Editor's note: Superior Integrated Solutions is not one of the plaintiffs suing CDK. An earlier version of this story listed Superior as being a plaintiff.
HOFFMAN ESTATES, Ill. — In three years as a stand-alone company, dealership software giant CDK Global Inc. has produced some eye-popping numbers for investors, who in turn pushed CDK's stock to a record high this month. The company's adjusted profit margin hit 32 percent in its 2017 fiscal year, and it's targeting 40 percent for 2019, continuing a growth rate that its CEO has called "almost unprecedented" for a business of its size and type.
But CDK's fast climb hasn't been smooth. Its pursuit of splashy results has driven some customers into the arms of competitors. Four rival vendors, including the powerful Cox Automotive conglomerate, have sued CDK, accusing it of anti-competitive business practices. At least five dealers or dealership groups have filed class-action lawsuits against the company this year, alleging antitrust violations.
"They're making it easier for us to win their business," said Autosoft CEO Bryce Veon, whose company has signed more than 30 customers away from CDK in each of the last two years. "A lot of [dealers] call us, and they're like, 'We just want off of them as fast as we can.' "
CDK officials acknowledge the company needs to improve in some areas but insist that it has made big strides in many others and is making the right moves to prepare for radical changes in the automotive retailing business.