Automotive software vendor Dealertrack Technologies Inc. said net income dropped 35 percent in the second quarter from the year-earlier period to $3.8 million. The drop was due in part to comparisons with a year-earlier period when net was boosted by a $3.5 million gain, net of taxes, on the sale of assets.
However, its income from operations rose 34 percent to $7.6 million and revenue rose 26 percent to $121.8 million. A year ago, the company benefited from a onetime $3.5 million gain from the sale of assets.
The company’s revenue is based partly on the number of times auto dealers process vehicle registrations, use Dealertrack’s software to submit credit applications and carry out other functions.
“Customers are increasingly embracing our vision of transforming automotive retail through integrated technology solutions,” Mark F. O’Neil, CEO of Dealertrack, said in a statement. “During the second quarter, we saw accelerating organic subscription revenue growth. We also saw strong trends in transaction revenue independent of healthy car sales and credit trends, as we increased average transaction price per car sold through growing adoption and cross selling of registration, titling and lien services.”
Dealertrack also revised its full-year forecasts:
-- Revenue: To $464.0-$468 million, from $453-$462 million.
-- Net income: To $10-$12 million, from $9.5-$12.5 million.
The company said the upward revisions reflect the trend of higher car sales. It now predicts 2013 new-vehicle sales by franchised dealers will be approximately 15.5 million units, 300,000 more than it previously forecast, and used-vehicle sales by franchised dealers will be 15.4 million, up 400,000 from the prior forecast.
There are 20,205 active U.S. auto dealers on the Dealertrack network, and another 18,076 dealers in the United States and Canada with Dealertrack subscriptions, the company said.
The company considers a dealer to be active on its network if that dealer completed at least one revenue-generating credit application processing transaction using the U.S. Dealertrack network during the most recent calendar month.