LinkedIn 2011 Annual Report Download - page 46

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion of our financial condition and results of operations in conjunction
with the consolidated financial statements and the notes thereto included elsewhere in this Annual Report on
Form 10-K. The following discussion contains forward-looking statements that reflect our plans, estimates and
beliefs. Our actual results could differ materially from those discussed in the forward-looking statements.
Factors that could cause or contribute to these differences include those discussed below and elsewhere in this
Annual Report on Form 10-K, particularly in “Risk Factors.”
This section and other parts of this Annual Report on Form 10-K contain forward-looking statements that
involve risks and uncertainties. Forward-looking statements can also be identified by words such as
“anticipates,” “expects,” “believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are
not guarantees of future performance and the Company’s actual results may differ significantly from the results
discussed in the forward-looking statements. Factors that might cause such differences include, but are not
limited to, those discussed in the subsection entitled “Risk Factors” above, which are incorporated herein by
reference. The following discussion should be read in conjunction with the consolidated financial statements and
notes thereto included in Item 8 “Financial Statements and Supplementary Data” of this Annual Report on Form
10-K. All information presented herein is based on the Company’s fiscal calendar. Unless otherwise stated,
references in this report to particular years or quarters refer to the Company’s fiscal years ended in December
and the associated quarters of those fiscal years. The Company assumes no obligation to revise or update any
forward-looking statements for any reason, except as required by law.
Overview
We are the world’s largest professional network on the Internet and currently have more than 150 million
members in over 200 countries and territories. Through our proprietary platform, members are able to create,
manage and share their professional identity online, build and engage with their professional network, access
shared knowledge and insights, and find business opportunities, enabling them to be more productive and
successful. We believe we are the most extensive, accurate and accessible network focused on professionals.
In May 2011, we closed our initial public offering (“IPO”), at which time we sold a total of 6,003,804 shares
of our Class A common stock and certain of our stockholders sold a total of 3,012,196 shares of our Class A
common stock. In November 2011, we closed our follow-on offering, at which time we sold a total of 2,583,755
shares of our Class A common stock and certain of our stockholders sold a total of 7,478,745 shares of our
Class A common stock. We received total cash proceeds of $426.5 million, net of underwriting discounts and
commissions and other costs, associated with these offerings.
In 2011, we achieved significant growth as compared to 2010 as our network of registered members and
member engagement continues to increase and we continue to benefit from our expanded product offerings. Our
net revenue was $522.2 million in 2011, which represented an increase of 115% from 2010. Our future growth
will depend, in part, on our ability to increase our member base and member engagement, which we believe will
result in increased sales of our hiring solutions, marketing solutions and premium subscriptions to new and
existing customers.
In 2012, our philosophy is to continue to invest for long-term growth. We expect to continue to invest
heavily in our product development efforts to enable our members and customers to derive more value from our
platform. In addition, we expect to continue to aggressively expand our field sales organization to market our
solutions both in the United States and internationally. We also expect to continue to make significant capital
expenditures to upgrade our technology and network infrastructure to improve the ability of our website to
handle expected increases in usage and to enable the release of new features and solutions. To support these
efforts, we expect to increase our workforce which will result in an increase of headcount related expenses,
including stock-based compensation. As of December 31, 2011, we had 2,116 employees, which represented an
increase of 114% compared to the same period last year.
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