UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to         

Commission File Number: 001-35168

LinkedIn Corporation

(Exact name of registrant as specified in its charter)

Delaware	47-0912023
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2029 Stierlin Court

Mountain View, CA 94043

(Address of principal executive offices and zip code)

(650) 687-3600

(Registrant’s telephone number, including area code)

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of October 21, 2013, there were 101,776,526 shares of the Registrant’s Class A common stock outstanding and 17,628,285 shares of the Registrant’s Class B common stock outstanding.

LINKEDIN CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page No.
	PART I—FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012	3
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2013 and September 30, 2012	4
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2013 and September 30, 2012	5
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2013 and September 30, 2012	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	50
Item 6.	Exhibits	51
Signatures		51

2

Part I. Financial Information

Item 1. Financial Statements

LINKEDIN CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	September 30, 2013		December 31, 2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	1,396,292	$	270,408
Short-term investments	875,993		479,141
Accounts receivable (net of allowance for doubtful accounts of $5,644 and $3,774 at September 30, 2013 and December 31, 2012, respectively)	208,956		203,607
Deferred commissions	28,507		30,232
Prepaid expenses	33,831		14,344
Other current assets	28,259		21,065
Total current assets	2,571,838		1,018,797
Property and equipment, net	336,656		186,677
Goodwill	150,831		115,214
Intangible assets, net	43,209		32,780
Other assets	41,744		28,862
TOTAL ASSETS	$	3,144,278	$	1,382,330
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	70,340	$	53,559
Accrued liabilities	139,898		104,077
Deferred revenue	335,700		257,743
Total current liabilities	545,938		415,379
DEFERRED TAX LIABILITIES	15,861		27,717
OTHER LONG TERM LIABILITIES	51,347		30,810
Total liabilities	613,146		473,906
COMMITMENTS AND CONTINGENCIES (Note 10)
STOCKHOLDERS’ EQUITY (Note 11):
Class A and Class B common stock	12		11
Additional paid-in capital	2,478,813		879,303
Accumulated other comprehensive income	470		260
Accumulated earnings	51,837		28,850
Total stockholders’ equity	2,531,132		908,424
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,144,278	$	1,382,330

See Notes to Condensed Consolidated Financial Statements

3

LINKEDIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Net revenue	$	392,960		$	252,028	$	1,081,326		$	668,691
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	53,395			33,778		145,043			89,278
Sales and marketing	133,172			83,168		364,865			224,792
Product development	106,223			72,730		282,503			179,903
General and administrative	61,767			33,194		160,776			89,022
Depreciation and amortization	33,767			23,122		91,766			55,552
Total costs and expenses	388,324			245,992		1,044,953			638,547
Income from operations	4,636			6,036		36,373			30,144
Other income (expense), net	156			672		(404		)	228
Income before income taxes	4,792			6,708		35,969			30,372
Provision for income taxes	8,155			4,406		12,982			20,270
Net income (loss)	$	(3,363	)	$	2,302	$	22,987		$	10,102
Net income (loss) per share of common stock:
Basic	$	(0.03	)	$	0.02	$	0.21		$	0.10
Diluted	$	(0.03	)	$	0.02	$	0.20		$	0.09
Weighted-average shares used to compute net income (loss) per share:
Basic	113,940			106,304		111,552			104,241
Diluted	113,940			113,618		117,090			112,420

See Notes to Condensed Consolidated Financial Statements

4

LINKEDIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Net income (loss)	$	(3,363	)	$	2,302	$	22,987		$	10,102
Other comprehensive income:
Change in unrealized gains on investments, net of tax	537			168		229			278
Less: reclassification adjustment for net investment gains included in net income (loss), net of tax	(3		)	—		(19		)	(81		)
Total other comprehensive income	534			168		210			197
Comprehensive income (loss)	$	(2,829	)	$	2,470	$	23,197		$	10,299

See Notes to Condensed Consolidated Financial Statements

5

LINKEDIN CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2013			2012
OPERATING ACTIVITIES:
Net income	$	22,987		$	10,102
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	91,766			55,552
Provision (benefit) for doubtful accounts and sales returns	3,521			(145		)
Stock-based compensation	136,738			58,747
Excess income tax benefit from stock-based compensation	(27,747		)	(13,255		)
Changes in operating assets and liabilities:
Accounts receivable	(7,991		)	(43,284		)
Deferred commissions	1,779			(1,923		)
Prepaid expenses and other assets	(14,139		)	(12,487		)
Accounts payable and other liabilities	70,406			57,290
Income taxes, net	(1,257		)	17,970
Deferred revenue	77,957			69,249
Net cash provided by operating activities	354,020			197,816
INVESTING ACTIVITIES:
Purchases of property and equipment	(220,625		)	(93,305		)
Purchases of investments	(642,442		)	(263,062		)
Sales of investments	111,357			25,804
Maturities of investments	128,779			66,973
Payments for intangible assets and acquisitions, net of cash acquired	(15,303		)	(56,955		)
Changes in deposits and restricted cash	(4,898		)	(3,120		)
Net cash used in investing activities	(643,132		)	(323,665		)
FINANCING ACTIVITIES:
Proceeds from follow-on offering, net of offering costs	1,348,419			—
Proceeds from issuance of common stock from employee stock options	27,146			36,096
Proceeds from issuance of common stock from employee stock purchase plan	11,500			7,718
Excess income tax benefit from stock-based compensation	27,747			13,255
Other financing activities	811			(148		)
Net cash provided by financing activities	1,415,623			56,921
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS	(627		)	733
CHANGE IN CASH AND CASH EQUIVALENTS	1,125,884			(68,195		)
CASH AND CASH EQUIVALENTS—Beginning of period	270,408			339,048
CASH AND CASH EQUIVALENTS—End of period	$	1,396,292		$	270,853
SUPPLEMENTAL DISCLOSURES OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchases of property and equipment recorded in accounts payable and accrued liabilities	$	24,196		$	13,481
Offering costs not yet paid	$	360		$	—
Vesting of early exercised stock options	$	763		$	3,035
Issuance of Class A common stock and stock options for business combinations	$	40,927		$	72,461

See Notes to Condensed Consolidated Financial Statements

6

LINKEDIN CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Description of Business and Basis of Presentation

LinkedIn Corporation and its subsidiaries, (the “Company”), a Delaware corporation, was incorporated on March 6, 2003. The Company operates an online professional network on the Internet through which the Company’s members are able to create, manage and share their professional identities online, build and engage with their professional networks, access shared knowledge and insights, and find business opportunities, enabling them to be more productive and successful. The Company believes it is the most extensive, accurate and accessible network focused on professionals.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed on February 19, 2013.

The condensed consolidated balance sheet as of December 31, 2012, included herein was derived from the audited financial statements as of that date, but does not include all disclosures including notes required by GAAP on an annual reporting basis.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, but are not necessarily indicative of the results of operations to be anticipated for the full year 2013 or any future period.

Principles of Consolidation

The condensed consolidated financial statements include the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from management’s estimates.

Recently Adopted Accounting Guidance

Comprehensive Income

In February 2013, the Financial Accounting Standards Board issued updated authoritative guidance requiring entities to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. The Company adopted this guidance in its interim period ended March 31, 2013. The adoption of this guidance did not impact the Company's financial results, as the guidance is related to disclosure only, and the Company has not had significant reclassifications out of accumulated other comprehensive income.

7

2. Fair Value Measurements

The Company measures its cash equivalents, short-term investments and foreign currency derivative contracts at fair value based on an expected exit price as defined by the authoritative guidance on fair value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants would use in pricing an asset or liability. The authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value on either a recurring or nonrecurring basis whereby inputs, used in valuation techniques, are assigned a hierarchical level. The following are the hierarchical levels of inputs to measure fair value:

• Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

• Level 2: Inputs reflect: quoted prices for identical assets or liabilities in markets that are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.

• Level 3: Unobservable inputs reflecting the Company’s assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.

The Company’s assets and liabilities that are measured at fair value on a recurring basis, by level, within the fair value hierarchy as of September 30, 2013 and December 31, 2012, are summarized as follows (in thousands):

	September 30, 2013								December 31, 2012
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents:
Money market funds	$	884,275	$	—	$	—	$	884,275	$	148,384	$	—	$	—	$	148,384
U.S. treasury securities	351,697		—		—		351,697		—		—		—		—
Commercial paper	—		16,897		—		16,897		—		18,488		—		18,488
Short-term investments:
Commercial paper	—		76,738		—		76,738		—		46,361		—		46,361
Certificates of deposit	—		2,004		—		2,004		—		2,005		—		2,005
U.S. treasury securities	92,731		—		—		92,731		18,197		—		—		18,197
U.S. agency securities	—		432,779		—		432,779		—		303,450		—		303,450
Corporate debt securities			257,432				257,432		—		107,517		—		107,517
Municipal securities	—		14,309		—		14,309		—		1,611		—		1,611
Other current assets:
Foreign currency derivative contracts	—		7		—		7		—		146		—		146
Total assets	$	1,328,703	$	800,166	$	—	$	2,128,869	$	166,581	$	479,578	$	—	$	646,159
Liabilities:
Accrued liabilities:															—
Foreign currency derivative contracts	$	—	$	1,994	$	—	$	1,994	$	—	$	1,040	$	—	$	1,040
Total liabilities	$	—	$	1,994	$	—	$	1,994	$	—	$	1,040	$	—	$	1,040

The fair value of the Company's Level 1 financial instruments, which are traded in active markets, are based on quoted market prices for identical instruments. The fair value of the Company's Level 2 fixed income securities are obtained from an independent pricing service, which may use quoted market prices for identical or comparable instruments or model driven valuations using observable market data or inputs corroborated by observable market data. The Company's procedures include controls to ensure that appropriate fair values are recorded, including comparing the fair values obtained from the Company's

8

pricing service against fair values obtained from another independent source. The Company's derivative instruments are valued using pricing models that use observable market inputs and, therefore, are classified as Level 2.

As of September 30, 2013 and December 31, 2012, the Company had outstanding foreign currency derivative contracts with a total notional amount of $81.8 million and $83.5 million, respectively.

3. Acquisition

On April 17, 2013, LinkedIn completed its acquisition of Alphonso Labs, Inc. ("Pulse"), a San Francisco, California-based privately held leading mobile news reader and content distribution platform. LinkedIn's purchase price of $47.6 million for all the outstanding shares of capital stock of Pulse consisted of $6.7 million in cash and 225,882 shares of LinkedIn Class A common stock. LinkedIn also issued 9,182 stock options related to assumed Pulse equity awards. The fair value of the earned portion of assumed stock options of $0.3 million is included in the purchase price, with the remaining fair value of $1.2 million resulting in post-acquisition compensation expense that will be recognized over the requisite service period of approximately three years from the date of acquisition. The total consideration in connection with the acquisition is subject to adjustment based on (i) purchase price adjustment provisions and (ii) indemnification obligations of Pulse stockholders after the closing of the acquisition.

The acquisition has been accounted for as a business combination under the acquisition method and, accordingly, the total purchase price is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their respective fair values on the acquisition date. The final purchase price allocation is pending the finalization of deferred tax calculations and residual goodwill. Pulse's results of operations have been included in the condensed consolidated financial statements from the date of acquisition. To retain the services of certain former Pulse employees, LinkedIn offered non-vested Class A common stock that will be earned over three years from the date of acquisition. As these equity awards are subject to post-acquisition employment, the Company is accounting for them as post-acquisition compensation expense. In connection with these post-acquisition arrangements, the Company issued 244,601 shares of non-vested Class A common stock with a total fair value of $44.0 million.

The following table presents the purchase price allocation initially recorded in the Company's condensed consolidated balance sheets on the respective acquisition dates (in thousands):

	Total
Net tangible assets	$	221
Goodwill (1)	35,617
Intangible assets (2)	14,000
Net deferred tax liability	(2,227		)
Total purchase price consideration (3)	$	47,611

 _______________________

(1) The goodwill represents the excess value over both tangible and intangible assets acquired and liabilities assumed. The goodwill in this transaction is primarily attributable to expected operational synergies, the assembled workforce, and the future development initiatives of the assembled workforce. None of the goodwill is expected to be deductible for tax purposes.

(2) Identifiable definite-lived intangible assets were comprised of developed technology of $9.5 million, trade name of $2.7 million, registered user base of $1.2 million and backlog of $0.6 million. The overall weighted-average life of the identifiable definite-lived intangible assets acquired was 2.9 years, which will be amortized on a straight-line basis over their estimated useful lives.

(3) Subject to adjustment based on (i) purchase price adjustment provisions and (ii) indemnification obligations of the acquired company stockholders.

Pro forma results of operations for this acquisition have not been presented as the financial impact to the Company’s consolidated financial statements is not material.

9

4. Cash and Investments

The following table presents cash, cash equivalents and short-term investments for the periods presented (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Market Value
September 30, 2013:
Cash	$	143,423	$	—	$	—		$	143,423
Cash equivalents:
Money market funds	884,275		—		—			884,275
U.S. treasury securities	351,700		—		(3		)	351,697
Commercial paper	16,896		1		—			16,897
Short-term investments:
Commercial paper	76,716		25		(3		)	76,738
Certificates of deposit	2,000		4		—			2,004
U.S. treasury securities	92,590		141		—			92,731
U.S. agency securities	432,352		428		(1		)	432,779
Corporate debt securities	257,278		197		(43		)	257,432
Municipal securities	14,311		6		(8		)	14,309
Total cash, cash equivalents, and short-term investments	$	2,271,541	$	802	$	(58	)	$	2,272,285
December 31, 2012:
Cash	$	103,536	$	—	$	—		$	103,536
Cash equivalents:
Money market funds	148,384		—		—			148,384
Commercial paper	18,487		1		—			18,488
Short-term investments:
Commercial paper	46,352		9		—			46,361
Certificates of deposit	2,000		5		—			2,005
U.S. treasury securities	18,184		13		—			18,197
U.S. agency securities	302,991		460		(1		)	303,450
Corporate debt securities	107,585		10		(78		)	107,517
Municipal securities	1,612		—		(1		)	1,611
Total cash, cash equivalents, and short-term investments	$	749,131	$	498	$	(80	)	$	749,549

The following table presents short-term investments by contractual maturity date (in thousands) as of September 30, 2013:

	Amortized Cost		Estimated Fair Market Value
Due in one year or less	$	390,295	$	390,532
Due after one year through two years	484,952		485,461
Total	$	875,247	$	875,993

5. Property and Equipment

The following table presents the detail of property and equipment, net, for the periods presented (in thousands):

	September 30, 2013			December 31, 2012
Computer equipment	$	340,288		$	199,022
Software	32,245			26,901
Capitalized website and internal-use software	69,445			40,971
Furniture and fixtures	25,282			17,087
Leasehold improvements	85,963			44,362
Total	553,223			328,343
Less accumulated depreciation	(216,567		)	(141,666		)
Property and equipment, net	$	336,656		$	186,677

6. Goodwill and Other Intangible Assets

Goodwill

Goodwill is generally not deductible for tax purposes. The following table presents the goodwill activity for the periods presented (in thousands):

Goodwill—December 31, 2012	$	115,214
2013 acquisition	35,617
Goodwill—September 30, 2013	$	150,831

Other Intangible Assets

The following table presents the detail of other intangible assets for the periods presented (dollars in thousands):

	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Weighted- Average Remaining Life
September 30, 2013:
Developed technology	$	37,452	$	(13,810	)	$	23,642	2.4 years
Trade name	7,000		(2,286		)	4,714		2.1 years
Patents	12,782		(941		)	11,841		11.0 years
Non-compete agreements	2,661		(2,496		)	165		1.4 years
Customer relationships	1,200		(320		)	880		3.7 years
Other intangible assets	5,998		(4,031		)	1,967		2.0 years
Total	$	67,093	$	(23,884	)	$	43,209	4.7 years
December 31, 2012:
Developed technology	$	30,952	$	(7,676	)	$	23,276	3.2 years
Trade name	4,300		(836		)	3,464		2.4 years
Patents	4,025		(750		)	3,275		13.5 years
Non-compete agreements	2,661		(1,717		)	944		1.1 years
Customer relationships	1,200		(140		)	1,060		4.4 years
Other intangible assets	4,176		(3,415		)	761		2.4 years
Total	$	47,314	$	(14,534	)	$	32,780	4.1 years

Amortization expense was $3.8 million for both the three months ended September 30, 2013 and 2012 and $12.4 million and $6.9 million for the nine months ended September 30, 2013 and 2012, respectively. Estimated amortization expense of purchased intangible assets for future periods as of September 30, 2013 is as follows (in thousands):

Remainder of 2013	$	3,817
2014	14,762
2015	11,655
2016	4,548
2017	1,224
Thereafter	7,064
Total	$	43,070

7. Accrued Liabilities

The following table presents the detail of accrued liabilities for the periods presented (in thousands):

	September 30, 2013		December 31, 2012
Accrued vacation and employee-related expenses	$	61,362	$	35,803
Accrued incentives	57,585		46,554
Accrued sales tax and value-added taxes	8,536		9,103
Exercise of unvested stock options	498		1,292
Other accrued expenses	11,917		11,325
Total	$	139,898	$	104,077

8. Other Income (Expense), Net

The following table presents the detail of other income (expense), net, for the periods presented (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
Interest income	$	686		$	245	$	1,734		$	680
Net gain (loss) on foreign exchange and foreign currency derivative contracts	(495		)	425		(2,247		)	(507		)
Net realized gain on sales of short-term investments	4			2		10			55
Other non-operating income (expense), net	(39		)	—		99			—
Total other income (expense), net	$	156		$	672	$	(404	)	$	228

9. Income (Loss) Per Share

Basic and diluted net income (loss) per common share is presented in conformity with the two-class method required for participating securities. Class A and Class B common stock are the only outstanding equity in the Company. The rights of the holders of Class A and Class B common stock are identical, except with respect to voting and conversion. Each share of Class A common stock is entitled to one vote per share and each share of Class B common stock is entitled to ten votes per share. Shares of Class B common stock may be converted into Class A common stock at any time at the option of the stockholder, and are automatically converted upon sale or transfer to Class A common stock, subject to certain limited exceptions.

Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. The Company’s potential common shares consist of the incremental common shares issuable upon the exercise of stock options, and to a lesser extent, shares issuable upon the release of restricted stock units ("RSUs") and purchases related to the 2011 Employee Stock Purchase Plan. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. The computation

12

of the diluted net income (loss) per share of Class A common stock assumes the conversion of Class B common stock, while the diluted net income (loss) per share of Class B common stock does not assume the conversion of Class A common stock as Class A common stock is not convertible into Class B common stock.

The undistributed earnings are allocated based on the contractual participation rights of the Class A and Class B common shares as if the earnings for the year have been distributed. As the liquidation and dividend rights are identical, the undistributed earnings are allocated on a proportionate basis. Further, as the conversion of Class B common stock is assumed in the computation of the diluted net income (loss) per share of Class A common stock, the undistributed earnings are equal to net income (loss) for that computation.

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The following table presents the calculation of basic and diluted net income (loss) per share (in thousands, except per share data):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2013						2012				2013				2012
	Class A			Class B			Class A		Class B		Class A		Class B		Class A		Class B
Basic net income (loss) per share:
Numerator:
Allocation of undistributed earnings	$	(2,832	)	$	(531	)	$	1,793	$	509	$	19,139	$	3,848	$	6,429	$	3,673
Denominator:
Weighted-average common shares outstanding	95,936			18,004			82,797		23,507		92,882		18,670		66,342		37,899
Basic net income (loss) per share	$	(0.03	)	$	(0.03	)	$	0.02	$	0.02	$	0.21	$	0.21	$	0.10	$	0.10
Diluted net income (loss) per share:
Numerator:
Allocation of undistributed earnings for basic computation	$	(2,832	)	$	(531	)	$	1,793	$	509	$	19,139	$	3,848	$	6,429	$	3,673
Reallocation of undistributed earnings as a result of conversion of Class B to Class A shares	(531		)	—			509		—		3,848		—		3,673		—
Reallocation of undistributed earnings to Class B shares	—			—			—		102		—		402		—		32
Allocation of undistributed earnings	$	(3,363	)	$	(531	)	$	2,302	$	611	$	22,987	$	4,250	$	10,102	$	3,705
Denominator:
Number of shares used in basic calculation	95,936			18,004			82,797		23,507		92,882		18,670		66,342		37,899
Weighted-average effect of dilutive securities
Add:
Conversion of Class B to Class A common shares outstanding	18,004			—			23,507		—		18,670		—		37,899		—
Employee stock options	—			—			6,808		6,654		4,388		2,976		7,844		3,327
RSUs and other dilutive securities	—			—			506		—		1,150		—		335		—
Number of shares used in diluted calculation	113,940			18,004			113,618		30,161		117,090		21,646		112,420		41,226
Diluted net income (loss) per share	$	(0.03	)	$	(0.03	)	$	0.02	$	0.02	$	0.20	$	0.20	$	0.09	$	0.09

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The following weighted-average employee equity awards were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
Employee stock options	4,594	14	560	31
RSUs	1,373	10	216	45
Total	5,967	24	776	76

10. Commitments and Contingencies

Aggregate Future Lease Commitments

The Company leases its office facilities under operating lease agreements, the longest of which is expected to expire in 2026. The Company’s future minimum payments, which exclude operating expenses, under non-cancelable operating leases for office facilities having initial terms in excess of one year as of September 30, 2013 are as follows (in thousands):

Year Ending December 31,	Operating  Leases (1)
Remainder of 2013	$	12,646
2014	64,210
2015	84,107
2016	84,721
2017	81,785
Thereafter	521,519
Total minimum lease payments	$	848,988

 __________________

(1) Subsequent to September 30, 2013, we entered into a lease with a provider of data center space. The lease expires in 2025 with aggregate future minimum lease payments of approximately $116.2 million.

Legal Proceedings

The Company is subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, certain pending patent and privacy matters, including class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Although occasional adverse decisions or settlements may occur, the Company does not believe that the final disposition of any of these matters will have a material adverse effect on the business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages, and include claims for injunctive relief. Additionally, the Company's litigation matters are maturing, and therefore litigation costs are increasing. Other regulatory matters could result in fines and penalties being assessed against the Company, and it may become subject to mandatory periodic audits, which would likely increase its regulatory compliance costs. Adverse results of litigation or regulatory matters could also result in the Company being required to change its business practices, which could negatively impact its membership and revenue growth.  

The Company records a liability when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. The Company periodically evaluates developments in its legal matters that could affect the amount of liability that it has previously accrued, if any, and makes adjustments as appropriate. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters, and the Company’s judgment may be incorrect. The outcome of any proceeding is not determinable in advance. Until the final resolution of any such matters that the Company may be required to accrue for, it may be exposed to loss in excess of the amount accrued, and such amounts could be material.

Indemnification

In the ordinary course of business, the Company enters into contractual arrangements under which it agrees to provide indemnification of varying scope and terms to business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of such agreements and out of intellectual property infringement

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claims made by third parties. In these circumstances, payment by the Company may be conditional on the other party making a claim pursuant to the procedures specified in the particular contract. Further, the Company’s obligations under these agreements may be limited in terms of time and/or amount, and in some instances, it may have recourse against third parties for certain payments. In addition, the Company has indemnification agreements with certain of its directors and executive officers that require it, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors or officers with the Company. The terms of such obligations vary.

11. Stockholders’ Equity

Follow-on Offering

In September 2013, the Company closed a follow-on offering, at which time it sold a total of 6,188,340 shares of its Class A common stock (inclusive of 807,174 shares from the full exercise of the over-allotment option granted to the underwriters). The public offering price of the shares sold in the offering was $223.00 per share. The total gross proceeds from the offering to the Company were $1,380.0 million. After deducting underwriting discounts and commissions and offering expenses payable by the Company, the aggregate net proceeds received by the Company totaled approximately $1,348.1 million.

Common Stock

As of September 30, 2013, the Company had 101,553,310 shares and 17,714,805 shares of Class A common stock and Class B common stock outstanding, respectively. As of December 31, 2012, the Company had 88,829,278 and 19,817,923 shares of Class A common stock and Class B common stock outstanding, respectively.

Stock Option Activity

A summary of stock option activity for the nine months ended September 30, 2013 is as follows:

	Stock Option Activity				Weighted-Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
	Number of Shares		Weighted-Average Exercise Price
Outstanding—December 31, 2012	8,251,850		$	10.50
Assumed options from acquisition	9,182		14.50
Granted	727,745		171.53
Exercised	(2,982,463	)	9.11
Canceled or expired	(192,417	)	14.43
Outstanding—September 30, 2013	5,813,897		$	31.25	6.74	$	1,248,881
Options vested and expected to vest as of September 30, 2013	5,583,547		$	28.43	6.67	$	1,215,143
Options vested and exercisable as of September 30, 2013	3,112,202		$	8.46	5.86	$	739,472

Aggregate intrinsic value represents the difference between the Company's closing stock price of its common stock and the exercise price of outstanding, in-the-money options. The Company’s closing stock price as reported on the New York Stock Exchange (“NYSE”) as of September 30, 2013 was $246.06. The total intrinsic value of options exercised was approximately $177.8 million and $151.6 million for the three months ended September 30, 2013 and 2012, respectively, and $507.7 million and $423.7 million for the nine months ended September 30, 2013 and 2012, respectively. The weighted-average grant date fair value of options granted was $118.50 and $53.40 for the three months ended September 30, 2013 and 2012, respectively, and $88.91 and $61.61 for the nine months ended September 30, 2013 and 2012, respectively.

RSU Activity

A summary of RSU activity for the nine months ended September 30, 2013 is as follows:

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	Number of Shares		Weighted- Average Grant Date Fair Value
Unvested—December 31, 2012	3,239,272		$	94.69
Granted	1,854,179		178.35
Vested and issued	(839,799	)	198.69
Canceled	(258,579	)	116.44
Unvested—September 30, 2013	3,995,073		$	130.73

Stock-Based Compensation

The following table presents the amount of stock-based compensation related to stock-based awards to employees and nonemployees on the Company’s condensed consolidated statements of operations during the periods presented (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Cost of revenue	$	4,098		$	2,182		$	10,817		$	4,219
Sales and marketing	9,853			5,198			25,557			12,393
Product development	27,186			14,609			69,709			31,070
General and administrative	13,308			4,809			30,655			11,065
Total stock-based compensation	54,445			26,798			136,738			58,747
Tax benefit from stock-based compensation	(15,209		)	(6,483		)	(37,963		)	(13,086		)
Total stock-based compensation, net of tax effect	$	39,236		$	20,315		$	98,775		$	45,661

The Company capitalized $2.6 million and $1.1 million for the three months ended September 30, 2013 and 2012, respectively, and $6.7 million and $2.4 million for the nine months ended September 30, 2013 and 2012, respectively, of stock-based compensation as website development costs.

12. Income Taxes

The Company is subject to income tax in the United States as well as other tax jurisdictions in which it conducts business. Earnings from non-U.S. activities are subject to local country income tax. The Company does not provide for federal income taxes on the undistributed earnings of its foreign subsidiaries, as such, earnings are to be reinvested indefinitely offshore. The determination of the interim period income tax provision utilizes the effective rate method, which requires the estimation of certain annualized components of the computation of income provision, including the estimate of the annual effective tax rate by legal entity and by jurisdiction.

On January 2, 2013, the President signed into law The American Taxpayer Relief Act of 2012 (the "2012 Act"). Under prior law, a taxpayer was entitled to a research tax credit for qualifying amounts paid or incurred on or before December 31, 2011. The 2012 Act extends the research credit for two years to December 31, 2013. The extension of the research credit is retroactive and includes amounts paid or incurred after December 31, 2011. As a result of the retroactive extension, the Company has recognized a tax benefit of $15.5 million in the nine months ended September 30, 2013 for qualifying amounts incurred in 2012.

The Company recorded income tax expense of $8.2 million and $4.4 million for the three months ended September 30, 2013 and 2012, respectively, and $13.0 million and $20.3 million for the nine months ended September 30, 2013 and 2012, respectively. The tax provision increased in the three months ended September 30, 2013 compared to the same period last year primarily due to foreign tax losses which derive no benefit, acquisition costs, and non-deductible stock-based compensation. The tax provision decreased in the nine months ended September 30, 2013 compared to the same period last year primarily due to recognizing a benefit for the retroactive reinstatement of the 2012 Federal Research and Experimentation credit, offset by foreign tax losses which derive no benefit. The Company's foreign losses increased during the three and nine months ended September 30, 2013 compared to the same periods last year primarily due to research and development expenses which grew internationally at a rate higher than the growth rate of international revenues. International research and development expenses include costs charged by LinkedIn Corporation.

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13. Information About Revenue and Geographic Areas

Revenue by geography is based on the shipping address of the customer. The following tables present the Company’s revenue by product line and geographic region for the periods presented (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenue by product:
Talent Solutions	$	224,676	$	138,433	$	614,052	$	362,585
Marketing Solutions	88,502		64,036		248,891		175,091
Premium Subscriptions	79,782		49,559		218,383		131,015
Total	$	392,960	$	252,028	$	1,081,326	$	668,691

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenue by geographic region:
United States	$	245,302	$	162,377	$	670,982	$	430,479
Other Americas (1)	27,027		17,134		78,060		44,190
Total Americas	272,329		179,511		749,042		474,669
EMEA(2)	90,087		54,530		249,935		147,432
APAC (3)	30,544		17,987		82,349		46,590
Total	$	392,960	$	252,028	$	1,081,326	$	668,691

 __________________

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

No individual customer accounted for 10% or more of consolidated net revenue or accounts receivable for any of the periods presented.

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14. Subsequent Events

In October 2013, the Company entered into a lease with a provider of data center space for total future minimum payments of approximately $116.2 million over the next 11 years.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This section and other parts of this Quarterly Report on Form 10-Q 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” below, which are incorporated herein by reference.

You should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the fiscal year ended December 31, 2012, filed on February 19, 2013.

Overview

We are the world’s largest professional network on the Internet and currently have more than 259 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 the three and nine months ended September 30, 2013, we achieved significant growth as compared to the same periods in 2012 as our network of registered members and member engagement continues to increase and we continue to benefit from expanded product offerings and international expansion. Our net revenue was $393.0 million and $1,081.3 million for the three and nine months ended September 30, 2013, respectively, which represented an increase of 56% and 62%, respectively, compared to the same periods in 2012. Our future growth will depend, in part, on our ability to continue to increase our member base and member engagement on both desktop and mobile devices, as well as continuing to expand our product offerings and international expansion, which we believe will result in increased sales of our Talent Solutions, Marketing Solutions and Premium Subscriptions to new and existing customers. We expect our growth rate related to net revenue will decrease over time. Also, we believe the rate at which we are able to increase our member base and member engagement, as measured by our key metrics, will decelerate over time because of the large scale of our network, and that this may impact portions of our business.

In 2013, our philosophy is to continue to invest for long-term growth and we expect to continue to invest heavily in the following:

• Talent. We expect to increase our workforce, which will result in an increase in headcount-related expenses, including stock-based compensation expense. As of September 30, 2013, we had 4,812 employees, which represented an increase of 51% compared to the same period last year.

• Technology. We 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, to enable the release of new features and solutions, and to scale for future growth.

• Product. 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.

• Monetization. We expect to continue to aggressively expand our field sales organization to market our solutions both in the United States and internationally.

In September 2013, we closed a follow-on offering, at which time we sold a total of 6,188,340 shares of our Class A common stock. We received total cash proceeds of $1,348.4 million, net of underwriting discounts and commissions and other costs associated with this offering.

As a result of our investment philosophy, we do not expect to be profitable on a U.S. generally accepted accounting principles (“GAAP”) basis in the fourth quarter of 2013 and we may not be profitable on a GAAP basis in 2014.

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Key Business Metrics

We regularly review a number of metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate financial projections and make strategic decisions.

• Number of Registered Members. We define the number of registered members in our network as the number of individual users who have created a member profile on our website as of the date of measurement. We believe the number of registered members is a key indicator of the growth of our network and our ability to receive the benefits of the network effects resulting from such growth. Growth in our member base depends, in part, on our ability to successfully develop and market our solutions to professionals who have not yet become members of our network. Member growth will also be contingent on our ability to translate our offerings into additional languages, create more localized products in certain key markets, and more broadly expand our member base internationally.

We believe that a higher number of registered members will result in increased sales of our Talent Solutions, Marketing Solutions and Premium Subscriptions, as customers will have access to a larger pool of professional talent. However, a higher number of registered members will not immediately increase sales, nor will a higher number of registered members in a given region immediately increase sales in that region.

The following table presents the number of registered members as of the periods presented by geographic region (certain items may not total due to rounding):

	September 30,
	2013			2012			% Change
	(in thousands)
Members by geographic region:
United States	89,410	34	%	69,771	37	%	28	%
Other Americas (1)	44,679	17	%	29,961	16	%	49	%
Total Americas	134,089	52	%	99,732	53	%	34	%
EMEA (2)	78,968	30	%	54,877	29	%	44	%
APAC (3)	46,122	18	%	32,810	18	%	41	%
Total number of registered members (4)	259,179	100	%	187,419	100	%	38	%

 ______________________

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

(4) The number of registered members is higher than the number of actual members due to various factors. For more information, see “Risk Factors—The number of our registered members is higher than the number of actual members and a substantial majority of our page views are generated by a minority of our members. Our business may be adversely impacted if we are unable to attract and retain additional members who actively use our services. In addition, the tracking of certain of our performance metrics is done with internal tools and is not independently verified.”

• Unique Visitors. We base unique visitors on data provided by comScore, a leading provider of digital marketing intelligence. comScore defines unique visitors as users who have visited our desktop website (which excludes mobile engagement) at least once during a month regardless of whether they are a member. We view unique visitors as a key indicator of growth in our brand awareness among users and whether we are providing our members with useful products and features, thereby increasing member engagement. We believe that a higher level of member engagement will result in increased sales of our Talent Solutions, Marketing Solutions and Premium Subscriptions, as customers will have access to a larger pool of professional talent. Growth in unique visitors will be driven by growth in the number of registered members, improvements to features and products that drive traffic to our website, and international expansion.

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The following table presents the average monthly number of unique visitors during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013	2012	% Change		2013	2012	% Change
	(in millions)				(in millions)
Unique visitors (1)	184	134	37	%	181	117	55	%

 ______________________

(1) Includes the impact of Slideshare, which was acquired on May 17, 2012, beginning on June 1, 2012. Excluding the impact of Slideshare, the average monthly number of unique visitors for the three and nine months ended September 30, 2013 was 142 million and 139 million, respectively.

• Page Views. We base page views on data provided by comScore. comScore defines page views as the number of pages on our desktop website (excluding mobile page views) that users view during the measurement period. Similar to unique visitors, we believe page views is a key indicator for gaining insight into whether we are increasing member engagement and whether our members are deriving value from our solutions. We expect growth in page views will be driven, in part, by growth in the number of registered members, improvements in products and features that drive member traffic to our website, and international expansion. However, page views may not capture all of the value that our members and other users derive from our solutions because part of the benefit of certain products and features is that the member or user does not need to visit our website to receive value from our platform. For example, members can respond to InMails they receive from other members without accessing their LinkedIn account or our website.

The following table presents the number of page views during the periods presented:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013	2012	% Change		2013	2012	% Change
	(in millions)				(in millions)
Page Views (1)	12,206	9,183	33	%	36,133	28,030	29	%

______________________

(1) Includes the impact of Slideshare, which was acquired on May 17, 2012, beginning on June 1, 2012. Excluding the impact of Slideshare, the number of page views for the three and nine months ended September 30, 2013 was 11.6 billion and 34.5 billion, respectively.

• Number of LinkedIn Corporate Solutions Customers. We define the number of LinkedIn Corporate Solutions customers as the number of enterprises and professional organizations that we have under active contracts for this product as of the date of measurement. Our LinkedIn Corporate Solutions include LinkedIn Recruiter, Job Slots, LinkedIn Recruitment Media and LinkedIn Career Pages, which are all part of Talent Solutions. We believe the number of LinkedIn Corporate Solutions customers is a key indicator of our market penetration in the online recruiting market, the productivity of our field sales organization and the value that our products bring to both large and small enterprises and professional organizations. The number of customers subscribing to our LinkedIn Corporate Solutions product is particularly important to monitor given that we expect revenue from LinkedIn Corporate Solutions to continue to represent a significant portion of our total net revenue, and we are significantly investing in our ability to successfully sell unique products in a rapidly evolving market.

The following table presents the number of LinkedIn Corporate Solutions customers as of the periods presented:

	September 30,
	2013	2012	% Change
LinkedIn Corporate Solutions customers	22,001	13,991	57	%

• Sales Channel Mix. Depending on the specific product, we sell our Talent Solutions and Marketing Solutions offline through our field sales organization or online on our website. The vast majority of our Premium Subscriptions are sold online on our website. Our field sales organization uses a direct sales force to solicit

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customers and agencies. This offline channel is characterized by a longer sales cycle where price can be negotiated, higher relative average selling prices, longer contract terms, higher selling expenses and a longer cash collection cycle compared to our online channel.

Our online sales channel allows members to purchase solutions directly on our website. Members can purchase Premium Subscriptions as well as certain lower priced products in our Talent Solutions and Marketing Solutions, such as job postings and self-service advertising. This channel is characterized by lower average selling prices and higher cancellations compared to our offline channel, lower selling costs due to our automated payments platform and a highly liquid collection cycle.

The following table presents our net revenue by field sales and online sales:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013				2012				2013				2012
	($ in thousands)
Field sales	$	227,588	58	%	$	143,176	57	%	$	620,786	57	%	$	374,095	56	%
Online sales	165,372		42	%	108,852		43	%	460,540		43	%	294,596		44	%
Net revenue	$	392,960	100	%	$	252,028	100	%	$	1,081,326	100	%	$	668,691	100	%

Adjusted EBITDA

To provide investors with additional information regarding our financial results, we have disclosed adjusted EBITDA, a non-GAAP financial measure. The table below presents a reconciliation of adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure.

We have included adjusted EBITDA in this Quarterly Report on Form 10-Q because it is a key measure used by our management and board of directors to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget and to develop short and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used by the compensation committee of our board of directors in connection with the payment of bonuses to our executive officers. Accordingly, we believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.

Our use of adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

• although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

• adjusted EBITDA does not consider the potentially dilutive impact of equity-based compensation;

• adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and

• other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results. The following table presents a reconciliation of adjusted EBITDA for each of the periods indicated (in thousands):

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	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Reconciliation of Adjusted EBITDA:
Net income (loss)	$	(3,363	)	$	2,302		$	22,987	$	10,102
Provision for income taxes	8,155			4,406			12,982		20,270
Other (income) expense, net	(156		)	(672		)	404		(228		)
Depreciation and amortization	33,767			23,122			91,766		55,552
Stock-based compensation	54,445			26,798			136,738		58,747
Adjusted EBITDA	$	92,848		$	55,956		$	264,877	$	144,443

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States (“GAAP”). The preparation of these condensed consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and related disclosures. We evaluate our estimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Our actual results could differ from these estimates.

We believe that the assumptions and estimates associated with revenue recognition, stock-based compensation, the valuation of goodwill and intangible assets, website and internal-use software development costs, leases, income taxes and legal contingencies have the greatest potential impact on our consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates.

There have been no material changes to the our critical accounting policies and estimates as compared to the critical accounting policies and estimates described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012 filed on February 19, 2013.

Recently Issued Accounting Pronouncements

Comprehensive Income

In February 2013, the Financial Accounting Standards Board issued updated authoritative guidance requiring entities to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. For other amounts that are not required under GAAP to be reclassified in their entirety from accumulated other comprehensive income to net income in the same reporting period, an entity is required to cross-reference other disclosures required under GAAP that provide additional detail about those amounts. We adopted this guidance in our interim period ended March 31, 2013. The adoption of this guidance did not impact our financial results, as the guidance is related to disclosure only, and we have not had significant reclassifications out of accumulated other comprehensive income.

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Results of Operations

The following table sets forth our results of operations for the periods presented as a percentage of net revenue for those periods (certain items may not total due to rounding). The period-to-period comparison of financial results is not necessarily indicative of future results.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(As a percentage of revenue)
Consolidated Statements of Operations Data: (1)
Net revenue	100	%	100	%	100	%	100	%
Costs and expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)	14		13		13		13
Sales and marketing	34		33		34		34
Product development	27		29		26		27
General and administrative	16		13		15		13
Depreciation and amortization	9		9		8		8
Total costs and expenses	99		98		97		95
Income from operations	1		2		3		5
Other income (expense), net	—		—		—		—
Income before income taxes	1		3		3		5
Provision for income taxes	2		2		1		3
Net income (loss)	(1	)%	1	%	2	%	2	%

 ______________________

(1) Certain items may not total due to rounding.

Net Revenue

We generate revenue from Talent Solutions, Marketing Solutions and Premium Subscriptions.

Talent Solutions. Revenue from Talent Solutions is derived primarily from providing access to the LinkedIn Recruiter product and job postings. We provide access to our professional database of both active and passive job candidates with LinkedIn Recruiter, which allows corporate recruiting teams to identify candidates based on industry, job function, geography, experience/education, and other specifications. Revenue from providing access to the LinkedIn Recruiter product is recognized ratably over the subscription period, which consists primarily of annual subscriptions that are billed monthly, quarterly, or annually. We also earn revenue from the placement of job postings on our website, which generally run for 30 days. Independent recruiters can pay to post job openings that are accessible through job searches or targeted job matches. Revenue from job postings is recognized as the posting is displayed or the contract period, whichever is shorter.

Marketing Solutions. Revenue from Marketing Solutions is earned from the display of advertisements (both graphic and text link) on our website primarily based on a cost per advertisement model. Revenue from internet advertising is recognized as the online advertisements are displayed on our website. The typical duration of our advertising contracts is approximately two months.

Premium Subscriptions. Revenue from Premium Subscriptions is derived from selling various subscriptions to customers that allow users to have further access to premium services via our LinkedIn.com website. We offer our members monthly or annual subscriptions. Revenue from Premium Subscriptions is recognized ratably over the contract period, which is generally one to 12 months.

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	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
Revenue by product:
Talent Solutions	$	224,676		$	138,433		62	%	$	614,052		$	362,585		69	%
Marketing Solutions	88,502			64,036			38	%	248,891			175,091			42	%
Premium Subscriptions	79,782			49,559			61	%	218,383			131,015			67	%
Total	$	392,960		$	252,028		56	%	$	1,081,326		$	668,691		62	%
Percentage of revenue by product: (1)
Talent Solutions	57		%	55		%			57		%	54		%
Marketing Solutions	23		%	25		%			23		%	26		%
Premium Subscriptions	20		%	20		%			20		%	20		%
Total	100		%	100		%			100		%	100		%

  ______________________

(1) Certain items may not total due to rounding.

Total net revenue increased $140.9 million and $412.6 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. Net revenue from our Talent Solutions increased $86.2 million and $251.5 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. The increase was a result of further market penetration of our LinkedIn Corporate Solutions product, as evidenced by the 57% increase in the number of LinkedIn Corporate Solutions customers as of September 30, 2013 compared to September 30, 2012, and to a lesser extent, sales of additional services to existing customers.

Net revenue from our Marketing Solutions increased $24.5 million and $73.8 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year due to higher sales volume by our field sales and self-service advertising solutions and higher average advertising prices. The increase in sales volume is driven by higher user engagement, which is positively impacted by increases in the number of our registered members and page views on our website. Additionally, we recently launched Sponsored Updates for marketers to show paid content in LinkedIn members' update feeds. Sponsored Updates is sold through our field sales and self-service channels, and while currently a small contributor to revenue, we expect this to become a larger percentage of total Marketing Solutions revenue over time.

Net revenue from our Premium Subscriptions increased $30.2 million and $87.4 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year as a result of an increase in the number of premium subscribers due to increases in member engagement. Specifically, the number of registered members is a meaningful metric in evaluating and understanding net revenue from our Premium Subscriptions because an increase in the number of registered members has historically led to a proportionate increase in the number of premium subscribers. In addition, although still in their early stages, our sales solutions products, which include Sales Navigator, are continuing to grow at a faster rate than our other Premium Subscription products as well as continuing to represent a larger percentage of total Premium Subscriptions revenue.

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The following table presents our net revenue by geographic region:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013		2012		% Change		2013		2012		% Change
	($ in thousands)						($ in thousands)
Revenue by geographic region:
United States	$	245,302	$	162,377	51	%	$	670,982	$	430,479	56	%
Other Americas (1)	27,027		17,134		58	%	78,060		44,190		77	%
Total Americas	272,329		179,511		52	%	749,042		474,669		58	%
EMEA (2)	90,087		54,530		65	%	249,935		147,432		70	%
APAC (3)	30,544		17,987		70	%	82,349		46,590		77	%
Total	$	392,960	$	252,028	56	%	$	1,081,326	$	668,691	62	%

 ______________________

(1) Canada, Latin America and South America

(2) Europe, the Middle East and Africa (“EMEA”)

(3) Asia-Pacific (“APAC”)

International revenue increased $58.0 million and $172.1 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. International revenue represented 38% of total revenue in the three and nine months ended September 30, 2013 compared to 36% in the three and nine months ended September 30, 2012, respectively. The increase in international revenue, in absolute dollars and as a percentage of total revenue, is primarily due to the expansion of our international field sales organization and our site localization efforts. As of September 30, 2013, we operated our websites and mobile applications in 20 languages, and continued our expansion outside of the United States in offices across North America, as well as throughout Europe, Asia, Australia and the Middle East. We expect international revenue to increase on an absolute basis and as a percentage of revenue in 2013 as we continue to focus on making our platform available in more languages and further developing our brand across various international geographies.

Cost of Revenue

Our cost of revenue primarily consists of salaries, benefits and stock-based compensation for our production operations, customer support, infrastructure and advertising operations teams and web hosting costs related to operating our website. Credit card processing fees, sales taxes, allocated facilities costs and other supporting overhead costs are also included in cost of revenue. Consistent with our investment philosophy for 2013, we currently expect cost of revenue to increase on an absolute basis and decrease as a percentage of revenue.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
Cost of revenue	$	53,395		$	33,778		58	%	$	145,043		$	89,278		62	%
Percentage of net revenue	14		%	13		%			13		%	13		%
Headcount (at period end)	746			447			67	%	746			447			67	%

Cost of revenue increased $19.6 million in the three months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to increases in headcount related expenses of $9.1 million, web hosting service expenses of $4.9 million, facilities and related costs of $3.2 million, and other direct costs of $2.1 million, primarily consisting of credit card processing fees.

Cost of revenue increased $55.8 million in the nine months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to increases in headcount related expenses of $25.8 million, web hosting service expenses of $15.6 million, other direct costs of $7.1 million, primarily consisting of credit card processing fees, and facilities and related costs of $5.4 million.

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Sales and Marketing

Our sales and marketing expenses primarily consist of salaries, benefits, stock-based compensation, travel expense and incentive compensation for our sales and marketing employees. In addition, sales and marketing expenses include customer acquisition marketing, branding, advertising, public relations costs, and commissions paid to agencies, as well as allocated facilities and other supporting overhead costs. We plan to continue to invest heavily in sales and marketing to expand our global footprint, grow our current customer accounts and continue building brand awareness. Consistent with our investment philosophy for 2013, we expect sales and marketing expenses to increase and be our largest expense on an absolute basis and decrease as a percentage of revenue.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
Sales and marketing	$	133,172		$	83,168		60	%	$	364,865		$	224,792		62	%
Percentage of net revenue	34		%	33		%			34		%	34		%
Headcount (at period end)	2,071			1,366			52	%	2,071			1,366			52	%

Sales and marketing expenses increased $50.0 million in the three months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to an increase in headcount related expenses of $35.9 million as we continue to expand our field sales organization. We also experienced increases in facilities and related costs of $5.7 million, agency commissions of $5.3 million, and consulting services of $2.3 million.

Sales and marketing expenses increased $140.1 million in the nine months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to an increase in headcount related expenses of $105.9 million as we continue to expand our field sales organization. We also experienced increases in agency commissions of $14.9 million, facilities and related costs of $12.6 million, and consulting services of $4.0 million.

Product Development

Our product development expenses primarily consist of salaries, benefits and stock-based compensation for our engineers, product managers and developers. In addition, product development expenses include outside services and consulting, as well as allocated facilities and other supporting overhead costs. We believe that continued investment in features, software development tools and code modification is important to achieving our strategic objectives. Consistent with our investment philosophy for 2013, we expect product development expense to increase on an absolute basis and decrease as a percentage of revenue.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
Product development	$	106,223		$	72,730		46	%	$	282,503		$	179,903		57	%
Percentage of net revenue	27		%	29		%			26		%	27		%
Headcount (at period end)	1,337			947			41	%	1,337			947			41	%

Product development expenses increased $33.5 million in the three months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to an increase in headcount related expenses of $30.8 million as a result of our focus on developing new features and products to encourage member growth and engagement. We also experienced increases in facilities and related costs of $2.0 million.

Product development expenses increased $102.6 million in the nine months ended September 30, 2013 compared to the same period last year. The increase was primarily attributable to an increase in headcount related expenses of $96.2 million as a result of our focus on developing new features and products to encourage member growth and engagement. We also experienced increases in facilities and related costs of $3.6 million and web hosting service expenses of $2.3 million.

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General and Administrative

Our general and administrative expenses primarily consist of salaries, benefits and stock-based compensation for our executive, finance, legal, information technology, human resources and other administrative employees. In addition, general and administrative expenses include outside consulting, legal and accounting services, and facilities and other supporting overhead costs not allocated to other departments. We expect that our general and administrative expenses will increase on an absolute basis in 2013 and decrease as a percentage of revenue. In particular, we anticipate that costs related to legal proceedings will increase as we are, and expect to continue to be, subject to increasing litigation and compliance requirements.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
General and administrative	$	61,767		$	33,194		86	%	$	160,776		$	89,022		81	%
Percentage of net revenue	16		%	13		%			15		%	13		%
Headcount (at period end)	658			417			58	%	658			417			58	%

General and administrative expenses increased $28.6 million in the three months ended September 30, 2013 compared to the same period last year. The increase was primarily a result of an increase in headcount related expenses of $19.7 million to support our overall growth. We also experienced increases in legal and consulting services of $6.9 million.

General and administrative expenses increased $71.8 million in the nine months ended September 30, 2013 compared to the same period last year. The increase was primarily a result of an increase in headcount related expenses of $47.8 million to support our overall growth. We also experienced increases in legal and consulting services of $15.8 million, bad debt expense of $4.3 million, and facilities and related costs of $3.4 million as we continue to expand our office space to support headcount growth.

Depreciation and Amortization

Depreciation and amortization expenses primarily consist of depreciation on computer equipment, software, leasehold improvements, capitalized software development costs and amortization of purchased intangibles. We expect that depreciation and amortization expenses will increase on an absolute basis and increase as a percentage of revenue as we continue to expand our technology infrastructure.

	Three Months Ended September 30,								Nine Months Ended September 30,
	2013			2012			% Change		2013			2012			% Change
	($ in thousands)								($ in thousands)
Depreciation and amortization	$	33,767		$	23,122		46	%	$	91,766		$	55,552		65	%
Percentage of net revenue	9		%	9		%			8		%	8		%

Depreciation and amortization expenses increased $10.6 million and $36.2 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. The increase in depreciation expense of $10.6 million and $30.8 million in the three and nine months ended September 30, 2013, respectively, was primarily a result of our continued investment in expanding our technology infrastructure in order to support continued growth in our member base, and to a lesser extent, increases in amortization of acquired intangible assets of $0.1 million and $5.4 million, respectively.

Other Income (Expense), Net

Other income (expense), net consists primarily of the interest income earned on our investments and foreign exchange gains and losses. Hedging strategies that we have implemented or may implement to mitigate this risk may not eliminate our exposure to foreign exchange fluctuations.

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	Three Months Ended September 30,					Nine Months Ended September 30,
	2013			2012		2013			2012
	($ in thousands)					($ in thousands)
Interest income	$	686		$	245	$	1,734		$	680
Net gain (loss) on foreign exchange and foreign currency derivative contracts	(495		)	425		(2,247		)	(507		)
Net realized gain on sales of short-term investments	4			2		10			55
Other non-operating income (expense), net	(39		)	—		99			—
Total other income (expense), net	$	156		$	672	$	(404	)	$	228

Other income (expense), net decreased $0.5 million and $0.6 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. The decrease was primarily due to increases in foreign currency exchange losses, offset by interest earned on higher investment balances compared to the same periods last year.

Provision for Income Taxes

Provision for income taxes consists of federal and state income taxes in the United States and income taxes in certain foreign jurisdictions. We expect that our provision for income taxes may equal or exceed income before taxes in the fourth quarter of 2013.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013		2012		% Change		2013		2012		% Change
	($ in thousands)						($ in thousands)
Provision for income taxes	$	8,155	$	4,406	85	%	$	12,982	$	20,270	(36	)%

Income tax expense increased $3.7 million and decreased by $7.3 million in the three and nine months ended September 30, 2013, respectively, compared to the same periods last year. The effective tax rates were 170% and 36% for the three and nine months ended September 30, 2013, respectively, and 66% and 67% for the three and nine months ended September 30, 2012, respectively. The tax provision increased in the three months ended September 30, 2013 compared to the same period last year primarily due foreign tax losses which derive no benefit, acquisition costs, and non-deductible stock-based compensation. The tax provision decreased in the nine months ended September 30, 2013 compared to the same period last year primarily due to recognizing a benefit for the retroactive reinstatement of the 2012 Federal Research and Experimentation credit, offset by foreign tax losses which derive no benefit. The Company's foreign losses increased during the three and nine months ended September 30, 2013 compared to same periods last year primarily due to research and development expenses which grew internationally at a rate higher than the growth rate of international revenues. International research and development expenses include costs charged by LinkedIn Corporation.

Liquidity and Capital Resources

	Nine Months Ended September 30,
	2013			2012
	(in thousands)
Consolidated Statements of Cash Flows Data:
Purchases of property and equipment	$	220,625		$	93,305
Depreciation and amortization	91,766			55,552
Cash flows provided by operating activities	$	354,020		$	197,816
Cash flows used in investing activities	(643,132		)	(323,665		)
Cash flows provided by financing activities	1,415,623			56,921

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As of September 30, 2013, we had cash and cash equivalents of $1,396.3 million and short-term investments of $876.0 million. Our cash equivalents and short-term investments are comprised primarily of money market funds, U.S. treasury securities, U.S. agency securities, corporate debt securities and commercial paper. As of September 30, 2013, the amount of cash and cash equivalents held by foreign subsidiaries was $130.0 million. If these funds are needed for our domestic operations, we would be required to accrue and pay U.S. taxes to repatriate these funds. However, our intent is to permanently reinvest these funds outside the U.S. and our current plans do not demonstrate a need to repatriate them to fund our domestic operations. We do not provide for federal income taxes on the undistributed earnings of our foreign subsidiaries. The income tax liability would be insignificant if these earnings were to be repatriated. We believe that our existing cash and cash equivalents and short-term investment balances, together with cash generated from operations, will be sufficient to meet our working capital expenditure requirements for at least the next 12 months.

Operating Activities

Operating activities provided $354.0 million of cash in the nine months ended September 30, 2013, as a result of our improved operating performance compared to same period last year. The cash flow from operating activities consisted primarily of the changes in our operating assets and liabilities, with deferred revenue increasing $78.0 million and accounts payable and other liabilities increasing $70.4 million, partially offset by an increase in excess tax benefit from stock-based compensation of $27.7 million, which is reclassified as a financing activity, and an increase in prepaid expenses and other assets of $14.1 million. The increases in our deferred revenue and accounts payable and other liabilities were primarily due to increases in transaction volumes in the nine months ended September 30, 2013. We had net income in the nine months ended September 30, 2013 of $23.0 million, which included non-cash stock-based compensation of $136.7 million and non-cash depreciation and amortization of $91.8 million.

Operating activities provided $197.8 million of cash in the nine months ended September 30, 2012, as a result of our improved operating performance compared to the same period last year. The cash flow from operating activities consisted primarily of the changes in our operating assets and liabilities, with deferred revenue increasing $69.2 million and accounts payable and other liabilities increasing $57.3 million, partially offset by an increase in accounts receivable of $43.3 million, an increase in excess tax benefit from stock-based compensation of $13.3 million, which is reclassified as a financing activity, and an increase in prepaid expenses and other assets of $12.5 million. The increases in our deferred revenue and accounts receivable were primarily due to increases in transaction volumes in the nine months ended September 30, 2012. We had net income in the nine months ended September 30, 2012 of $10.1 million, which included non-cash depreciation and amortization of $55.6 million and non-cash stock-based compensation of $58.7 million.

Investing Activities

Our primary investing activities have consisted of purchases of investments, purchases of property and equipment specifically related to the build out of our data centers, as well as payments for intangible assets and strategic acquisitions. We also continued to invest in technology hardware to support our growth, software to support website functionality development, website operations and our corporate infrastructure. Purchases of property and equipment may vary from period to period due to the timing of the expansion of our operations and website and internal-use software development. We expect to continue to invest in property and equipment and development of software in 2013. Our planned purchases of property and equipment for 2013 are expected to be approximately $260 million.

In the nine months ended September 30, 2013, we had net purchases of investments of $402.3 million and purchases of property and equipment of $220.6 million. In the nine months ended September 30, 2012, we had net purchases of investments of $170.3 million, purchases of property and equipment of $93.3 million, and made payments for intangible assets and acquisitions, net of cash acquired of $57.0 million.

Financing Activities

In the nine months ended September 30, 2013, we received $1,348.4 million in proceeds from our follow-on offering, net of underwriting discounts and commissions and other costs associated with this offering. With the exception of the offering, our financing activities consisted primarily of net proceeds from the issuance of common stock from employee stock option exercises and stock purchase plan as well as the excess tax benefit from stock-based compensation for the nine months ended September 30, 2013 and September 30, 2012, respectively.

Off Balance Sheet Arrangements

We did not have any off balance sheet arrangements as of September 30, 2013.

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Contractual Obligations

We lease office space for our headquarters in Mountain View, California, under operating leases that we expect to expire in 2023. We lease other facilities around the world, including office space in Sunnyvale, California, to be constructed by our landlord, the longest of which expires in 2026. We have several material long-term purchase obligations outstanding with third parties. We do not have any debt or material capital lease obligations. As of September 30, 2013, the following table summarizes our contractual obligations and the effect such obligations are expected to have on our liquidity and cash flow in future periods:

	Payments Due by Period
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
	(in thousands)
Operating lease obligations (1)	$	848,988	$	56,848	$	167,783	$	157,156	$	467,201
Purchase obligations	$	83,317	$	49,843	$	28,765	$	4,709	$	—

 __________________

(1) Subsequent to September 30, 2013, we entered into a lease with a provider of data center space. The lease expires in 2025 with aggregate future minimum lease payments of approximately $116.2 million.

The contractual commitment amounts in the table above are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a significant penalty are not included in the table above.

Contingent obligations arising from unrecognized tax benefits are not included in the contractual obligations because it is expected that the unrecognized benefits would only result in an insignificant amount of cash payments.

Item 3. Quantitative and Qualitative Disclosure About Market Risk

We have operations both within the United States and internationally, and we are exposed to market risks in the ordinary course of our business. These risks include primarily interest rate, foreign exchange risks and inflation.

Interest Rate Fluctuation Risk

We had cash, cash equivalents and short-term investments of $2,272.3 million and $749.5 million as of September 30, 2013 and December 31, 2012, respectively. This amount was invested primarily in money market funds and highly liquid investment grade fixed income securities. The cash, cash equivalents and short-term marketable securities are held for working capital purposes. Our investment policy and strategy is focused on the preservation of capital and supporting our liquidity requirements. We do not enter into investments for trading or speculative purposes. At September 30, 2013, the weighted-average duration of our investment portfolio was less than one year.

Our fixed-income portfolio is subject to fluctuations in interest rates, which could affect our results of operations. Based on our investment portfolio balance as of September 30, 2013, a hypothetical increase in interest rates of 1% (100 basis points) would have resulted in a decrease in the fair value of our portfolio of approximately $9.2 million, and a hypothetical increase of 0.5% (50 basis points) would have resulted in a decrease in the fair value of our portfolio of approximately $4.6 million.

Foreign Currency Exchange Risks

We have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, principally the British Pound Sterling, the Euro, the Australian dollar, the Canadian dollar, the Indian rupee and the Singapore dollar. The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy. We have experienced and will continue to experience fluctuations in our net income (loss) as a result of gains (losses) related to remeasuring certain monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. In the event our foreign currency denominated assets, liabilities, sales or expenses increase, our operating results may be more greatly affected by fluctuations in the exchange rates of the currencies in which we do business.

We enter into foreign currency derivative contracts to hedge against assets and liabilities for which we have foreign currency exposure to minimize the risk that our earnings will be adversely affected by exchange rate fluctuations. Our foreign currency derivative contracts are not designated as hedging instruments. These derivative instruments are carried at fair value with changes in the fair value recorded to other income (expense), net in our consolidated statements of operations. These

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contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the hedged foreign currency denominated assets and liabilities.

As of September 30, 2013, we had outstanding foreign currency derivative contracts with a total notional amount of $81.8 million. If overall foreign currency exchange rates appreciated (depreciated) uniformly by 5% against the U.S. Dollar, our foreign currency derivative contracts outstanding as of September 30, 2013 would experience a loss (gain) of approximately $4.1 million.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer have concluded that as of such date, our disclosure controls and procedures were effective.

Changes in Internal Control

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. Other Information

Item 1. Legal Proceedings

We are subject to legal proceedings and litigation arising in the ordinary course of business, including, but not limited to, certain pending patent and privacy matters, including class action lawsuits, as well as inquiries, investigations, audits and other regulatory proceedings. Although occasional adverse decisions or settlements may occur, we do not believe that the final disposition of any of these matters will have a material adverse effect on our business. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages, and include claims for injunctive relief. Additionally, our litigation matters are maturing, and therefore our litigation costs are increasing. Other regulatory matters could result in fines and penalties being assessed against us, and we may become subject to mandatory periodic audits, which would likely increase our regulatory compliance costs. Adverse results of litigation or regulatory matters could also result in us being required to change our business practices, which could negatively impact our membership and revenue growth.

We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Periodically, we evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued, if any, and make adjustments as appropriate. Significant judgment is required to determine both likelihood of there being, and the estimated amount of, a loss related to such matters, and our judgment may be incorrect. The outcome of any proceeding is not determinable in advance. Until the final resolution of any such matters that we may be required to accrue for, we may be exposed to loss in excess of the amount accrued, and such amounts could be material.

Item 1A. Risk Factors

RISK FACTORS

Investing in our Class A common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described below, together with all of the other information in this Quarterly Report on Form 10-Q, including our consolidated financial statements and related notes, before deciding whether to purchase shares of our Class A common stock. If any of the following risks are realized, our business, operating results and prospects could be materially and adversely affected. In that event, the price of our Class A common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business

We have a limited operating history in new and unproven markets, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful.

We have a limited operating history in new and unproven markets that may not develop as expected. This limited operating history makes it difficult to effectively assess or forecast our future prospects. You should consider our business and prospects in light of the risks and difficulties we encounter or may encounter in these rapidly evolving markets. These risks and difficulties include our ability to, among other things:

• hire, integrate and retain world class talent;

• continue to earn and preserve our members' trust with respect to their professional reputation and information;

• develop and maintain scalable, high-performance technology infrastructure that can efficiently and reliably handle increased member usage globally while also implementing appropriate localization, as well as the deployment of new features and products;

• avoid interruptions or disruptions in our service or slower than expected load times for our services;

• increase our number of members and member engagement;

• responsibly use the data that our members share with us to provide solutions that make our members more productive and successful and that are critical to the talent, marketing and sales needs of enterprises and professional organizations;

• process, store, protect and use personal data in compliance with governmental regulations, contractual obligations and other legal obligations related to privacy and security;

• halt the operations of websites that aggregate our data as well as data from other companies, or copycat websites that have misappropriated our data;

• increase revenue from the solutions we provide;

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• successfully adapt to mobile markets and optimize services for mobile devices;

• successfully expand our business in markets outside the United States;

• successfully compete with other companies that are currently in, or may in the future enter, the online professional networking space; and

• defend ourselves against litigation, regulatory, intellectual property, privacy and other claims.

If the market for online professional networks does not develop as we expect, or if we fail to address the needs of this market, our business will be harmed. We may not be able to successfully address these risks and difficulties or others, including those described elsewhere in these risk factors. Failure to adequately address these risks and difficulties could harm our business and cause our operating results to suffer.

We may not timely and effectively scale and adapt our existing technology and network infrastructure to ensure that our services and solutions are accessible within an acceptable load time. Additionally, natural disasters or other catastrophic occurrences beyond our control could interfere with access to our services.

A key element to our continued growth is the ability of our members, users (whom we define as anyone who visits one of our websites through a computer or application on a mobile device, regardless of whether or not they are a member), enterprises and professional organizations in all geographies to access our websites, services and solutions within acceptable load times. We call this website performance. We have experienced, and may in the future experience, service disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, human or software errors, capacity constraints due to an overwhelming number of users accessing our services simultaneously, and denial of service or fraud or security attacks. In some instances, we may not be able to identify the cause or causes of these website performance problems within an acceptable period of time. We expect it will become increasingly difficult to maintain and improve our website performance, especially during peak usage times and as our solutions become more complex and our total user traffic increases. If our services are unavailable when users attempt to access them or they do not load as quickly as users expect, they may seek other websites or services to obtain the information for which they are looking, and may not return to our website or use our services as often in the future, or at all. This would negatively impact our ability to attract members, enterprises and professional organizations and increase engagement of our members and users. We expect to continue to make significant investments to maintain and improve website performance and to enable rapid releases of new features and products. To the extent that we do not effectively address capacity constraints, upgrade our systems as needed and continually develop our technology and network architecture to accommodate actual and anticipated changes in technology, our business and operating results may be harmed.

We have implemented a disaster recovery program, which allows us to move production to a back-up data center in the event of a catastrophe. Although this program is functional, it does not yet provide a real-time back-up data center, so if our primary data center shuts down, there will be a period of time that our services will remain shut down while the transition to the back-up data center takes place.

Our systems are also vulnerable to damage or interruption from catastrophic occurrences such as earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks and similar events. Our U.S. corporate offices and certain of the facilities we lease to house our computer and telecommunications equipment are located in the San Francisco Bay Area and Southern California, both regions known for seismic activity. Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our hosting facilities could result in lengthy interruptions in our services.

We do not carry business interruption insurance sufficient to compensate us for the potentially significant losses, including the potential harm to the growth of our business that may result from interruptions in our service as a result of system failures.

If our security measures are compromised, or if our websites are subject to attacks that degrade or deny the ability of members or customers to access our solutions, or if our member data is compromised, members and customers may curtail or stop use of our solutions.

Our solutions involve the collection, processing, storage, sharing, disclosure and usage of members' and customers' information and communications, some of which may be private. We are vulnerable to computer viruses, break-ins, phishing attacks, attempts to overload our servers with denial-of-service or other attacks and similar disruptions from unauthorized use of our computer systems, any of which could lead to interruptions, delays, or website shutdowns, causing loss of critical data or the unauthorized disclosure or use of personally identifiable or other confidential information, such as credit card information. For example, in June 2012, approximately 6.5 million of our members' encrypted passwords were stolen and published on an unauthorized website. If we experience compromises to our security that result in website performance or availability

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problems, the complete shutdown of our websites, or the loss or unauthorized disclosure of confidential information, our members or customers may be harmed or lose trust and confidence in us, and decrease the use of our website and services or stop using our services in their entirety, we could be subject to liability and litigation, and we would suffer reputational and financial harm. Additionally, we are, and in the future could be, subject to regulatory investigations and litigation in connection with a security breach or related issue, and we could also be liable to third parties for these types of breaches. Such litigation, regulatory investigations and our technical activities intended to prevent future security breaches are likely to require additional management resources and expenditures. We work with third party vendors to process credit card payments by our customers and are subject to payment card association operating rules. If our security measures fail to protect this information adequately or we fail to comply with the applicable operating rules, we could be liable to both our customers for their losses, as well as the vendors under our agreements with them, we could be subject to fines and higher transaction fees, we could face regulatory action, and our customers and vendors could end their relationships with us, any of which could harm our business and financial results.

Unauthorized parties may also attempt to fraudulently induce employees, members or customers to disclose sensitive information in order to gain access to our information or our members' or customers' information or access this information through other means, or abuse our systems in ways that otherwise degrade our users' experience with LinkedIn, such as sending numerous unsolicited emails. Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently, often are not recognized until launched against a target and may originate from less regulated and remote areas around the world, we may be unable to proactively address these techniques or to implement adequate preventative measures. Any or all of these issues could negatively impact our ability to attract new members and increase engagement by existing members, cause existing members to close their accounts or existing customers to cancel their contracts, subject us to third-party lawsuits, regulatory fines or other action or liability, thereby harming our operating results.

Our core value of putting our members first may conflict with the short-term interests of our business.

One of our core values is to make decisions based on the best long-term interests of our members, which we believe is essential to our success in increasing our member growth rate and engagement and in serving the best, long-term interests of the company and our stockholders. Therefore, in the past, we have forgone, and may in the future forgo, certain expansion or short-term revenue opportunities that we do not believe are in the best interests of our members, even if our decision negatively impacts our operating results in the short term. In addition, as part of our philosophy of putting our members first, as long as our members are adhering to our terms of service, this philosophy may cause disagreements, or negatively impact our relationships, with our existing or prospective customers. This could result in enterprises and professional organizations blocking access to our services or refusing to purchase our Talent or Marketing Solutions or Premium Subscriptions. Our decisions may not result in the long-term benefits that we expect, in which case our member engagement, business and operating results could be harmed.

The number of our registered members is higher than the number of actual members and a substantial majority of our page views are generated by a minority of our members. Our business may be adversely impacted if we are unable to attract and retain additional members who actively use our services. In addition, the tracking of certain of our performance metrics is done with internal tools and is not independently verified.

The number of registered members in our network is higher than the number of actual members because some members have multiple registrations, other members have died or become incapacitated, and others may have registered under fictitious names or created fraudulent accounts. Given the challenges inherent in identifying these non-actual member accounts, we do not have a reliable system to accurately identify the number of actual members, and thus we rely on the number of registered members as our measure of the size of our network. While the number of registered members represents what we believe to be reasonable estimates of our member base, there are inherent challenges in ensuring that the number of registered members presents an accurate reflection of our member network. For example, we do not have a reliable system for identifying and counting duplicate or fraudulent accounts, or deceased, incapacitated or other non-members and so we rely on estimates and assumptions. In addition, our methodology for measuring our membership numbers, and specifically for making estimates regarding non-members who should not be included as registered members, has changed over time and may continue to change from time to time. While we are using what we believe to be accurate methods of measuring the number of registered members, there are no methodologies available that would provide us with an exact number of non-actual member types of accounts. Therefore, we cannot assure you that our current or future methodologies are accurate, and we will need to continue to adjust them in the future from time to time, which could result in the number of registered members being lower or higher than expected. Further, a substantial majority of our members do not visit our website on a monthly basis, and a substantial majority of our page views are generated by a minority of our members.

If the number of our actual members does not meet our expectations, if the rate at which we add new members slows or declines or if we are unable to increase the breadth and frequency of our visiting members, then our business may not grow as

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fast as we expect. In addition, we track certain performance metrics with internal tools, which are not independently verified by any third party. The tracking of this information has a number of limitations, including reliance on estimates and assumptions, which may not be accurate. Our methodologies for tracking these metrics may also change over time, which could result in unexpected changes to our metrics. If the internal tools we use to track these metrics undercount or overcount performance, the data we report may not be accurate. This may harm our operating and financial results and may cause our stock price to decline.

If our members' profiles are out-of-date, inaccurate or lack the information that users and customers want to see, we may not be able to realize the full potential of our network, which could adversely impact the growth of our business.

If our members do not update their information or provide accurate and complete information when they join LinkedIn, or do not establish sufficient connections, the value of our network may be negatively impacted because our value proposition as a professional network and as a source of accurate and comprehensive data will be weakened. For example, customers of our Talent Solutions may not find members that meet their qualifications or may misidentify a candidate as having such qualifications, which could result in mismatches that erode customer confidence in our solutions. Similarly, incomplete or outdated member information would diminish the ability of our Marketing Solutions customers to reach their target audiences and our ability to provide our customers with valuable insights. Therefore, we must provide features and products that demonstrate the value of our network to our members and motivate them to contribute additional, timely and accurate information to their profile and our network. If we fail to successfully motivate our members to do so, our business and operating results could be adversely affected.

We collect, process, store, share, disclose and use personal information and other data, which subjects us to governmental regulations and other legal obligations related to privacy and security, and our actual or perceived failure to comply with such obligations could harm our business.

We collect, process, store, share, disclose and use information from and about our members, customers and users, including personal information and other data, and we enable our members to passively and proactively share their personal information with each other and with third parties and to communicate and share news and other information into and across our platform. There are numerous federal, state and local laws around the world regarding privacy and the collection, storing, sharing, using, processing, disclosing and protecting of personal information and other data from and about our members, the scope of which are changing, subject to differing interpretations, and which may be costly to comply with and may be inconsistent among countries and jurisdictions or conflict with other rules. We generally comply with industry standards and are subject to the terms of our privacy policies and privacy‑related obligations to third parties (including voluntary third‑party certification bodies such as TRUSTe). We strive to comply with applicable laws, policies, and legal obligations and certain applicable industry codes of conduct relating to privacy and data protection. However, it is possible that these obligations may be interpreted and applied in new ways and/or in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices or that new regulations could be enacted. In addition, governmental agencies may request or take member or customer data for security or informational purposes. Any failure or perceived failure by us to comply with our privacy policies, our privacy‑related obligations to members, customers or other third parties, or our privacy‑related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personal or other information, which may include personally identifiable information or other member data, may result in governmental enforcement actions, litigation or public statements against us by consumer advocacy groups or others and could cause our members and customers to lose trust in us, which could have an adverse effect on our business. Additionally, if third parties we work with, such as customers, vendors or developers, violate applicable laws, our policies or other policy‑related obligations, such violations may also put our members’ information at risk and could in turn have an adverse effect on our business.

Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and solutions to our members and customers, thereby harming our business.

The regulatory framework for privacy and security issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, display, processing, transmission and security of personal information by companies offering online services have recently come under increased public scrutiny. The U.S. government, including the White House, the Federal Trade Commission, the Department of Commerce and many state governments, are reviewing the need for greater regulation of the collection and use of information concerning consumer behavior with respect to online services, including regulation aimed at restricting certain targeted advertising practices and collection and use of data from mobile devices. The FTC in particular has approved consent decrees resolving complaints and their resulting investigations into the privacy and security practices of a number on‑line, social media companies. Similar actions may also impact LinkedIn directly. The FTC and certain members of Congress seek legislation to impose Do‑Not‑Track requirements, and the White House continues to support a consumer privacy Bill of Rights and comprehensive privacy legislation that could impact the collection of data, internet and social media companies, as well as online and mobile advertising. In addition, the

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European Union is in the process of promulgating a new General Data Protection Regulation, which would apply across the entire EU and may result in significantly greater compliance burdens for companies with users and operations in Europe. Various government and consumer agencies have also called for new regulation and changes in industry practices. Recently, the State of California and other states passed laws relating to disclosure of companies’ practices with regard to Do-Not-Track signals from internet browsers, the ability to delete information of minors, and new definitions that may impact data breach notification requirements. California and several other states have also adopted privacy guidelines with respect to mobile application.

Our business, including our ability to operate and expand internationally or on new technology platforms, could be adversely affected if legislation or regulations are adopted, interpreted, or implemented in a manner that is inconsistent with our current business practices and that require changes to these practices, the design of our websites, mobile applications, products, features or our privacy policy. In particular, the success of our business has been, and we expect will continue to be, driven by our ability to responsibly use the data that our members share with us. Therefore, our business could be harmed by any significant change to applicable laws, regulations or industry standards or practices regarding the storage, use or disclosure of data our members choose to share with us, or regarding the manner in which the express or implied consent of consumers for such use and disclosure is obtained. Such changes may require us to modify our products and features, possibly in a material manner, and may limit our ability to develop new products and features that make use of the data that we collect about our members.

Our business is subject to a variety of U.S. and foreign laws, many of which are unsettled and still developing and which could subject us to claims or otherwise harm our business.

We are subject to a variety of laws in the United States and abroad, including laws regarding privacy, data protection, data security, data retention and consumer protection and the provision of online payment services that are continuously evolving and developing. In addition, some of our members are subject to laws and/or licensing or certification obligations that may restrict their ability to engage with LinkedIn’s online services. The scope and interpretation of the laws and other obligations that are or may be applicable to us or certain groups of our members are often uncertain and may be conflicting, particularly laws and other obligations outside the United States. For example, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims, including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories based on the nature and content of the materials searched, the ads posted, or the content provided by users. In addition, regulatory authorities around the world are considering a number of legislative and regulatory proposals concerning privacy, data storage, data protection and other matters that may be applicable to our business. Compliance with these laws may require substantial investment or may provide technical challenges for our business. It is also likely that as our business grows and evolves and our solutions are used in a greater number of countries and additional groups, we will become subject to laws and regulations in additional jurisdictions. Further, as our services and solutions expand to include more content (including from third parties), additional laws and regulations may become applicable to our products and offerings including laws requiring us to restrict the availability of such content on a geographical basis or to certain groups of members. In some cases, laws and legal obligations of various jurisdictions may be ambiguous or conflict as to LinkedIn’s right to display and distribute certain content as part of its online services. Users of our site and our solutions could also abuse or misuse our products in ways that violate laws. It is difficult to predict how existing laws will be applied to our business and the new laws and legal obligations to which we may become subject.

If we are not able to comply with these laws or other legal obligations or if we (or our members) become liable under these laws or legal obligations, we could be directly harmed, and we may be forced to implement new measures to reduce exposure to this liability. This may require us to expend substantial resources or to discontinue certain solutions, which would negatively affect our business, financial condition and results of operations. In addition, the increased attention focused upon liability issues as a result of lawsuits and legislative proposals could harm our reputation or otherwise impact the growth of our business. Any costs incurred as a result of this potential liability could harm our business and operating results.

Many individuals use devices other than personal computers to access online services. If users of these devices do not widely adopt solutions we develop for these devices, our business could be adversely affected.

The number of people who access online services through devices other than personal computers, including smart phones, handheld tablets and mobile telephones has increased dramatically in the past few years and is projected to continue to increase. If the mobile solutions we have developed do not meet the needs of our members or customers, they may reduce their usage of our platform and our business could suffer. Additionally, as new devices and new platforms are continually being released, it is difficult to predict the problems we may encounter in developing versions of our solutions for use on these alternative devices, and we are devoting significant resources to the support and maintenance of such devices.

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Growth in access to LinkedIn's services through mobile devices as a substitute for access on personal computers may negatively affect our revenue and financial results.

Because access to online services through mobile devices is growing, our members are increasingly accessing LinkedIn on mobile devices. While many of our members who use our online services on mobile devices also access LinkedIn through personal computers, as we have developed our mobile solutions, we have seen substantial growth in mobile usage, and we anticipate that the rate of growth in mobile usage will continue to grow. Advertising is a source of revenue for us, and it is not clear that we will be able find ways for our Marketing Solutions product to be effectively used on mobile devices. Historically, our Marketing Solutions products have not been made widely available on mobile products, and subsequently have not generated a material amount of revenue. We are devoting valuable resources to solutions related to monetization of mobile usage, and have only recently launched these solutions. We cannot assure you that these solutions will be successful. If our members increasingly use mobile devices as a substitute for access to our online services as opposed to personal computers, and if we are unable to successfully implement monetization strategies for our solutions on mobile devices, if these strategies are not as successful as our offerings for personal computers, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.

We expect our operating results to fluctuate on a quarterly and annual basis, which may result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.

Our revenue and operating results could vary significantly from quarter-to-quarter and year-to-year and may fail to match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which are outside of our control. Any of these events could cause the market price of our Class A common stock to fluctuate. Factors that may contribute to the variability of our operating results include:

• our ability to increase our member base and member engagement;

• disruptions or outages in the availability of our websites or services, actual or perceived breaches of privacy, and compromises of our member data;

• our commitment to putting our members first even if it means forgoing short-term revenue opportunities;

• shifts in the way members and users access our websites and services from personal computers to mobile devices;

• the unproven nature of our business model;

• changes in our pricing policies or those of our competitors;

• our ability to increase sales of our products and solutions to new customers and expand sales of additional products and solutions to our existing customers;

• the size and seasonal variability of our customers' recruiting and marketing budgets;

• the extent to which existing customers renew their agreements with us and the timing and terms of those renewals;

• macroeconomic changes, in particular, deterioration in labor markets, which would adversely impact sales of our Talent Solutions, or economic growth that does not lead to job growth, for instance increases in productivity;

• the cost of investing in our technology infrastructure, product initiatives and international expansion may be greater than we anticipate;

• expenses related to hiring, incentivizing and retaining employees;

• the timing and costs of expanding our field sales organization and delays or inability in achieving expected productivity;

• the timing of certain expenditures, including hiring of employees and capital expenditures;

• the entrance of new competitors in our market whether by established companies or the entrance of new companies; and

• general industry and macroeconomic conditions.

Given our limited operating history and the rapidly evolving market of online professional networks, our historical operating results may not be useful to you in predicting our future operating results. We believe our rapid growth has masked the cyclicality and seasonality of our business. As our revenue growth rate slows, we expect that the cyclicality and seasonality

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in our business may become more pronounced and may in the future cause our operating results to fluctuate. In particular, we expect sales of Talent Solutions to be weaker in the first quarter of the year due to budgetary cycles and sales of our Marketing Solutions to be weaker in the third quarter of the year as use of online services during the summer months generally slows. In addition, global economic concerns continue to create uncertainty and unpredictability and add risk to our future outlook. Sovereign debt issues and economic uncertainty in the United States, Europe and around the world raise concerns in markets important to our business. An economic downturn in any particular region in which we do business or globally could result in reductions in sales of our Talent Solutions and Marketing Solutions, decreased renewals of existing arrangements and other adverse effects that could harm our operating results.

We expect our revenue growth rate to decline, and, as our costs increase, we may not be able to generate sufficient revenue to sustain our profitability over the long term.

From 2008 to 2012, our annual net revenue grew from $78.8 million to $972.3 million, which represents a compounded annual growth rate of approximately 87%. As our net revenue has increased to higher levels, our revenue growth rate has slowed, and we expect that it will continue to decline over time. We also expect that the growth rates of each of our three primary business lines will fluctuate and that these business lines may not grow at the same rate. As with 2012, our philosophy in 2013 is to continue to invest for future growth. We expect to continue to expend substantial financial and other resources on:

• our technology infrastructure, including architecture, development tools scalability, availability, performance and security, as well as disaster recovery measures;

• product development, including investments in our product development team and the development of new features for both members and customers, including those for mobile use and our sales solutions products;

• sales and marketing, including a significant expansion of our field sales organization;

• international expansion in an effort to increase our member base, engagement and sales;

• general administration, including legal and accounting expenses related to being a public company with an expanding global presence; and

• capital expenditures, including facilities.

These investments may not result in increased revenue or growth in our business, and will increase our expenses. Even if our revenue continues to increase, we expect that due to increased expenses, in particular, stock‑based compensation, depreciation and amortization and provision for income taxes we may incur a GAAP loss during future periods, including the fourth quarter of 2013. If we fail to continue to grow our revenue and overall business, our operating results and business would be harmed.

We expect to face increasing competition in the market for online professional networks from social networking sites and Internet search companies, among others, as well as continued competition for customers of our Talent Solutions and Marketing Solutions.

We face significant competition in all aspects of our business, and we expect such competition to increase, particularly in the market for online professional networks and engagement of professionals.

Our industry is evolving rapidly and is becoming increasingly competitive. Larger and more established companies may focus on our market and could directly compete with us. Smaller companies, including application developers, could also launch new products and services that compete with us and that could gain market acceptance quickly. We also expect our existing competitors in the markets for Talent Solutions and Marketing Solutions to continue to focus on these areas. A number of these companies may have greater resources than us, which may enable them to compete more effectively. Specifically, we are investing significantly in our Marketing Solutions products with respect to mobile solutions, and we may not be successful in generating revenue through advertising on mobile devices, especially as compared to our competitors. Additionally, users of social networks may choose to use, or increase their use of, those networks for professional purposes, which may result in those users decreasing or eliminating their use of LinkedIn. Companies that currently focus on social networking could also expand their focus to professionals. We and other companies have historically established alliances and relationships with some of these companies to allow broader exposure to users and access to data on the Internet. We may also, in the future, establish alliances or relationships with other competitors or potential competitors. To the extent companies terminate such relationships and establish alliances and relationships with others, our business could be harmed. Specifically, we compete for members, enterprises and professional organizations as discussed below.

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Members-professional networks. The market for online professional networks is new and rapidly evolving. Other companies such as Facebook, Google, Microsoft and Twitter are developing or could develop competing solutions. Further, some of these companies are partnering with third parties to offer products and services that could compete with ours. We face competition from a number of smaller companies in international markets, such as Xing in German-speaking regions and Viadeo in France, that provide online professional networking solutions, as well as Internet companies in the customer relationship management market, such as salesforce.com (Chatter and Jigsaw). Additionally, we compete against smaller companies that focus on groups of professionals within a specific industry or vertical. Our competitors may announce new products, services or enhancements that better address changing industry standards or the needs of members and customers, such as mobile access. Any such increased competition could cause pricing pressure, loss of market share or decreased member engagement, any of which could adversely affect our business and operating results. Internet search engines could also change their methodologies in ways that adversely affect our ability to optimize our page rankings within their search results.

Enterprises and professional organizations-Talent Solutions. With respect to our Talent Solutions, we compete with established online recruiting companies, such as Monster, CareerBuilder, and Indeed.com (acquired by Recruit.net), talent management companies and larger companies that are focusing on talent management and human resource services, such as Oracle (through its acquisition of Taleo), SAP (through its acquisition of SuccessFactors) and IBM (through its acquisition of Kenexa), and traditional recruiting firms. Additionally, other companies, including newcomers to the recruiting industry, may partner with Internet companies, including social networking companies, to provide services that compete with our solutions, either on their own or as third party applications. If the efficiency and usefulness of our products to enterprises and professional organizations do not continue to exceed those provided by competitors, which factors are influenced by the number and engagement of our members, we will not be able to compete successfully.

Enterprises and professional organizations-Marketing Solutions. With respect to our Marketing Solutions, we compete with online and offline outlets that generate revenue from advertisers and marketers. To the extent competitors are better able to provide customers with cost-effective access to attractive demographics, either through new business models or increased user volume, we may not be successful in retaining our existing advertisers or attracting new advertisers, and our business would be harmed.

Additionally, other companies that provide content for professionals could develop more compelling offerings that compete with our Premium Subscriptions and adversely impact our ability to sell and renew subscriptions to our members. Finally, we are in the early stages of developing our sales solutions products and we may not be able to compete effectively in this area.

If we fail to effectively manage our growth, our business and operating results could be harmed.

We continue to experience rapid growth in our headcount and operations, which will continue to place significant demands on our management and our operational and financial infrastructure. As of September 30, 2013, approximately 41% of our employees had been with us for less than one year and approximately 88% for less than two years. As we continue to grow, we must effectively integrate, develop and motivate a large number of new employees in various countries around the world, and we must maintain the beneficial aspects of our corporate culture. In particular, we intend to continue to make substantial investments to expand our engineering, research and development, field sales, and general and administrative organizations, and our international operations. To attract top talent, we have had to offer, and believe we will need to continue to offer, highly competitive compensation packages before we can validate the productivity of those employees. The significant increase in the price of our Class A common stock since we became a public company in 2011 may make it more difficult or costly in the future to use equity compensation to motivate, incentivize and retain our employees. We face significant competition for talent from other Internet and high-growth companies, which include both publicly traded and privately-held companies. As we have transitioned from a private company to a public company, this competition has become even more acute in assessing appropriate compensation packages, particularly, determining the mix of cash and equity compensation. The risks of over-hiring (especially given overall macroeconomic risks) or over-compensating and the challenges of integrating a rapidly growing employee base into our corporate culture are exacerbated by our international expansion, and because of our growth, we have significantly expanded our operating lease commitments, which has increased our expenses. Additionally, we may not be able to hire new employees quickly enough to meet our needs. If we fail to effectively manage our hiring needs and successfully integrate our new hires, our efficiency and ability to meet our forecasts and our employee morale, productivity and retention could suffer, and our business and operating results could be adversely affected.

Additionally, if we do not effectively manage the growth of our business and operations, the quality of our solutions could suffer, which could negatively affect our brand, operating results and overall business. Further, we have made changes in the past, and will in the future make changes, to our features, products and services that our members or customers may not like, find useful or agree with. We may also decide to discontinue certain features, products or services, or charge for certain features, products or services that are currently free or increase fees for any of our features, products or services. If members or

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customers are unhappy with these changes, they may decrease their engagement on our site, or stop using features, products or services or the site generally. They may, in addition, choose to take other types of action against us such as organizing petitions or boycotts focused on our company, our website or any of our services, filing claims with the government or other regulatory bodies, or filing lawsuits against us. Any of these actions could negatively impact our member growth and engagement and our brand, which would harm our business. To effectively manage this growth, we will need to continue to improve our operational, financial and management controls, and our reporting systems and procedures by, among other things:

• improving our information technology infrastructure to maintain the effectiveness of our solutions;

• enhancing information and communication systems to ensure that our employees and offices around the world are well-coordinated and can effectively communicate with each other and our growing base of members, enterprises and professional organizations;

• enhancing our internal controls to ensure timely and accurate reporting of all of our operations; and

• appropriately documenting our information technology systems and our business processes.

These systems enhancements and improvements will require significant capital expenditures and allocation of valuable management and employee resources. If we fail to implement these improvements effectively, our ability to manage our expected growth and comply with the rules and regulations that are applicable to publicly reporting companies will be impaired.

Our international operations are subject to increased challenges and risks.

We have offices around the world and our websites and mobile applications are available in numerous other languages. For the nine months ended September 30, 2013, international revenue represented 38% of our total revenue. We expect to continue to expand our international operations in the future by opening offices in new jurisdictions and expanding our offerings in new languages. However, we have limited operating history as a company outside the United States, and our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to the particular challenges of supporting a rapidly growing business in an environment of multiple languages, cultures, customs, legal systems, alternative dispute systems, regulatory systems and commercial infrastructures. International expansion has required and will continue to require us to invest significant funds and other resources. Operating internationally subjects us to new risks and may increase risks that we currently face, including risks associated with:

• recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices;

• providing solutions across a significant distance, in different languages and among different cultures, including potentially modifying our solutions and features to ensure that they are culturally relevant in different countries, which may include modifying content in certain jurisdictions if it may be considered objectionable;

• increased competition from local websites and services, that provide online professional networking solutions, such as Germany-based Xing and France-based Viadeo, and online recruitment services, such as Australia-based Seek and Japan-based Recruit, who have and may continue to expand their geographic footprint;

• differing and potentially lower levels of member growth and engagement in new and nascent geographies;

• compliance with applicable foreign laws and regulations, including potential risk of penalties to individual members of management if our practices are deemed to be out of compliance;

• longer payment cycles in some countries;

• credit risk and higher levels of payment fraud;

• compliance with anti-bribery laws including, without limitation, compliance with the Foreign Corrupt Practices Act and the UK Anti-Bribery Act;

• implementing and maintaining effective internal processes and controls;

• compliance with various economic and trade sanctions regulations which restrict certain conduct of business;

• currency exchange rate fluctuations;

• foreign exchange controls that might prevent us from repatriating cash earned outside the United States;

• foreign exchange controls that might require significant lead time in setting up operations and bank accounts before monetizing certain geographic territories;

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• political and economic instability in some countries, specifically in Ireland;

• modifications we make to our site in certain jurisdictions due to local laws and regulations;

• double taxation of our non-U.S. earnings and potentially adverse tax consequences due to changes in the tax laws of the United States or the foreign jurisdictions in which we operate; and

• higher costs of doing business internationally.

If our revenue from our international operations, and particularly from our operations in the countries and regions on which we have focused our spending, do not exceed the expense of establishing and maintaining these operations, our business and operating results will suffer. In addition, as our member base expands internationally, members in certain geographies may have lower levels of engagement with our website and services.

Our business depends on a strong and trusted brand, and any failure to maintain, protect and enhance our brand would hurt our ability to retain or expand our base of members, enterprises and professional organizations, our ability to increase their level of engagement and our ability to attract and retain high level employees.

We have developed a strong and trusted brand that we believe has contributed significantly to the success of our business. Our brand is predicated on the idea that individual professionals will trust us and find immense value in building and maintaining their professional identities and reputations on our platform. Maintaining, protecting and enhancing the “LinkedIn” brand is critical to expanding our base of members, enterprises, advertisers, corporate customers and other partners, and increasing their engagement with our services, and will depend largely on our ability to maintain member trust, be a technology leader and continue to provide high-quality solutions, which we may not do successfully. Despite our efforts to protect our brand and prevent its misuse, if others misuse our brand or pass themselves off as being endorsed or affiliated with us, it could harm our reputation and our business could suffer. If our members or potential members determine that they can use other platforms, such as social networks, for the same purposes as or as a replacement for our network, or if they choose to blend their professional and social networking activities, our brand and our business could be harmed. Our members or customers could find that new products or features that we introduce are difficult to use or may feel that they degrade their experience on LinkedIn, which could harm our reputation for delivering high-quality products. Our brand is also important in attracting and maintaining high performing employees. If we do not successfully maintain a strong and trusted brand, our business could be harmed.

We may not be able to halt the operations of online services that aggregate our data as well as data from other companies, including social networks, or copycat online services that have misappropriated our data in the past or may misappropriate our data in the future. These activities could harm our brand and our business.

From time to time, third parties have accessed data from our networks through scraping, robots or other means and used this data or aggregated this data on their online services with other data. In addition, “copycat” online services have misappropriated data on our network and attempted to imitate our brand or the functionality of our services, and these services or others could use similar tactics to develop products that compete with ours. These activities could degrade our brand, negatively impact our website performance and harm our business. When we have become aware of such online services, in many instances we have employed contractual, technological or legal measures in an attempt to halt unauthorized activities, but these measures may not be successful. In addition, if our customers do not comply with our terms of service, they also may be able to abuse our products and services and provide access to our solutions to unauthorized users. However, we may not be able to detect any or all of these types of activities in a timely manner and, even if we could, technological and legal measures may be insufficient to stop their operations. In some cases, particularly in the case of online services operating from outside of the United States, our available legal remedies may not be adequate to protect our business against such activities. Regardless of whether we can successfully enforce our rights against these parties, any measures that we may take could require us to expend significant financial or other resources.

Failure to protect or enforce our intellectual property rights could harm our business and operating results.

We regard the protection of our trade secrets, copyrights, trademarks, trade dress, databases, domain names and patents as critical to our success. We strive to protect our intellectual property rights by relying on federal, state and common law rights and other rights provided under foreign laws, as well as through contractual restrictions. We have a practice of entering into confidentiality and invention assignment agreements with our employees and contractors, and often enter into confidentiality agreements with parties with whom we conduct business in order to limit access to, and disclosure and use of, our proprietary information. However, these contractual arrangements and the other steps we have taken to protect our intellectual property may not prevent the misappropriation of our proprietary information, infringement of our intellectual property rights or deter independent development of similar or competing technologies by others.

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Obtaining and maintaining effective intellectual property rights is expensive, including the costs of defending our rights. We are seeking to protect our trademarks and patents, and other intellectual property rights in a number of jurisdictions, a process that is expensive and may not be successful in all jurisdictions for every such right or which we may not pursue in every location. In particular, we believe it's important maintain, protect and enhance the “LinkedIn” brand. Accordingly, we pursue the registration of domain names and our trademarks and service marks in the United States and in certain locations outside the United States. We have already and may, over time, increase our investment in protecting innovations through investments in patents and similar rights that is expensive and time-consuming.

Litigation may be necessary to enforce our intellectual property rights, protect our proprietary rights or determine the validity and scope of proprietary rights claimed by others. Any litigation of this nature, regardless of outcome or merit, could result in substantial costs and diversion of management and technical resources, any of which could adversely affect our business and operating results. We may incur significant costs in enforcing our trademarks against those who attempt to imitate our “LinkedIn” brand and other valuable trademarks and service marks.

In addition, we have chosen to make certain of our technology available under open source licenses that allow others to use the technology without payment to us. While we hope to benefit from these activities by having access to others' useful technology under open source licenses, there is no assurance that we will receive the business benefits we expect.

If we fail to maintain, protect and enhance our intellectual property rights, our business and operating results may be harmed, and the market price of our Class A common stock could decline.

We are, and expect in the future to be, subject to legal proceedings and litigation, including intellectual property and privacy disputes, which are costly to defend and could materially harm our business and operating results.

We are party to lawsuits and legal proceedings in the normal course of business. These matters are often expensive and disruptive to normal business operations. We are currently facing, or may face in the future, allegations, lawsuits and regulatory inquiries, audits and investigations regarding data privacy, security and intellectual property infringement, including claims related to privacy, patents, publicity, trademarks, copyrights and other rights. Litigation and regulatory proceedings, and particularly the patent infringement and class action matters we are facing or may face, may be protracted and expensive, and the results are difficult to predict. Certain of these matters include speculative claims for substantial or indeterminate amounts of damages, and include claims for injunctive relief. Additionally, our litigation matters are maturing, and therefore our litigation costs are increasing. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require us to modify our products and features or require us to stop offering certain features, all of which could negatively impact our membership and revenue growth. Additionally, we are subject to mandatory periodic audits, which would likely increase our regulatory compliance costs, and may require us to change our business practices, which could negatively impact our revenue growth. Managing legal proceedings, litigation and audits, even if we achieve favorable outcomes, is time‑consuming and diverts management’s attention from our business.

In addition, we use open source software in our solutions and plan to continue to use open source software in the future. We may face claims from others claiming ownership of open source software, or breach of open source license terms, including a demand for release of material portions of our source code or otherwise seeking to enforce the terms of the applicable open source license. These claims could also result in litigation, require us to purchase a costly license, require us to establish specific open source compliance procedures, or require us to devote additional research and development resources to change our solutions, any of which would have a negative effect on our business and operating results.

Although the results of regulatory proceedings, litigation, claims and audits cannot be predicted with certainty, and determining reserves for pending litigation and other legal, regulatory and audit matters requires significant judgment, we do not believe that the final outcome of any individual matter that we currently face will have a material adverse effect on our business. However, there can be no assurance that our expectations will prove correct, and even if these matters are not resolved in our favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or, resolve them, could harm our business, our operating results, our reputation or the market price of our Class A common stock.

If we do not continue to attract new customers, or if existing customers do not renew their subscriptions, renew on less favorable terms, or fail to purchase additional solutions, we may not achieve our revenue projections, and our operating results would be harmed.

In order to grow our business, we must continually attract new customers, sell additional solutions to existing customers and reduce the level of non-renewals in our business. Our ability to do so depends in large part on the success of our sales and marketing efforts. We do not typically enter into long-term contracts with our customers, and even when we do, they can generally terminate their relationship with us. We have limited historical data with respect to rates of customer renewals, upgrades and expansions, so we may not accurately predict future trends for any of these metrics. Furthermore, unlike

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traditional software companies, the nature of our products and solutions is such that customers may decide to terminate or not renew their agreements with us without causing significant disruptions to their own businesses.

We must demonstrate that our Talent Solutions are an important recruiting tool for enterprises and professional organizations and that our Marketing Solutions provide them with access to an audience of one of the most influential, affluent and highly educated audiences on the Internet. However, potential customers may not be familiar with our solutions or may prefer other more traditional products and services for their talent, advertising and marketing needs.

The rate at which we expand our customer base or increase our customers’ renewal rates may decline or fluctuate because of several factors, including the prices of our solutions, the prices of products and services offered by our competitors, reduced hiring by our customers or reductions in their talent or marketing spending levels due to macroeconomic or other factors and the efficacy and cost-effectiveness of our solutions. If we do not attract new customers or if our customers do not renew their agreements for our solutions, renew on less favorable terms, or do not purchase additional functionality or offerings, our revenue may grow more slowly than expected or decline.

Ultimately, attracting new customers and retaining existing customers requires that we continue to provide high quality solutions that our customers value. In particular, our Talent Solutions customers will discontinue their purchases of our solutions if we fail to effectively connect them with the talent they seek, and our premium subscribers will discontinue their subscriptions if they do not find the networking and business opportunities that they value. Similarly, customers of our Marketing Solutions will not continue to do business with us if their advertisements do not reach their intended audiences. Therefore we must continue to demonstrate to our customers that using our Marketing Solutions is the most effective and cost-efficient way to maximize their results. Even if our Marketing Solutions are providing value to our customers, advertisers are sensitive to general economic downturns and reductions in consumer spending, among other events and trends, which generally results in reduced advertising expenditures and could adversely affect sales of our Marketing Solutions. Finally, we are in the early stages of developing our sales solutions products which may not be successful. If we fail to provide high quality solutions and convince customers of our value proposition, we may not be able to retain existing customers or attract new customers, which would harm our business and operating results.

Because we recognize most of the revenue from our Talent Solutions and our Premium Subscriptions over the term of the agreement, a significant downturn in these businesses may not be immediately reflected in our operating results.

We recognize most of the revenue from sales of our Talent Solutions and Premium Subscriptions over the terms of the agreements, which is typically 12 months. As a result, a significant portion of the revenue we report in each quarter is generated from agreements entered into during previous quarters. Consequently, a decline in new or renewed agreements in any one quarter may not significantly impact our revenue in that quarter but will negatively affect our revenue in future quarters. In addition, we may be unable to adjust our fixed costs in response to reduced revenue. Accordingly, the effect of significant declines in the sales of these offerings may not be reflected in our short-term results of operations.

We depend on world class talent to grow and operate our business, and if we are unable to hire, retain and motivate our personnel, we may not be able to grow effectively.

Our future success will depend upon our continued ability to identify, hire, develop, motivate and retain world class talent. Our ability to execute efficiently is dependent upon contributions from all of our employees, in particular our senior management team. Key institutional knowledge remains with a small group of long-term employees and directors whom we may not be able to retain. We may not be able to retain the services of any of our long-term employees or other members of senior management in the future. We do not have employment agreements other than offer letters with any key employee, and we do not maintain key person life insurance for any employee. In addition, from time to time, there may be changes in our senior management team that may be disruptive to our business. If our senior management team, including any new hires that we may make, fails to work together effectively and to execute our plans and strategies on a timely basis, our business could be harmed.

Our growth strategy also depends on our ability to expand and retain our organization with world class talent. Identifying, recruiting, training and integrating qualified individuals will require significant time, expense and attention. In addition to hiring new employees, we must continue to focus on retaining our best talent. Competition for these resources is intense, particularly in the San Francisco Bay Area, where our headquarters is located. We may need to invest significant amounts of cash and equity for new employees and we may never realize returns on these investments. If we are not able to effectively increase and retain our talent, our ability to achieve our strategic objectives will be adversely impacted, and our business will be harmed.

We believe that our culture has the potential to be a key contributor to our success. From 2011 to 2012, we increased the size of our workforce by more than 60%, and we expect to continue to hire aggressively as we expand. If we do not continue to

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develop our corporate culture as we grow and evolve, including maintaining our culture of transparency with our employees, it could harm our ability to foster the innovation, creativity and teamwork we believe we need to support our growth. In addition, we completed our initial public offering in May 2011. As a result, employees who have been with us for longer than two years have been able to and may continue to realize substantial financial gains in connection with the sales of their shares from the exercise of their vested options, which could result in a loss of employees. There will likely be disparities of wealth between those of our employees whom we hired prior to our initial public offering in May 2011 and those who joined us after we became a public company, which could adversely impact relations among employees and our culture in general.

The effectiveness of our Marketing Solutions depends in part on our relationships with advertising serving technology companies.

We rely, in part, on advertising serving technology companies to deliver our Marketing Solutions product. Our agreements with these companies may not be extended or renewed after their respective expirations, or we may not be able to extend or renew our agreements on terms and conditions favorable to us. If these agreements are terminated, we may not be able to enter into agreements with alternative companies on acceptable terms or on a timely basis or both, which could negatively impact revenue from our Marketing Solutions.

Enterprises or professional organizations, including governmental agencies, may restrict access to our services, which could lead to the loss or slowing of growth in our member base or the level of member engagement.

Our solutions depend on the ability of our members to access the Internet and our services. Enterprises or professional organizations, including governmental agencies, could block or restrict access to our online services, website or the Internet generally for a number of reasons such as security or confidentiality concerns or regulatory reasons, or they may adopt policies that prohibit listing the employers' names on the employees' LinkedIn profiles in order to minimize the risk that employees will be contacted and hired by other employers.

In some cases, certain governments may seek to restrict the Internet or our service providers' websites, services and solutions and the performance of our websites, services and solutions could be suspended, blocked (in whole or part) or otherwise adversely impacted in these jurisdictions. For example, the government of the People's Republic of China has blocked access to many social networking and other sites, including ours, and certain self-regulatory organizations have policies that could result in access to our content, services or features being blocked. Any restrictions on the use of our services by our members and users could lead to the loss or slowing of growth in our member base or the level of member engagement.

If Internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, our member engagement could decline.

We depend in part on various Internet search engines, such as Google, Bing and Yahoo!, to direct a significant amount of traffic to our website. Similarly, we depend on providers of mobile application “store fronts” to allow users to locate and download our mobile applications that enable our service. Our ability to maintain the number of visitors directed to our website and users of our online services is not entirely within our control. Our competitors' search engine optimization, or SEO, efforts may result in their websites receiving a higher search result page ranking than ours, or Internet search engines could revise their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engine companies modify their search algorithms in ways that are detrimental to our new user growth or in ways that make it harder for our members to use our website, or if our competitors' SEO efforts are more successful than ours, overall growth in our member base could slow, member engagement could decrease, and we could lose existing members. These modifications may be prompted by search engine companies entering the online professional networking market or aligning with competitors. Our website has experienced fluctuations in search result rankings in the past, and we anticipate similar fluctuations in the future. Any reduction in the number of users directed to our websites would harm our business and operating results.

Our business depends on continued and unimpeded access to the Internet by us and our members on personal computers and mobile devices. If government regulations relating to the Internet or other areas of our business change, if Internet access providers are able to block, degrade, or charge for access to certain of our products and services, or if third parties disrupt access to the Internet, we could incur additional expenses and the loss of members and customers.

Our products and services depend on the ability of our members and customers to access the Internet through their personal computers and mobile devices. Currently, this access is provided by companies that have significant market power in the broadband and internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies, and government-owned service providers, any of whom could take actions that degrade, disrupt, or increase the cost of user access to our products or solutions, which would, in turn, negatively impact our business. In

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addition, Internet access could be disrupted by other third parties. Further, the adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws limiting Internet neutrality, could decrease the demand for our subscription service or the usage of our services and increase our cost of doing business.

Our growth depends in part on the success of our strategic relationships with third parties.

We anticipate that we will continue to depend on relationships with various third parties, including technology and content providers to grow our business. Identifying, negotiating and maintaining relationships with third parties requires significant time and resources, as does integrating third-party content and technology. Our agreements with technology and content providers and similar third parties are typically non-exclusive and do not prohibit them from working with our competitors or from offering competing services. In some cases, in particular, with respect to content providers, these relationships are documented, or, if there are agreements in place, they may be easily terminable. Our competitors may be effective in providing incentives to these parties to favor their solutions or may prevent us from developing strategic relationships with these parties. In addition, these third parties may not perform as expected under our agreements with them, and we have had, and may in the future have, disagreements or disputes with these parties, which could negatively affect our brand and reputation. It is possible that these third parties may not be able to devote the resources we expect to the relationship or they may terminate their relationships with us. Further, as users increasingly access our services through mobile devices, we are becoming more dependent on the distribution of our mobile applications through third parties, and we may not be able to access their application program interfaces or be able to distribute our applications, and this may also impact our ability to monetize our mobile products. If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our business could be impaired, and our operating results would suffer. Even if we are successful, these relationships may not result in improved operating results.

If currency exchange rates fluctuate substantially in the future, the results of our operations, which are reported in U.S. dollars, could be adversely affected.

As we continue to expand our international operations, we become more exposed to the effects of fluctuations in currency exchange rates. We incur expenses for employee compensation and other operating expenses at our non-U.S. locations in the local currency, and accept payment from customers in currencies other than the U.S. dollar. Since we conduct business in currencies other than U.S. dollars but report our financial results in U.S. dollars, we face exposure to fluctuations in currency exchange rates. Consequently, exchange rate fluctuations between the U.S. dollar and other currencies could have a material impact on our profitability. Although we hedge a portion of our international currency exposure, significant fluctuations in exchange rates between the U.S. dollar and foreign currencies may adversely affect our net income (loss). Additionally, hedging programs rely on our ability to forecast accurately and could expose us to additional risks that could adversely affect our financial condition and results of operations.

The intended tax efficiency of our corporate structure and intercompany arrangements depend on the application of the tax laws of various jurisdictions and on how we operate our business, and changes to our effective tax rate could adversely impact our results.

Our corporate structure and intercompany arrangements, including the manner in which we develop and use our intellectual property and the transfer pricing of our intercompany transactions, are intended to reduce our worldwide effective tax rate. The application of the tax laws of various jurisdictions, including the United States and the other jurisdictions in which we operate, to our international business activities is subject to interpretation and depends on our ability to operate our business in a manner consistent with our corporate structure and intercompany arrangements. The taxing authorities of the jurisdictions in which we operate may challenge our methodologies for valuing developed technology or for transfer pricing on intercompany arrangements. In particular, our non-U.S. headquarters is located in Dublin, Ireland, but tax authorities in other jurisdictions where we operate, and specifically other countries in Europe, may make a determination that the manner in which we operate results in our business not achieving the intended tax consequences. This could increase our worldwide effective tax rate and harm our financial position and results of operations. Our effective tax rate could be adversely affected by several other factors, many of which are outside of our control, such as: increases in expenses that are not deductible for tax purposes, the tax effects of restructuring charges or purchase accounting for acquisitions, changes related to our ability to ultimately realize future benefits attributed to our deferred tax assets, including those related to other-than-temporary impairment, and a change in our decision to indefinitely reinvest foreign earnings. Further, we are currently undergoing review and audit by both domestic and foreign tax authorities and expect such actions to continue in the future. Any adverse outcome of such a review or audit could have a negative effect on our operating results and financial condition.

The enactment of legislation implementing changes in the U.S. taxation of international business activities, the adoption of other tax reform policies or changes in tax legislation or policies in jurisdictions outside the United States could materially impact our financial position and results of operations.

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Members of the U.S. House of Representatives and the U.S. Senate have released draft proposals to reform the U.S. system for taxing cross-border income. Provisions that would tighten tax laws with respect to international operations have been part of every Obama Administration budget and the President's Economic Recovery Advisory Board ("PERAB") has issued a report that includes an extensive discussion of international tax reform options ("PERAB 2010"). Possible future changes to U.S. tax laws, including limitations on the ability of taxpayers to claim and utilize foreign tax credits and the deferral of certain tax deductions until earnings outside of the United States are repatriated to the United States, as well as changes to U.S. tax laws that may be enacted in the future, could impact the tax treatment of our foreign earnings and adversely impact our effective tax rate. Additionally, the Organisation for Economic Co-Operation and Development ("OECD") is focused on developing resolutions in various areas, including addressing the “tax challenges of the digital economy” and definitional changes to permanent establishment, which could ultimately impact the tax treatment of our foreign earnings and adversely impact our effective tax rate. Due to the large and expanding scale of our international business activities, any changes in the U.S. or international taxation of such activities may increase our worldwide effective tax rate and harm our financial position and results of operations.

We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features and products or enhance our existing solutions, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may engage in equity or debt financings to secure additional funds. If we raise additional funds through future issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our Class A common stock. Any debt financing we secure in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. We may not be able to obtain additional financing on terms favorable to us, if at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired, and our business may be harmed.

Acquisitions and investments could result in operating difficulties, dilution, and other harmful consequences that may adversely impact our business and results of operations.

We have made and will continue to make acquisitions to add employees, complementary companies, products, or technologies. These transactions could be material to our financial condition and results of operations. We also expect to continue to evaluate and enter into discussions regarding a wide array of potential strategic transactions. The process of integrating an acquired company, business, or technology has created, and will continue to create, unforeseen operating difficulties and expenditures. The areas where we face risks include:

• loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture;

• diversion of management time and focus from operating our business to acquisition integration challenges;

• implementation or remediation of controls, procedures, and policies at the acquired company;

• integration of the acquired company’s accounting, human resource, and other administrative systems, and coordination of product, engineering, and sales and marketing function;

• assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights or increase our risk for liability;

• failure to successfully further develop the acquired technology; and

• liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities.

These risks or other problems encountered in connection with our acquisitions and investments could cause us to fail to realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and adversely affect our business generally.

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Future acquisitions could also result in dilutive issuances of our equity securities, the incurrence of debt, contingent liabilities, or amortization expenses, or write-offs of goodwill, any of which could harm our financial condition. Also, the anticipated benefit of many of our acquisitions may not materialize.

Risks Related to Our Class A Common Stock

The dual class structure of our common stock as contained in our charter documents has the effect of concentrating voting control with those stockholders who held our stock prior to our initial public offering, including our founders and our executive officers, employees and directors and their affiliates, and limiting our other stockholders’ ability to influence corporate matters.

Our Class B common stock has 10 votes per share, and our Class A common stock has one vote per share. Stockholders who hold shares of Class B common stock, including our founders, and our executive officers, employees and directors and their affiliates, together held approximately 63.8% of the voting power of our outstanding capital stock as of September 30, 2013. Our co-founder and Chair, Reid Hoffman, controlled approximately 13.7% of our outstanding shares of Class A and Class B common stock, representing approximately 58.2% of the voting power of our outstanding capital stock as of September 30, 2013. Mr. Hoffman has significant influence over the management and affairs of the company and over all matters requiring stockholder approval, including election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets. Mr. Hoffman will continue to have significant influence over these matters for the foreseeable future.

In addition, the holders of Class B common stock collectively will continue to be able to control all matters submitted to our stockholders for approval even if their stock holdings represent less than 50% of the outstanding shares of our common stock. Because of the 10-to-1 voting ratio between our Class B and Class A common stock, the holders of our Class B common stock collectively will continue to control a majority of the combined voting power of our common stock even when the shares of Class B common stock represent as little as 10% of the combined voting power of all outstanding shares of our Class A and Class B common stock. This concentrated control will limit the ability of our Class A stockholders to influence corporate matters for the foreseeable future, and, as a result, the market price of our Class A common stock could be adversely affected.

Future transfers by holders of Class B common stock will generally result in those shares converting to Class A common stock, which will have the effect, over time, of increasing the relative voting power of those holders of Class B common stock who retain their shares in the long term. If, for example, Mr. Hoffman retains a significant portion of his holdings of Class B common stock for an extended period of time, he could, in the future, continue to control a majority of the combined voting power of our Class A and Class B common stock. As a board member, Mr. Hoffman owes a fiduciary duty to our stockholders and must act in good faith in a manner he reasonably believes to be in the best interests of our stockholders. As a stockholder, even a controlling stockholder, Mr. Hoffman is entitled to vote his shares in his own interests, which may not always be in the interests of our stockholders generally.

Our stock price has been volatile in the past and may be subject to volatility in the future.

The trading price of our Class A common stock has been volatile historically, and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. During fiscal year 2013, the closing price of our Class A common stock ranged from $109.80 to $257.56 through September 30, 2013. For example, fluctuations in the valuation of companies perceived by investors to be comparable to us or in valuation metrics, such as our price to earnings ratio, could impact our stock price. Additionally, the stock markets have at times experienced extreme price and volume fluctuations that have affected and might in the future affect the market prices of equity securities of many companies. These fluctuations have, in some cases, been unrelated or disproportionate to the operating performance of these companies. Further, the trading prices of publicly traded shares of companies in our industry have been particularly volatile and may be very volatile in the future. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes, international currency fluctuations or political unrest, may negatively impact the market price of our Class A common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could harm our business.

There may be a limited market for investors in our industry.

There are few publicly traded companies in the social and professional networking and related industries at this time, and, in fact, we were among the first social networking companies to go public. Investors may have limited funds to invest in the social and professional networking sector, and as publicly traded securities in these industries become more available, investors who have purchased or may in the future purchase securities in this sector may choose to sell LinkedIn securities that they have

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already purchased in favor of other companies, and/or choose to invest in other companies, including our competitors. As a result, demand for our Class A common stock could decline, which would result in a corresponding decline in our stock price.

Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of us more difficult, limit attempts by our stockholders to replace or remove our current management and limit the market price of our Class A common stock.

Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, may have the effect of delaying or preventing a change of control or changes in our management. Our certificate of incorporation and bylaws include provisions that:

• authorize our board of directors to issue, without further action by the stockholders, up to 100,000,000 shares of undesignated preferred stock;

• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent;

• specify that special meetings of our stockholders can be called only by our board of directors, the Chair of our board of directors, or our Chief Executive Officer;

• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors;

• establish that our board of directors is divided into three classes, Class I, Class II and Class III, with each class serving three-year staggered terms;

• prohibit cumulative voting in the election of directors;

• provide that our directors may be removed only for cause;

• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;

• require the approval of our board of directors or the holders of a supermajority of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation; and

• reflect two classes of common stock, as discussed above.

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, institutional shareholder representative groups, shareholder activists and others may disagree with our corporate governance provisions or other practices, including our dual class structure and the other anti-takeover provisions, such as those listed above. We generally will consider recommendations of institutional shareholder representative groups, but we will make decisions based on what our board and management believe to be in the best long term interests of our company and stockholders. Our dual class structure concentrates the voting power of our stock in a small group of stockholders who would have the ability to control the outcome of a stockholder vote. Additionally, these groups could make recommendations to our stockholders against our practices or our board members if they disagree with our positions. Finally, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any “interested” stockholder for a period of three years following the date on which the stockholder became an “interested” stockholder.

If securities or industry analysts publish reports that are interpreted negatively by the investment community or publish negative research reports about our business, our share price and trading volume could decline.

The trading market for our Class A common stock depends, to some extent, on the research and reports that securities or industry analysts publish about us or our business. We do not have any control over these analysts. If one or more analysts publish research reports that are interpreted negatively by the investment community, or have a negative tone regarding our business, industry or end-markets, our share price could decline. If one or more of these analysts cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

The requirements of being a public company may strain our resources, divert management's attention and affect our ability to attract and retain qualified board members.

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We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the listing requirements of the NYSE and other applicable securities rules and regulations. Compliance with these rules and regulations has increased and will continue to increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly, and increase demand on our systems and resources.

We have and will continue to consume management resources and incur significant expenses for Section 404 compliance on an ongoing basis. In the event that our chief executive officer, chief financial officer, or independent registered public accounting firm determines in the future that our internal control over financial reporting is not effective as defined under Section 404, we could be subject to one or more investigations or enforcement actions by state or federal regulatory agencies, stockholder lawsuits or other adverse actions requiring us to incur defense costs, pay fines, settlements or judgments and causing investor perceptions to be adversely affected and potentially resulting in a decline in the market price of our stock.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and our business may be harmed.

As a public company that is subject to these rules and regulations, we may find that it is more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified members of our board of directors and qualified executive officers.

We do not intend to pay dividends for the foreseeable future.

We have never declared or paid any cash dividends on our common stock and do not intend to pay any cash dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the development of our business and for general corporate purposes. Any determination to pay dividends in the future will be at the discretion of our board of directors. Accordingly, investors must rely on sales of their Class A common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

Item 2. Unregistered Sales of Equity Securities

Issuer Purchases of Equity Securities

The table below provides information with respect to repurchases of unvested shares of our Class B common stock made pursuant to the 2003 Plan. No shares of our Class A common stock were repurchased during the period.

Period	Total Number of Shares Purchased (1)	Weighted Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - July 31, 2013	709	$	3.50	—	—
August 1 - August 31, 2013	—	—		—	—
September 1 - September 30, 2013	—	—		—	—
Total	709	$	3.50	—

 ______________________

(1) Under the 2003 Plan, participants may exercise options prior to vesting, subject to a right of a repurchase by us. All shares in the above table were shares repurchased as a result of us exercising this right and not pursuant to a publicly announced plan or program.

50

Item 6. Exhibits

Exhibit Number
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema Linkbase Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Labels Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document

Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		LINKEDIN CORPORATION
Dated:	October 29, 2013	By:	/s/    Jeffrey Weiner
			Jeffrey Weiner
			Chief Executive Officer and Director (Principal Executive Officer)
Dated:	October 29, 2013	By:	/s/    Steven Sordello
			Steven Sordello
			Senior Vice President and Chief Financial Officer (Principal Financial Officer)

51

Exhibit Index

Exhibit Number
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32.1	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Schema Linkbase Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Definition Linkbase Document
101.LAB	XBRL Taxonomy Labels Linkbase Document
101.PRE	XBRL Taxonomy Presentation Linkbase Document