Professional networking company LinkedIn posted quarterly results that beat estimates and raised its full-year outlook, but margin expectations and plans for a share offer drew scrutiny from investors.
LinkedIn, which went public in May, said on Thursday that it expects to report adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the year of $83 million to $85 million on revenue of $508 million to $512 million.
It had previously targeted a full-year adjusted EBITDA profit of $65 million to $70 million and revenue of $475 million to 485 million.
The company, started in the living room of ex-PayPal executive Reid Hoffman in 2002 and launched in May 2003, also gave an outlook for the current quarter, which some analysts said was too cautious.
The results were good, other than fourth quarter EBITDA guidance seeming a little conservative, Ken Sana of Evercore said.
LinkedIn stock lost 9 percent in extended trade after closing with a gain of 3.5 percent at $87.50.
Stock trading where it is, it has to be a perfect quarter, Herman Leung of Susquehanna Financial Group said, adding that company margin expectations of 12.8 percent on average were somewhat below estimates of 13.4 percent.
In addition, a proposal to sell up to $500 million in stock raised concerns that it would dilute company shares.
LinkedIn said it wanted to raise capital for the company but also facilitate an orderly distribution of shares.
A 180-day lock-up period -- agreed to after its listing in May -- prohibits employees and others from selling their stock. Come Nov. 21 the restrictions will be lifted, potentially resulting in a massive sell-off.
Leung had said ahead of the earnings a potential follow up offer could allow LinkedIn a more controlled way to redistribute shares.
LinkedIn's performance is also closely watched as a sign of how other Internet companies will do.
Online coupon distributor Groupon is due to start trading on Friday while social gaming company Zynga and social network Facebook are considering tapping markets.
LinkedIn's third-quarter revenue rose 126 percent to $139.5 million, above Wall Street expectations of $127.6 million, according to Thomson Reuters I/B/E/S.
Net loss was $1.6 million, or $0.02 per share, compared with a profit of $4.0 million a year earlier. Wall Street had expected a loss of $0.04.
The Mountain View, California-based company makes money by selling premium subscriptions to its members and by helping companies with hiring and marketing.
Its services are used by professionals seeking jobs or contacts and companies hoping to fill vacancies.