Safe harbor This presentation contains forward-looking statements. All statements other than statements of historical facts contained in this presentation, including statements regarding LinkedIn Corporation s ( LinkedIn or the Company ) future results of operations and financial position, including preliminary financial results for the quarter ended March 31, 2011, financial targets, business strategy, plans and objectives for future operations, are forward-looking statements. The Company has based these forward-looking statements largely on its current estimates of its financial results and its current expectations and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy, short term and long-term business operations and objectives, and financial needs as of the date of this presentation. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under the heading Risk Factors in the Company s filings with the Securities and Exchange Commission (the SEC ). Moreover, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for Company management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking statements for any reason after the date of this presentation, to conform these statements to actual results or to changes in the Company s expectations. The Company s filings with the Securities and Exchange Commission are available to you and you should read the documents the Company has filed with the SEC for more complete information about the Company. You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov. 2
Jeff Weiner 1st Chief Executive Officer at LinkedIn San Francisco Bay Area Internet Send Message View Profile LinkedIn Overview 3
What is the single most important driver of long-term value creation within a company? 4
Talent 5
Great talent builds great companies If I were running a company today, I would have one priority above all others: to acquire as many of the best people as I could. I'd put off everything else to fill my bus. Jim Collins, Good to Great 6
The LinkedIn opportunity Connect talent with opportunity at massive scale + Fundamentally transforming the way the world works 7
Our mission Connect the world s professionals to make them more productive and successful 8
The value we bring to our members Rolodex, Resume, Business Card Identity Connect, find and be found LinkedIn Profile, Address Book, Search Newspapers, Trade Magazines, Events Insights Be great at what you do Homepage, LinkedIn Today, Groups Desktop Everywhere Work wherever our members work Mobile, APIs, Plug-Ins Opportunities that will transform the trajectory of your career 9
The power of LinkedIn s network effects Member growth and engagement Relevant and valuable products & services Technology platform Critical mass of data 10
The world s largest professional network International now comprises over 50% of total membership 100M+ 1 75M 2 Avg Monthly Users in Q1 11 65% y/y growth 7B+ 2 Page Views in Q1 11 96% y/y growth ~1B 1 Searches in Q1 11 70% y/y growth 1 Internal data as of March 31, 2011; 2 comscore data as of March 31, 2011 11
Three diverse, scalable and growing business lines 2010 y/y growth Hiring Solutions Providing passive recruiting at scale and adding social relevancy to active job searches $102M 182% Marketing Solutions Delivering marketers targeted access to one of the most influential, affluent and educated audiences on the web $79M 107% Premium Subscriptions Enabling professionals to be more productive with premium tools tailored by customer segment $62M 35% Total $243M 102% 12
Huge global market opportunity in members 100M+ 1 LinkedIn Members 640M+ 2 Worldwide Professionals 3,300M+ 2 Worldwide Labor Force 1 LinkedIn members as of March 31, 2011 2 Source: International Planning & Research 13
Huge global market opportunity in monetization Worldwide talent acquisition and staffing services Worldwide Internet advertising spend $27B 1 Addressable Today $25B B2B 1 $85B Total 2 $69B Total 2 1 LinkedIn estimates 2 Source: IDC 14
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 15
Technology infrastructure Building an industry-leading, global platform for developing scalable, data-fueled professional networking applications Professional Graph Scale & Redundancy Service Infrastructure Data Infrastructure Security APIs 16
Technology infrastructure Developing an open platform for third-party developers and publishers Already generating as many API calls off LinkedIn as page views on LinkedIn 17
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 18
Viral growth engine Increasing the number of member invitations and connections 6/1/09 9/1/09 12/1/09 3/1/10 6/1/10 9/1/10 12/1/10 3/1/11 Weekly Member Invitations 19
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 20
Professional identity ecosystem The professional profile of record Experience / Education Connect Professional Details Summary: Career and Professional Highlights Recommendations Groups / Associations 21
Professional identity ecosystem The definitive professional search engine 1st 244 shared connections 22
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 23
Professional insights and knowledge sharing Your professional dashboard Data Context Connections Critical Mass 24
Professional insights and knowledge sharing Your essential source for business intelligence Context Critical Mass Data Connections 25
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 26
Global monetization: Hiring Solutions - An unprecedented opportunity: passive recruiting at scale - 73 of the Fortune 100 are using LinkedIn Hiring Solutions Sherri Wang LinkedIn Recruiter: Search Results (113) Save this search Keyword: (mergers OR arbitrage) - Location: Hong Kong, China - Industry: Financial Services Michael Cho 27
Global monetization: Marketing Solutions Targeting one of the most affluent and influential audiences on the web Self-Service Platform Display / Social Ads LinkedIn Company Pages Custom groups / Sponsorship 28
Global monetization: Subscriptions Premium tools tailored by customer segment Subscription targeted to member based on profile data and activity Recommended subscription for the individual Product feature list is presented dynamically 29
Blue-chip enterprise companies and thousands of SMB customers derive value from LinkedIn on a global basis TECHNOLOGY HEALTH CARE FINANCIAL PROFESSIONAL SERVICES CONSUMER 150K+ Small Business 27% International Customers Revenue 30
Our strategy Global Monetization Professional Insights & Knowledge Sharing Professional Identity Ecosystem Data Viral Growth Engine Technology Infrastructure 31
Increasing investment for long-term growth Infrastructure Scale hardware and software to enhance site performance and accelerate development cycles Product Development Execute robust product roadmap to enhance growth, engagement and monetization Sales Force Meet increasing demand across multiple business lines International Growth Expand global footprint by launching new languages and sales offices 32
The talent to make it happen Jeff Weiner Chief Executive Officer www.linkedin.com / in / jeffweiner08 Steve Sordello Chief Financial Officer www.linkedin.com / in / stevesordello Nick Besbeas Vice President, Marketing http://www.linkedin.com / in / nickbesbeas Steve Cadigan Vice President, People Operations www.linkedin.com / in / cadigan Mike Gamson Senior Vice President, Global Sales www.linkedin.com/ in / mikegamson David Henke Senior Vice President, Operations and Engineering www.linkedin.com / in / drhenke Robby Kwok Head of Corporate Development www.linkedin.com / in / robbykwok Deep Nishar Senior Vice President, Products and User Experience www.linkedin.com/ in / deepnishar Erika Rottenberg Vice President, General Counsel and Secretary www.linkedin.com / in / erikarottenberg 33
Steve Sordello 1st Chief Financial Officer at LinkedIn San Francisco Bay Area Internet Send Message View Profile Financial Overview 34
Rapid growth in key metrics Worldwide Cumulative Registered Members 59% y/y growth Average Monthly Unique Visitors 65% y/y growth Total Page Views 96% y/y growth (Millions) 1 (Millions) 2 (Billions) 3 1 At period end 2 Average monthly number over the three months ended 3 Over the three months ended Source: comscore 35
Accelerating revenue growth ($ millions) Quarterly Revenue -------------------2008------------------- 2008: $79M -------------------2009------------------- 2009: $120M +52% -------------------2010------------------- 2010: $243M +102% -2011- Q1 2011 +110% y/y 36
SaaS business built on a consumer web platform Online / offline mix results in monthly recurring revenue and high margin self-serve business Hiring Solutions Marketing Solutions Premium Subscriptions Field Sales Corporate Solutions Recruiter Jobs Recruitment Media Job Postings Subscriptions Talent Finder Display Ads LinkedIn Ads Business Subscription Online Sales Payments Platform 37
Attractive financial model!! Strong revenue growth!! Diversified and proven revenue models!! Visibility into future revenues!! Significant operating leverage!! Investing aggressively for growth!! Strong balance sheet 38
Our vision Create economic opportunity for every professional in the world 39
Adjusted EBITDA and Non-GAAP Expenses To provide investors with additional information regarding our financial results, we have disclosed adjusted EBITDA, a non-gaap financial measure, and certain expenses on a non-gaap basis. We have provided below a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, and a reconciliation of these non-gaap expenses to their most directly comparable GAAP financial measure. We have included these non-gaap financial measures because they are key measures used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA and these non-gaap expenses can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used by the compensation committee of our board of directors in connection with the payment of bonuses to our executive officers. Accordingly, we believe that adjusted EBITDA and these non-gaap operating expenses provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors. Our use of adjusted EBITDA and non-gaap expenses has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:!although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;!adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;!adjusted EBITDA and non-gaap expenses do not consider the potentially dilutive impact of equity-based compensation. Equity-based compensation expenses are recurring and, for the foreseeable future, will continue to be a significant recurring expense in our business as it represents an important part of our employees compensation and impacts their performance;!adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and!other companies, including companies in our industry, may calculate adjusted EBITDA and non-gaap expenses differently, which reduces their usefulness as a comparative measure. Because of these limitations, you should consider adjusted EBITDA and non-gaap expenses alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results. 41
Reconciliation of GAAP to Non-GAAP expenses ($ millions) 2007 2008 2009 2010 Q1'11 Revenue $32.5 $78.8 $120.1 $243.1 $93.9 Cost of Revenue (GAAP) 7.4 18.6 25.9 44.8 16.8 SBC included in cost of revenue 0.1 0.3 0.4 0.4 0.2 Cost of revenue (Non-GAAP) 7.3 18.3 25.5 44.4 16.6 Gross margin % (Non-GAAP) 78% 77% 79% 82% 82% Sales and marketing (GAAP) 5.0 17.0 26.8 59.0 29.4 SBC included in sales and marketing 0.2 0.5 0.7 1.2 1.1 Sales and marketing (Non-GAAP) 4.9 16.5 26.2 57.8 28.3 Sales and marketing as a % of revenue (Non-GAAP) 15% 21% 22% 24% 30% Research and development (GAAP) 11.6 29.4 39.4 65.1 24.7 SBC included in research and development 0.6 1.2 2.3 3.2 1.6 Research and development (Non-GAAP) 11.0 28.2 37.1 61.9 23.1 Research and development as a % of revenue (Non-GAAP) 34% 36% 31% 25% 25% General and administrative (GAAP) 6.8 13.0 19.5 35.1 13.6 SBC included in general and administrative 1.0 2.6 2.8 3.9 1.0 General and administrative (Non-GAAP) 5.9 10.4 16.7 31.1 12.7 General and administrative as a % of revenue (Non-GAAP) 18% 13% 14% 13% 13% 42
Reconciliation of Adjusted EBITDA ($ millions) $ millions) 2007 2008 2009 2010 Q1'11 Net income (loss) $0.3 ($4.5) ($4.0) $15.4 $2.1 Provision (benefit) for income taxes 0.0 0.3 0.8 3.6 (0.3) Other (income) expense, net (0.8) (1.3) (0.2) 0.6 (0.4) Depreciation and amortization 2.1 6.4 11.9 19.6 8.2 Stock-based compensation 1.8 4.6 6.2 8.8 3.8 Adjusted EBITDA 3.5 5.5 14.7 48.0 13.3 43