UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14A-101)

 

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.     )

 

Filed by the Registrant   x

 

Filed by a Party other than the Registrant    o

 

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o

Definitive Proxy Statement

x

Definitive Additional Materials

o

Soliciting Material under §240.14a-12

 

LINKEDIN CORPORATION

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

(1)

Title of each class of securities to which transaction applies:

 

 

 

 

(2)

Aggregate number of securities to which transaction applies:

 

 

 

 

(3)

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

 

 

 

 

(4)

Proposed maximum aggregate value of transaction:

 

 

 

 

(5)

Total fee paid:

 

 

 

o

Fee paid previously with preliminary materials.

o

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 

(1)

Amount Previously Paid:

 

 

 

 

(2)

Form, Schedule or Registration Statement No.:

 

 

 

 

(3)

Filing Party:

 

 

 

 

(4)

Date Filed:

 

 

 

 



 

LinkedIn Announces Second Quarter 2016 Results

 

MOUNTAIN VIEW, Calif., August 4, 2016 -  LinkedIn  Corporation (NYSE: LNKD), the world’s largest professional network on the Internet, today reported results for the second quarter of 2016. Supplemental financials will be available on the investor relations section of the LinkedIn website at http://investors.linkedin.com.

 

On June 11, 2016, LinkedIn entered into a merger agreement with Microsoft Corporation (“Microsoft”) under which Microsoft will acquire LinkedIn for $196.00 per share in an all-cash transaction valued at approximately $26.2 billion, inclusive of LinkedIn’s net cash.

 

“In Q2, we demonstrated good momentum with our member and customers, and delivered strong financial results,” said Jeff Weiner, CEO of LinkedIn. “Continued product innovation drove increased levels of engagement, and strengthened our enterprise offerings. We believe joining forces with Microsoft enables us to further accelerate and scale our ability to deliver value and create economic opportunity for every member of the global workforce.”

 

In the quarter, our core member operating metrics reflected continued strength. Cumulative members grew 18% year-over-year to 450 million, unique visiting members grew 9% to an average of 106 million members a month, and member page views grew 32%. This yielded 21% year-over-year growth in page views per unique visiting member, continuing a pattern of strong engagement growth over the past several quarters.

 

Total revenue increased 31% year-over-year to $933 million.

 

  Talent Solutions revenue increased 35% year-over-year to $597 million.

 

·                   Hiring contributed $535 million in revenue, up 26% year-over-year.

·                   Learning & Development contributed $62 million in revenue.

 

Marketing Solutions revenue increased 29% year-over-year to $181 million.

 

·                   Sponsored Content surpassed 60% of total Marketing Solutions revenue and was the primary driver of growth, driven largely by increase in customer demand.

 

Premium Subscriptions revenue increased 21% year-over-year to $155 million.

 

·                   Sales Navigator remained the faster growing component of Premium Subscriptions, with growth in the field channel continuing to outpace growth in individual online subscriptions.

 

GAAP net loss attributable to common stockholders was $119 million, primarily driven by a non-cash charge of $101 million as a result of recording a valuation allowance for a significant portion of our tax assets. GAAP diluted EPS was $(0.89), compared to last year’s performance of $(0.53).

 

Non-GAAP net income was $153 million, excluding $14 million of merger-related transaction costs. Non-GAAP diluted EPS was $1.13, compared to $0.55 last year.

 

Adjusted EBITDA was $292 million, or 31% of revenue.

 

“LinkedIn delivered another quarter of strong growth,” said Steve Sordello, CFO of LinkedIn. “We achieved record levels of operating cash flow, while continuing to invest heavily across our core member and customer value propositions.”

 

In light of the pending merger, LinkedIn will not be updating its outlook for fiscal 2016 and will not be hosting a conference call for its second quarter 2016 business results.

 



 

LINKEDIN CORPORATION

TRENDED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

As of

 

 

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

March 31,
2016

 

June 30,
2016

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

450,991

 

$

631,725

 

$

546,237

 

$

759,451

 

$

719,807

 

Marketable securities

 

2,582,435

 

2,457,607

 

2,573,145

 

2,400,187

 

2,591,709

 

Accounts receivable

 

449,500

 

457,975

 

603,060

 

582,726

 

560,440

 

Deferred commissions

 

58,585

 

56,453

 

87,706

 

80,783

 

78,353

 

Prepaid expenses

 

75,669

 

72,752

 

62,992

 

76,414

 

76,478

 

Other current assets

 

118,718

 

136,225

 

61,949

 

68,835

 

78,046

 

Total current assets

 

3,735,898

 

3,812,737

 

3,935,089

 

3,968,396

 

4,104,833

 

Property and equipment, net

 

793,034

 

906,189

 

1,047,005

 

1,139,032

 

1,228,402

 

Goodwill

 

1,492,972

 

1,508,946

 

1,507,093

 

1,597,268

 

1,597,423

 

Intangible assets, net

 

456,233

 

418,050

 

373,087

 

334,048

 

295,942

 

Other assets

 

78,645

 

70,788

 

148,925

 

170,623

 

84,840

 

TOTAL ASSETS

 

$

6,556,782

 

$

6,716,710

 

$

7,011,199

 

$

7,209,367

 

$

7,311,440

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

109,715

 

$

123,329

 

$

162,176

 

$

161,523

 

$

147,934

 

Accrued liabilities

 

256,958

 

296,794

 

316,792

 

257,371

 

253,778

 

Deferred revenue

 

629,671

 

621,411

 

709,116

 

787,621

 

785,680

 

Total current liabilities

 

996,344

 

1,041,534

 

1,188,084

 

1,206,515

 

1,187,392

 

CONVERTIBLE SENIOR NOTES, NET

 

1,104,010

 

1,115,439

 

1,126,534

 

1,138,264

 

1,150,132

 

OTHER LONG-TERM LIABILITIES

 

238,001

 

241,532

 

201,128

 

225,023

 

228,434

 

Total liabilities

 

2,338,355

 

2,398,505

 

2,515,746

 

2,569,802

 

2,565,958

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

 

 

 

 

 

REDEEMABLE NONCONTROLLING INTEREST

 

25,784

 

26,296

 

26,810

 

27,321

 

27,846

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

 

 

 

 

 

Class A and Class B common stock

 

13

 

13

 

13

 

13

 

13

 

Additional paid-in capital

 

4,268,731

 

4,405,911

 

4,588,578

 

4,779,628

 

4,989,710

 

Accumulated other comprehensive income (loss)

 

(2,877

)

6,632

 

9,124

 

7,502

 

22,077

 

Accumulated deficit

 

(73,224

)

(120,647

)

(129,072

)

(174,899

)

(294,164

)

Total stockholders’ equity

 

4,192,643

 

4,291,909

 

4,468,643

 

4,612,244

 

4,717,636

 

TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST, AND STOCKHOLDERS’ EQUITY

 

$

6,556,782

 

$

6,716,710

 

$

7,011,199

 

$

7,209,367

 

$

7,311,440

 

 



 

LINKEDIN CORPORATION

TRENDED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

March 31,
2016

 

June 30,
2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Net revenue

 

$

711,735

 

$

779,595

 

$

861,894

 

$

860,650

 

$

932,714

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization shown separately below)

 

100,086

 

111,368

 

118,998

 

117,528

 

120,526

 

Sales and marketing

 

261,271

 

265,454

 

291,768

 

301,786

 

308,466

 

Product development

 

190,133

 

202,682

 

217,265

 

237,620

 

235,932

 

General and administrative

 

142,389

 

118,871

 

120,161

 

127,650

 

133,940

 

Depreciation and amortization

 

99,004

 

117,901

 

129,595

 

142,285

 

139,401

 

Total costs and expenses

 

792,883

 

816,276

 

877,787

 

926,869

 

938,265

 

Loss from operations

 

(81,148

)

(36,681

)

(15,893

)

(66,219

)

(5,551

)

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

2,017

 

2,798

 

3,771

 

4,973

 

5,974

 

Interest expense

 

(12,694

)

(12,773

)

(12,818

)

(12,841

)

(12,916

)

Other, net

 

(1,723

)

(10,684

)

(7,035

)

(4,190

)

(5,601

)

Other expense, net

 

(12,400

)

(20,659

)

(16,082

)

(12,058

)

(12,543

)

Loss before income taxes

 

(93,548

)

(57,340

)

(31,975

)

(78,277

)

(18,094

)

Provision (benefit) for income taxes

 

(26,048

)

(10,429

)

(24,064

)

(32,961

)

100,646

 

Net loss

 

(67,500

)

(46,911

)

(7,911

)

(45,316

)

(118,740

)

Accretion of redeemable noncontrolling interest

 

(248

)

(512

)

(514

)

(511

)

(525

)

Net loss attributable to common stockholders

 

$

(67,748

)

$

(47,423

)

$

(8,425

)

$

(45,827

)

$

(119,265

)

Net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.53

)

$

(0.36

)

$

(0.06

)

$

(0.35

)

$

(0.89

)

Diluted

 

$

(0.53

)

$

(0.36

)

$

(0.06

)

$

(0.35

)

$

(0.89

)

Weighted-average shares used to compute net loss per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

128,241

 

130,716

 

131,583

 

132,779

 

134,132

 

Diluted

 

128,241

 

130,716

 

131,583

 

132,779

 

134,132

 

 



 

LINKEDIN CORPORATION

TRENDED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

March 31,
2016

 

June 30,
2016

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(67,500

)

$

(46,911

)

$

(7,911

)

$

(45,316

)

$

(118,740

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

99,004

 

117,901

 

129,595

 

142,285

 

139,401

 

Provision for doubtful accounts and sales returns

 

3,280

 

3,373

 

4,269

 

7,746

 

3,608

 

Amortization of investment premiums, net

 

5,001

 

5,362

 

4,457

 

4,160

 

3,647

 

Amortization of debt discount and transaction costs

 

11,322

 

11,456

 

11,592

 

11,730

 

10,721

 

Stock-based compensation

 

145,491

 

126,874

 

134,800

 

146,104

 

144,943

 

Excess income tax benefit from stock-based compensation

 

18,198

 

1,726

 

(13,965

)

(1,698

)

1,618

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accounts receivable

 

(21,887

)

(9,168

)

(147,895

)

11,932

 

20,321

 

Deferred commissions

 

1,535

 

3,094

 

(38,204

)

8,844

 

2,927

 

Prepaid expenses and other assets

 

(1,957

)

(9,568

)

(11,865

)

(29,495

)

(2,113

)

Accounts payable and other liabilities

 

55,959

 

58,854

 

26,838

 

(45,086

)

33,599

 

Income taxes, net

 

(22,876

)

(15,659

)

(3,373

)

(34,998

)

95,077

 

Deferred revenue

 

72

 

(7,739

)

88,268

 

75,979

 

(2,586

)

Net cash provided by operating activities

 

225,642

 

239,595

 

176,606

 

252,187

 

332,423

 

INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

(72,462

)

(166,653

)

(178,010

)

(177,480

)

(208,479

)

Purchases of investments

 

(632,774

)

(809,448

)

(915,977

)

(465,424

)

(951,735

)

Sales of investments

 

141,452

 

391,914

 

268,727

 

168,434

 

226,526

 

Maturities of investments

 

417,115

 

536,891

 

521,548

 

470,456

 

532,613

 

Payments for intangible assets and acquisitions, net of cash acquired

 

(650,681

)

(20,030

)

(2,975

)

(40,430

)

(6,654

)

Changes in deposits and restricted cash

 

(1,877

)

10,461

 

(602

)

3,025

 

(451

)

Net cash used in investing activities

 

(799,227

)

(56,865

)

(307,289

)

(41,419

)

(408,180

)

FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by financing activities

 

3,364

 

1,255

 

46,456

 

125

 

37,475

 

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

3,925

 

(3,251

)

(1,261

)

2,321

 

(1,362

)

CHANGE IN CASH AND CASH EQUIVALENTS

 

(566,296

)

180,734

 

(85,488

)

213,214

 

(39,644

)

CASH AND CASH EQUIVALENTS—Beginning of period

 

1,017,287

 

450,991

 

631,725

 

546,237

 

759,451

 

CASH AND CASH EQUIVALENTS—End of period

 

$

450,991

 

$

631,725

 

$

546,237

 

$

759,451

 

$

719,807

 

 


 


 

LINKEDIN CORPORATION

TRENDED SUPPLEMENTAL REVENUE INFORMATION

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

March 31,
2016

 

June 30,
2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by product:

 

 

 

 

 

 

 

 

 

 

 

Talent Solutions

 

 

 

 

 

 

 

 

 

 

 

Hiring

 

$

425,812

 

$

460,838

 

$

486,746

 

$

502,391

 

$

534,569

 

Learning & Development

 

17,558

 

41,273

 

48,593

 

55,256

 

62,105

 

Total Talent Solutions

 

443,370

 

502,111

 

535,339

 

557,647

 

596,674

 

Marketing Solutions

 

140,037

 

139,549

 

182,550

 

154,147

 

181,119

 

Premium Subscriptions

 

128,328

 

137,935

 

144,005

 

148,856

 

154,921

 

Total

 

$

711,735

 

$

779,595

 

$

861,894

 

$

860,650

 

$

932,714

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by geographic region:

 

 

 

 

 

 

 

 

 

 

 

United States

 

$

444,531

 

$

484,300

 

$

527,719

 

$

526,416

 

$

568,157

 

International

 

 

 

 

 

 

 

 

 

 

 

Other Americas (1)

 

39,904

 

43,505

 

46,500

 

45,362

 

47,631

 

EMEA (2)

 

168,771

 

187,286

 

217,624

 

217,601

 

239,267

 

APAC (3)

 

58,529

 

64,504

 

70,051

 

71,271

 

77,659

 

Total International revenue

 

267,204

 

295,295

 

334,175

 

334,234

 

364,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

711,735

 

$

779,595

 

$

861,894

 

$

860,650

 

$

932,714

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by geography, by product:

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

 

 

 

 

 

 

 

 

Talent Solutions

 

$

277,772

 

$

309,935

 

$

328,772

 

$

341,534

 

$

364,948

 

Marketing Solutions

 

91,761

 

93,362

 

114,955

 

98,361

 

113,904

 

Premium Subscriptions

 

74,998

 

81,003

 

83,992

 

86,521

 

89,305

 

Total United States revenue

 

$

444,531

 

$

484,300

 

$

527,719

 

$

526,416

 

$

568,157

 

International

 

 

 

 

 

 

 

 

 

 

 

Talent Solutions

 

165,598

 

192,176

 

206,567

 

216,113

 

231,726

 

Marketing Solutions

 

48,276

 

46,187

 

67,595

 

55,786

 

67,215

 

Premium Subscriptions

 

53,330

 

56,932

 

60,013

 

62,335

 

65,616

 

Total International revenue

 

$

267,204

 

$

295,295

 

$

334,175

 

$

334,234

 

$

364,557

 

 

 

 

 

 

 

 

 

 

 

 

 

Total revenue

 

$

711,735

 

$

779,595

 

$

861,894

 

$

860,650

 

$

932,714

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue by channel:

 

 

 

 

 

 

 

 

 

 

 

Field sales

 

$

440,476

 

$

479,547

 

$

551,279

 

$

535,957

 

$

591,571

 

Online sales

 

271,259

 

300,048

 

310,615

 

324,693

 

341,143

 

Total

 

$

711,735

 

$

779,595

 

$

861,894

 

$

860,650

 

$

932,714

 

 


(1)  Canada, Latin America and South America

(2)  Europe, the Middle East and Africa (“EMEA”)

(3)  Asia-Pacific (“APAC”)

 



 

LINKEDIN CORPORATION

TRENDED RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

June 30,
2015

 

September 30,
2015

 

December 31,
2015

 

March 31,
2016

 

June 30,
2016

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP net income and net income per share:

 

 

 

 

 

 

 

 

 

 

 

GAAP net loss attributable to common stockholders

 

$

(67,748

)

$

(47,423

)

$

(8,425

)

$

(45,827

)

$

(119,265

)

Add back: stock-based compensation

 

145,491

 

126,874

 

134,800

 

146,104

 

144,943

 

Add back: non-cash interest expense related to convertible senior notes

 

11,322

 

11,456

 

11,592

 

11,730

 

11,868

 

Add back: amortization of intangible assets

 

29,474

 

46,466

 

46,989

 

47,323

 

44,433

 

Add back: accretion of redeemable noncontrolling interest

 

248

 

512

 

514

 

511

 

525

 

Add back: fair value adjustment on other derivative

 

 

6,900

 

1,900

 

2,300

 

2,200

 

Add back: merger-related transaction costs (1)

 

 

 

 

 

13,502

 

Income tax effects and adjustments (2)

 

(47,378

)

(41,331

)

(61,624

)

(62,672

)

54,910

 

NON-GAAP NET INCOME

 

$

71,409

 

$

103,454

 

$

125,746

 

$

99,469

 

$

153,116

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted shares

 

128,241

 

130,716

 

131,583

 

132,779

 

134,132

 

Add back: dilutive shares under the treasury stock method

 

2,224

 

1,825

 

2,020

 

1,259

 

1,405

 

NON-GAAP DILUTED SHARES

 

130,465

 

132,541

 

133,603

 

134,038

 

135,537

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-GAAP DILUTED NET INCOME PER SHARE

 

$

0.55

 

$

0.78

 

$

0.94

 

$

0.74

 

$

1.13

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(67,500

)

$

(46,911

)

$

(7,911

)

$

(45,316

)

$

(118,740

)

Provision (benefit) for income taxes

 

(26,048

)

(10,429

)

(24,064

)

(32,961

)

100,646

 

Other expense, net

 

12,400

 

20,659

 

16,082

 

12,058

 

12,543

 

Depreciation and amortization

 

99,004

 

117,901

 

129,595

 

142,285

 

139,401

 

Stock-based compensation

 

145,491

 

126,874

 

134,800

 

146,104

 

144,943

 

Merger-related transaction costs

 

 

 

 

 

13,502

 

ADJUSTED EBITDA

 

$

163,347

 

$

208,094

 

$

248,502

 

$

222,170

 

$

292,295

 

 


(1)  Represents transaction costs associated with our merger agreement with Microsoft entered into on June 11, 2016.

(2)  Excludes accretion of redeemable noncontrolling interest.

 



 

About LinkedIn

 

LinkedIn connects the world’s professionals to make them more productive and successful and transforms the ways companies hire, market, and sell. Our vision is to create economic opportunity for every member of the global workforce through the ongoing development of the world’s first Economic Graph. LinkedIn has offices around the world.

 

Non-GAAP Financial Measures

To supplement its condensed consolidated financial statements, which are prepared and presented in accordance with US GAAP, the company uses the following non-GAAP financial measures: adjusted EBITDA, non-GAAP net income, and non-GAAP diluted EPS (collectively the “non-GAAP financial measures”). The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with US GAAP. The company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making.

 

The company excludes the following items from one or more of its non-GAAP measures:

 

Stock-based compensation . The company excludes stock-based compensation because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. The company further believes this measure is useful to investors in that it allows for greater transparency to certain line items in its financial statements and facilitates comparisons to peer operating results.

 

Non-cash interest expense related to convertible senior notes. In November 2014, the company issued $1.3 billion aggregate principal amount of 0.50% convertible senior notes. In accordance with GAAP, the company separately accounted for the value of the conversion feature as a debt discount, which is amortized in a manner that reflects the company’s non-convertible debt borrowing rate. Accordingly, the company recognizes imputed interest expense on its convertible senior notes of approximately 4.7% in its statement of operations. The company excludes the difference between the imputed interest expense and coupon interest expense, net of any capitalized interest, because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peer operating results.

 

Amortization of acquired intangible assets . The company excludes amortization of acquired intangible assets because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peer operating results.

 

Accretion of redeemable noncontrolling interest. The accretion of redeemable noncontrolling interest represents the accretion of the company’s redeemable noncontrolling interest to its redemption value. The company excludes the accretion because it is non-cash in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operating performance. In addition, excluding this item from the non-GAAP financial measures facilitates comparisons to historical operating results and comparisons to peer operating results.

 



 

Fair value adjustment on other derivative. These adjustments represent the changes in fair value of the cash settlement feature for the preferred shares in the company’s joint venture. The company excludes these fair value adjustments because they are non-cash in nature and the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operating performance. In addition, excluding this item from the non-GAAP financial measures facilitates comparisons to historical operating results and comparisons to peer operating results.

 

Merger-related transaction costs. This adjustment represents the transaction costs associated with the Company’s merger agreement with Microsoft Corporation. The company excludes the merger-related transaction costs as they are non-recurring in nature and because the company believes that the non-GAAP financial measures excluding this item provide meaningful supplemental information regarding operational performance and liquidity. In addition, excluding this item from the non-GAAP measures facilitates comparisons to historical operating results and comparisons to peer operating results.

 

Income tax effects and adjustments . The company adjusts non-GAAP net income by considering the income tax effects of excluding stock-based compensation, the amortization of acquired intangible assets and merger-related transaction costs. The company uses a static non-GAAP tax rate for evaluating its operating performance as well as for planning and forecasting purposes. This projected 10-year weighted average non-GAAP tax rate eliminates the effects of non-recurring and period specific items, such as tax charges or benefits that are a result of a change in the valuation allowance, which can vary in size and frequency and does not necessarily reflect the company’s long-term operations. Based on the company’s current forecast, a tax rate of 23% has been applied to its non-GAAP financial results for the current period. This rate will be adjusted annually, if necessary. The company believes that adjusting for these income tax effects and adjustments provides additional transparency to the overall or “after tax” effects of excluding these items from its non-GAAP net income.

 

Dilutive shares under the treasury stock method.  During periods with a net loss, the company excludes certain potential common shares from its GAAP diluted shares because their effect would have been anti-dilutive. On a non-GAAP basis, these shares would have been dilutive. As a result, the company has included the impact of these shares in the calculation of its non-GAAP diluted net income per share under the treasury stock method.

 

For more information on the non-GAAP financial measures, please see the “Trended Reconciliation of GAAP to Non-GAAP Financial Measures” table in this press release. This accompanying table has more details on the GAAP financial measures that are most directly comparable to non-GAAP financial measures and the related reconciliations between these financial measures.

 

Additionally, the company has not reconciled adjusted EBITDA or non-GAAP EPS guidance to net loss or GAAP EPS guidance because it does not provide guidance for items such as other income (expense), net, or GAAP provision for income taxes, which are reconciling items between net loss and adjusted EBITDA and non-GAAP EPS. As items that impact net loss are out of the company’s control and/or cannot be reasonably predicted, the company is unable to provide such guidance. Accordingly, a reconciliation to net loss is not available without unreasonable effort.

 



 

Safe Harbor Statement

 

“Safe Harbor” statement under the Private Securities Litigation Reform Act of 1995: This press release may contain forward-looking statements about our products, including our investments in products, technology and other key strategic areas. The achievement of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions. If any of these risks or uncertainties materialize or if any of the assumptions prove incorrect, the company’s results could differ materially from the results expressed or implied by the forward-looking statements the company makes.

 

The risks and uncertainties referred to above include - but are not limited to - risks related to our pending merger with Microsoft Corporation; our core value of putting members first, which may conflict with the short-term interests of the business; engagement of our members; the price volatility of our Class A common stock; general economic conditions; expectations regarding the return on our strategic investments; execution of our plans and strategies, including with respect to mobile products and features and expansion into new areas and businesses; security measures and the risk that they may not be sufficient to secure our member data adequately or that we are subject to attacks that degrade or deny the ability of members to access our solutions; expectations regarding our ability to timely and effectively scale and adapt existing technology and network infrastructure to ensure that our solutions are accessible at all times with short or no perceptible load times; our ability to maintain our rate of revenue growth and manage our expenses and investment plans; our ability to accurately track our key metrics internally; members and customers curtailing or ceasing to use our solutions; privacy, security and data transfer concerns, as well as changes in regulations, which could impact our ability to serve our members or curtail our monetization efforts; litigation and regulatory issues; increasing competition; our ability to manage our growth; our international operations; our ability to recruit and retain our employees; the application of U.S. and international tax laws on our tax structure and any changes to such tax laws; acquisitions we have made or may make in the future; and the dual class structure of our Class A common stock.

 

Further information on these and other factors that could affect the company’s financial results is included in filings it makes with the Securities and Exchange Commission from time to time, including the section entitled “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 2015, and additional information will also be set forth in our Form 10-Q that will be filed for the quarter ended June 30, 2016, which should be read in conjunction with these financial results. These documents are or will be available on the SEC Filings section of the Investor Relations page of the company’s website at http://investors.linkedin.com/. All information provided in this release and in the attachments is as of August 4, 2016, and LinkedIn undertakes no duty to update this information.

 

Additional Information and Where to Find It

 

In connection with the transaction with Microsoft described above, on July 22, 2016, LinkedIn filed with the SEC and sent to its stockholders a definitive proxy statement. INVESTORS AND SECURITY HOLDERS OF LINKEDIN ARE URGED TO READ CAREFULLY AND IN THEIR ENTIRETY THE DEFINITIVE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN THEY BECOME AVAILABLE. Investors and security holders may obtain a free copy of the definitive proxy statement and other documents filed with the SEC.

 

LinkedIn and its directors and executive officers are participants in the solicitation of proxies from the LinkedIn’s stockholders with respect to the transaction. Information about LinkedIn’s directors and executive officers and their ownership of LinkedIn’s common stock is set forth in LinkedIn’s annual proxy statement on Schedule 14A filed with the SEC on April 22, 2016, as well as the definitive proxy statement filed on July 22, 2016.

 

CONTACT

 

Press:

press@linkedin.com

 

Investor:

IErequests@linkedin.com

 


 

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