CDK - Earnings call transcript Q4 2021

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Operator

Thank you for standing by, and welcome to the CDK Global, Inc. Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions].

program recorded. today's reminder, a may be As And today's program, like to host for introduce your Taze now I'd Rowe, Treasurer. Please go ahead, sir.

Taze Rowe

good quarter call. and to you, afternoon. to like Thank welcome our fourth fiscal earnings XXXX I'd you

Operating Joining me are Tautges; call on Guerin. our Eric Officer, Krzanich; CFO, CEO, and Joe Brian today's Chief

be prepared will taking their Following we questions. remarks,

simultaneously Relations the webcast. call is posted and earnings release issued was today this press where after our market website Investor Our is investors.cdkglobal.com, being the close of at on

website presentation In Excel our of be our operations today's updated addition, remarks includes copy in involve call mentioned the could the with further which as not amounts Brian. include turn most contain in press forward-looking continuing schedule statements cause would it's refer the the amount release. basis. our percentages Throughout to discontinued risks to all during that only, growth and With pleasure differ change directly supplemental all an a year-over-year call, do the detailed everyone to the may These otherwise on which and to unless to afternoon's Reconciliations included of remind that to those referencing otherwise discussing amounts we'll uncertainties call statement. prepared specified. filings GAAP the actual period materially today. SEC, this the financial that a as like forward-looking Please in information I remarks financial our our statements. note are during references noted, be from of results results my International Unless over to for that, Business non-GAAP presented the are comparable are operations. on call adjusted adjusted the results, which we'll

Brian Krzanich

you, Taze, us everyone and joining Thank for today. to thanks

customers, solid positive pleased our from and $XXX in the closed quarter how continue we met up EPS business improve unique their opportunity ultimately, sets CDK more EBITDA challenges to the has in transformation trends with vehicles efficiently, today's stage debt retail transformation strengthened strong, year our the the and continued metrics, also OEM and determination reduce to in with XX% to achieved for sale the We fiscal CDK sheet, strategic in was we sites significantly fund site International growth company allowing the offering expectations, quarter. in growth. for And the and drive the which a growth help ongoing and and the the the up XXXX And the our dealer period businesses ongoing vehicles, by financial position understanding. am accelerating also this XXXX strengthen support service out dealers to at turn CDK. quarter. pandemic, run COVID day for million, of impact despite with of show the fourth site Digital fourth our our the markets, rebounding American acquisition the QX revenue we and partnership XXXX leaves the quarter, built the balance laser-focused industry, more with XXth with adjacency shutdowns, of again years and in pandemic to this of was highly sell up the height our these XXXX. auto than was me X% but for start strategic straight Marketing the was $X.XX. of Fueling from our underlying supporting XXXX, We is Combined company $XXX auto million more sale International discounts results software customers the adjacency the a record results us in of our in the in showing saying markets, per year and customers. strongly our North our [fractured] automotive along entire I core on more our Roadster Let markets. of last X% transition growth Business. of offered late both we And with the that wake of versus divestiture on auto industry. with every and Revenue pivotal recorded

heart ecosystem, the the in at future. lead are We every connecting vision of industry investing at our industry and into to our heavily the level the

We the recent acquisition Roadster. are dealerships of to consumers with connecting

application profitability. we Though now from a great solution. including to service CDK for with on a work part better intelligence sales as new end this coming with technician DMS the than is customers. recommend platform able at that of while to is data. our complete the them like exceeding We're departments the into set increasing already the to of industry are an suite continue we to Fortellis our XXXX, into across gain months, our connecting a the benefits, And enabling over right transformation Elead of And and a easily generating but service regardless allowing the right and integrations CRM. for Elead capabilities. stronger customer will continued satisfaction, get results. benefiting the invest record. built increase seamlessly, with our access our preview action. all-time solution, of their the Then need heavy by And solutions this investments XXX be growing us to we're traction of example our more intelligence, including Fortellis service, and and the time, intelligent advancement dealers leveraging the dealers lifting the extend their transactions, data continued CDK's in some Over connecting with that the platform, the to will DMS integration the DMS. Most providing the behind ability of existing employees within to in revenues, OEMs front repairs our lack financial customer will goal solutions million. Roadster million base is our we And dealer together right predictive Roadster's XXX we're and consumer of dealership predictive year significantly, year, In of the And connecting are far best-in-class

result, our accelerating year included As issues, line. continue And pleased a and will trends more reflects to and solid to data from be of that in bottom the to just systems cars. some and issues, fourth the for our in coming resulting the Eric have and details which production growth continued few the constraints indicates We've tighter provide earnings I'm in auto supply due sales used quarter. remains fairly which top both minutes. both into themes continued in a our supply earnings presentation, XXXX, new OEMs strong largely for Despite pricing face dealer demand and inventory. chain are the guidance

to As into have strong larger, partner profitability. Consolidation, CDK, strategic and remain expect strong profits tailwind is XXXX. along into consolidation, more site will theme acquisitive maintaining been us strong those sales dealers which benefits we And us consolidation as count continue successful a installation we with to see a for given that And our continue growth. helped dealers. investing efforts, result, in our a interested a position in our dealers

that to applications force like as products creating build. continue continue strong continue We're and of CDK we These for These XXXX. we to help customer we're moves OnePay our most the automotive Roadster investing and we future. CDK excited enter sales others follow for the and Roadster to lead be than sales show as we models retail forward, to force products evolving the at the enter And it and the ever CRM in will on rolling faster and we will see show the its confident are we powerful to the We that in out forefront landscape field. platforms be strategic is help CDK XXXX. as developing that is infrastructure And service. industry growth that continue experience

develop associated Joe, before this like with prouder partners, to together really pass what just Despite and continue pandemic and economic over achieved the employees, starting by XXXX. year. promising the deliver driven efforts industry. a our in worked solutions to forward the thank look and I challenges and implement XXXX we these all and innovation for of Now to stakeholders: their to our support and to global our we And significant our of support be I challenges, customers couldn't technology year improvements for to uncertainty and I I'd

now So the over to it Joe business for I'll turn highlights.

Joe Tautges

Thanks, Brian.

talked As the continued including our products new providing we and enhancements Brian like said, progress made significant last open customers. have the with investments through years, with the about in we X Fortellis pleased and over to existing we've integrations the quarter are Brian momentum fourth platform. Roadster, the we made solutions the

serve. strengthen groups, dealer departments, dealership with unify to is the they and their and connection goal consumers OEMs Our

with customers, to resonating partnership is our are finding dealers approach Our with team CDK. our sales and receptive is increased

We deeply to satisfaction understanding on the also continue focus our of customers.

show Score positive continued sentiment. Promoter recent Our Net results

sites Our easy at hub thinks when strong and in than as and its site systems, the consistent focus evidenced the satisfaction success Its to customer in auto across customers has in that Drive do remains resulted dealer solidly forefront performance CDK NPS drove and and our strong increases with growth, technology dealers, being on the is improvement compared strategic in in retention of investing The product consumers. for results central industry all of more resulted X%. existing connects business to management When continued products. by OEMs which increased even up support last our quarter.

had that can demand. robust quarter. need of excited functionality to we of to share capabilities offering addition, wins we traced integrations, competitive last the be X-plus and In This unmatched X are sites Drive's accomplishment groups dealer dealers and

adjacency We XXXX. than quarter pleased the saw -- to more solid strongly from growth continues well, We rebounded our which site the quarter well, growth in perform revenue count are site fourth as of also X%. rising that

momentum support recall, of QX, onetime to COVID by dealer gave the was You'll pandemic. to customers third X-plus business. in Compared of dealers, Recurring but revenue site to down the per XXXX adjacencies show X% X-site might a dealers. the quarter growth X- X% of in the site among discounts better our slightly face QX annualized in nicely impacted revenue we was and the be to auto we have the in for rose continued comparison from

the continue market with to win strategic we DMS, in applications. key Beyond

year with growth to of value to and Elead strong Service, Elead Stock driving more Connect, sites. to than finished Dealers that and Cloud addition the the am the CDK sales see I X,XXX excited in In service. continue say Cloud in

biggest on Roadster. front course, the is news acquisition our application the of Of

and sales user the both start experience digital the with online a in experience enabling lets and a the solution on an dealers that online in our of side and to processes. omnichannel combining mentioned, are with jacket, them adoption leading experience, one storage store. Brian in-store Roadster CRM brings accelerating consumer-facing anywhere for for Roadster, are Elead deal By As best signing we market digital or consumers, their capabilities, OEMs modern choose, the seamless end-to-end they eSign. from in document and and retail retailing assets

Our have sales aggressive in team XXX-day plan the to core. and is CDK team into further on another strong track technology with Roadster to the an for build is our asset integration excited portfolio

XXXX, have in to we efforts continued Looking DMS XXXX drive set penetration. forward build our and customer growth on The better to continue and for I application metrics will and table increase team in a confident made the corresponding associated to am experience sites accelerate the growth.

about me me have the Let a tell next initiatives year. bit excited that for the you

need providing side, XXXX they consumer the is dealers we On focus on year the improve experience. capabilities technology where will to a the

will in the transformation department. we're to example, finance of dealers’ functions that the enable expand For back office the digital pilot

Drive will we We for as of in service shepherd are experience. simplifying failure. Brian results to And easier of thousands through better and vehicles, quickly allow the and a In from it historical consumer the technician the and we turn, many to be to a probability creates components workflow for will intelligence predictive high By sales deals navigation increased dealer capabilities, learning combining predict data analytics, the repair what machine systems delivering revenue for a have with this beginning within service. first the F&I advanced mentioned, process. make built-in records

we optimize by have on also the efforts in service XXXX, to improvement action by to and they wait needed teams Throughout dealers. We continue our take progress almost will making to center have made their the resources times our half, they call information sure to process make sure customer to focusing reducing need dealers run support business.

in continue to resolution further aggressive momentum that adding expect on We also responsiveness. and reducing improve to are times XXXX goals

team. creation Beyond of DMS are our customer existing product steps the we also dealers additional a core to universal base, taking sales through new on platforms help non-CDK

stepping and are dealers Elead, choice. customer to experience and Dealer DMS universal Roadster of regardless efforts up can improved We productivity IT sell the for Solutions that products drive like

to of and universal open on have the Fortellis, we actively see connects and a APIs dealers as developers. CDK the to ecosystem continue Fortellis Turning adoption platform publishing Fortellis. developers that been other

needs industry-leading Specifically, this results that with responded continue scalable, self-service has to our in focus show choices for that invested the over enhancements our power build Fortellis APIs better quickly partner we dealers It's connectivity. to with them point to innovate Eric is allows with on results. an been XX market. our on and service To core possible pleased fit the for and product now that to with APIs. and we providing of to financial CDK's an enter and developers to in to improve drive to and focus being offerings, we integrate help marketplace providing new customer-first as a their quite improved are technology The the I'll exciting ensure dealers more like and progress business platform on technology, continue them We'll workflows has new our at turn adapt journey. it CDK's their We've and ever-changing XXXX with help market best we applications these performance. conclude, a as heavily that third-party strategy execute using systems. our than position I'm and

Eric Guerin

Joe, everyone. good afternoon, Thanks, and

for performance accelerated year had expectations XXXX. Brian that close As positioned we we with solid in and Joe are mentioned, to and growth our met a financial the

businesses. me impact from last by up and include not are year, you COVID Fourth in last XX% with and and rebounding volumes. XXXX. XXXX out partner growth XXX XXXX to in revenue partially was XXXX $XX presented on sites was continuing offset million, from as as to I'd of impacts, including of revenue modest remind Transaction the to customers start Consulting million, revenue million, in headwinds versus fiscal is everyone International results. ASC by XX% timing revenue XXXX, which revenue results, discontinued transactions registration hardware year's like for continues XX% we growth for reflecting credit see that growth check impact reflects strong up our revenue these only, If of Business, program. $XX under impacts, the solid strip for year. the Let the through we was and COVID challenged quarter both strong the fourth million, last operations. be Other compare and discounts revenue hardware improvements in sales year recognition was X% revenue, vehicle Subscription results walking particularly COVID-impacted shift the operations we $XXX of COVID up versus some the linger. business. still quarter do $XXX in recognition call to This and provided the accounting center

in subscription rebound XXXX, For the a COVID of reflecting that on impact and revenue revenues. grew of year, billion $X.XXX the transactions revenue versus offset X% fiscal other

Travel ongoing earnings. and the grew million. to the positive X% more costs offset headcount $XXX EBITDA strategic The to in costs compensation, travel employee entertainment EBITDA COVID reflecting impact Fourth XXXX COVID. and million growth a interactions. due in driven $XX due and on partially performance. investments by $XXX related by by revenue bonus impact and lower by of revenue related also the offset strategic investments COVID quarter partially of of year was our to higher quarter, bonus QX accelerated to financial by fell waned and impact growth Now impact higher higher and entertainment costs, in-person turning our was the of the increase allowing of of impact in as to incentive to headcount reversal X% driven million a higher attainment, Full

the Our reduced was Free to higher year expense. EPS interest Earnings EBITDA EBITDA, lower $X.XX $X.XX, both tax due the in full reflecting $XXX effective quarter amortization partially year. for and and by driven rate tax debt flow depreciation Full lower the cash and rate, fell share million the the XX.X% offset to by X% higher expense was per expense year. higher reduction. quarter at to XX% solid rose interest for effective and

year-end. Our fiscal remains at balance strong sheet

the Roadster repayment in by to in Our dividends quarter the total fell million, bringing cash million of balance our the our driven year. bonds. $XXX million and We $XX paid acquisition $XX of XXXX quarter, for the to of the

fourth the common during We the announcement as also our repurchased the we our of restarted stock of deal. $XX share million program Roadster repurchase quarter after

$XXX the to these $XXX are under to million reminder, fiscal a the repurchase first XXXX. by repurchases of plan our of million stock end As

debt at net X.Xx EBITDA to move up as in the range to acquisitions X.Xx, X.Xx of Xx towards shareholder was pace to adjusted a we target in to approach that growth and measured drive returns. our quarter a accommodates continue from Our and back third balanced investment

pipeline M&A invest strong value. create in transactions remains shareholder to to and continue that expect we Our

XXXX. fiscal to Turning

expect of $XXX $X.XX EBITDA of growth million This each represents of effective to million to guidance rate to an the $X.XX $X.XX X%, and revenue and $X.XX at tax EPS. of midpoint XX.X% EPS for We to X% billion EBITDA and revenue of billion, X% and $XXX XX.X%.

Roadster long-term in consistent the ramp the Square X its X with in we growth in set is to growth, the the will helped but in incremental required questions. summary, and improve long-term business beyond. That underlying now and table point XXXX improvement strategy. our customer-focused reflects as of to X adding accelerated top our for metrics Root prior guidance about to customer and our points open growth XXXX you. of acquisitions, invest a revenue, And continues businesses. XXXX for acquisition, line CDK Thank strategy. executing we In on in With and significant impact drag the earnings key in achieve in Absent less line us of Operator? to progress to investment our make outlook XXXX strategy

Operator

Instructions]. [Operator

First question Baer the of comes Morgan from from line Stanley. Josh

Josh Baer

the you the wondering any a on talk give has this? double this little I also with stepped about Could wanted there cases? to you associated if could then context transaction click around up dramatically. And use Fortellis, revenue more on step-up

Brian Krzanich

absolute more want. can little then Eric growth. Josh, little This a and continued talk if -- revenue It's start. like Joe of about is the showing talk and and Brian, can all, bit you Sure. just I'll bit more I they let a number

So we is XXX more continuing CDK Fortellis. write But order into API. get to more APIs what to and I more third-party the going value And to you growth back our are what's will step still most case kind and even the repair about the service continue There's our of use #X to want is talk Fortellis, growth over we second now join. APIs future. see Definitely to of Fortellis for the where of in of and and a strategy and APIs. fuel

push our and don't investment goal million of it connections a XXX come. allows, we'll Our the XXx quite up this to basically right, hit for know basically as it. we're software, modernize billion And what grow this year, is the into to transactions of and is but X APIs has and trying where if more we get our I to more through lot 'XX. fiscal

they're Roadster, us OnePay, can well data do allow our what like API-based and we products, those As them. CDK their like modern we and acquisitions integrate those do integrate to transfers, as because they're as with partnerships we do is

Roadster XXX-day integration. we this plan built So for

would something and been complex Roadster. You without have integrate could have that It months as Fortellis. try as to done not

integrated comes and as Elead So it's the and and through that integrated and fuel Roadster through will into Fortellis driven online, into DMS. now Fortellis

allow the through use will of APIs You'll many transactions as OnePay partnerships integrate. grow we application. coming other Roadster And see to to posted thousands, many, Fortellis millions we we have coming that the for companies

acquisitions partnerships, of share. like where have we those of revenue Some are some are those OnePay and

API comes about all value, all where set, it like you repair And we of really a couple are right? We checks, order talk do of a the we from generation when win the the there One, places. do the of so have what's of lot profit of verification. Fortellis, warranty places

be and to in All that basically was things of paid generate rev and do set and going not then generate things Roadster, form that And better OnePay. get repair now going that we those combined those more for charge that us card like APIs. are there not that's transactions allow connection be acquisitions for add than shares partnerships able the something that and us stuff where example, of the able to another share there's we're get in And value, like to service and -- Fortellis, to way. for may goes revenue then Then to separate, we through we'll integrate paid order -- you we those like but of credit APIs that. space we're will revenue happened, through through where

many think Fortellis, of these interactions So have you is in to all to forms. all when think come revenue APIs, of about these and about going you new

sometimes, but we add Fortellis, was almost with necessarily don't Joe Fortellis. if without want And guys it won't you to I to like impossible Eric, if know with associate more. and do it OnePay,

Joe Tautges

it revenue XXX described. million Josh, multiple a I business we're seeing is, over being that would and BK. I you areas No, real come you transactions, think What now across have covered well, say Brian in

disclosing this point, it dealers, So payment general we're which release modernization OnePay, to but is at would for in June. I our not say live separately went

And 'XX out you revenue of year. is seeds go next service our into is contributor. growth largest a start The as really, 'XX, and picking will 'XX. Brian that for Lyft back plant discussed lot doing well. these beyond accelerated integration up So look

future seeds planting ecosystem these that there's expand just growth, that So a for mature exponentially to you continue see will 'XX. more now each of in

Operator

[Operator Instructions].

Ian from the from comes Oppenheimer. question of next Zaffino Our line

Mark Zhang

for This Ian. on is Mark

should XXXX? customers needed you update adoption guys I yet? on guess, investments far? we expect of are Have more maybe maybe so a you sort seen like detailed guys can beyond how the Roadster that from give more And performed So any has

Joe Tautges

excited Mahesh dealerships. in way the XXX-day have where transformational tech tell September. will a franchise to the that's I workflow integrate going responsiveness a it hear interested And stitch and through for to just Thanks track, very more much have to sell you to you're -- visiting with positive, when we just simplify team that about what life for. much are create has us see the And in, say expectations customer about came it OEMs a what and experience delivered with that you day the quite the and And even we board, the DMS. plan about all experience to how be question. being puzzle is the do retailing to are and Roadster experience proven be and the What dealers you'll cars, how of better I Roadster talk with I interested our and connect customers. my efficiently through together has a we a modernize that in, the can experience. dealers to vehicles benefits how now and that And to That closed the Roadster, quite to create service create Andy deliver more for can I hear are going you Elead, an through final do team better workflow Sure. you really that it dealership really run modern more connects piece to on leadership help Roadster really to be do got more integration it's the better And in been we from for customers. on would our market big And able for experience

Brian Krzanich

Brian. Mark, one I'd to Joe This what like to add thing is said.

the and that drop pajamas -- up more it importantly, out a they point going up is Though there They are But getting a commercials, happens can longer car a and will car genuinely introduction what at want talk names drive, some the all experience who in at deliver may to linked allow get now, all out the sit and and any right? picking to all to our in the in platform. driveway. to getting around can on because car several dealership that your to where sit to drop shows see you it will them are that that is for your It to And want This paperwork we them buy that want just that's you people occur. about what in people Roadster get but dealership even you to trying know take money and order to and really test hours there's walk not insurance. way, sitting get need Bluetooth mentioned they the all to for moving obscure TV I ship these If still their competitors' -- the do you the takes out help everywhere. in and in spend you right? there there ones the to car there in, take of here look there. transaction from you there have long having never the necessarily, with companies and

something what is capable it's beyond or So like cases in most that.

can and -- drop integration the DMS points they be Roadster there So to What CDK may perfect. out occur is you any penny interaction and are to drop and point that want various allowing out. at

You will able drop could and everything be all done, have of of to out you you you will your prepayment done. that have done, have loan can

in a be quick the that dealership, at done. to X is let's that's in test your X there done is signature is papers drive paperwork insurance your those. in the you do and So our financing and paperwork, payoff want show are or all out and when that's wet of of very your required to is go, right, way, have minutes. a done, say by done And all done, up And and to your quick allow a up, you sign and can law goal, some you're show XX

to all go want where point the do it's to the you driveway, delivered way your If to in be that. able you'll

to be it's for and to experience the provide continuum for able the dealer give that of that So experience. continuum to consumer of

Joe Tautges

would investing X% it's I question Eric worth add. his we factors. through that at section, about look And pointing I point growth the a when there's just Mark, was of I the X a out, your side. in think at around about guidance. our talked of combination XXXX midpoint thinking

as you're core momentum the the business we're in as momentum making. so seeing acquisitions well from And healthy positive underlying

you a invest at leaning Secondly, have, you look to the really response we're when and the 'XX that year -- margin front, quite we momentum. -- confidence behind given really at investing is big 'XX we're the of the around in we are seeing, given EBITDA front, heavily look in

look I And think the think out. pointing worth when at so I picture, you that's total

Mark Zhang

helpful. one I then just more. That's Okay. guess maybe And

could see X just of that to a another trend sense to guys relate growth. the then quarter Can deals of trended? smaller dealers? does You larger X sort And give have the you site maybe how how

Joe Tautges

so support you at customer drive sales experience at customer and sites. really team momentum look experience. important. is and lot positive well of X-plus we the the Thanks, really around We I'm with sites, We're install proud the improvement improving talk and and so that that and whether everything rallying as team customer you of to Herbers as the coming in X our retention look site do the sales, the great portfolio, the Yes. putting about to Mark. whether seeing X our have really center across at the Listen, done a done job team The work grow count just done team and over work X%. we've Scott a has improving

really acceleration. applications year, up, the today. into flattening to look amount of that last got X We've an of Brian you're the on because sites, that quarters. as flattening been it's bring is seeing the in had able And prepared in sell then through our work some and you're the heading the you're been several X-plus, remarks retention at On business. penetrated solutions a really And has of Q&A of seeing revenue. we've when well And X in particularly, his a into -- is to as most the base, described we've that that I highest the the next seeing revenue

X to turn trend continuing corner. continuing I X of way long to -- is question, a the better. doing So see to answering it your

first and customer excited. at putting strength really we're service is our sentiment the customers resonating, Our and in the

Operator

of question line the next Barrington Gary Our from Research. comes Prestopino from

Gary Prestopino

questions here. Several

guidance, like fiscal profile, on your looks 'XX. got million but to usually I of of from $XX million your a on calls, at guidance don't look degradation margin I ask versus As it anywhere and based -- conference 'XX you've questions EBITDA year-over-year adjusted $XX

model, guess -- equal, have things that at But X.X% business. to some expansion. I the the business you looking X.X% given all leverage should So in the investing if sales you're being the appreciate margin you're growth, I in fact

you of So a some and fire I function in are of beyond? Or at to the a in the got of it step-up all this company is structure permanent have, question we you've here? I this grow invest cost need really guess to irons looking the the number year

Eric Guerin

not is little Yes. detail. more a provide is Thanks Eric. it question short, then is for a I'll the No, answer your It step-up. you to not, question. This permanent in and

in comments, business. invest to his As mentioned about are Root. continue and to in we we excited that Square Roadster going And really had are Joe

want this get We We a to to off really start. plan. have XXX-day good

Elead, As sites. is acquisition with you've we've what seen X,XXX to done highlighted we've up that

we about can Roadster we develop that and 'XX are experience. are in integration going experience, end-to-end complete excited that to We to sure make get really invest and really that

Gary Prestopino

with get talking well? make -- does negotiate in car a completely could car seamless Roadster can Okay. if transaction? As you the buy And and to ability about the give then or in online for you you trade a to a totally dealer possibly platform car your value as general, it theoretically there, that can just your you

Brian Krzanich

answer The is simple This yes. Brian. is

investments into perfect. about of you these are some penny So talked that these some when things you right? And and have DMS can only to do, of we of that the I are the today that are go making things things some available are So fully through process. these features integrate

a get for that trade-in a there And So your car. you'll able value on do to agree you'll be already able price, as well. that places are to be

that if value go your payoff there car, things be car. do is to out the known how the is get able payoff out the to it's of there. and that do you for So a so to And have other on one

penny those well. all we're is at to who are get goal. new our So of end being that complex, as Those the sale the there's looking that a of can very things down And and few through do very able to things go and car.

step-up. Some of we point, those are this are to those X, Eric's of within the plan not make XXX-day and to some out. some X months do permanent And

the cost infancy that we've job. our sites. really DMS realize map done itself, of company got out years owned X.X it is is think a when example, phenomenal improved more the on structure that a than acquired in Elead product, great been on and road our was for I And both -- the right? it it, its we buy there. When got of growth agnostic a sub-X,XXX technology the and a We've you number we've -- Elead the In You good Elead, sites doubled dramatically we've to where those DMS. has we've to

will same the continue work Roadster, other it well. with will Roadster. to integrated do ours, we'll with as be So more it but DMS into

we we and that advancements advancements okay, meant up into get as of these look it 'XX to going this to year not it to will to it so And meant and through this. 'XX, technology And back-end of really technology to and back say, not that. beyond. but advancements It's growth fuel some we is do bring move half meant to it it get negative technology to meant margin bit the is like integrated, it 'XX alignment but is to not at but invest we're

Joe Tautges

BK of great mean its And our the to it's equal XX% point our margins And X that profile. core sites, for there same guidance impact core X,XXX when the margins such and we the gross seeing look playbook that's the just with digit, what it, years think to are range. I made. and point very Hey, home with really at you're Roadster, I software in very, it's growing EBITDA, a that's now that low was. later using its Gary, business double the were -- again, just just we're you at bought when the me, drive I Elead, in want business

Sorry.

Gary Prestopino

Roadster? Okay. And base? an layered is it did transactions? -- Roadster are subscription installed just regular Does any Is app it of a have pricing Or you add-on priced kind on how product?

Joe Tautges

Yes. Connected over Roadster did have our Roadster When a we've combination of look Store the base. product, X,XXX sites. good at you subscription and got

look X,XXX, a question, of Elead and Roadster was just And see installed opportunity. great when very good at your of a to X,XXX, you base we opportunity workflow again, have huge Gary? that a We What second together. connect

Gary Prestopino

It's pricing it, just how a you're Joe, it subscription? just is

Joe Tautges

per subscription. subscription. a site is Yes, It

Operator

any does Brian [Operator Pfau conclude the for the hand today's program. Instructions]. Matt this session line like I'd to William a we the remark have program actually, Blair. oh, -- from of question-and-answer Krzanich to of back And question further from

Matt Pfau

had Just a you first, competitive cited. X I that on the wins question

you detail Just know maybe what I customer some on drove And that. cited as well. more couple last quarter, takebacks a

service be competitively. pretty seems seems doing resonating you're it well with that something to So customer and product like the

Brian Krzanich

can Joe then add. and start can I Brian. Sure. is This

to well the the whole we and customer it just resonated years you resonate focus has I with X.X So was customers well. would effort tell ago continues started our really

of and now, -- technology the -- Fortellis that ease their extract has driving they mentioned it the the program fees with combine they're whether own And in these things and use that whether -- NPS Joe our of You be Fortellis are for to lot XPA which reduced the his already in the product. seeing fees, them, of remarks. all improvement partner numbers are using they the product, it's the data the of a

And we're the those combine Roadster whether and or win them making those new. we've are it all service there They sometimes map, the deliver seen And of wants the credibility scores, and can of allowing us of believe OnePay our be because the NPS we're the the belief. and road getting find try things products. integration still maps. customer of both backs Elead to And in that they've we or grow you done. these, those now then something them out improvement We're maintain. of because to road think what can We're have showing So the you improvements all acquisition application. we the a out there in showing I

follow data supportive. transfers. worry. We with it, them. we here the very, issues, help up and are hooked We run to tell leave very We them them to We them We're necessarily up. don't if that they so in we into in back go don't de-install. call you And look, with continue

in, you had, them. is for you had you for want here, you worked the Are here's saying, But there map back sure us. had. and then well supportive really the don't what you we back are going we're we're And on?" "Look, pricing product to just So it doing it's the turn road

but use else? do for oftentimes all Joe, think it's that. to to thing continue anything what's them the customer, So is CDK. part of we best We want to best for the

Joe Tautges

us. covered well. you big year highlight a is other it 'XX for perfect. is The really give It's I No, only would

I and continue create front. excited front that and build And momentum progress technology on the another that the and think that going both on. we're to to service up the we'll we're the game notch,

Matt Pfau

Got it, more. guys. And then just one

less a keep move wanted to and a announced Ford about inventory ago, think dealer that month build-to-order lots. the I more model to they on

have does business or any Just positively impact on wondering, that your negatively?

Brian Krzanich

I'll start right? acquisitions, is will input order, it then take from I the can I think it's Roadster and do any actually can the This asked build source. a Yes. Brian. couldn't the positive the way mean we others Because have in. like Roadster is a timing, join and to way work better for to

OEM talks that's think website, whether OEM the is, defined. will So of the say, OEM that But the what to website some build-to-order let's it. be care website to happens I be happen that then we don't the still it build will dealer to the on or website

the out that what to they Because doesn't build what requirements whatever F&I take of go to the do to go all to the do, but that in. want their dealer OEM payoff and to want don't ability then figure right? input the They to or Our really pricing work don't are. trade They want price their is. want has find their out

Roadster be that workload of take very And it all to through able so push seamlessly. we'll and through

dealers they do do deliver the this and in looking the between this be do So to for really the problem us, this is like solver and us business. how are to great, medium their really within to

So uniquely advantaged that are we for. it's actually we something think

Operator

question-answer does the hand session. further conclude Brian the like any I'd for to back This program to remarks.

Brian Krzanich

Sure.

importantly, a So also I to chance for just really really business call. everybody about. It that a thank CDK want and up employees, XXXX. I is delivered XXXX outstanding. And XXXX like breakthrough record first in that more even work I thank joining really And right? were do excited us to to a meant a really be results set did the they year. the we're And gives it to describe all appreciate. The hard

to things about but the I the by saw top that are grow very or by to better by in I doing high And we're line just X% we more And deliver And penetration share, number that excited growing is it’s growth. products. prices that, you You ways this by think business. year it. our quite not mean history. those and increasing and that, and delivering are really very more into products, a is of our the company's confident like want that moving

you very much. So we're of all about I'd for And to very call. thank great hope I have you rest excited your day. like XXXX. you thank a the joining

Operator

for Thank program. This conference. does today's your you, ladies conclude participation and the in gentlemen

You disconnect. Good may now today.

CDK Global (CDK) 17 Aug 212021 Q4 Earnings call transcript