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Value For Microsoft? LinkedIn Q2 Revenue Grows, Loss Posted

Ahead of its sale to Microsoft, LinkedIn has posted quarterly results showing both growing revenue and a growing loss.

With Microsoft to acquire LinkedIn in an all-cash transaction valued at US$26.2 billion, another dimension was added to the professional social network’s 2016 second quarter results, ahead of closing of the deal, expected this calendar year.

Upon announcement of the sale, LinkedIn CEO Jeff Weiner had touted the combination of LinkedIn’s network and Microsoft’s cloud, and upon release of the results again pointed to the benefits it will deliver LinkedIn.

“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,” Weiner, who will stay on as CEO following the deal, stated.

So, how did LinkedIn shape up for the quarter in what may be its last earnings release ahead of the Microsoft acquisition?

LinkedIn’s revenue grew 31 per cent year-on-year to US$932.71 million, however a net loss of US$119.26 million compared to a loss of US$67.75 million in last year’s corresponding quarter.

It was LinkedIn’s largest ever quarterly revenue and also its largest ever loss as a public company.

LinkedIn advised that the loss was primarily driven by a non-cash charge of US$101 million, which related to its tax assets.

Meanwhile, LinkedIn stated that cumulative members grew 18 per cent year-on-year to 450 million, with unique visiting members growing 9 per cent to an average of 106 million members a month, and member page views growing 32 per cent. LinkedIn stated that this yielded 21 per cent year-on-year growth in page views per unique visiting member.

Looking ahead to the remainder of the year, in light of the pending merger, LinkedIn stated that it will not be updating its outlook for fiscal 2016.

As for the value Microsoft will derive from the acquisition, whether it is a bargain buy or paying overs will be borne out over time. Certainly, the manner in which the two companies integrate their respective services will be subject to ongoing scrutiny as cloud and network meet.

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