LinkedIn records Q1 profit, but investors fear that growth in the social network might be slowing
Professional social network LinkedIn has posted profits of $22.6 million (£14.5m) for the first quarter of 2012, more than quadruple the $5 million (£3.2m) it made during the same period last year.
Revenues at the company rose by 72 percent from $188.5 million (£121m) to $324.7 million (£208.5m) as income generated from talent solutions, marketing and premium subscriptions all increased.
“Q1 was a strong quarter for LinkedIn with member engagement and financial results reaching record levels,” said Jeff Weiner, CEO of LinkedIn. “We remained focused on delivering great products that increasingly make LinkedIn the essential daily resource for global professionals.”
The company says that it only expects a comparatively modest increase in revenue during the second quarter, with $342 million (£220m) and $347 million (£222m) touted as a potential figure. This has caused alarm among some investors who fear that LinkedIn’s growth might be slowing, despite just releasing record figures.
Shareholders have grown used to results that exceed expectations since LinkedIn launched its IPO in 2011, but the company appears confident that it can maintain its current level of growth, especially as the focus shifts from networking to recruitment.
LinkedIn now counts 218 million people among its user base, with two people every second signing up for the service. The company has refreshed its smartphone applications and has just announced a deal to acquire newsreader Pulse for £59 million.
“Our continued focus on our operating priorities yielded strong results in the first quarter, resulting in record levels of revenue, profitability, and cash flow,” said Steve Sordello, CFO of LinkedIn. “We remain encouraged by the diversity of our business and size of our market opportunities, and we will continue to invest aggressively to realise LinkedIn’s long-term potential.”
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