new features, including social news product LinkedIn Today and LinkedIn Groups, both intended to boost engagement.
He also said that the company is looking to develop its mobile presence, which is its fastest-growing consumer service.
Sena said that while LinkedIn beat the street's expectations, the bar was set relatively low to begin with. Considering the company's post-IPO engagement bump in May and June, he said analysts were expecting the results to be stronger than management's guidance indicated. The increased engagement drove the company's non-hiring solutions businesses, including advertising and premium subscriptions, he said.
"Our estimates were probably on the conservative side given the additional traction that they got. When you look to the third quarter, they're probably below what we were expecting. For the full year, they're probably in-line," he said. "Was it a good quarter? Yeah, but it wasn't anything that dramatically changed how we viewed the overall growth opportunity."