Form 8-K Dealertrack Technologies For: May 08

 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

 

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 8, 2015

 

DEALERTRACK TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)

 

 

Delaware		000-51653		52-2336218
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS. Employer Identification No.)
	1111 Marcus Ave., Suite M04, Lake Success, NY		11042
	(Address of principal executive offices)		(Zip Code)

 

Registrant's telephone number, including area code: (516) 734-3600

 

Not Applicable
(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

TABLE OF CONTENTS

 

Item 2.02. Results of Operations and Financial Condition Item 7.01 Regulation FD Disclosure Item 9.01. Financial Statements and Exhibits   EXHIBIT INDEX

EX-99.1: Registrant’s Press Release dated May 8, 2015

EX-99.2: Registrant’s May 2015 Investor Presentation

Item 2.02 Results of Operations and Financial Condition.

 

Attached hereto as Exhibit 99.1 and incorporated by reference herein is financial information for the registrant for the first quarter of 2015 as presented in a press release of May 8, 2015. The information in this Current Report on Form 8-K is furnished under Item 2.02 - "Results of Operations and Financial Condition." Such information, including the exhibits attached hereto, shall not be deemed "filed" for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

 

Item 7.01 Regulation FD Disclosure.

 

Effective May 8, 2015, senior management of Dealertrack Technologies, Inc. will begin using the materials included in Exhibit 99.2 to this report (the “Investor Presentation”) in connection with presentations to existing and prospective investors. The Investor Presentation is attached as Exhibit 99.2 to this report and is incorporated herein by reference. The registrant undertakes no obligation to update this information, including any forward-looking statements, to reflect subsequently occurring events or circumstances.

 

The information furnished pursuant to this Item 7.01 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Dealertrack Technologies, Inc. under the Securities Act of 1933, as amended, or the Exchange Act.

 

Safe Harbor for Forward-Looking Statements

 

Statements in this Current Report on Form 8-K regarding Dealertrack Technologies, Inc., including but not limited to the Exhibits attached hereto, other than the recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Dealertrack to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d)  Exhibits.

 

Exhibit No.		Description
99.1		Registrant’s Press Release dated May 8, 2015
99.2		Registrant’s May 2015 Investor Presentation

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 8, 2015

 

	Dealertrack Technologies, Inc.
	By: /s/ Eric D. Jacobs
	Eric D. Jacobs
	Executive Vice President, Chief Financial and Administrative Officer

 

  

EXHIBIT INDEX

 

  

Exhibit No.		Description
99.1		Registrant’s Press Release dated May 8, 2015
99.2		Registrant’s May 2015 Investor Presentation

 

 

 

 

 

 

Exhibit 99.1

 

 

 

 

MEDIA CONTACT:

Alison von Puschendorf

[email protected]

(877) 327-8422 x7366

 

INVESTOR CONTACT:

[email protected]

(888) 450-0478

 

Dealertrack Reports First Quarter 2015 Financial Results

 

Reports 59% Year over Year Revenue Growth

Updates 2015 Guidance for First Quarter Performance and Business Success

Lake Success, N.Y., May 8, 2015 – Dealertrack Technologies, Inc. (NASDAQ: TRAK) today reported financial results for the first quarter ended March 31, 2015. The company achieved year-over-year revenue growth across all business lines, positioning itself for long-term growth and to capitalize on evolving market opportunities.

 

“Our all-time record revenue for the first quarter reflects continuing market demand for our broad suite of software and services, which are driving innovation through integration across nearly every aspect of auto retailing,” said Mark O’Neil, chairman and chief executive officer, Dealertrack. “Dealertrack’s year-over-year organic growth rate of 16 percent provides further evidence of our continuing momentum and the dedication and efforts of our team members.”

 

“We are excited by the strengthening of our OEM partnerships and endorsements. These companies are clearly inspired by Dealertrack’s plan to expand its unique portfolio of solutions into key global markets through our recent acquisition of incadea. OEMs and their dealers are also seeing tangible benefits by deploying our online to in-store integrated solutions, such as Digital Retailing,” said O’Neil.

 

A video highlighting the results that Port City Nissan achieved with Dealertrack’s Digital Retailing solution is currently available for viewing at go.dealertrack.com/success.

 

First Quarter 2015 Earnings Overview

 

GAAP Results for the First Quarter 2015

§

Revenue for the quarter was $252.8 million, as compared to $158.8 million for 2014.

§

GAAP net loss for the quarter was $(22.7) million, as compared to $(11.6) million for 2014.

§

Diluted GAAP net loss per share for the quarter was $(0.42), as compared to $(0.25) for 2014.

 

Non-GAAP Results for the First Quarter 2015

§

Adjusted EBITDA for the quarter was $39.8 million, as compared to $30.5 million for 2014.

§

Adjusted net income for the quarter was $10.3 million, as compared to $11.5 million for 2014.

§

Diluted adjusted net income per share for the quarter was $0.19, as compared to $0.23 for 2014.

 

 

 

 

Updated Guidance for 2015
Dealertrack updated its 2015 guidance as follows:

 

Expected GAAP Results

§

Revenue for the year is expected to be between $1,085 million and $1,105 million, an increase at the mid-point of the range from prior guidance of between $1,080 million and $1,100 million.

§

GAAP net loss for the year is expected to be between $(25.0) million and $(21.0) million, a change at the mid-point of the range from prior guidance of between $(20.0) million and $(17.0) million.

§

Diluted GAAP net loss per share for the year is expected to be between $(0.45) and $(0.38), a change at the mid-point of the range from prior guidance of between $(0.34) and $(0.29) per share.

 

Expected Non-GAAP Results

§

Adjusted EBITDA for the year is expected to be between $222.0 million and $227.0 million, an increase at the mid-point of the range from prior guidance of between $220.0 million and $225.0 million.

§

Adjusted net income for the year is expected to be between $80.0 million and $85.0 million, no change from prior guidance.

§

Diluted adjusted net income per share for the year is expected to be between $1.40 and $1.49, an increase at the mid-point of the range from prior guidance of $1.39 and $1.48 per share.

 

Diluted GAAP net loss and adjusted net income per share guidance for 2015 are now based on an estimated diluted share count of 56.0 million and 57.2 million shares, respectively. The guidance continues to assume that new and used car sales by franchised dealers will increase between 2% and 3%.

 

First Quarter Earnings Conference Call

Dealertrack will host a conference call to discuss its first quarter 2015 results, as well as its 2015 guidance, on May 8, 2015, at 8:00 a.m. Eastern Time. The conference call will be webcast live on the Internet at ir.dealertrack.com. In addition, a live audio of the call will be accessible to the public by calling 877-303-6648 (domestic) or 970-315-0443 (international); no access code is necessary. Callers should dial in approximately 10 minutes before the call begins. A webcast replay will be available on the Dealertrack Technologies, Inc. website at www.dealertrack.com.

 

Non-GAAP Financial Measures

 

The non-GAAP measures of adjusted EBITDA and adjusted net income disclosures are not presented in accordance with generally accepted accounting principles (GAAP) and are not intended to be used in lieu of GAAP presentations of net income (loss). Adjusted EBITDA is a non-GAAP financial measure that represents GAAP net income (loss) excluding interest, taxes, depreciation and amortization expenses, stock-based compensation, contra-revenue and certain items, as applicable, such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, rebranding expenses and certain other items that we do not believe are indicative of our ongoing operating results.

 

Adjusted net income is a non-GAAP financial measure that represents GAAP net income (loss) excluding stock-based compensation expense, the amortization of acquired identifiable intangibles, contra-revenue, and certain items, as applicable, such as: impairment charges, restructuring charges, impact of acquisition-related activity (including contingent consideration changes, compensation expense, basis difference amortization, and professional service fees), realized gains on sales of previously impaired securities, gains or losses on sales or disposals of subsidiaries and other assets, adjustments to deferred tax asset valuation allowances, non-cash interest expense, rebranding expenses and certain other items that we do not believe are indicative of our ongoing operating results. These adjustments to net income (loss), which are shown before taxes, are adjusted for their tax impact at their applicable statutory rates.

 

 

 

 

Adjusted EBITDA and adjusted net income are presented because management believes that they provide additional information with respect to the performance of our fundamental business activities and are also frequently used by securities analysts, investors and other interested parties in the evaluation of comparable companies. Adjusted EBITDA and adjusted net income are also presented because the acquisition method of accounting can have a negative impact on our GAAP results because the depreciation and amortization expenses associated with acquired assets, in particular intangibles which tend to have a relatively short useful life, can be substantial in the first several years following an acquisition. As a result, we monitor our adjusted EBITDA and adjusted net income and other business statistics as a measure of operating performance in addition to net income (loss) and the other measures included in our consolidated financial statements. Management believes the adjusted EBITDA and adjusted net income information is useful to investors for these reasons. Adjusted EBITDA and adjusted net income are non-GAAP financial measures and should not be viewed as an alternative to GAAP measures of performance. Management believes the most directly comparable GAAP financial measure for adjusted EBITDA and adjusted net income is GAAP net income (loss) and has provided a reconciliation of adjusted EBITDA to GAAP net income (loss) and adjusted net income to GAAP net income (loss) in this press release.

 

About Dealertrack Technologies (www.dealertrack.com)

Dealertrack Technologies' intuitive and high-value web-based software solutions and services enhance efficiency and profitability for all major segments of the automotive retail industry, including dealers, lenders, OEMs, third-party retailers, aftermarket providers and other service providers. In addition to the industry's largest online credit application network, connecting approximately 20,000 dealers with more than 1,500 lenders, Dealertrack Technologies delivers the industry's most comprehensive solution set for automotive retailers, including Digital Marketing, Dealer Management System (DMS), Inventory, F&I Solutions and Registration and Titling Solutions. For more information visit www.dealertrack.com.

 

Safe Harbor for Forward-Looking and Cautionary Statements

 

Statements in this press release regarding Dealertrack’s expected 2015 performance based on both GAAP and non-GAAP measures, the long-term outlook for its business, the benefits of Dealertrack’s solutions and all other statements in this release other than the recitation of historical facts are forward-looking statements (as defined in the Private Securities Litigation Reform Act of 1995). These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Dealertrack to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

 

Factors that might cause such a difference include: economic trends that affect the automotive retail industry or the indirect automotive financing industry including the number of new and used cars sold; credit availability; reductions in automotive dealerships; increased competitive pressure from other industry participants, including CDK Global (formerly ADP), Cox Automotive, Dominion Dealer Solutions, Open Dealer Exchange, Reynolds and Reynolds, RouteOne, and Solera Holdings; the impact of some vendors of software products for automotive dealers making it more difficult for our customers to use our solutions and services; security breaches, interruptions, failures and/or other errors involving our systems or networks; the failure or inability to execute any element of our business strategy, including selling additional products and services to existing and new customers; our success in implementing ERP and CRM systems; the volatility of our stock price; new regulations or changes to existing regulations; the integration of recent acquisitions and the expected benefits, as well as the integration and expected benefits of any future acquisitions that we may pursue; our success in expanding its customer base and product and service offerings, the impact of recent economic trends, and difficulties and increased costs associated with raising additional capital; the impairment of intangible assets, such as trademarks and goodwill; the possibility that the expected benefits of our acquisition of incadea may not materialize as expected; failure to successfully integrate the business, infrastructure and employees of incadea; and other risks listed in our reports filed with the Securities and Exchange Commission (SEC), including its most recent Annual Report on Form 10-K. These filings can be found on our website at www.dealertrack.com and the SEC’s website at www.sec.gov. Forward-looking statements included herein speak only as of the date hereof and Dealertrack disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

                 

		Three Months Ended March 31,
		2015				2014
Net revenue		$	252,754			$	158,808
Cost of revenue			143,468				89,907
Research and development			33,260				24,048
Selling, general and administrative			94,465				67,486
Total operating expenses			271,193				181,441
Loss from operations			(18,439	)			(22,633	)
Interest expense, net			(9,557	)			(5,810	)
Other (expense) income, net			(5,712	)			709
Gain on sale of investment			—				9,828
Earnings from equity method investment, net			2,200				1,625
Loss before benefit from income taxes, net			(31,508	)			(16,281	)
Benefit from income taxes, net			8,780				4,639
Net loss		$	(22,728	)		$	(11,642	)
Basic net loss per share		$	(0.42	)		$	(0.25	)
Diluted net loss per share		$	(0.42	)		$	(0.25	)
Weighted average common stock outstanding (basic)			54,441				47,351
Weighted average common stock outstanding (diluted)			54,441				47,351
Adjusted EBITDA (non-GAAP) (a)		$	39,815			$	30,514
Adjusted EBITDA margin (non-GAAP) (b)			16	%			19	%
Adjusted net income (non-GAAP) (a)		$	10,318			$	11,487
Shares used for diluted adjusted net income per share (c)			55,520				49,576
Diluted adjusted net income per share (non-GAAP)		$	0.19			$	0.23
Segment operating results:
U.S. & Canada		$	(12,086	)		$	(22,633	)
International			(6,353	)			—
Loss from operations		$	(18,439	)		$	(22,633	)
Stock-based compensation expense was classified as follows:
Cost of revenue		$	327			$	276
Research and development			923				752
Selling, general and administrative			4,065				3,095
		$	5,315			$	4,123

 

(a) See Reconciliation Data.

(b) Represents adjusted EBITDA as a percentage of net revenue.

(c) For the three months ended March 31, 2015 and 2014, due to the net loss, the share count used for computing diluted net loss per share is equal to the share count used for computing basic net loss per share. For computing diluted adjusted net income per share for the three months ended March 31, 2015, the share count used includes 1,079 thousand shares related to options to purchase common stock and restricted common stock units. For computing diluted adjusted net income per share for the three months ended March 31, 2014, the share count used includes 1,799 thousand shares related to options to purchase common stock and restricted common stock units and 426 thousand shares related to our warrants.

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

		March 31,				December 31,
		2015				2014
ASSETS
Cash and cash equivalents		$	87,578			$	332,310
Marketable securities			—				2,101
Customer funds and customer funds receivable			40,807				33,568
Accounts receivable, net			128,863				101,019
Deferred tax assets, net			18,495				18,838
Prepaid expenses and other current assets			51,944				54,183
Total current assets			327,687				542,019
Property and equipment, net			97,724				86,909
Software and website development costs, net			96,590				91,146
Equity method investment			34,487				34,662
Intangible assets, net			571,191				526,202
Goodwill			1,181,455				1,055,262
Other assets – long-term			25,521				24,875
Total assets		$	2,334,655			$	2,361,075
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued liabilities		$	120,591			$	116,798
Customer funds payable			40,807				33,568
Deferred revenue			23,354				15,112
Deferred tax liabilities			2,786				—
Due to acquirees and notes payable			4,778				23,906
Total current liabilities			192,316				189,384
Long-term liabilities			1,078,005				1,073,003
Total liabilities			1,270,321				1,262,387
Total stockholders' equity			1,064,334				1,098,688
Total liabilities and stockholders' equity		$	2,334,655			$	2,361,075

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

               

		Three Months Ended March 31,
		2015				2014
Operating activities:
Net loss		$	(22,728	)		$	(11,642	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			39,097				31,291
Deferred tax benefit			(12,991	)			(34,603	)
Stock-based compensation expense			5,315				4,123
Provision for doubtful accounts and sales credits			3,538				3,114
Earnings from equity method investment, net			(2,200	)			(1,625	)
Deferred compensation			27				50
Stock-based compensation windfall tax benefit			(3,242	)			(8,685	)
Gain on sale of investment			—				(9,828	)
Amortization of debt issuance costs and debt discount			3,191				3,170
Change in contingent consideration			100				(250	)
Net foreign currency adjustments			1,069				—
Forfeited customer deposits			(20	)			(648	)
Amortization of deferred interest			7				53
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable			(10,653	)			(12,534	)
Prepaid expenses and other current assets			12,490				4,236
Other assets – long-term			1,104				(4,227	)
Accounts payable and accrued liabilities			(44,679	)			(68,213	)
Deferred rent			37				(6	)
Deferred revenue			5,857				1,714
Other liabilities – long-term			1,435				11,646
Net cash used in operating activities			(23,246	)			(92,864	)

 

 

 

 

Consolidated Statements of Cash Flows (continued)

 

		Three Months Ended March 31,
		2015				2014
Investing activities:
Capital expenditures			(13,039	)			(5,108	)
Capitalized software and website development costs			(9,954	)			(10,645	)
Proceeds from sale of investment in TrueCar			—				92,518
Purchases of marketable securities			—				(2,150	)
Proceeds from sales and maturities of marketable securities			2,095				7,539
Payment for acquisition of businesses, net of acquired cash			(174,574	)			(541,288	)
Net cash used in investing activities			(195,472	)			(459,134	)
Financing activities:
Proceeds from issuance of term loan B credit facility			—				575,000
Repayment of incadea debt facilities			(22,604	)			—
Payments for debt issuance costs			—				(15,501	)
Stock-based compensation windfall tax benefit			3,242				8,685
Proceeds from stock purchase plan and exercise of stock options			4,099				10,729
Purchases of treasury stock			(2,201	)			(4,412	)
Proceeds from note receivable			—				500
Payment of contingent consideration			(5,250	)			—
Principal payments on capital lease obligations and financing arrangements			(23	)			(29	)
Net cash (used in) provided by financing activities			(22,737	)			574,972
Net (decrease) increase in cash and cash equivalents			(241,455	)			22,974
Effect of exchange rate changes on cash and cash equivalents			(3,277	)			(1,080	)
Cash and cash equivalents, beginning of period			332,310				122,373
Cash and cash equivalents, end of period		$	87,578			$	144,267
Supplemental disclosure:
Cash paid for:
Income taxes		$	326			$	2,210
Interest			7,864				3,424
Non-cash investing and financing activities:
Accrued capitalized hardware, software and fixed assets			5,856				6,771
Assets acquired under capital leases and financing arrangements			—				35
Non-cash consideration issued for investment in Dealer.com			—				471,220

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA

(Dollars in thousands)

(Unaudited)

 

		Three Months Ended March 31,
		2015				2014
Net loss (GAAP)		$	(22,728	)		$	(11,642	)
Interest income			(71	)			(100	)
Interest expense – cash			6,437				2,740
Interest expense – non-cash			3,191				3,170
Benefit from income taxes, net			(8,780	)			(4,639	)
Depreciation of property and equipment and amortization of capitalized software and website costs			15,896				10,595
Amortization of acquired identifiable intangibles			23,201				20,696
EBITDA (non-GAAP)			17,146				20,820
Adjustments:
Stock-based compensation			5,315				4,123
Contra-revenue			1,486				1,157
Integration and other related costs			5,713				5,792
Acquisition-related and other professional fees			9,470				6,974
Acquisition-related contingent consideration changes and compensation expense, net			248				929
Gain on sale of investment			—				(9,828	)
Amortization of equity method investment basis difference			437				547
Adjusted EBITDA (non-GAAP)		$	39,815			$	30,514

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted Net Income

(Dollars in thousands)

(Unaudited)

   

		Three Months Ended March 31,
		2015				2014
Net loss (GAAP)		$	(22,728	)		$	(11,642	)
Adjustments:
Interest expense – non-cash (not tax-impacted)			3,191				3,170
Amortization of acquired identifiable intangibles			23,201				20,696
Stock-based compensation			5,315				4,123
Contra-revenue			1,486				1,157
Integration and other related costs (a)			5,713				6,481
Acquisition-related and other professional fees (a)			9,545				6,974
Acquisition-related contingent consideration changes and compensation expense, net			248				929
Amortization of equity method investment basis difference			437				547
Gain on sale of investment			—				(9,828	)
Tax impact of adjustments (b)			(16,090	)			(11,120	)
Adjusted net income (non-GAAP)		$	10,318			$	11,487

 

(a) The adjustment for adjusted net income exceeds the adjustment for adjusted EBITDA as a result of accelerated amortization charges relating to internally developed software, which are included in the depreciation adjustment within the adjusted EBITDA reconciliation, as well as integration items and acquisition items with an interest component, which are included in the interest adjustment within the adjusted EBITDA reconciliation. The adjustment for adjusted EBITDA and adjusted net income includes foreign exchange losses resulting from the funding of the incadea acquisition.

 

(b) The tax impact of adjustments for the three months ended March 31, 2015 are based on a blended tax rate of 37.7% applied to taxable adjustments. Additionally, the tax impact of adjustments for the three months ended March 31, 2015 includes $1.2 million of discrete deferred tax adjustments related to the acquisition of incadea and state rate apportionment changes. The blended tax rates are based upon the statutory tax rates of 38.6%, 26.5%, 25.0%, and 33.0% applied to the adjustments for the respective countries.

 

The tax impact of adjustments for the three months ended March 31, 2014 are based on a blended tax rate of 38.8% applied to taxable adjustments. Additionally, the tax impact of the adjustments for the three months ended March 31, 2014 inclues a $0.9 million change in deferred taxes related to the acquisition of Dealer.com and the sale of TrueCar. The blended tax rates are based upon the statutory rates of 38.7% and 26.5%, applied to the adjustments for U.S. and Canada, respectively.

 

A reconciliation of GAAP to non-GAAP measures is included in the investor presentation available on Dealertrack’s website, which also includes the impact of reconciled items on individual income statement classifications.

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Reconciliation of Segment Operating Results to Consolidated Pretax Earnings

(In thousands, except per share amounts)

(Unaudited)

  

		Three Months Ended March 31,
		2015				2014
Segment operating results:
U.S. & Canada (a)		$	(12,086	)		$	(22,633	)
International			(6,353	)			—
Loss from operations		$	(18,439	)		$	(22,633	)
Unallocated amounts:
Interest expense, net		$	(9,557	)		$	(5,810	)
Other income, net			(5,712	)			709
Gain on sale of investment			—				9,828
Earnings from equity method investment, net			2,200				1,625
Loss before benefit from income taxes, net		$	(31,508	)		$	(16,281	)
Depreciation, software and intangible amortization:
U.S. & Canada		$	36,300			$	31,291
International			2,797				—
		$	39,097			$	31,291

(a) Includes $2.5 million of costs incurred in conjunction with international segment integration activities.

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Reconciliation of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted EBITDA

(Dollars in millions)

(Unaudited)

 

		Year Ending December 31, 2015
		Expected Range
GAAP net loss		$	(25.0	)		$	(21.0	)
Interest, net			42.5				42.5
Income taxes, net			(9.5	)			(8.0	)
Amortization of basis difference from joint venture			1.5				1.5
Depreciation and amortization			68.0				65.5
Amortization of acquired identifiable intangibles			90.0				90.0
EBITDA (non-GAAP)			167.5				170.5
Adjustments:
Stock-based compensation			26.0				26.0
Non-recurring costs (a)			24.5				26.5
Contra-revenue			4.0				4.0
Adjusted EBITDA (non-GAAP)		$	222.0			$	227.0

 

 

(a)

Includes certain acquisition-related foreign exchange gains/losses, professional fees, integration and other related costs, acquisition-related compensation expense, and fair value adjustments.

 

Reconciliation of Forward-looking GAAP Net Income to Forward-looking Non-GAAP Adjusted Net Income

(Dollars in millions)

(Unaudited)

 

		Year Ending December 31, 2015
		Expected Range
GAAP net loss		$	(25.0	)		$	(21.0	)
Adjustments:
Stock-based compensation			26.0				26.0
Amortization of acquired identifiable intangibles			90.0				90.0
Amortization of basis difference from joint venture			1.5				1.5
Non-cash interest expense (not tax-impacted)			14.0				14.0
Non-recurring costs (a)			24.5				26.5
Contra-revenue			4.0				4.0
Tax impact of adjustments (b)			(55.0	)			(56.0	)
Adjusted net income (non-GAAP)		$	80.0			$	85.0

 

 

(a)

Includes certain acquisition-related foreign exchange gains/losses, professional fees, integration and other related costs, acquisition-related compensation expense, and fair value adjustments.

 

(b)

The tax impact of adjustments are based on a blended tax rate of 38% applied to taxable adjustments.

 

 

 

 

 

DEALERTRACK TECHNOLOGIES, INC.

Summary of Business Statistics

Three months ended

 (Unaudited)

                             

		Mar 31,				Dec 31,				Sep 30,				Jun 30,				Mar 31,
		2015				2014				2014				2014				2014
Subscription services revenue (in thousands)		$	100,283			$	98,499			$	94,803			$	91,485			$	61,969
Transaction services revenue (in thousands)			84,497				80,368				87,157				87,381				77,735
Advertising and other revenue (in thousands)			55,450				58,453				51,560				45,901				19,104
U.S. & Canada revenue (in thousands)		$	240,230			$	237,320			$	233,520			$	224,767			$	158,808
International services revenue (in thousands)		$	12,524			$	—			$	—			$	—			$	—
Subscribing dealers in U.S. and Canada as of end of the period (a)			24,723				24,336				24,089				23,876				23,624
Average monthly subscription revenue per subscribing dealership (b)		$	1,290			$	1,288			$	1,253			$	1,218			$	956
Active dealers in our U.S. network as of end of the period (c)			20,661				19,770				20,334				20,670				20,719
Active lenders in our U.S. network as of end of the period (d)			1,557				1,539				1,511				1,468				1,443
Active lender to dealer relationships as of end of the period (e)			211,145				202,086				204,338				201,240				202,984
Transactions processed (in thousands) (f)			30,552				28,789				31,391				30,669				28,560
Average transaction price (g)		$	2.80			$	2.84			$	2.82			$	2.89			$	2.76
Transaction revenue per car sold (h)		$	11.68			$	9.53			$	8.86			$	8.68			$	11.20
Active dealerships on advertising platform as of end of the period (i)			7,157				7,525				8,143				7,031				7,053
Average monthly advertising spend per dealer rooftop (j)		$	2,251			$	2,146			$	2,041			$	1,826			$	1,708

 

(a) Represents the number of dealerships in the U.S. and Canada with one or more active subscriptions at the end of a given period. Subscriptions to Dealertrack CentralDispatch have been excluded as these customers include brokers and carriers in addition to dealers.

 

(b) Represents dealer-based subscription services revenue, including subscription revenue from partners who include our solutions in their dealer offerings, divided by average subscribing dealers for a given period in the U.S. and Canada. Revenue used in the calculation adds back (excludes) subscription related contra-revenue. In addition, subscribing dealers and subscription services revenue from Dealertrack CentralDispatch have been excluded from the calculation as a majority of these customers are not dealers.

 

(c) We consider a dealer to be active in our U.S. network as of a date if the dealer completed at least one revenue-generating credit application processing transaction using the U.S. Dealertrack network during the most recently ended calendar month. The number of active U.S. dealers is based on the number of dealer accounts as communicated by lenders on the U.S. Dealertrack network.

 

 

 

 

(d) We consider a lender to be active in our U.S. network as of a date if it is accepting credit application data electronically from U.S. dealers in the U.S. Dealertrack network.

 

(e) Each lender to dealer relationship represents a pair between an active U.S. lender and an active U.S. dealer at the end of a given period.

 

(f) Represents revenue-generating transactions processed in the U.S. Dealertrack, Dealertrack Aftermarket Services, Registration and Titling Solutions, Collateral Management Solutions and Dealertrack Canada networks at the end of a given period.

 

(g) Represents the average revenue earned per transaction processed in the U.S. Dealertrack, Dealertrack Aftermarket Services, Registration and Titling solutions, Collateral Management solutions and Dealertrack Canada networks during a given period. Revenue used in the calculation adds back (excludes) transaction related contra-revenue.

 

(h) Represents transaction services revenue divided by our estimate of total new and used car sales for the period in the U.S. and Canada. Revenue used in this calculation adds back (excludes) transaction related contra-revenue.

 

(i) We consider a dealership to be active on our advertising platform as of a date if they incurred advertising spend in that month. The number of advertisers at the end of the period may be impacted by the timing of manufacturer endorsed campaigns on behalf of their dealership base, for which there were approximately 250 dealerships that were part of a short term campaign as of March 31, 2015, 225 as of December 31, 2014 and 900 as of September 30, 2014.

 

(j) Represents advertising services revenue divided by average active dealerships on our advertising platform for a given period.

 

TRAK-E ###

 

 

 

Exhibit 99.2

 

1 May 8, 2015 Investor Presentation

2 Safe Harbor for Forward - Looking Statements ■ Statements in this investor presentation regarding Dealertrack’s expected 2015 performance based on both GAAP and non - GAAP measures, estimated or forecasted information for periods in or after 2015 , the long - term outlook for its business, and all other statements in this release other than the recitation of historical facts are forward - looking statements (as defined in the Private Securities Litigation Reform Act of 1995 ) . These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Dealertrack to be materially different from any future results, performance or achievements expressed or implied by these forward - looking statements . ■ Factors that might cause such a difference include : economic trends that affect the automotive retail industry or the indirect automotive financing industry including the number of new and used cars sold ; credit availability ; reductions in automotive dealerships ; increased competitive pressure from other industry participants, including CDK Global (formerly ADP), Cox Automotive, Dominion Dealer Solutions, Open Dealer Exchange, Reynolds and Reynolds, RouteOne and Solera Holdings ; the impact of some vendors of software products for automotive dealers making it more difficult for our customers to use our solutions and services ; security breaches, interruptions, failures and/or other errors involving our systems or networks ; the failure or inability to execute any element of our business strategy, including selling additional products and services to existing and new customers ; our success in implementing an ERP and CRM systems ; the volatility of our stock price ; new regulations or changes to existing regulations ; the integration of recent acquisitions and the expected benefits, as well as the integration and expected benefits of any future acquisitions that we may pursue ; our success in expanding our customer base and product and service offerings, the impact of recent economic trends, and difficulties and increased costs associated with raising additional capital ; the impairment of intangible assets, such as trademarks and goodwill ; the possibility that the expected benefits of our acquisition of incadea may not materialize as expected ; failure to successfully integrate the business, infrastructure and employees of incadea ; and other risks listed in our reports filed with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10 - K . These filings can be found on our website at www . dealertrack . com and the SEC’s website at www . sec . gov . Forward - looking statements included herein speak only as of the date hereof and Dealertrack disclaims any obligation to revise or update such statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events or circumstances, except as required by law .

3 ▪ Founded in 2001, IPO in 2005, Global presence in 2015 ▪ Headquartered in Lake Success, New York ▪ ~ 4, 5 00 employees ▪ 2015 Estimated Revenue: $ 1.1 billion (mid - point of guidance) ▪ 2015 Estimated Adjusted EBITDA: $ 225 million (mid - point of guidance) ▪ S ervices customers in more than 90 countries Business Description: ■ Dealertrack’s SaaS software solutions and services enhance efficiency and profitability for all major segments of the automotive retail industry, including dealers, lenders, OEMs, third - party retailers, aftermarket providers and other service providers ■ Operates the largest online credit application network in the United States and Canada ■ In 2015, acquired incadea , a leading global provider of DMS software and services Dealertrack Overview

4 ▪ Most comprehensive suite of solutions in the industry ▪ Leading provider of SaaS software solutions and services that enhance the efficiency and profitability for all major segments of the U.S. automotive retail industry ▪ Successfully integrating and leveraging Dealer.com’s innovative digital marketing solutions with Dealertrack’s in - store and online solutions ▪ A leading provider of a Dealer Management System on a single global platform in over 90 countries through incadea ▪ ~ $7 billion SaaS and transaction market opportunity ▪ ~$10 billion digital marketing market opportunity anticipated to double by end of 2018 ▪ ~$4 billion international market opportunity ▪ Consistent track record of growth and profitability ▪ Double - digit organic revenue growth ▪ Predictable business model with highly visible, recurring revenue ▪ Seasoned management team with extensive industry experience Investment Highlights

5 Our Vision Deliver the market leading suite of integrated technologies capable of transforming automotive retailing… globally . 2001 2007 2014 Revolutionized automotive credit. Offered end - to - end tools to drive efficiency. Provided our clients with the power to transform automotive retail. 1999 Elevated the role of digital in car buying. 2015+ Global expansion.

6 Dealertrack’s Network Aftermarket providers, accessory providers, OEMs and OpenTrack partners Third Party Participants Other Information and Service Providers Lenders 1,500+ U.S. lenders connected to Dealertrack’s network Credit bureaus, used car value guides, identity verification services Dealers 20,600+ active U.S. auto dealers on Dealertrack’s network 24,700+ dealers with Dealertrack subscriptions (U.S. & Canada) Reflects business as of March 31 , 2015.

7 Technology Is Transforming The Auto Industry SELF DIRECTED Personalized Shopping Experience TEDIOUS 3 to 4 Hours in the Dealership FAST Process is Measured in Minutes not Hours RIGID / PROTIFABLE Limited Options FLEXIBLE / PROFITABLE Transparent and Predictable UNCOMFORTABLE Unpleasant Interactions and Negotiation ENJOYABLE Building & Strengthening Relationships TODAY TRANSFORMED CONTROLLED Dealerships Driving the Process

8 4,500+ Team members worldwide 20,600+ Dealerships 94%+ of U.S. franchise dealers 20+ OEMs 1,500+ Lenders 100M+ Transactions Annually Generating $1 B + In Expected 2015 Revenue Connecting with supporting and o ver 4 5M + Unique visitors / month on 13,000+ Dealer Websites “Touching” 3 of 4 Cars sold in the U.S. and Canada and hosting “Insight into” 1 out of 4 Buy/Sell Lists & 5M+ Inventory Listings and and Managing 41M+ Financed Titles 3M+ Vehicles Transported We Have Unique Capabilities To Enable Change in 90+ Countries Investing $175M+ In R&D / IDS by

9 Subscription - Based Solutions Dealer Management Solutions DMS ERP system for dealers that provides easy - to - use tools and data to enhance efficiency. Digital Marketing Solutions Digital marketing and digital retailing solutions enabling dealers to move more of the in - store sales process online. F&I Solutions Streamlines the entire vehicle sales and purchase process, while helping dealers meet legal and regulatory requirements. Inventory Solutions Desktop and mobile tools to help manage and merchandise inventory to achieve faster turns and higher profits.

10 Facilitating Workflow in the Dealership

11 0 5,000 10,000 15,000 20,000 25,000 30,000 Digital Marketing - Websites Sales and F&I** CRM Digital Marketing - Advertising Inventory DMS* Compliance Market Opportunity Current Clients Significant Opportunity For Further Market Penetration * Top franchise groups not included in DMS market opportunity. ** Sales and F&I include Desking, eContracting, Menu, Deal Transfer and Bookout. Addressable franchise and independent dealers Market Opportunity ▪ Dealers spend on average $10K to $15K per month on technology. ▪ We are currently averaging $1,290 per dealer per month.

12 U.S. Market Opportunity Has Increased 2006 Compliance eContracting Menu Desking Bookout Deal Transfer 2008 Inventory DMS 2014 Dealer.com ASR Pro CRM / CFM Digital Retailing 2010 Central Dispatch AAX 2012 eCarlist ClickMotive $1,700 $3,400 $ 4,500 $6,000 $13,000 Monthly subscription revenue opportunity per Dealership

13 ▪ Average dealership revenue and profitability is at its highest level in over 15 years ▪ Dealership optimism index is at its highest level since 1994 ▪ High - readiness to invest in marketing and productivity solutions Source: NADA Industry Analysis Division. EBT represents Earnings before tax. Record Dealership Sales and Profitability Encourages Investment in Technology - enabled Solutions Dealership Financial Performance 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% $15 $20 $25 $30 $35 $40 $45 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sales ($mm) EBT% ( $ in millions)

14 $474 $550 $678 $749 $690 $708 $767 $1,188 $956 $1,290 $0 $300 $600 $900 $1,200 $1,500 2007 2008 2009 2010 2011 2012 2013 2014 1Q'14 1Q'15 13,209 14,342 13,852 13,996 16,003 17,619 18,464 24,336 23,624 24,723 0 5,000 10,000 15,000 20,000 25,000 30,000 2007 2008 2009 2010 2011 2012 2013 2014 1Q'14 1Q'15 The Power of Dealertrack’s Subscription Solutions Note: All numbers represent end of period. 1. Excludes impact of ALG and Chrome. 2. Excludes impact of ALG, Chrome and CentralDispatch. 3. Excludes impact of CentralDispatch. Number of Dealers with a Dealertrack Subscription Solution Average Monthly Dealership Spend (as of Last Month in Period) (1) (2) (3) (3) (3) (1) (2) (3) (3) (3)

15 Transaction - Based Solutions F&I Solutions Largest online credit application processing networks in the U.S. and Canada Processing Solutions Electronic motor vehicle registration, lien and titling, and digital document services

16 Growing Number of Transactions in Car Buying Process Processing an increasing number of transactions on a single car sale through Dealertrack’s network * Verification services can either be transaction or subscription revenue. ** Additional contract related transactions can occur based on lenders’ participation in digital document services. Note: Not all cars sold are processed through the Dealertrack’s network. Dollar amounts are illustrative of US pricing and may not reflect actual pricing. Dealer Dealer Lender Lender Lender Verify ID* and pull credit bureau Submit credit application Process contract** Vehicle registration Title and lien administration ~1 to 2 transactions ~2 to 4 transactions ~1 to 2 transactions ~1 transaction ~1 to 2 transactions $0.05 to $1.00 $1.50 to $5.00 $2.50 to $5.00 $2.00 to $25.00 $1.50 to $5.00 $29.00 Revenue Potential per Car Sold

17 0.60 0.65 0.70 0.75 0.80 0.85 0.90 0.95 1.00 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Submissions per unique applicant have been rising back to 2008 levels. Source: New car sales – Automotive News. Used car sales – CNW Research. Today: 0.91 Trough, July 2009: 0.67 Transaction Revenue Drivers Increasing Application Submissions Monthly Submissions per Applicant for New and Used Cars

18 Dealertrack’s Opportunity To Grow Electronic Lien & Registration Revenue Dealertrack ELT Dealertrack Electronic Registrations Both ELT and Electronic Registrations (Market) Electronic Registrations Only (Market) ELT Only (Market) NM CO UT NV OR MT ND WY KS OK AR MO LA MS AL TN KY MN WI MI IL IN OH CA AR AZ TX WA ID SD NE IA FL GA SC NC VA WV PA NY ME NH VT HI MD DE NJ CT RI MA √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

19 16.5 14.3 14.3 13.2 12.8 12.8 13.8 14.9 15.7 15.6 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 17.0 16.5 16.2 13.2 10.4 11.6 12.8 14.5 15.6 16.5 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Transaction Revenue Drivers: Car Sales Continue to Improve U.S. New Car Sales by Franchised Dealers U.S. Used Car Sales by Franchised Dealers (units in millions) TRAK Guidance (units in millions) Two primary drivers of Dealertrack’s transaction revenue are car sales and consumer credit availability. TRAK Guidance Source: New car sales – Automotive News. Used car sales – CNW Research and DT estimates. 2014 car sales (new + used) from franchise dealers were 32.1 million units and we expect a 2 - 3% increase for 2015

20 0.5 22.5 25.0 27.5 30.0 32.5 35.0 $5.50 123.8 137.5 151.3 165.0 178.8 192.5 $6.00 135.0 150.0 165.0 180.0 195.0 210.0 $6.50 146.3 162.5 178.8 195.0 211.3 227.5 $7.00 157.5 175.0 192.5 210.0 227.5 245.0 $7.50 168.8 187.5 206.3 225.0 243.8 262.5 $8.00 180.0 200.0 220.0 240.0 260.0 280.0 Predictable Transaction Revenue with Baseline Approaching $200 Million Annually North American Cars by Franchise Dealers (units in millions) Source: New car sales – Automotive News. Used car sales – CNW Research and DT estimates, Canada New – Desrosiers, Canada Used – DT Estimates. Average Transaction Revenue per Car Sold Approx. Exclusivity: Credit Apps 20%, Contracting 30%, CMS 25% Baseline car sales of 25.0 to 27.5 million annually and revenue generated per car sold of $7.00 to $7.50 equates to expected minimum annual recurring transaction revenue of $175 million to $206 million . * Increase reflects addition of RTS and CMS solutions. ** Increase reflects addition of Casey & Casey and VINtek solutions. 33.9 33.5 29.7 26.5 27.7 29.5 32.9 34.8 35.8 0.0 8.0 16.0 24.0 32.0 40.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 $4.4 $5.6 $6.0 $5.4 $5.5 $6.6 $7.0 $8.1 $9.4 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 2006 2007 2008 2009 2010 2011* 2012 2013** 2014**

21 Late - Model Used Vehicle Supply Forecast

22 Digital Marketing Solutions Websites An optimal experience from every device - desktop, mobile or tablet Digital Retailing Flexible workflow solutions for online transacting Advertising Retargeting, paid search, display, and social media to reach the most relevant audience everywhere

23 Source: *Polk ”How the Internet is changing the vehicle shopping process.” August 2013. **Statista “Breakdown of U.S. car dealers’ advertising spending from 2002 to 2013 by medium.” Current Advertising Spend Data

24 Source: comScore (June 2014) Proven Leader in Driving Consumer Engagement Unique Visitors – 2014 YTD Monthly Average Desktop Mobile Our 13,000+ websites attract over 45+ million unique visitors per month

25

26 Advertising Channels Our combination of paid search, network and premium display, and social provides complete coverage across all digital ad opportunities. Unified Advertising Dashboard Connects cross - channel campaign results with market intelligence, providing performance transparency and forecasting, and precise customization of ad spending. Media Consultants Align campaigns with your strategy and leverage Real Time Bidding technology to maximize every campaign’s effectiveness. 99 The Dealer.com UAX covers of the Web % Dealer.com Advertising Overview

27 More Efficient Digital Spending 45+ million unique visitors per month

28 Growth Strategy & Financial Results

29 Dealertrack’s Core Growth Strategy • New lender relationships (credit, title, lien and BPO) • New subscribing dealer relationships • Additional states and expanding geographic market (entering new countries) Additional Market Share Gains • Providing a comprehensive suite of solutions makes marketing and cross - selling easier • Increases stickiness of customer relationships • Better facilitates end - to - end workflow solutions Greater Wallet Share of Existing Customers • Innovate new features, functions and integration for products • Add value to subscription products to improve dealership efficiency and profitability • Enhance core credit application functionality New Products and Services • Acquire complementary technologies and services to increase operating leverage • Use our networks for distribution of new products and services Strategic Acquisitions

30 ▪ 21 consecutive quarters of year - over - year revenue growth ▪ Over 60% of revenue from recurring subscription services and highly predictable advertising revenue ▪ Diversified transaction revenue outpacing car sales growth ▪ Strong subscription renewal rates ▪ Operating leverage drives long - term margin potential ▪ Proven acquisition strategy complements healthy organic growth Financial Highlights

31 Strong Revenue Growth Annual Revenue Quarterly Revenue ($ in millions) ($ in millions) Note: Numbers may not add due to rounding. $145.1 $181.7 $346.8 $225.0 $276.9 $332.6 $18.7 $22.9 $175.0 $0.0 $150.0 $300.0 $450.0 $600.0 $750.0 $900.0 2012 2013 2014 Advertising & Other Revenue Transaction Revenue Subscription Revenue $388.8 $481.5 $854.4 $42.8 $44.6 $45.3 $49.1 $62.0 $91.5 $94.8 $98.5 $100.3 $61.4 $71.6 $73.5 $70.3 $77.7 $87.4 $87.2 $80.4 $84.5 $4.9 $5.5 $5.8 $6.7 $19.1 $45.9 $51.6 $58.5 $55.5 $12.5 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 International Revenue Advertising & Other Revenue Transaction Revenue Subscription Revenue $109.1 $121.8 $124.6 $126.1 $158.8 $224.8 $233.5 $237.3 $252.8

32 $86 $97 $118 $193 24% 25% 24% 23% 20% 25% 30% 35% 40% $0 $50 $100 $150 $200 2011 2012 2013 2014 Adj. EBITDA Adj. EBITDA Margin $24 $33 $33 $28 $31 $50 $57 $55 $40 22% 27% 26% 22% 19% 22% 24% 23% 16% 0% 15% 30% 45% 60% $0 $15 $30 $45 $60 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 3Q'14 4Q'14 1Q'15 Adj. EBITDA Adj. EBITDA Margin $65 $71 $82 $30 18% 18% 17% 4% 0% 10% 20% 30% 40% 50% $0 $20 $40 $60 $80 $100 2011 2012 2013 2014 Cash Flow from Operations Operating Cash Flow Margin $43 $49 $59 $82 $0 $25 $50 $75 $100 2011 2012 2013 2014 ($ in millions) ($ in millions) Annual Adj. EBITDA and Margin Annual Cash Flow from Operations Quarterly Adj. EBITDA and Margin Annual Adjusted Net Income ($ in millions) ($ in millions) Strong Adj. EBITDA and Cash Flow Trends $134* * After adjusting for the impact of acquisition and acquisition - related costs.

33 Appendix

34 Other niche players (Compliance / Menu / Desking) Other niche players Note: Selected list does not include all competitors. DMS / Sales Subscription Products Credit Application Network Vehicle Registration / Title Management Inventory Management Solutions Digital Marketing Solutions (Websites & Advertising) Selected Competitive Landscape

35 22,043 19,652 16,690 16,829 17,543 19,067 20,046 19,770 20,719 20,661 536 733 823 823 1,120 1,261 1,410 1,539 1,443 1,557 0 500 1,000 1,500 2,000 2,500 0 5,000 10,000 15,000 20,000 25,000 2007 2008 2009 2010 2011 2012 2013 2014 1Q'14 1Q'15 Active Dealers Lenders Active Dealers and Lenders in Dealertrack’s U.S. Network Note: Numbers represent end of period. Number of Transactions (in millions) 71.5 90.9 79.7 51.4 49.4 74.5 87.8 101.9 119.4 28.6 30.6 0.0 30.0 60.0 90.0 120.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 1Q'14 1Q'15 The Power of Dealertrack’s Network - Growth in Dealers, Lenders and Number of Transactions

36 New and Used Car Sales 2015 Growth 1Q14 2Q14 3Q14 4Q14 Jan-15 Feb-15 Mar-15 1Q15 Y/Y Q/Q SAAR 1 15,650 16,572 16,823 16,873 16,660 16,240 17,110 16,670 6.5% (1.2%) Actual Units 1 3,741 4,423 4,268 4,092 1,152 1,259 1,546 3,957 5.8% (3.3%) Fleet 2 783 878 650 680 230 290 311 832 6.3% 22.3% Retail 2,958 3,545 3,618 3,412 922 968 1,235 3,125 5.6% (8.4%) Financed 3 2,446 3,060 3,127 2,914 756 810 1,040 2,606 6.5% (10.6%) Cash 4 513 486 491 498 166 132 195 493 (3.7%) (1.0%) USED Actual Units 5 2,677 4,662 4,628 3,661 890 740 1,113 2,743 2.5% (25.1%) Actual Units 6,418 9,085 8,896 7,752 2,042 1,999 2,659 6,700 4.4% (13.6%) TOTAL Retail Units 5,635 8,207 8,246 7,073 1,812 1,708 2,348 5,868 4.1% (17.0%) Fleet 783 878 650 680 230 290 311 832 6.3% 22.3% NEW (1) Source: Automotive News. (2) Source: JD Power. (3) Estimated. (4) Source: AutoCount. (5) Source: CNW marketing and DT’s estimates. CNW no longer available as a source after January 2015. U.S. - New and Used Car Sales (in 000s) Note: Numbers may not add due to rounding.

37 The recession and OEM bankruptcies resulted in franchised dealership closures and consolidation. We believe the level of U.S. auto dealerships has stabilized after decreasing from 2007 to 2012. 21,725 21,650 21,640 21,495 21,200 20,770 20,010 18,460 17,700 17,540 17,635 17,930 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: NADA. Number of dealerships as of January 1 each year . * As of 12/31/2014. Number of U.S. Franchised Auto Dealerships Number of U.S. Franchised Auto Dealerships *

38 Reconciliation of GAAP Net Income to Non - GAAP Financial Measures Adjusted EBITDA Reconciliation ($ millions) 2011 2012 2013 2014 1Q15 Net income (loss) $65.1 $20.5 $5.9 ($17.3) ($22.7) Interest income (0.3) (0.7) (0.5) (0.5) (0.1) Interest expense - cash 0.9 3.4 3.8 20.9 6.4 Interest expense - non-cash - 7.4 9.5 13.1 3.2 Provision for (benefit from) income tax (2.4) 12.2 (1.3) (11.4) (8.8) Depreciation of property and equipment and amortization of capitalized software and website costs 21.0 23.3 31.0 50.3 15.9 Amortization of acquired identifiable intangibles 29.7 28.3 31.5 86.2 23.2 EBITDA $114.0 $94.4 $79.9 $141.4 $17.1 Stock-based Compensation 11.5 13.6 14.4 17.1 5.3 Gain on disposal of subsidiary and sale of other assets (47.3) (33.2) - (9.8) - Restructuring, integration and other related costs 1.2 1.5 6.8 19.0 5.7 Acquisition-related and other professional fees 4.8 2.7 5.2 13.3 9.5 Change in fair value of warrants (1.0) 6.3 - - - Acquisition related consideration changes and compensation (1.1) 1.8 2.0 4.2 0.2 Rebranding expense - 1.9 2.1 - - Amortization of equity method investment basis difference - 4.0 2.8 2.2 0.4 Realized (gain) loss on securities (0.4) - (0.4) - - Contra-revenue 4.2 4.2 4.9 5.3 1.5 Adjusted EBITDA (non-GAAP) $85.9 $97.2 $117.7 $192.6 $39.8

39 Reconciliation of GAAP Net Income to Non - GAAP Financial Measures (cont.) Adjusted Net Income Reconciliation ($ millions) 2011 2012 2013 2014 1Q15 Net income (loss) $65.1 $20.5 $5.9 ($17.3) ($22.7) Deferred tax asset valuation allowance (non-taxable) (25.1) - - - - Amended state tax returns – benefits (non-taxable) (0.2) - (0.0) - - Stock-based compensation expense (excluding restructuring costs) 11.5 13.6 14.4 17.1 5.3 Integration and other related costs (including stock-based compensation) 1.2 1.6 7.0 19.8 5.7 Amortization of acquired identifiable intangibles 29.7 28.3 31.5 86.2 23.2 Acquisition-related and other non-recurring professional fees 4.7 2.7 5.2 13.5 9.5 Realized (gain) on securities (non-taxable) (0.4) - (0.4) - - Gain on sale or disposal of subsidiary (47.3) (33.2) - (9.8) - Change in fair value of warrants (1.0) 6.3 - - - Acquisition related earn-out compensation expense, net (1.1) 1.8 2.0 4.2 0.2 Contra-revenue 4.2 4.2 4.9 5.3 1.5 Interest expense - non-cash (not tax impacted) - 7.4 9.5 13.1 3.2 Amortization of equity method investment basis difference - 4.0 2.8 2.2 0.4 Accelerated depreciation of certain technology assets - 1.0 - - - Rebranding expense - 1.9 2.1 - - Tax impact of adjustments 2.1 (11.1) (26.2) (51.9) (16.1) Adjusted Net Income (non-GAAP) $43.4 $49.1 $58.8 $82.3 $10.3

40 Reconciliation of GAAP Net Income to Non - GAAP Financial Measures by Income Statement Category GAAP Non-GAAP As Reported Adjusted 2015 Ref 2014 Three Months Ended March 31, 2015 Net Loss Ref Adjustments Net Income Ref Net loss (GAAP) (22,728)$ (11,642)$ Net revenue 252,754$ A 1,486 254,240$ Adjustments: Cost of revenue 143,468 B (24,560) 118,908 Interest expense - non-cash (not tax-impacted) 3,191 E 3,170 Research and development 33,260 C (1,247) 32,013 Amortization of acquired identifiable intangibles 23,201 1 20,696 Selling, general and administrative 94,465 D (18,215) 76,250 Stock-based compensation 5,315 2 4,123 Total operating expenses 271,193 (44,022) 227,171 Contra-revenue 1,486 A 1,157 Income from operations (18,439) 45,508 27,069 Acquisition-related and other professional fees 9,545 D 6,974 Interest expense, net (9,557) E 3,191 (6,366) H Acquisition-related contingent consideration changes and compensation expense, net 248 3 929 Other income, net (5,712) - (5,712) Integration and other related costs 5,713 4 6,481 Earnings from equity method investment, net 2,200 F 437 2,637 Gain on sale of investment K (9,828) Loss before benefit from income taxes, net (31,508) 49,136 17,628 Amortization of equity method investment basis difference 437 F 547 Benefit from income taxes, net 8,780 G (16,090) (7,310) I Tax impact of adjustments (16,090) G (11,120) Net loss (22,728)$ 33,046$ 10,318$ Adjusted net income (non-GAAP) 10,318$ 11,487$ EBITDA Adjustments: Additional classification details: Depreciation and amortization 15,896$ J Amortization of acquired identifiable intangibles 23,201$ 1 20,696$ Interest expense, net 6,366 H Revenue - A - Acquisition related interest expense, net (75) D Cost of revenue 23,201 B 20,696 Provision for income taxes, net 7,310 I Adjusted EBITDA 39,815$ Stock-based compensation 5,315$ 2 4,123$ Cost of revenue 327 B 276 Research and development 923 C 752 GAAP Non-GAAP Selling, general and administrative 4,065 D 3,095 As Reported Adjusted Three Months Ended March 31, 2014 Net Loss Ref Adjustments Net Income Ref Acquisition-related contingent consideration changes and compensation expense, net 248$ 3 929$ Cost of revenue - B 36 Net revenue 158,808$ A 1,157 159,965$ Research and development 36 C - Cost of revenue 89,907 B (24,957) 64,950 Selling, general and administrative 212 D 893 Research and development 24,048 C (1,812) 22,236 Selling, general and administrative 67,486 D (12,434) 55,052 Integration and other related costs 5,713$ 4 6,481$ Total operating expenses 181,441 (39,203) 142,238 Cost of revenue 1,032 B 3,949 Income from operations (22,633) 40,360 17,727 Research and development 288 C 1,060 Interest expense, net (5,810) E 3,170 (2,640) H Selling, general and administrative 4,393 D 1,472 Other income, net 709 - 709 Gain on sale of investment 9,828 K (9,828) - Depreciation and amortization 15,896$ J 9,906$ Earnings from equity method investment, net 1,625 F 547 2,172 Cost of revenue 10,831 7,802 Income before provision for income taxes, net (16,281) 34,249 17,968 Research and development 1,545 806 Provision for income taxes, net 4,639 G (11,120) (6,481) I Selling, general and administrative 3,520 1,987 Net income (11,642)$ 23,129$ 11,487$ Fixed asset accelerated amortization / depreciation - (689) EBITDA Adjustments: Depreciation and amortization 9,906$ J Interest expense, net 2,640 H Provision for income taxes, net 6,481 I Adjusted EBITDA 30,514$ (Unaudited) (Unaudited) Three Months Ended March 31, DEALERTRACK TECHNOLOGIES, INC. DEALERTRACK TECHNOLOGIES, INC. Reconciliation of GAAP Net (Loss) Income to Non-GAAP Adjusted Net Income Proforma Reconciliation of GAAP Net (Loss) Income to Non-GAAP Measures (Dollars in thousands) (Dollars in thousands)

41 Revenue Adjusted for Acquisitions 1. Adjustments for Dealer.com and ASR Pro acquisitions. 2. Subscription and advertising revenue was adjusted for pro forma revenue as if acquisition of Dealer.com was included in prior results. ($ in millions) Year over Year Comparison Acquisitions Acquisitions Acquisitions Y/Y Comparison As Reported Adj'ments (3) Adjusted As Reported Adj'ments (1) Adjusted Transaction Revenue $77.7 $0.0 $77.7 $84.5 $0.0 $84.5 Subscription Revenue 62.0 $24.5 $86.5 100.3 (0.8) 99.5 Advertising & Other Revenue 19.1 $22.8 $41.9 55.4 (0.1) 55.4 Total Revenue $158.8 $47.3 $206.1 $240.2 ($0.9) $239.3 As Reported '15 As Reported vs vs Organic Growth, Y/Y Adjusted '14 As Reported Growth Transaction Revenue 8.7% 8.7% 8.7% Subscription Revenue 15.9% 61.8% 15.0% Advertising & Other Revenue 32.5% 190.3% 32.3% Total Revenue 16.6% 51.3% 16.1% Sequential Quarterly Comparison Acquisitions Acquisitions AcquiSitionS Q/Q Comparison As Reported Adj'ments Adjusted As Reported Adj'ments (2) Adjusted Transaction Revenue $80.4 $0.0 $80.4 $84.5 $0.0 $84.5 Subscription Revenue 98.5 0.0 98.5 100.3 (0.8) 99.5 Advertising & Other Revenue 58.5 0.0 58.5 55.4 (0.1) 55.4 Total Revenue $237.3 $0.0 $237.3 $240.2 ($0.9) $239.3 As Reported '15 As Reported vs vs Organic Growth, Q/Q Adjusted '14 As Reported Growth Transaction Revenue 5.1% 5.1% 5.1% Subscription Revenue 1.8% 1.8% 1.0% Advertising & Other Revenue (5.1%) (5.1%) (5.3%) Total Revenue 1.2% 1.2% 0.8% 3 Months Ended March 31, 2014 3 Months Ended December 31, 2014 3 Months Ended March 31, 2015 3 Months Ended March 31, 2015

42 Non - GAAP Net Cash Provided by Operating Activities 1. Assumes amounts are paid in same period as incurred. 2. Acquisition related contingent consideration and compensation expense are generally accrued over multiple periods (included in adjustment s a t (1 )). The adjustment reflects payment of such staypay and earnout amounts . 3. Adjustment Includes the impact of payment of significant acquired liabilities. ($ in thousands) YTD QTD Q1 Q2 Q3 Q4 Q4 Q1 March 31, 2014 June 30, 2014 September 30, 2014 December 31, 2014 December 31, 2014 March 31, 2015 Net cash (used) provided by operating activities (92,864) 30,179 48,074 45,001 30,390 (23,246) Integration and other related costs (1) 5,792 3,542 3,410 6,213 18,957 5,713 Acquisition-related and other professional fees (1) 6,974 900 315 5,143 13,332 9,470 Acquisition related contingent consideration and compensation expense, net (2) - 250 709 1,856 2,815 1,945 Purchase accounting and other acquisition related impacts (3) 69,000 - - - 69,000 6,693 Non-GAAP net cash provided by operating activities (11,098) 34,871 52,508 58,213 134,494 575 QTD

43 2015 Estimated Full Year Earnings Guidance and Assumptions Total New & Used Car Sales by Franchise Dealers 32.7 - 33.1 million units Weighted Average Shares Outstanding 57.2 million (Non - GAAP) 56 million (GAAP) Additional potential impact of dilution from the combination of convertible debt above warrant trigger and / or changes in current stock price are not included in share count. Cost Addbacks for Non - GAAP Measures $24.5 - $26.5 million Includes certain acquisition related foreign exchange gains / losses, professional fees, integration and other related costs, acquisition related compensation expense, and fair value adjustments Effective Tax Rate on Add - backs for Non - GAAP Measures 38% Effective Tax Rate on for GAAP Net Income 28% Revenue $1.085 - $1.105 billion Net of $4 million contra revenue. Expected $56 million contribution of incadea . GAAP Net Loss $(25.0) - $(21) million GAAP Net Loss per Share (Basic) $(0.45) - $(0.38) Adjusted EBITDA $222 - $227 million Adjusted Net Income (ANI) $80 - $85 million ANI per Share (Diluted) $1.40 - $1.49 Capital Expenditures $96 - $100 million . Guidance Measure Range Comments Guidance Assumption Assumption Comments

 

 

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