Social media site LinkedIn saw its shares jump after hours after the company reported second quarter revenue that grew faster than expected, despite an overall drop in net income.
Also, in contrast to Facebook’s performance, LinkedIn raised its guidance for the full year. Despite European headwinds and limits to LinkedIn’s advertising inventory, strong demand for its recruiting services drove the company to boost its 2012 revenue projection range by $30.
And now that the company has a new redesign and LinkedIn Today story stream, the company expects users to be even more engaged with the site—not just when they’re looking for jobs, but all the time, the company said.
LinkedIn’s overall revenue grew 89 percent to a record $228 million, more than the $216 Wall Street predicted, while non-GAAP EPS grew over 55% to 16 cents. The site also gained new users, with membership growing 50 percent to 174 million.
The company also benefitted from a newly-designed home page and its iPad app, which CEO Jeff Weiner said is “driving a nice trend of engagement.” The lowest point for the company this past quarter was a security breach where passwords were stolen. The company said it’s “redoubled” its efforts since then to ensure safety and that the breach cost the company between half a million to a million dollars.
All three of LinkedIn’s business segments grew, but the biggest progress came from its recruiting tools, called “hiring solutions.” That business grew 107 percent to $121.6 million, now comprising 53 percent of total revenue. Revenue from marketing solutions (which is effectively advertising,) grew 64 percent to $63.1 million, and premium subscriptions grew 82 percent to $43.5 million.
Like Facebook, more of LinkedIn’s users are using the service on their mobile phones—LinkedIn says more than 15 percent of new member registrations are on mobile, up from 10 percent the prior quarter. But with mobile use hanging over Facebook’s revenue growth, CEO Weiner made a point of stressing that the company will be able to make money on mobile usage not just from advertising, but also from its other two business lines, saying “we believe it can be accretive with regard to hiring solutions.” He noted that a pilot program for advertising within the LinkedIn tablet app is off to a strong start.
LinkedIn’s stock has suffered in recent weeks—dragged down by the suffering social media sector and concerns that economic weakness would hurt recruiting revenue. Yes, its growth is slowing—that was expected. But based on the stock’s quick ascent after the earnings report, it seems to be showing significant enough progress across its three segments, despite economic headwinds, to reassure investors it can perform better than the rest of the social media space.
(Click here for the latest after-hours quote.)
-By CNBC's Julia Boorstin
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