CDK Global Reports Double-Digit Earnings Decline
Brookfield Business Partners-backed CDK Global reported a roughly 18% drop in pro forma EBITDA to about $127 million in the fourth quarter, with revenue largely unchanged at $390 million versus $392 million a year earlier and free cash flow of $8 million. The results, delivered to investors late Tuesday, coincide with post-cyberattack costs, a fall in its $4 billion term loan quote to about 68 cents, and Moody’s lowering its outlook.
Key Points
- 1Reports pro forma EBITDA fell ~18% to about $127 million in Q4
- 2Shows credit stress and investor concern: $4bn term loan trading ~68 cents; Moody’s outlook cut
- 3Signals need for tighter cost controls, restructuring risk, and scrutiny of dealership software investments
Scoring Rationale
Authoritative Bloomberg reporting of meaningful credit and earnings stress, limited novelty and confined to a niche software segment.
Sources
Public references used for this report.
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