- SEASONAL BUT MARKED IMPROVEMENT: Our LNKD JOLTS tracker improved sequentially into the first month of 1Q16, which is expected given seasonality in LNKD's selling environment. But as we've mentioned previously, 4Q15/1Q16 is more about magnitude than direction; the former is fairly strong QTD. As a reminder, our LNKD Talent Solutions TAM analysis suggests that the bulk of that TAM is in the upsell opportunity (ARPA) vs. new account volume. Note that LNKD will no longer be reporting its Talent Solution customer counts, so we will not be able to calculate ARPA anymore (but that doesn't mean we can't use the tracker).
- BUT DEAD MONEY FOR NOW: LNKD's 2016 guidance is basically implying a recession since it essentially calls for declining ARPA and/or net new LCS account growth. Our tracker update suggests LNKD wasn't seeing the recession that its guidance is calling for when it issued it. We expect a beat/raise on the 1Q16 release is even more likely now, but we're not sure the street will chase the print. We suspect it will take more than one positive earnings release to regain the trust of the street after mgmt tattooed its holders on the 4Q15 release (especially after deciding to pull its LCS account metric). We remain on the sideline for now.
See the note below for additional detail on LNKD's 4Q15 release. Let us know if you would like to discuss further.
LNKD: Guidance = Recession
02/05/16 09:50 AM EST