Investors appear to have reacted positively to Microsoft's acquisition of LinkedIn. The business-oriented social company posted a strong second quarter that bested analyst prediction. These are the firstly quarterly financials LinkedIn has released since Microsoft purchased the company. One of the most expensive tech deals in history, the two companies will merge later in the year.
For the second quarter, the company reported revenue of $933 million. That figure is the highest per quarter revenue in the company's history, 31% above the $712 million through Q2 2015. Analysts had predicted LinkedIn would report $898 million in revenue.
Microsoft announced in June that it would pay $26.2 billion to acquire LinkedIn. At $196 per share it was an over the odds purchase that becomes the biggest in the company's history. The deal does seem to have stimulated LinkedIn's worrying performance though. It is easy to forget in the post-Microsoft merger that the company's shares collapsed by 40% in February.
“In Q2, we demonstrated good momentum with our member and customers, and delivered strong financial results,” LinkedIn CEO Jeff Weiner said in a statement. “Continued product innovation drove increased levels of engagement, and strengthened our enterprise offerings. 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.”
It is worth pointing out that LinkedIn is still not a profit making company. During the second quarter of the year, the company posted a net loss of $119 million. That was up from $68 million year-on-year. It is definitely an area that Microsoft needs to address, especially as this is the harshest Q2 loss in LinkedIn's history.
Microsoft will certainly see some potential. For example, LinkedIn's advertising grew 29% and brought in $181 million. Premium subscriptions grew a not too shabby 21% year-on-year to $155 million and the service as 450 million users overall.
Growing these aspects of LinkedIn will be Microsoft's goal. While the company will still operate independently with Weiner in charge, it will benefit from Redmond's services. Cortana integration and deeper links to Skype are ways in which Microsoft can expand LinkedIn's usefulness.