As earning surge, expenses – including payroll costs – also rise, says professional networking platform

Pre-tax profits at the main Irish arm of jobs and professional networking social media platform, LinkedIn last year decreased by 43.5pc to $99.5m (€93.4m) due to higher costs.

New accounts show that LinkedIn Ireland Unlimited Company recorded the sharp downturn in pre-tax profits as revenues surged by $676.5m, or 15pc, from $4.62bn to $5.3bn.

In a post-balance sheet event, the firm paid out a dividend of $150m.

The directors state that revenue increased “due to increases across all lines of business”.

The directors state that profits reduced due to a significant increase in the cost of sales and administrative expenses including higher recurring inter-company charges from group undertakings and higher payroll costs due to a 25pc growth in headcount.

Numbers employed rose by 449 from 1,787 to 2,236 as staff costs increased from $294.2 m to $322.54m.

Wages and salaries along with share-based payments totalled $278m showing that average pay to the 2,236 staff totalled $124,349 for the year.

The opening of One Wilton and part of LinkedIn’s regional EMEA+LATAM headquarters in Dublin added to the firm’s cost base last year with occupancy costs for One Wilton for 2022 amounting to $7.7m.

In another post-balance sheet event, a note states that in April 2023, the Irish Data Protection Commission issued a draft decision alleging EU GDPR violation and proposed a fine.

The note states that LinkedIn’s ­ultimate parent, Microsoft, has ­indemnified the company against all potential fines directed by the Data Protection Commissioner in Ireland.

The note states: “Accordingly, there is no financial impact on the company.”

The Dublin company’s shareholder funds last year decreased by $5.5bn mainly as a result of a return of capital of $5.6bn from the firm to its immediate parent firm, Microsoft Ireland Research UC.

The Irish-based business of LinkedIn manages the company’s operations in Europe, the Middle East and Africa (EMEA).

The business last year recorded post- tax profits of $77.74m after a corporation tax charge of €21.75m.

The number of LinkedIn members last year increased at record levels rising by 90 million to 900 million across 200 countries in 26 languages.

The directors state: “This was achieved through continued investment on the LinkedIn platform and in marketing and advertising expenses.”

The company’s cost of sales last year increased by 20pc from $2.74bn to $3.28bn and administrative expenses increased by 17pc from $1.7bn to $2bn while “other operating expenses” totalled $17.75m.

The firm last year recorded an operating loss of $1.18m and the operating loss became a pre-tax profit of $99.5m due to $27m received in shares from group subsidiaries and net interest income of $73.69m.

The profit for last year takes account of non-cash depreciation and amortisation costs of $20.9m along with a foreign exchange loss of $21m.

At the end of December last, the business had shareholder funds of $669.24m.

The firm’s cash funds last year increased from $8.9m to $9.2m.

The company has subsidiaries in Britain, Canada, India, France, Netherlands, Italy, Japan, Germany, Spain, the United Arab Emirates, Hong Kong, Singapore, Sweden, Brazil, Austria, ­Malaysia and Mexico.

Reporting On: www.independent.ie