LinkedIn surpasses $5B quarterly revenue as video ads surge, Microsoft earnings show

LinkedIn has cleared $5 billion in quarterly revenue for the first time, according to Microsoft's Q2 2026 earnings report. The professional networking platform's revenue grew 11% year-over-year, reaching an annual run rate exceeding $20 billion. Microsoft CEO Satya Nadella specifically called out a 30% increase in paid video advertising as a key growth driver during the earnings call.

The revenue milestone represents LinkedIn's strongest performance since Microsoft acquired the platform for $26.2 billion in 2016. Video advertising now accounts for an estimated 25-30% of LinkedIn's total ad revenue, up from approximately 20% a year ago. This growth comes amid broader expansion in Microsoft's cloud services, which saw revenue increase 26% to $51.5 billion, though LinkedIn's 11% growth slightly lagged the company's overall 17% revenue increase.

What's driving this acceleration? Three factors stand out:

1. Enterprise video adoption: Businesses increasingly use LinkedIn's video ad formats for product launches and recruitment campaigns
2. AI-powered targeting: Improvements in LinkedIn's Campaign Manager algorithms have increased video ad engagement by 15-20% according to agency tests
3. Economic recovery: B2B marketing budgets rebounded as corporate spending stabilized

Despite the positive results, LinkedIn faces significant headwinds. Its advertising growth still trails competitors like Meta, which reported 24% overall revenue growth last quarter. Video platforms like TikTok and YouTube continue encroaching on LinkedIn's professional content space, with TikTok Business reporting 40% year-over-year ad growth. Additionally, LinkedIn's core recruitment tools face pricing pressure as companies reduce hiring budgets amid economic uncertainty.

Nadella's emphasis on video ads suggests Microsoft sees this as LinkedIn's primary near-term opportunity. However, the platform must navigate privacy regulations like GDPR and CCPA that complicate ad targeting, along with ongoing concerns about algorithmic bias in job recommendations. These factors could constrain growth below the 15-20% range analysts consider sustainable for the platform.

The results confirm LinkedIn's evolution from a recruitment-focused service to a multifaceted B2B marketing platform. With video now central to that strategy, its ability to maintain ad growth while improving measurement and reducing platform friction will determine whether it can sustain this momentum beyond the current economic cycle.