Linkedin

LinkedIn now counts more than 400 million members worldwide. Credit: LinkedIn. 

Shares of LinkedIn (NYSE:LNKD) jumped more than 10% in late trading Thursday. The professional social network reported its first sequential revenue growth in five quarters as contribution from its acquired lynda.com business more than doubled. Here's a closer look at the most crucial year-over-year figures:

MetricQ3 2015 ActualsQ3 2014 ActualsYOY Growth
Revenue  $779.6 million  $568.3 million  37.2%
Non-GAAP income   $103.5 million  $66.1 million  56.6%
Adjusted EPS  $0.78  $0.52  50%
Cash from operations   $239.6 million  $181.2 million 32.2% 

Sources: S&P Capital IQ and LinkedIn press release. 

Commenting on the results, CEO Jeff Weiner said in prepared remarks included with the press release:

Q3 cumulative members grew 20% to 396 million, and last week reached the 400 million member milestone. Unique visiting members grew 11% to an average of 100 million per month, and member page views grew 33%. This has yielded 20% year over year growth in page views per unique visiting member, continuing a pattern of accelerated growth throughout 2015. This is in part a result of placing more emphasis on quality engagement for our members and less on transactional engagement generated by emails. Mobile continues to grow at double the rate of overall member activity, and now represents 55% of all traffic to LinkedIn.

What went right: LinkedIn grew its membership base nearly twice as fast as Twitter (NYSE:TWTR), which counted 320 million monthly active users at the end of its third quarter. Yet both companies share something crucial: revenue growth is significantly outpacing user growth. Learning and development services offered through lynda.com is proving to be an effective way for LinkedIn to earn more from the installed base, accounting for $41.3 million in third-quarter revenue. That's equal to roughly 8% of the $502.1 million LinkedIn's talent solutions produced in Q3.

What went wrong: LinkedIn's efforts to diversify aren't taking hold nearly as well in other parts of the Americas as they are in the U.S. Total revenue for the region that includes Canada, Mexico, and other parts of Latin America grew just 19.1% year over year, badly lagging overall growth. On a segment-by-segment basis, marketing solutions (up 27.8%) and premium subscriptions (up 20.5%) also lagged overall revenue growth. Even the core talent solutions business (up 33.7%) failed to match the top line. Had lynda.com sales not been in the mix, investors might have reacted differently to LinkedIn's report. 

What to look for now: Learning and development looks to be LinkedIn's highest-growth business over the short term. Watch for accelerating revenue in the division as LinkedIn tries to get more of its installed base to try lynda.com courses. Also keep an eye on engagement statistics; publishing should lead to more member page views, which should lead to more ad revenue and -- in the best cases -- hiring transactions.

Tim Beyers needs to unplug. He's also a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission but didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool.

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