Tuesday, Nov. 28, 2006, 07:00 PM UPDATED 11:59 AMBy Nick Zulovich
LAKE SUCCESS, N.Y. — DealerTrack Holdings recently announced that transactions processed through its DealerTrack network for the third quarter came in at 18.8 million, a 29 percent increase from about 14.6 million in the third quarter of 2005.
DealerTrack Holdings also reported that GAAP net income for the third quarter reached $5.6 million, up from $0.6 million in the same quarter of last year. Moreover, the company said revenue hit $46.3 million for the period, up 35 percent from $34.4 million in the same time frame of 2005.
"We are pleased with the third-quarter performance of both our transaction and subscription businesses, and with the ongoing expansion of the DealerTrack network," explained Mark O'Neil, the company's chairman and chief executive officer.
"Successful execution of our growth strategy is delivering solid financial performance and creating a substantial foundation for DealerTrack's future growth opportunities," he added.
Meanwhile, DealerTrack Holdings also reported that GAAP net income for the nine-month period was $13.7 million. Executives highlighted the fact that this amount is more than triple the $3.8 million in revenue posted in the same period of last year.
Revenue for the nine-month period came in at $127.6 million, a 47-percent increase from $86.8 million in the same time frame of 2005, according to executives.
"Our business continues to thrive as we create efficiencies for all participants within the automotive retail environment by converting legacy paper-based tasks to electronic processes," O'Neil pointed out. "Higher interest rates are an additional catalyst for the adoption of our electronic and digital contracting solutions as dealers seek to reduce their costs and accelerate the funding process.
"We expect dealers, especially the large public dealer groups, will place increasing pressure on their financing sources to implement e-contracting. As an intermediate step, lenders can implement eDocs, our digital contracting solution, to reduce their back-end processing costs," O'Neil noted.
Looking at dealer and finance relationships, the company said it had 22,276 active dealers in DealerTrack's network as of Sept. 30, up 6 percent from 21,071 in the network at the same point last year.
The number of active financing sources in the network for the same time frame came in at 268, up 60 percent from 167 a year ago, executives said.
Additionally, the number of subscriptions in DealerTrack's network was 19,952, a 54-percent climb from 12,928 last year, according to the company. Also, dealers with at least one subscription in the network reached 9,566, up 30 percent.
The company went on to say that 43 percent of dealers in the network subscribed to at least one product, and 14 providers have signed agreements to participate in the aftermarket segment of the network by the end of the quarter.
The company also mentioned that it acquired the assets of DealerWare, an aftermarket menu provider, on Aug. 1 of this year.
Looking ahead, DealerTrack Holdings said it expects revenue for 2006 to come in around $170 million to $171 million. Executives also anticipate that GAAP net income will be in the range of $17 million to $17.5 million.
DealerTrack Honored by American Banker's FinTech 100 Rankings
DealerTrack Holdings also announced that American Bankers recently ranked the company as 71st in its 2006 FinTech 100 rankings.
"We are pleased to be recognized as one of the leading providers of technology services to the financial services industry," O'Neil said. "More than 275 financing sources have joined the DealerTrack network to streamline and automate their processing of automotive credit applications.
"A growing number are realizing even greater efficiencies through our eContracting and eDocs solutions, which together can support a 100-percent digital contracting workflow and eliminate the cost of handling paper transactions," he concluded.