CDK reports mixed Q4 results as it looks to integrate Roadster

CDK Global Inc. reported higher revenue and profit in its fiscal fourth quarter, a period in which the company brought digital retailing firm Roadster under its umbrella.

The Hoffman Estates, Ill., dealership management system giant on Tuesday posted net earnings attributable to CDK of $49.4 million in the period ended June 30, up 8.3 percent from the year-earlier period.

CDK’s net earnings from continuing operations, which do not include the international business unit it divested in March, fell 42 percent to $36.3 million.

CEO Brian Krzanich said in an earnings call Tuesday afternoon that the sale helped strengthen CDK Global’s balance sheet and reduce debt, as well as pursue the $360 million acquisition of Roadster in an all-cash deal.

That purchase is seen by CDK as key to the company being at the cutting edge of retail technology. “Roadster is proving to be that final piece in our puzzle to really help modernize and really deliver a modern retailing experience for customers,” Krzanich said.

CDK will complete the integration of Roadster over the coming months, Krzanich said. The company is creating a new, universal product sales team to handle “universal” products such as Roadster and the Elead customer relationship management software platform, COO Joe Tautges said on the call.

CDK’s revenue climbed 12 percent to $420.1 million in the fourth quarter.

Krzanich highlighted the 10th consecutive quarter of year-over-year growth in dealership customer sites. The total rose to 9,062 in the period, up from 9,042 in its third quarter and from 8,951 in the year-earlier period.

For the full year, net earnings attributable to CDK rose nearly fivefold to $1.03 billion, resulting from the $1.45 billion sale of the international business unit. Net earnings from continuing operations fell 28 percent to $190.2 million. Full-year revenue climbed 2.1 percent to $1.67 billion.

Shares of CDK fell 7 percent to $42.30 in Wednesday morning trading.