CDK Global earnings, revenue increase in quarter despite tightening inventories
CDK Global Inc.’s revenue and net income increased in the company’s first fiscal quarter, compared to a quarter a year earlier that was affected by the pandemic.
Dealership management system giant Hoffman Estates, Ill. Said on Tuesday that its first quarter of its 2022 fiscal year showed solid growth despite headwinds from inventory shortages that drained dealership lots this past. year.
CDK added automotive DMS customer sites for the 11th consecutive quarter, said CEO Brian Krzanich, bringing the total to 9,107 as of September 30. This represents an increase from 8,966 as of September 30, 2020 and 9,062 as of June 30.
“I am satisfied with these results, which met our expectations despite a modest slowdown in trading activity, driven by stockouts in the auto market,” Krzanich said Tuesday on a call with analysts. “Our ability to excel in 2022 demonstrates that CDK has become a fundamentally different company than it was just a few years ago. We have focused on making investments that strengthen our core business.
CDK in September announced plans to acquire insurance technology company Salty Dot Inc., which allows consumers to purchase auto insurance at the same time as they buy a vehicle. CDK executives said the purchase of Salty will allow dealers to tap into a new revenue market and help improve the car buying experience for customers.
The company’s transaction revenue fell 2.5% in the first quarter to $ 42.8 million. CDK receives transaction fees for connecting dealerships to companies that process credit reports and vehicle registrations, and this equates to nearly 10 percent of CDK’s total revenues. CFO Eric Guerin told analysts he was “dragged down by falling vehicle registration revenues as vehicle sales are affected by supply chain disruptions.”
CDK’s financial results covered continuing operations, excluding its international operations, which it sold in March to private equity firm Francisco Partners.
1st quarter turnover: $ 440 million, up 6.4% from a year ago
Q1 net income attributable to CDK: $ 71.7 million, up 28.7% from the previous year
Adjusted EBITDA for the 1st quarter: $ 170.3 million, up 1.7% from a year ago
Recordings: Total company DMS sites and revenue by site
Advice: Revenue, $ 1.78 billion to $ 1.82 billion; net income attributable to CDK, $ 235 million to $ 265 million