Shares of professional networking site LinkedIn (NYSE:LNKD) crashed a massive 40% on the first day of trading after the company delivered Q4 2015 results. LinkedIn’s results topped analyst expectations but the company issued a very weak Q1 2016 guidance. LinkedIn reported fourth-quarter revenue of $861.9M, good for 34% Y/Y growth, easily exceeding LinkedIn’s guidance of $845M-$850M, as well as Wall Street’s consensus figure of $857.59M. LinkedIn reported non-GAAP EPS $0.94, way higher than its own guidance of $0.74, and Wall Street’s consensus of $0.78.

LinkedIn Stock 5-Day Returns

Source: CNN Money

It was, however, another quarter of losses for LinkedIn. The company reported GAAP diluted EPS of $-0.06 compared to $-0.02 posted during last year’s comparable quarter.

But that’s not what spooked investors. It was LinkedIn’s Q1 2016 and full year 2016 guidance. LinkedIn said that it expects Q1 revenue of $820M, well below Wall Street’s consensus of $866.7M. For the full year, LinkedIn said that it expects revenue of $3.6B-$3.65B, again well below Wall Street’s consensus of $3.91B. LinkedIn’s non-GAAP EPS projection of $3.05-$3.20 also compares poorly with the Street’s consensus estimate of $3.67.

LinkedIn’s Ad Business Could Have Fallen Victim To Facebook

Looking at LinkedIn’s performance by segment, it becomes clear why the market reacted so strongly to LinkedIn’s guidance, despite the fact that the company had just topped estimates. LinkedIn’s Talent Solutions, the company’s largest segment, grew revenue by 45% Y/Y to $535M. That was a slowdown compared to the previous quarter but still good enough nevertheless.

Meanwhile, LinkedIn’s Premium Subscriptions grew revenue by 19% to $144M, while LinkedIn’s ad business, Marketing Solutions, grew revenue by 20% to $183M.

LinkedIn’s ad business has been the focal point of many bear theses, and the company’s most recent quarter seems to confirm investors’ worst fear that the ad business is getting walloped by Facebook (NASDAQ:FB). Just a year ago, LinkedIn’s Marketing Solutions was the company’s fastest-growing revenue segment. The one that most investors counted on to offset its slowing Talent Solutions business. During Q4 2014, LinkedIn’s Marketing Solutions posted growth of 56% compared to 41% growth in Talent Solutions and 38% growth in Premium Subscriptions.