Current Report Filing (8-k)

 

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): August 11, 2014

 

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: [phone]

 

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 August 11, 2014

EX-99.2: Registrant’s August 2014 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 second quarter of 2014 as presented in a press release of August 11, 2014. 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 August 11, 2014, 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 August 11, 2014
99.2		Registrant’s August 2014 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: August 11, 2014

 

	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 August 11, 2014
99.2		Registrant’s August 2014 Investor Presentation

 

 

 

Exhibit 99.1

 

MEDIA CONTACT:

Ken Engberg

[e-mail]

[phone]

 

INVESTOR CONTACT:

Garo Toomajanian

[e-mail]

[phone]

 

Dealertrack Technologies Reports Second Quarter 2014 Financial Results

 

Reports 85% Year over Year Revenue Growth

Raises 2014 Guidance to Reflect Strong Second Quarter Performance and Business Momentum

 

Lake Success, N.Y., August 11, 2014 – Dealertrack Technologies, Inc. (NASDAQ: TRAK) today reported financial results for the second quarter ended June 30, 2014.

 

GAAP Results for the Second Quarter 2014

§

Revenue for the quarter was $224.8 million, as compared to $121.8 million for 2013.

§

GAAP net loss for the quarter was $(1.4) million, as compared to GAAP net income of $3.8 million for 2013.

§

Diluted GAAP net loss per share for the quarter was $(0.03), as compared to diluted GAAP net income per share of $0.09 for 2013.

 

Non-GAAP Results for the Second Quarter 2014

§

Adjusted EBITDA for the quarter was $50.1 million, as compared to $32.8 million for 2013.

§

Adjusted net income for the quarter was $22.4 million, as compared to $16.7 million for 2013.

§

Diluted adjusted net income per share for the quarter was $0.41, as compared to $0.37 for 2013.

 

GAAP Results for the Six Months Ended June 30, 2014

§

Revenue for the period was $383.6 million, as compared to $230.8 million for 2013.

§

GAAP net loss for the period was $(13.0) million, as compared to GAAP net income of $3.8 million for 2013.

§

Diluted GAAP net loss per share for the period was $ (0.26), as compared to diluted GAAP net income per share of $0.09 for 2013.

GAAP net loss for the six months ended June 30, 2014, was negatively impacted by a $7.5 million, or $0.15 per share, non-cash charge (net of taxes) relating to certain changes in expected asset use as Dealertrack integrates acquired solutions, and was positively impacted by a $6.8 million, or $0.13 per share, gain (net of taxes) on the sale of Dealertrack’s investment in TrueCar, Inc.

 

Non-GAAP Results for the Six Months Ended June 30, 2014

§

Adjusted EBITDA for the period was $80.6 million, as compared to $57.1 million for 2013.

§

Adjusted net income for the period was $33.9 million, as compared to $28.7 million for 2013.

§

Diluted adjusted net income per share for the period was $0.65, as compared to $0.64 for 2013.

 

Page 1

 

Mark F. O’Neil, chairman and chief executive officer of Dealertrack Technologies, Inc., commented, “We reported a strong second quarter financially as we continue on our journey to transform automotive retailing for our dealer clients. We completed the first full quarter with Dealer.com in our results, and we are particularly excited about the contributions that new subscription and advertising solutions are having on our overall growth and revenue visibility. We achieved organic growth of 21 percent for the second quarter in a row. As a result, we are increasing our full year revenue and profitability guidance to reflect our strong performance in the second quarter and growing confidence that our vision to deliver a suite of integrated technologies capable of transforming automotive retailing is resonating with our clients.”

 

Updated Guidance for 2014
Dealertrack increased its 2014 annual revenue guidance and updated profitability guidance, as follows:

 

Expected GAAP Results

§

Revenue for the year is expected to be between $829.0 million and $843.0 million, an increase from prior guidance of between $814.0 million and $826.0 million.

§

GAAP net loss for the year is expected to be between $(12.0) million and $(7.0) million, an improvement from prior guidance of between $(18.0) million and $(12.0) million.

§

Diluted GAAP net loss per share for the year is expected to be between $(0.23) and $(0.13), an improvement from prior guidance of between $(0.34) and $(0.23) per share.

 

Expected Non-GAAP Results
Dealertrack has increased its 2014 annual non-GAAP guidance, as follows:

§

Adjusted EBITDA for the year is expected to be between $186.0 million and $190.0 million, an increase from prior guidance of between $180.0 million and $188.0 million.

§

Adjusted net income for the year is expected to be between $81.0 million and $86.0 million, an increase from prior guidance of between $78.0 million and $84.0 million.

§

Diluted adjusted net income per share for the year is expected to be between $1.47 and $1.56, an increase from prior guidance of $1.42 and $1.53 per share.

 

Diluted GAAP net loss per share and diluted adjusted net income per share guidance for 2014 continue to be based on an estimated diluted share count of 53 million and 55 million shares, respectively. The guidance also continues to assume that new car sales by franchised dealers will be approximately 16.2 million units and used car sales by franchised dealers will be approximately 15.9 million units in 2014.

 
Conference Call

 

Dealertrack will host a conference call to discuss its second quarter 2014 results, as well as its 2014 guidance, on August 11, 2014, at 5:00 p.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.

 

Page 2

 

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 expense 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 expense 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 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 more than 20,000 dealers with more than 1,400 lenders, Dealertrack Technologies delivers the industry's most comprehensive solution set for automotive retailers, including Dealer Management System (DMS), Inventory, F&I Solutions, Digital Marketing and Registration and Titling solutions. For more information visit www.dealertrack.com.

 

Page 3

  

Safe Harbor for Forward-Looking and Cautionary Statements

 

Statements in this press release regarding Dealertrack’s expected 2014 performance based on both GAAP and non-GAAP measures, 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 ADP, AutoTrader, Open Dealer Exchange, Reynolds and Reynolds, and RouteOne; the impact of some vendors of software products for automotive dealers making it more difficult for Dealertrack’s customers to use Dealertrack’s solutions and services; security breaches, interruptions, failures and/or other errors involving Dealertrack’s systems or networks; the failure or inability to execute any element of Dealertrack’s business strategy, including selling additional products and services to existing and new customers; Dealertrack’s success in implementing an ERP system; the volatility of Dealertrack’s 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 Dealertrack may pursue; Dealertrack’s 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; and other risks listed in Dealertrack’s 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 Dealertrack’s 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.

 

Page 4

  

DEALERTRACK TECHNOLOGIES, INC.

Consolidated Statements of Operations

(In thousands, except per share amounts)

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
Net revenue		$	224,767			$	121,782			$	383,575			$	230,841
Cost of revenue			119,461				51,997				209,368				100,207
Research and development			27,136				18,269				51,184				35,899
Selling, general and administrative			74,637				43,887				142,123				86,355
Total operating expenses			221,234				114,153				402,675				222,461
Income (loss) from operations			3,533				7,629				(19,100	)			8,380
Interest expense, net			(9,737	)			(3,228	)			(15,547	)			(6,468	)
Other income, net			129				62				838				128
Gain on sale of investment			—				—				9,828				—
Earnings from equity method investment, net			1,907				1,279				3,532				2,498
(Loss) income before benefit from (provision for) income taxes, net			(4,168	)			5,742				(20,449	)			4,538
Benefit from (provision for) income taxes, net			2,793				(1,903	)			7,432				(733	)
Net (loss) income		$	(1,375	)		$	3,839			$	(13,017	)		$	3,805
Basic net (loss) income per share		$	(0.03	)		$	0.09			$	(0.26	)		$	0.09
Diluted net (loss) income per share		$	(0.03	)		$	0.09			$	(0.26	)		$	0.09
Weighted average common stock outstanding (basic)			53,642				43,545				50,514				43,360
Weighted average common stock outstanding (diluted)			53,642				44,881				50,514				44,741
Adjusted EBITDA (non-GAAP) (a)		$	50,121			$	32,835			$	80,636			$	57,064
Adjusted EBITDA margin (non-GAAP) (b)			22	%			27	%			21	%			25	%
Adjusted net income (non-GAAP) (a)		$	22,427			$	16,702			$	33,915			$	28,738
Shares used for diluted adjusted net income per share (c)			55,031				44,881				52,334				44,741
Diluted adjusted net income per share (non-GAAP)		$	0.41			$	0.37			$	0.65			$	0.64
Stock-based compensation expense was classified as follows:
Cost of revenue		$	249			$	319			$	525			$	590
Research and development			753				662				1,505				1,251
Selling, general and administrative			3,291				2,874				6,386				5,285
		$	4,293			$	3,855			$	8,416			$	7,126

 

(a) See Reconciliation Data.

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

(c) For the three months ended June 30, 2014, the diluted weighted average shares outstanding includes 1,389 thousand shares related to options to purchase common stock and restricted common stock units and does not include 731 thousand shares related to our senior convertible notes. For the six months ended June 30, 2014, the diluted weighted average shares outstanding includes 1,765 thousand shares related to options to purchase common stock and restricted common stock units and 56 thousand shares related to our warrants and does not include 1,066 thousand shares related to our senior convertible notes.

 

Page 5

  

DEALERTRACK TECHNOLOGIES, INC.

Condensed Consolidated Balance Sheets

(Dollars in thousands)

(Unaudited)

 

		June 30,				December 31,
		2014				2013
ASSETS
Cash and cash equivalents		$	128,513			$	122,373
Marketable securities			5,131				10,589
Customer funds and customer funds receivable			32,130				25,901
Accounts receivable, net			100,552				48,349
Deferred tax assets, net			22,938				6,331
Prepaid expenses and other current assets			30,002				21,314
Total current assets			319,266				234,857
Property and equipment, net			83,351				31,866
Investments – cost and equity			36,135				119,318
Software and website development costs, net			77,421				62,513
Intangible assets, net			565,130				136,754
Goodwill			1,052,013				316,130
Deferred tax assets, net			61,501				40,421
Other assets – long-term			24,137				14,616
Total assets		$	2,218,954			$	956,475
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses		$	107,697			$	56,942
Customer funds payable			32,130				25,901
Deferred revenue			14,372				9,958
Deferred tax liabilities			4,277				4,278
Due to acquirees and notes payable			7,551				2,000
Total current liabilities			166,027				99,079
Long-term liabilities			964,657				256,172
Total liabilities			1,130,684				355,251
Total stockholders' equity			1,088,270				601,224
Total liabilities and stockholders' equity		$	2,218,954			$	956,475

 

Page 6

  

DEALERTRACK TECHNOLOGIES, INC.

Consolidated Statements of Cash Flows

(Dollars in thousands)

(Unaudited)

 

		Six Months Ended June 30,
		2014				2013
Operating activities:
Net (loss) income		$	(13,017	)		$	3,805
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization			64,172				28,821
Deferred tax benefit			(39,536	)			(653	)
Stock-based compensation expense			8,416				7,126
Provision for doubtful accounts and sales credits			6,599				5,559
Earnings from equity method investment, net			(3,532	)			(2,498	)
Deferred compensation			96				84
Stock-based compensation windfall tax benefit			(9,802	)			(4,278	)
Gain on sale of investment			(9,828	)			—
Realized gain on sale of securities			—				(11	)
Amortization of debt issuance costs and debt discount			6,810				4,666
Change in contingent consideration			(250	)			(500	)
Forfeited customer deposits			(708	)			—
Amortization of deferred interest			68				636
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable			(18,819	)			(20,535	)
Prepaid expenses and other current assets			4,638				(4,185	)
Other assets – long-term			(5,115	)			7,075
Accounts payable and accrued liabilities			(57,786	)			(4,351	)
Deferred rent			826				178
Deferred revenue			1,284				453
Other liabilities – long-term			2,799				(884	)
Net cash (used in) provided by operating activities			(62,685	)			20,508

 

Page 7

  

Consolidated Statements of Cash Flows (continued)

 

		Six Months Ended June 30,
		2014				2013
Investing activities:
Capital expenditures			(16,867	)			(6,112	)
Capitalized software and website development costs			(23,931	)			(17,360	)
Proceeds from sale of investment in TrueCar			92,518				—
Purchases of marketable securities			(5,150	)			(27,231	)
Proceeds from sales and maturities of marketable securities			10,539				21,309
Payment for acquisition of businesses, net of acquired cash			(541,288	)			(20,984	)
Net cash used in investing activities			(484,179	)			(50,378	)
Financing activities:
Proceeds from stock purchase plan and exercise of stock options			15,722				5,295
Proceeds from issuance of term loan B credit facility			575,000				—
Principal payments on term loan B credit facility			(26,438	)			—
Principal payments on capital lease obligations and financing arrangements			(50	)			(74	)
Payment of contingent consideration			(250	)			—
Proceeds from note receivable			500				—
Payments for debt issuance costs			(16,696	)			—
Purchases of treasury stock			(4,615	)			(762	)
Stock-based compensation windfall tax benefit			9,802				4,278
Net cash provided by financing activities			552,975				8,737
Net increase (decrease) in cash and cash equivalents			6,111				(21,133	)
Effect of exchange rate changes on cash and cash equivalents			29				(1,099	)
Cash and cash equivalents, beginning of period			122,373				143,811
Cash and cash equivalents, end of period		$	128,513			$	121,579
Supplemental disclosure:
Cash paid for:
Income taxes		$	8,552			$	3,298
Interest			8,716				1,891
Non-cash investing and financing activities:
Accrued capitalized hardware, software and fixed assets			6,562				5,714
Assets acquired under capital leases and financing arrangements			35				116
Non-cash consideration issued for investment in Dealer.com			471,220				—

 

Page 8

  

DEALERTRACK TECHNOLOGIES, INC.

Reconciliation of GAAP Net Income to Non-GAAP Adjusted EBITDA

(Dollars in thousands)

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
GAAP net (loss) income		$	(1,375	)		$	3,839			$	(13,017	)		$	3,805
Interest income			(100	)			(117	)			(200	)			(241	)
Interest expense – cash			6,197				981				8,937				2,043
Interest expense – non-cash			3,640				2,364				6,810				4,666
(Benefit from) provision for income taxes, net			(2,793	)			1,903				(7,432	)			733
Depreciation of property and equipment and amortization of capitalized software and website costs			11,941				7,165				22,536				13,746
Amortization of acquired identifiable intangibles			20,940				7,759				41,636				15,075
EBITDA (non-GAAP)			38,450				23,894				59,270				39,827
Adjustments:
Stock-based compensation			4,293				3,855				8,416				7,126
Contra-revenue			1,375				1,381				2,532				2,735
Acquisition-related and other professional fees			900				573				7,874				1,056
Acquisition-related contingent consideration changes and compensation expense, net			1,014				594				1,943				629
Integration and other related costs			3,542				1,567				9,334				2,366
Gain on sale of investment			—				—				(9,828	)			—
Amortization of equity method investment basis difference			547				706				1,095				1,412
Rebranding expense			—				265				—				1,913
Adjusted EBITDA (non-GAAP)		$	50,121			$	32,835			$	80,636			$	57,064

 

Page 9

  

DEALERTRACK TECHNOLOGIES, INC.

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

(Dollars in thousands)

(Unaudited)

 

		Three Months Ended June 30,								Six Months Ended June 30,
		2014				2013				2014				2013
GAAP net (loss) income		$	(1,375	)		$	3,839			$	(13,017	)		$	3,805
Adjustments:
Interest expense – non-cash (not tax-impacted)			3,640				2,364				6,810				4,666
Amortization of acquired identifiable intangibles			20,940				7,759				41,636				15,075
Stock-based compensation			4,293				3,855				8,416				7,126
Contra-revenue			1,375				1,381				2,532				2,735
Gain on sale of investment			—				—				(9,828	)			—
Acquisition-related and other professional fees			900				573				7,874				1,056
Acquisition-related contingent consideration changes and compensation expense, net			1,014				594				1,943				629
Integration and other related costs			3,542				1,810				10,023				2,609
Rebranding expense			—				265				—				1,913
Amortization of equity method investment basis difference			547				706				1,095				1,412
Amended state tax returns impact (non-taxable)			—				—				—				56
Tax impact of adjustments (a)			(12,449	)			(6,444	)			(23,569	)			(12,344	)
Adjusted net income (non-GAAP)		$	22,427			$	16,702			$	33,915			$	28,738

 

(a) The tax impact of adjustments for the three and six months ended June 30, 2014 are based on a blended tax rate of 38.5% and 38.6%, respectively, applied to taxable adjustments other than gain on sale of investment which is based on an effective tax rate of 31.0%. Additionally, the tax impact of adjustments for the three and six months ended June 30, 2014 includes $0.1 million and $1.7 million, respectively, of incremental deferred taxes related to the acquisition of Dealer.com. The blended tax rates are based upon the statutory tax rates of 38.7% and 26.5% applied to the adjustments for U.S. and Canada, respectively.

 

The tax impact of adjustments for the three and six months ended June 30, 2013 are based on a U.S. statutory tax rate of 38.2% applied to taxable adjustments other than amortization of acquired identifiable intangibles and stock-based compensation expense, which are based on a blended tax rate of 38.1% and 37.8%, respectively, for the three months ended June 30, 2013 and 38.1% and 37.7% respectively, for the six months ended June 30, 2013.

 

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

 

Page 10

  

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, 2014
		Expected Range
GAAP net loss		$	(12.0	)		$	(7.0	)
Interest, net			34.0				34.0
Income taxes, net			(6.4	)			(3.8	)
Amortization of basis difference from joint venture			2.2				2.2
Depreciation and amortization			45.6				42.0
Amortization of acquired identifiable intangibles			83.0				83.0
EBITDA (non-GAAP)			146.4				150.4
Adjustments:
Stock-based compensation			17.0				17.0
Gain on sale of investment			(9.8	)			(9.8	)
Non-recurring costs (a)			27.4				27.4
Contra-revenue			5.0				5.0
Adjusted EBITDA (non-GAAP)		$	186.0			$	190.0

  

 

(a) Includes certain 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, 2014
		Expected Range
GAAP net loss		$	(12.0	)		$	(7.0	)
Adjustments:
Stock-based compensation			17.0				17.0
Amortization of acquired identifiable intangibles			83.0				83.0
Amortization of basis difference from joint venture			2.2				2.2
Non-cash interest expense (not tax-impacted)			14.0				14.0
Gain on sale of investment			(9.8	)			(9.8	)
Non-recurring costs (a)			28.1				28.1
Contra-revenue			5.0				5.0
Tax impact of adjustments (b)			(46.5	)			(46.5	)
Adjusted net income (non-GAAP)		$	81.0			$	86.0

 

 

(a) Includes certain professional fees, integration and other related costs, acquisition-related compensation expense, accelerated depreciation and fair value adjustments.

(b)  The tax impact of adjustments are based on a blended tax rate of 37% applied to taxable adjustments.

 

Page 11

 

 

DEALERTRACK TECHNOLOGIES, INC.

Summary of Business Statistics

Three months ended

(Unaudited)

 

		Jun 30,				Mar 31,				Dec 31,				Sep 30,				Jun 30,
		2014				2014				2013				2013				2013
Transaction services revenue (in thousands)		$	87,381			$	77,735			$	70,338			$	73,514			$	71,645
Subscription services revenue (in thousands)		$	91,485			$	61,969			$	49,107			$	45,223			$	44,623
Advertising and other revenue (in thousands)		$	45,901			$	19,104			$	6,666			$	5,845			$	5,514
Active dealers in our U.S. network as of end of the period (a)			20,670				20,719				20,046				20,238				20,205
Active lenders in our U.S. network as of end of the period (b)			1,468				1,443				1,410				1,378				1,355
Active lender to dealer relationships as of end of the period (c)			201,240				202,984				191,135				191,548				184,273
Transactions processed (in thousands) (d)			30,669				28,560				24,471				27,172				26,176
Average transaction price (e)		$	2.89			$	2.76			$	2.91			$	2.74			$	2.79
Transaction revenue per car sold (f)		$	8.68			$	11.20			$	8.63			$	7.70			$	7.38
Subscribing dealers in U.S. and Canada as of end of the period (g)			23,876				23,624				18,464				18,255				18,076
Average monthly subscription revenue per subscribing dealership (h)		$	1,218			$	956			$	815			$	758			$	757
Active dealerships on advertising platform as of end of the period (i)			7,031				7,053				*				*				*
Average monthly advertising spend per dealer rooftop (j)		$	1,826				1,708				*				*				*

 

*       Historical amounts not applicable

 

(a)     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.

 

(b)     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.

 

(c)      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.

 

(d)     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.

 

(e)     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.

 

(f)      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 calculation adds back (excludes) transaction related contra-revenue.

 

Page 12

  

(g)     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.

 

(h)     Represents dealer based subscription services revenue 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.

 

(i)      We consider a dealership to be active on our advertising platform as of a date if they incurred advertising spend in that month.

 

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

 

TRAK-E ###

 

Page 13

Exhibit 99.2

 

©2014 Dealertrack, Inc. All rights reserved. 1 1 August 11, 2014 Investor Presentation

©2014 Dealertrack, Inc. All rights reserved. 2 ▪ Statements in this press release regarding Dealertrack’s expected 2014 performance based on both GAAP and non - GAAP measures, 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 that could materially affect such forward - looking statements 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 ADP, AutoTrader, Open Dealer Exchange, Reynolds and Reynolds and RouteOne ; the impact of some vendors of software products for automotive dealers making it more difficult for Dealertrack’s customers to use Dealertrack’s solutions and services ; security breaches, interruptions, failures and/or other errors involving Dealertrack’s systems or networks ; the failure or inability to execute any element of Dealertrack’s business strategy, including selling additional products and services to existing and new customers ; Dealertrack’s success in implementing an ERP system ; the volatility of Dealertrack’s 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 Dealertrack may pursue ; Dealertrack’s 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 Dealer . com may not materialize as expected ; failure to successfully integrate the business, infrastructure and employees of Dealer . com ; and other risks listed in Dealertrack’s 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 Dealertrack’s website at www . dealertrack . com and the SEC’s website at www . sec . gov . Forward - looking statements included herein speak only as of August 11 , 2014 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 . Safe Harbor for Forward - Looking Statements

©2014 Dealertrack, Inc. All rights reserved. 3 ▪ Founded in 2001, IPO in 2005 ▪ Headquartered in Lake Success, New York ▪ ~3,600 employees ▪ 2014 Estimated Revenue: $836 million (mid - point of guidance) ▪ 2014 Estimated Adjusted EBITDA: $188 million (mid - point of guidance ) Business Description: ▪ Dealertrack’s 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 procedures ▪ Operates the largest online credit application networks in the United States and Canada Dealertrack Overview

©2014 Dealertrack, Inc. All rights reserved. 4 ▪ Leading provider of web - based software solutions and services that enhance the efficiency and profitability for all major segments of the automotive retail industry ▪ Ability to integrate and leverage Dealer.com’s innovative digital marketing solutions with Dealertrack’s in - store solutions ▪ Most comprehensive suite of solutions in industry ▪ Attractive ~ $4 billion SaaS and transaction market size provides opportunity for long - term growth ▪ ~$10 billion digital market opportunity anticipated to double by end of 2018 ▪ Consistent track record of growth and profitability ▪ Double - digit revenue growth driven through both organic growth and acquisitions ▪ Predictable business model with highly visible recurring revenue ▪ Seasoned management team with extensive industry experience Investment Highlights

©2014 Dealertrack, Inc. All rights reserved. 5 Our Vision Deliver the market leading suite of integrated technologies capable of transforming automotive retailing . 2001 2007 2014 Revolutionize automotive credit. End - to - end tools to drive efficiency. Provide our clients with the power to transform automotive retail. 1999 Elevate the role of digital in car buying.

©2014 Dealertrack, Inc. All rights reserved. 6 Dealertrack’s Network Aftermarket providers, accessory providers, OEMs and OpenTrack partners Third Party Integrations Other Information and Service Providers Lenders 1,468 U.S. lenders connected to credit application network Credit bureaus, used car value guides, identity verification services Dealers 20,670 active U.S. auto dealers on Dealertrack’s network 23,876 dealers with Dealertrack subscriptions (U.S. & Canada) Reflects business as of June 30, 2014.

©2014 Dealertrack, Inc. All rights reserved. 7 Facilitating Workflow in the Dealership

©2014 Dealertrack, Inc. All rights reserved. 8 We Believe 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

©2014 Dealertrack, Inc. All rights reserved. 9 *Based on Q2 2014 Reported Company Earnings and estimates. 3,640 Team members across North America 20,700 Dealerships 94%+ of franchise dealers 20+ OEMs 1,400+ Lenders 45% of all U.S. cars financed via dealertrack.com 100m+ Transactions Annually Generating $800m+ In Expected 2014 Revenue Connecting with supporting and Over 60m+ Unique visitors / month on 11,000 Dealer Websites “Touching” 3 of 4 Cars sold in North America and hosting “Insight into” 1 out of 4 Buy/Sell Lists & 5m Inventory Listings and and Managing 45% of all Financed Titles We Have Unique Capabilities To Achieve Change

©2014 Dealertrack, Inc. All rights reserved. 10 Subscription - Based Solutions Dealer Management Solutions DMS accounting 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.

©2014 Dealertrack, Inc. All rights reserved. 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 ASR Pro 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

©2014 Dealertrack, Inc. All rights reserved. 12 Market Opportunity Has Increased Over Time 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 Dealer monthly subscription revenue opportunity per rooftop

©2014 Dealertrack, Inc. All rights reserved. 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)

©2014 Dealertrack, Inc. All rights reserved. 14 $415 $474 $550 $678 $749 $690 $708 $767 $757 $1,218 $0 $400 $800 $1,200 $1,600 2006 2007 2008 2009 2010 2011 2012 2013 2Q'13 2Q'14 10,722 13,209 14,342 13,852 13,996 16,003 17,619 18,464 18,076 23,876 0 6,000 12,000 18,000 24,000 2006 2007 2008 2009 2010 2011 2012 2013 2Q'13 2Q'14 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)

©2014 Dealertrack, Inc. All rights reserved. 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

©2014 Dealertrack, Inc. All rights reserved. 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 $20.00 $1.50 to $5.00

©2014 Dealertrack, Inc. All rights reserved. 17 How Transaction Revenue Grows Faster Than Car Sales 7.8% 3.1% 3.9% 2.0% 5.1% Q2 13 vs. Q2 14 10.6% 1.0% 2.4% 2.1% 10.8% Q1 13 vs. Q1 14 Acquired Revenue Car Sales Higher % of Vehicles Financed Improving Credit Increased Market Share Drivers of Market Share: ▪ Adding new lenders and dealers to the network ▪ Driving higher utilization of products from existing participants ▪ Expanding RTS opportunities by adding additional states

©2014 Dealertrack, Inc. All rights reserved. 18 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 Submissions per unique applicant have been rising back to 2008 levels. Source : New car sales – Automotive News . Used car sales – CNW Research . Today: 0.88 Trough, July 2009: 0.67 Transaction Revenue Drivers Increasing Application Submissions Monthly Submissions per Applicant for New and Used Cars

©2014 Dealertrack, Inc. All rights reserved. 19 ELT & Electronic Markets and Dealertrack Footprints 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 √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √ √

©2014 Dealertrack, Inc. All rights reserved. 20 Transaction Revenue Drivers: Car Sales Continue to Improve New Car Sales by Franchised Dealers 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. 16.9 17.0 16.5 16.2 13.2 10.4 11.6 12.8 14.5 15.6 16.2 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 16.0 16.5 14.3 14.3 13.2 12.8 12.8 13.8 14.9 15.7 15.9 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 16.0 18.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E 2014 car sales (new + used) from franchise dealers are trending to 32.1 million units based on historical seasonality and YTD sales as of 6/30/14

©2014 Dealertrack, Inc. All rights reserved. 21 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 Revenue Approaching $200 Million Annually North American Cars by Franchise Dealers (units in millions) Source: New car sales – Automotive News. Used car sales – CNW Research, Canada New – Desrosiers, Canada Used – DT Est. 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 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 35.3 0.0 10.0 20.0 30.0 40.0 2006 2007 2008 2009 2010 2011 2012 2013 2014E $4.43 $5.62 $5.98 $5.44 $5.50 $6.61 $6.95 $8.08 $9.70 $0.0 $3.0 $6.0 $9.0 $12.0 2006 2007 2008 2009 2010 2011* 2012 2013** YTD Jun '14**

©2014 Dealertrack, Inc. All rights reserved. 22 Transaction Revenue Drivers: Used Car Supply Will Grow Used Car Supply: Industry History and Trends 23.0 23.6 23.8 23.8 24.0 24.0 24.1 23.7 22.9 22.1 20.8 18.8 18.3 18.0 18.5 19.2 20.6 21.8 0.0 5.0 10.0 15.0 20.0 25.0 30.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2016E 2017E 2018E (units in millions) Source: ALG TrueCar. Data represents used market vehicles aged seven years or less.

©2014 Dealertrack, Inc. All rights reserved. 23 Digital Marketing Solutions Dealer Website Seamless Websites ensure an optimal experience from every device - desktop, mobile or tablet Digital Retailing Connecting Dealer and Consumers to transact on - line Digital Advertising Advertising across the channels most relevant to auto shoppers: retargeting, paid search, display, and social media

©2014 Dealertrack, Inc. All rights reserved. 24 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 Car Shopping Data

©2014 Dealertrack, Inc. All rights reserved. 25 25

©2014 Dealertrack, Inc. All rights reserved. 26 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 o f the Web % Dealer.com Advertising Overview

©2014 Dealertrack, Inc. All rights reserved. 27 27 More Efficient Digital Spending

©2014 Dealertrack, Inc. All rights reserved. 28 28 Growth Strategy & Financial Results

©2014 Dealertrack, Inc. All rights reserved. 29 Dealertrack’s Core Growth Strategy • New lender relationships • New subscribing dealer relationships 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 • Leverage Dealertrack’s networks for distribution of new products and services Strategic Acquisitions

©2014 Dealertrack, Inc. All rights reserved. 30 M&A Complements Organic Growth 2013 2014 - Credit App 1.0 - Desking - PaymentTrack - eContracting - NADA BookOut - Website Plus - WebAlg - CreditConnection - dealerAccess - LeaseLink - IPO - Launch eMenu - DealWatch - Desking - SalesMaker - InventoryPro - GoBig Menu - ALG (sold 10/1/11) - Chrome (JV 1/1/12) - DealerWire - DealerWare - GlobalFax - OpenTrack - Inventory 3.0 - iOS - Price Driver - Canada DMS - SmartFind - PaymentDriver - FinanceDriver - eMenu for iPad - Inventory+ - DMS 2.0 - DT 2.0 (Honda) - TradeDriver - Arkona - Curomax - ASM - AAX - TradeTracker - Polk AIC - triVIN - CentralDispatch - ClickMotive - iCONNECT - eCarlist - Casey & Casey - CFM - VINtek - Nexteppe Vision: Deliver the market leading suite of integrated technologies capable of transforming auto retailing - Dealer.com - ASR Pro

©2014 Dealertrack, Inc. All rights reserved. 31 ▪ Eighteen consecutive quarters of year - over - year revenue growth ▪ Diversified transaction revenue outpacing car sales growth ▪ Advertising revenue now a significant contributor to our overall business ▪ Over 60% of revenue from recurring subscription services and highly predictable advertising revenue ▪ Strong subscription renewal rates ▪ Operating leverage drives long - term margin potential ▪ Proven acquisition strategy complements healthy organic growth Financial Highlights

©2014 Dealertrack, Inc. All rights reserved. 32 Strong Revenue Growth Annual Revenue Quarterly Revenue $53.4 $75.1 $94.7 $114.9 $123.5 $146.6 $145.1 $181.7 $112.7 $147.3 $132.4 $94.4 $102.0 $184.9 $225.0 $276.9 $7.2 $11.4 $15.6 $16.3 $18.3 $21.8 $18.7 $22.9 71.5 90.9 79.7 51.4 49.4 74.5 87.8 101.9 0 60 120 180 240 $0.0 $100.0 $200.0 $300.0 $400.0 $500.0 2006 2007 2008 2009 2010 2011 2012 2013 Advertising & Other Revenue Transaction Revenue Subscription Revenue # Transactions $173.3 $233.8 $242.7 $225.6 $243.8 $353.3 $ 388.8 $33.9 $35.7 $42.2 $42.8 $44.6 $45.3 $49.1 $62.0 $91.5 $57.5 $58.8 $54.6 $61.4 $71.6 $73.5 $70.3 $77.7 $87.4 $5.0 $4.6 $5.0 $4.9 $5.5 $5.8 $6.7 $19.1 $45.9 22.6 22.7 20.8 24.1 26.2 27.2 24.5 28.6 30.7 0.0 10.0 20.0 30.0 40.0 50.0 60.0 $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Advertising & Other Revenue Transaction Revenue Subscription Revenue # Transactions $101.8 $109.1 $ 96.4 $ 99.1 $121.8 ($ and transactions in millions) ($ and transactions in millions) Note: Numbers may not add due to rounding. $124.6 $481.5 $126.1 $158.8 $224.8

©2014 Dealertrack, Inc. All rights reserved. 33 $77 $62 $48 $53 $86 $97 $118 33% 26% 21% 22% 24% 25% 24% 0% 10% 20% 30% 40% 50% $0 $25 $50 $75 $100 $125 2007 2008 2009 2010 2011 2012 2013 Adj. EBITDA Adj. EBITDA Margin $25 $27 $26 $24 $33 $33 $28 $31 $50 26% 27% 25% 22% 27% 26% 22% 19% 22% 0% 15% 30% 45% 60% $0 $15 $30 $45 $60 2Q'12 3Q'12 4Q'12 1Q'13 2Q'13 3Q'13 4Q'13 1Q'14 2Q'14 Adj. EBITDA Adj. EBITDA Margin $57 $62 $46 $34 $65 $71 $82 24% 25% 20% 14% 18% 18% 17% 0% 10% 20% 30% 40% 50% $0 $20 $40 $60 $80 $100 2007 2008 2009 2010 2011 2012 2013 Cash Flow from Operations Operating Cash Flow Margin $44 $35 $20 $22 $43 $49 $59 $0 $15 $30 $45 $60 2007 2008 2009 2010 2011 2012 2013 ($ 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

©2014 Dealertrack, Inc. All rights reserved. 34 34 Appendix

©2014 Dealertrack, Inc. All rights reserved. 35 Other niche players ( Compliance / Menu / Desking) Other niche players Note: Selected list may 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

©2014 Dealertrack, Inc. All rights reserved. 36 22,147 22,043 19,652 16,690 16,829 17,543 19,067 20,046 20,205 20,670 370 536 733 823 970 1,120 1,261 1,410 1,355 1,468 0 200 400 600 800 1,000 1,200 1,400 1,600 0 5,000 10,000 15,000 20,000 25,000 2006 2007 2008 2009 2010 2011 2012 2013 2Q'13 2Q'14 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 26.2 30.7 0.0 30.0 60.0 90.0 120.0 2006 2007 2008 2009 2010 2011 2012 2013 2Q'13 2Q'14 The Power of Dealertrack’s Network Growth in Dealers, Lenders and Number of Transactions

©2014 Dealertrack, Inc. All rights reserved. 37 Rising Interest Rates: Limited Risk? Impact of changing interest rates will be offset by larger payment terms. Monthly Payments Total Car Loan 3 Years 5 Years 7 Years 10 Years 3 Years 5 Years 7 Years 10 Years 2.5% $866 $532 $390 $283 2.5% $31,170 $31,945 $32,733 $33,937 3.0% $872 $539 $396 $290 3.0% $31,408 $32,344 $33,298 $34,762 3.5% $879 $546 $403 $297 3.5% $31,646 $32,745 $33,868 $35,599 4.0% $886 $552 $410 $304 4.0% $31,886 $33,150 $34,445 $36,448 4.5% $892 $559 $417 $311 4.5% $32,127 $33,557 $35,028 $37,310 Tables Based On A $30,000 Car Loan

©2014 Dealertrack, Inc. All rights reserved. 38 During the credit crisis, the number of LDRs* declined significantly due to dealership closure / consolidation and lenders exiting indirect auto lending. This metric has risen as credit has improved, dealership closures have abated and lenders have deployed more capital into auto lending . 1. Each lender to dealer relationship (LDR) represents a pair between an active U.S. lender and an active U.S. dealer on the Dealertrack’s network. 2. Active lenders per dealer defined as LDRs divided by active U.S. dealers. Transaction Revenue Drivers: Lender to Dealer Relationships Growing Dealertrack Technologies U.S. Lender to Dealer Relationships (in 000s) (1) (2) 224 199 179 158 134 124 120 118 130 138 139 140 152 158 161 165 172 178 179 175 182 184 192 191 203 201 578 1,468 10.0 9.2 8.5 8.0 7.1 6.9 7.0 7.1 7.6 8.1 8.2 8.3 8.8 8.9 9.2 9.4 9.4 9.5 9.4 9.2 9.1 9.1 9.5 9.5 9.8 9.7 - 2 4 6 8 10 12 14 16 - 50 100 150 200 250 300 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q 10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 LDRs Lenders Avg # of lenders per dealer

©2014 Dealertrack, Inc. All rights reserved. 39 $100 $1,000 $10,000 $100,000 $1,000,000 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Auto Credit Cards Home Equity ($ in millions) Auto loan asset - backed securities (ABS) issuance is at its highest level since 2007 and continues to improve. Source: SIFMA US Asset - Backed Securities Issuance. Transaction Revenue Drivers: Auto ABS Issuance is Strengthening Consumer Credit Trends

©2014 Dealertrack, Inc. All rights reserved. 40 ($ in millions) Wages Growth Driving Financed Used Car Sales Wages and % of Used Units Financed 0.0% 12.0% 24.0% 36.0% 48.0% 60.0% $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Aggregate Wages Used Units Financed as % of Totals Used Sales Source: Social Security Administration. 2013 data not available.

©2014 Dealertrack, Inc. All rights reserved. 41 Used Car Sales Used Car Sales Source: CNW Marketing Research. 0.0% 12.0% 24.0% 36.0% 48.0% 60.0% 0 9 18 27 36 45 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Used Car Sales Total Used Financed Cars % of Total Used Car Sales

©2014 Dealertrack, Inc. All rights reserved. 42 New and Used Car Sales 2014 Growth 1Q13 2Q13 3Q13 4Q13 1Q14 Apr-14 May-14 Jun-14 2Q14 Y/Y Q/Q SAAR 1 15,297 15,517 15,710 15,710 15,650 16,064 16,735 16,918 16,572 6.8% 5.9% Actual Units 1 3,689 4,132 3,952 3,809 3,741 1,391 1,610 1,422 4,423 7.0% 18.2% Fleet 2 790 803 557 601 783 272 289 317 878 9.2% 12.1% Retail 2,898 3,329 3,396 3,208 2,958 1,120 1,321 1,105 3,545 6.5% 19.8% Financed 3 2,433 2,820 2,920 2,714 2,446 971 1,164 925 3,060 8.5% 25.1% Cash 4 465 508 475 493 513 149 158 179 486 (4.4%) (5.2%) Actual Units 5 2,665 4,633 4,733 3,682 2,677 1,411 1,610 1,641 4,662 0.6% 74.1% USED Financed 5 1,774 3,096 3,352 2,677 1,904 1,011 1,154 1,174 3,339 7.8% 75.3% Cash 5 890 1,536 1,381 1,006 773 400 456 467 1,323 (13.9%) 71.2% Actual Units 6,353 8,765 8,686 7,491 6,418 2,803 3,219 3,063 9,085 3.7% 41.6% Retail Units 5,563 7,961 8,129 6,890 5,635 2,531 2,931 2,746 8,207 3.1% 45.6% TOTAL Fleet 790 803 557 601 783 272 289 317 878 9.2% 12.1% Financed 4,208 5,917 6,273 5,391 4,350 1,982 2,317 2,099 6,398 8.1% 47.1% Cash 1,356 2,044 1,856 1,499 1,286 549 613 646 1,809 (11.5%) 40.7% NEW (1) Source: Automotive News. (2) Source: JD Power. (3) Estimated. (4) Source: AutoCount. (5) Source: CNW Marketing Research. U.S. - New and Used Car Sales (in 000s) Note: Numbers may not add due to rounding.

©2014 Dealertrack, Inc. All rights reserved. 43 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 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: NADA. Number of dealerships as of January 1 each year. Number of U.S. Franchised Auto Dealerships Number of U.S. Franchised Auto Dealerships

©2014 Dealertrack, Inc. All rights reserved. 44 Reconciliation of GAAP Net Income to Non - GAAP Financial Measures by Income Statement Category GAAP Non-GAAP As Reported Adjusted 2014 Ref 2013 Three Months Ended June 30, 2014 Net Loss Ref Adjustments Net Income Ref GAAP net (loss) income (1,375)$ 3,839$ Net revenue 224,767$ A 1,375 226,142$ Adjustments: Cost of revenue 119,461 B (24,752) 94,709 Interest expense - non-cash (not tax-impacted) 3,640 E 2,364 Research and development 27,136 C (1,056) 26,080 Amortization of acquired identifiable intangibles 20,940 1 7,759 Selling, general and administrative 74,637 D (4,881) 69,756 Stock-based compensation 4,293 2 3,855 Total operating expenses 221,234 (30,689) 190,545 Contra-revenue 1,375 A 1,381 Income from operations 3,533 32,064 35,597 Acquisition-related and other professional fees 900 D 573 Interest expense, net (9,737) E 3,640 (6,097) J Acquisition-related contingent consideration changes and compensation expense, net 1,014 3 594 Other income, net 129 - 129 Integration and other related costs 3,542 4 1,810 Earnings from equity method investment, net 1,907 F 547 2,454 Rebranding expense - D 265 Loss before benefit from income taxes, net (4,168) 36,251 32,083 Amortization of equity method investment basis difference 547 F 706 Benefit from income taxes, net 2,793 G (12,449) (9,656) K Tax impact of adjustments (12,449) G (6,444) Net loss (1,375)$ 23,802$ 22,427$ Adjusted net income (non-GAAP) 22,427$ 16,702$ EBITDA Adjustments: Additional classification details: Depreciation and amortization 11,941$ H Amortization of acquired identifiable intangibles 20,940$ 1 7,759$ Interest expense, net 6,097 J Revenue - A 13 Benefit from income taxes, net 9,656 K Cost of revenue 20,940 B 7,746 Adjusted EBITDA 50,121$ Stock-based compensation 4,293$ 2 3,855$ Cost of revenue 249 B 319 GAAP Non-GAAP Research and development 753 C 662 As Reported Adjusted Selling, general and administrative 3,291 D 2,874 Three Months Ended June 30, 2013 Net Loss Ref Adjustments Net Income Ref Acquisition-related contingent consideration changes and compensation expense, net 1,014$ 3 594$ Net revenue 121,782$ A 1,394 123,176$ Cost of revenue 977 B 73 Cost of revenue 51,997 B (9,215) 42,782 Research and development (11) C 19 Research and development 18,269 C (720) 17,549 Selling, general and administrative 48 D 502 Selling, general and administrative 43,887 D (4,908) 38,979 Total operating expenses 114,153 (14,843) 99,310 Integration and other related costs 3,542$ 4 1,810$ Income from operations 7,629 16,237 23,866 Cost of revenue 2,586 B 1,077 Interest expense, net (3,228) E 2,364 (864) J Research and development 314 C 39 Other income, net 62 - 62 Selling, general and administrative 642 D 694 Earnings from equity method investment, net 1,279 F 706 1,985 Income before provision for income taxes, net 5,742 19,307 25,049 Depreciation and amortization 11,941$ H 6,922$ Provision for income taxes, net (1,903) G (6,444) (8,347) K Cost of revenue 8,452 5,534 Net income 3,839$ 12,863$ 16,702$ Research and development 1,026 140 Selling, general and administrative 2,463 1,491 EBITDA Adjustments: Fixed asset accelerated amortization/depreciation (243) Depreciation and amortization 6,922$ H Interest expense, net 864 J Provision for income taxes, net 8,347 K Adjusted EBITDA 32,835$ (Unaudited) (Unaudited) Three Months Ended June 30, 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)

©2014 Dealertrack, Inc. All rights reserved. 45 Operating Expense Reclassification Operating Expenses: Cost of revenue $ 67,587 $ (15,590) $ 51,997 $ 130,775 $ (30,568) $ 100,207 Product development 4,064 (4,064) — 7,694 (7,694) — Research and development — 18,269 18,269 — 35,899 35,899 Selling, general and administrative 42,502 1,385 43,887 83,992 2,363 86,355 Total operating expenses $ 114,153 $ — $ 114,153 $ 222,461 $ — $ 222,461 Operating Expenses: Cost of revenue $ 70,199 $ (16,341) $ 53,858 $ 200,974 $ (46,909) $ 154,065 Product development 3,952 (3,952) — 11,646 (11,646) — Research and development — 18,447 18,447 — 54,346 54,346 Selling, general and administrative 43,519 1,846 45,365 127,511 4,209 131,720 Total operating expenses $ 117,670 $ — $ 117,670 $ 340,131 $ — $ 340,131 Operating Expenses: Cost of revenue $ 76,606 $ (20,745) $ 55,861 $ 277,580 $ (67,654) $ 209,926 Product development 3,555 (3,555) — 15,201 (15,201) — Research and development — 21,912 21,912 — 76,258 76,258 Selling, general and administrative 50,188 2,388 52,576 177,699 6,597 184,296 Total operating expenses $ 130,349 $ — $ 130,349 $ 470,480 $ — $ 470,480 Operating Expenses: Cost of revenue $ 220,695 $ (45,223) $ 175,472 Product development 11,732 (11,732) — Research and development — 53,616 53,616 Selling, general and administrative 142,518 3,339 145,857 Total operating expenses $ 374,945 $ — $ 374,945 Adjusted Three Months Ended June 30, 2013 Six Months Ended June 30, 2013 Historic Adjustment Adjusted Historic Adjustment Three Months Ended September 30, 2013 Nine Months Ended September 30, 2013 Historic Adjustment Adjusted Historic Adjustment Adjusted Year Ended December 31, 2012 Historic Adjustment Adjusted Three Months Ended December 31, 2013 Year Ended December 31, 2013 Historic Adjustment Adjusted Historic Adjustment Adjusted

©2014 Dealertrack, Inc. All rights reserved. 46 Revenue Adjusted for Acquisitions 1. Adjustments for VINtek, CFM and Dealer.com acquisitions. 2. Subscription and advertising revenue was a djusted for pro forma revenue as if acquisitions of Dealer.com and CFM were included in prior results. ($ in millions) Year over Year Comparison Acquisitions Acquisitions Acquisitions Y/Y Comparison As Reported Adj'ments (2) Adjusted As Reported Adj'ments (1) Adjusted Transaction Revenue $72 $0 $72 $87 ($6) $82 Subscription Revenue 45 $35 $80 91 $0 91 Other Revenue 6 $24 $30 46 $0 46 Total Revenue $122 $59 $181 $225 ($6) $219 As Reported '13 As Reported vs vs Organic Growth, Y/Y Adjusted '12 As Reported Growth Transaction Revenue 22% 22% 14% Subscription Revenue 14% 105% 14% Other Revenue 56% 733% 56% Total Revenue 24% 85% 21% Sequential Quarterly Comparison Acquisitions Acquisitions AcquiSitionS Q/Q Comparison As Reported Adj'ments (2) Adjusted As Reported Adj'ments Adjusted Transaction Revenue $78 $0 $78 $87 $0 $87 Subscription Revenue 62 $25 86 91 0 91 Other Revenue 19 $23 42 46 0 46 Total Revenue $159 $47 $206 $225 $0 $225 As Reported '14 As Reported vs vs Organic Growth, Q/Q Adjusted '14 As Reported Growth Transaction Revenue 12% 12% 12% Subscription Revenue 6% 48% 6% Other Revenue 10% 140% 10% Total Revenue 9% 42% 9% 3 Months Ended June 30, 2013 3 Months Ended March 31, 2014 3 Months Ended June 30, 2014 3 Months Ended June 30, 2014

©2014 Dealertrack, Inc. All rights reserved. 47 2014E Full Year Earnings Guidance and Assumptions New Car Sales by Franchise Dealers 16.2 million units Used Car Sales by Franchise Dealers 15.9 million units Weighted Average Shares Outstanding (Diluted) 55 million (Non - GAAP) 53 million (GAAP) Additional potential impact of dilution from combination of convertible debt above warrant trigger and change in current stock price is not included in share count Costs Addbacks for Non - GAAP Measures $28 million Includes certain acquisition related costs, including integration costs, professional fees and other related costs, and acquisition related compensation expense. Effective Tax Rate on Add - backs for Non - GAAP Measures 37% Reflects change from 36% due to ASR Pro transaction. Effective Tax Rate on Add - backs for GAAP Net Income 35% Reflects change from 36% due to ASR Pro transaction. Revenue $829 - $843 million Net of $5 million contra revenue. GAAP Net Loss $(12) - $(7) million GAAP Net Loss per Share (Diluted) $(0.23) - $(0.13) Adjusted EBITDA $186 - $190 million Adjusted Net Income (ANI) $81 - $86 million ANI per Share (Diluted) $1.47 - $1.56 Capital Expenditures $86 - $88 million Reflects impact of, CFM, VINtek, Nexteppe, Dealer.com and ASR Pro acquisitions Guidance Measure Range Comments Guidance Assumption Assumption Comments