LinkedIn (LNKD.DL) shares closed Thursday up more than 5% following a first-quarter report that beat estimates. The company did have a small slip in a key segment that proves LinkedIn doesn't stand in direct competition with Facebook (META -12.36%) -- but that's not a bad thing. And LinkedIn's first quarter did show overall growth that should encourage investors.
Source: LinkedIn
Analysts had estimated revenue of $466 million, compared to LinkedIn's own guidance of $455 million-$460 million. The company beat all of those figures by reporting $473 million, a 46% year-over-year increase. Analysts predicted EPS of $0.34 while LinkedIn reported $0.38. LinkedIn has now beaten both estimates for the past six quarters.
What were the most important results from LinkedIn's first-quarter report?
3 key segments
LinkedIn's revenue comes from three segments: talent solutions, marketing solutions, and premium subscriptions.
Talent solutions revenue grew 50%, year over year, to $280 million. The segment provides hiring tools for companies looking to tap into LinkedIn's membership for recruiting. Talent solutions accounted for more than half of total revenues in the quarter. 
Source: LinkedIn
Marketing solutions was the only segment to slip, quarter over quarter. The segment reported $102 million in revenue compared to $114 million in the fourth quarter. But the performance for this segment, which is derived from advertising, still marked a 36% year-over-year improvement.
Rounding out the list was premium subscriptions, with $96 million, a 46% increase over last year's quarter. The segment gets its revenue from typical profile members -- rather than corporations -- who pay to have access to additional services such as sending private messages to people who aren't direct connections.
In the first-quarter preview, we looked at why membership growth is important -- because those members are why corporations turn to LinkedIn for hiring and why advertisers are willing to pay for space. And LinkedIn did grow membership in the first quarter -- 36% compared to last year and 7% compared to last quarter, up to about 297 million.
Looking ahead
LinkedIn predicts second-quarter revenue of $500 million-$505 million and the high end matches analyst estimates. Analysts also expect EPS of $0.38.
Future quarters could show the impact of LinkedIn's two new certified marketing platforms, which improve the ways companies can build marketing campaigns through LinkedIn. The results could improve the amount of advertising revenue. But LinkedIn won't ever become the ruler of social networking ads.
Competitor comparison
The quarter-on-quarter loss in the marketing solutions segment further illustrates that LinkedIn's strength won't ever reside in advertisements. And that actually helps the company have a distinct identity and makes it harder to directly compare LinkedIn to Facebook.
In its own first-quarter report, Facebook showed revenue of $2.5 billion -- 72% year-over-year growth -- with more than 90% of that total coming from advertising. Facebook announced last week a new mobile advertising network that will utilize the data the company has collected on its nearly 1.4 billion monthly active users. The data will help better target ads that advertisers can now place in third-party apps.
So Facebook's going to conquer the mobile ad space. But that's not LinkedIn's concern. LinkedIn is a souped-up hiring resource and networking tool, and as long as quality members keep turning up, companies will keep paying to participate in LinkedIn's model.
Foolish final thoughts
LinkedIn turned in a fairly sold first-quarter report. Do the results merit the company's current P/E ratio of over 722? That's up to the individual investor to decide. But the company's performance keeps climbing as LinkedIn forms an identity away from Facebook.
