##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-51653
 DealerTrack Holdings, Inc.
 (Exact name of Registrant as specified in its charter)
 Delaware
(State or other jurisdiction of incorporation or 
organization)
    
    52-2336218
(I.R.S. Employer Identification Number)1111 Marcus Ave., Suite M04Lake Success, NY
    
    11042(Address of principal executive offices)
    
    (Zip Code)
 (516) 734-3600
 þ o
 o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



DEALERTRACK HOLDINGS, INC.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED June 30, 2009
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Consolidated Balance Sheets (unaudited)
    
    
    3Consolidated Statements of Operations (unaudited)
    
    
    4Consolidated Statements of Cash Flows (unaudited)
    
    
    5Notes to Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    29PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    29Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 4.
Submission of Matters to a Vote of Security Holders
    
    
    31Item 6. Exhibits
    
    
    31Signature
    
    
    32EX 31.1: CERTIFICATIONEX 31.2: CERTIFICATIONEX 32.1: CERTIFICATION
   2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED BALANCE SHEETS
(unaudited)
 June 30,
    
    
    December 31,2009
    
    
    2008(In thousands, except shareand per share amounts)ASSETSCurrent assetsCash and cash equivalents
    
    $
    178,254
    
    
    $
    155,456Short-term investments
    
    
    1,108
    
    
    
    43,350Accounts receivable, net of allowances of
$2,968 and $1,848 at June 30, 2009 and
December 31, 2008, respectively
    
    
    19,729
    
    
    
    18,462Prepaid expenses and other current assets
    
    
    13,932
    
    
    
    9,624Deferred tax assets
    
    
    2,270
    
    
    
    2,195Restricted cash
    
    
    28
    
    
    
    142Total current assets
    
    
    215,321
    
    
    
    229,229Long-term investments
    
    
    3,964
    
    
    
    4,392Property and equipment, net
    
    
    14,350
    
    
    
    13,448Software and web site developments costs, net
    
    
    16,560
    
    
    
    12,705Intangible assets, net
    
    
    50,899
    
    
    
    44,405Goodwill
    
    
    131,084
    
    
    
    114,886Restricted cash
    
    
    250
    
    
    
    250Deferred taxes and other long-term assets
    
    
    21,326
    
    
    
    17,900Total assets
    
    $
    453,754
    
    
    $
    437,215LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    3,934
    
    
    $
    4,488Accrued compensation and benefits
    
    
    10,300
    
    
    
    7,850Accrued other
    
    
    12,366
    
    
    
    11,385Deferred revenues
    
    
    5,213
    
    
    
    5,609Due to acquirees
    
    
    600
    
    
    
    1,740Capital leases payable
    
    
    359
    
    
    
    360Total current liabilities
    
    
    32,772
    
    
    
    31,432Capital leases payable  long-term
    
    
    272
    
    
    
    454Due to acquirees  long-term
    
    
    
    
    
    
    682Deferred tax liabilities  long-term
    
    
    5,016
    
    
    
    2,477Deferred revenue and other long-term liabilities
    
    
    5,975
    
    
    
    5,950Total liabilities
    
    
    44,035
    
    
    
    40,995Commitments and contingencies (Note 17)Stockholders equityPreferred stock, $0.01 par value: 10,000,000
shares authorized and no shares issued and
outstanding at June 30, 2009 and December 31,
2008
    
    
    
    
    
    
    Common stock, $0.01 par value: 175,000,000
shares authorized; 43,333,994 shares issued
and 40,296,894 shares outstanding at June 30,
2009; and 175,000,000 shares authorized;
42,841,737 shares issued and 39,833,616
shares outstanding at December 31, 2008
    
    
    433
    
    
    
    428Treasury stock, at cost, 3,037,100 shares and
3,008,121 shares at June 30, 2009 and
December 31, 2008, respectively
    
    
    (50,395
    )
    
    
    (50,061
    )Additional paid-in capital
    
    
    442,521
    
    
    
    428,771Deferred stock-based compensation (APB 25)
    
    
    (41
    )
    
    
    (446
    )Accumulated other comprehensive income
    
    
    381
    
    
    
    (2,730
    )Retained earnings
    
    
    16,820
    
    
    
    20,258Total stockholders equity
    
    
    409,719
    
    
    
    396,220Total liabilities and stockholders equity
    
    $
    453,754
    
    
    $
    437,215
   3




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##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
 Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(In thousands, except share and
    
    
    (In thousands, except share andper share amounts)
    
    
    per share amounts)RevenueNet revenue
    
    $
    57,870
    
    
    $
    63,181
    
    
    $
    113,570
    
    
    $
    127,489Operating costs and expensesCost of revenue (1)
    
    
    28,852
    
    
    
    27,879
    
    
    
    57,973
    
    
    
    56,491Product development (1)
    
    
    3,514
    
    
    
    3,084
    
    
    
    7,646
    
    
    
    6,226Selling, general and administrative (1)
    
    
    25,280
    
    
    
    28,010
    
    
    
    57,598
    
    
    
    57,742Total operating costs and expenses
    
    
    57,646
    
    
    
    58,973
    
    
    
    123,217
    
    
    
    120,459Income (loss) from operations
    
    
    224
    
    
    
    4,208
    
    
    
    (9,647
    )
    
    
    7,030Interest income
    
    
    341
    
    
    
    1,145
    
    
    
    743
    
    
    
    2,708Other income
    
    
    2
    
    
    
    
    
    
    
    52
    
    
    
    Interest expense
    
    
    (76
    )
    
    
    (74
    )
    
    
    (126
    )
    
    
    (166
    )Realized gain on securities
    
    
    930
    
    
    
    
    
    
    
    1,393
    
    
    
    Income (loss) before benefit
(provision) for income taxes
    
    
    1,421
    
    
    
    5,279
    
    
    
    (7,585
    )
    
    
    9,572Benefit (provision) for income taxes, net
    
    
    766
    
    
    
    (2,213
    )
    
    
    4,147
    
    
    
    (4,168
    )Net income (loss)
    
    $
    2,187
    
    
    $
    3,066
    
    
    $
    (3,438
    )
    
    $
    5,404Basic net income (loss) per share
applicable to common stockholders (2)
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    (0.09
    )
    
    $
    0.13Diluted net income (loss) per share
applicable to common stockholders (2)
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    (0.09
    )
    
    $
    0.12Weighted average shares outstanding (2)
    
    
    39,499,313
    
    
    
    41,505,451
    
    
    
    39,298,637
    
    
    
    41,569,417Weighted average shares outstanding
assuming dilution (2)
    
    
    40,458,174
    
    
    
    42,609,342
    
    
    
    39,298,637
    
    
    
    42,704,862
 
 (1)
    
    Stock-based compensation expense recorded for the three and six months ended June 30, 2009 and 2008 was classified as follows: Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009 (3)
    
    
    2008Cost of revenue
    
    $
    634
    
    
    $
    599
    
    
    $
    1,247
    
    
    $
    1,213Product development
    
    
    199
    
    
    
    181
    
    
    
    408
    
    
    
    358Selling, general and administrative
    
    
    2,573
    
    
    
    2,754
    
    
    
    9,157
    
    
    
    5,424
 (2)
    
    Basic and diluted income per share amounts for the three and six months ended June 30, 2008 have been retroactively adjusted
to conform with the provisions of FSP No. EITF 03-6-1. For further information about the adoption of the provisions of
FSP No. EITF 03-6-1 refer to Note 5.(3)
    
    Included in stock-based compensation expense for the six months ended June 30, 2009 was $3.9 million of stock-based compensation
expense related to the realignment of our workforce and business on January 5, 2009. For further information about the realignment
of our workforce and business see Note 18.   4




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##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
 Six Months Ended June 30,2009
    
    
    2008(In thousands)Cash flows from operating activitiesNet (loss) income
    
    $
    (3,438
    )
    
    $
    5,404Adjustments to reconcile net (loss) income to net cash provided by operating activitiesDepreciation and amortization
    
    
    17,888
    
    
    
    20,208Deferred tax benefit
    
    
    (3,675
    )
    
    
    (1,135
    )Stock-based compensation expense
    
    
    10,812
    
    
    
    6,995Provision for doubtful accounts and sales credits
    
    
    4,749
    
    
    
    3,572(Gain) loss on sale of property and equipment
    
    
    (167
    )
    
    
    1Amortization of bond premium
    
    
    56
    
    
    
    18Amortization of deferred interest
    
    
    70
    
    
    
    103Non cash deferred compensation
    
    
    150
    
    
    
    125Amortization of bank financing costs
    
    
    
    
    
    
    31Stock-based compensation windfall tax benefit
    
    
    (1,508
    )
    
    
    (290
    )Realized gain on securities
    
    
    (1,393
    )
    
    
    Changes in operating assets and liabilities, net of effects of acquisitionsTrade accounts receivable
    
    
    (5,850
    )
    
    
    (4,248
    )Prepaid expenses and other current assets
    
    
    (3,858
    )
    
    
    (1,844
    )Accounts payable and accrued expenses
    
    
    4,761
    
    
    
    (6,527
    )Deferred revenue and other current liabilities
    
    
    250
    
    
    
    1,499Other long-term liabilities
    
    
    (55
    )
    
    
    543Deferred rent
    
    
    79
    
    
    
    360Other long-term assets
    
    
    (228
    )
    
    
    (519
    )Net cash provided by operating activities
    
    
    18,643
    
    
    
    24,296Cash flows from investing activitiesCapital expenditures
    
    
    (3,239
    )
    
    
    (2,991
    )Other restricted cash
    
    
    114
    
    
    
    Purchase of investments
    
    
    
    
    
    
    (144,084
    )Sale of investments
    
    
    44,569
    
    
    
    264,912Capitalized software and web site development costs
    
    
    (6,327
    )
    
    
    (4,410
    )Proceeds from sale of property and equipment
    
    
    78
    
    
    
    2Payment for acquisition of businesses and intangible assets, net of acquired cash
    
    
    (34,621
    )
    
    
    (2,358
    )Net cash provided by investing activities
    
    
    574
    
    
    
    111,071Cash flows from financing activitiesPrincipal payments on capital lease obligations
    
    
    (184
    )
    
    
    (554
    )Proceeds from the exercise of employee stock options
    
    
    1,641
    
    
    
    797Proceeds from employee stock purchase plan
    
    
    525
    
    
    
    1,094Purchase of treasury stock
    
    
    (334
    )
    
    
    (19,131
    )Principal payments on notes payable
    
    
    (423
    )
    
    
    Stock-based compensation windfall tax benefit
    
    
    1,508
    
    
    
    290Net cash provided by (used in) financing activities
    
    
    2,733
    
    
    
    (17,504
    )Net increase in cash and cash equivalents
    
    
    21,950
    
    
    
    117,863Effect of exchange rate changes on cash and cash equivalents
    
    
    848
    
    
    
    (389
    )Cash, beginning of period
    
    
    155,456
    
    
    
    50,564Cash, end of period
    
    $
    178,254
    
    
    $
    168,038Supplemental disclosureCash paid for:Income taxes
    
    $
    3,087
    
    
    $
    4,846Interest
    
    
    29
    
    
    
    84Non-cash investing and financing activities:Asset sale through note receivable
    
    
    500
    
    
    
    Accrued capitalized hardware, software and fixed assets
    
    
    1,413
    
    
    
    505Goodwill adjustment
    
    
    (12
    )
    
    
    Deferred compensation reversal to equity
    
    
    150
    
    
    
    125
   5




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##### Table of Contents



DEALERTRACK HOLDINGS, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
 1. Business Description
  2. Basis of Presentation
  3. Recent Accounting Pronouncements
 The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162
 Amendments to FASB Interpretation No. 46(R)
  6




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##### Table of Contents



Subsequent Events
 4. Fair Value Measurements
  
    
    Level 1  Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or
liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
    
    Level 2  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
    
    Level 3  Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives
the lowest priority to Level 3 inputs.
   Quoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableMarkets
    
    
    Inputs
    
    
    Inputs
    
    
    June 30,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2009Cash equivalents (1)
    
    $
    132,980
    
    
    $
    
    
    
    $
    
    
    
    $
    132,980Short-term investments (2)
    
    
    1,108
    
    
    
    
    
    
    
    
    
    
    
    1,108Long-term investments (3)
    
    
    
    
    
    
    
    
    
    
    3,964
    
    
    
    3,964Total
    
    $
    134,088
    
    
    $
    
    
    
    $
    3,964
    
    
    $
    138,052
 
 (1)
    
    Cash equivalents consist primarily of money market funds with
original maturity dates of three months or less, for which we
determine fair value through quoted market prices.(2)
    
    As of December 31, 2008, we had $2.3 million (net of impairment
charge) of Level 2 auction rate securities (ARS) invested in
tax-advantaged preferred stock trusts in which the underlying
equities are preferred stock. These ARS were associated with
failed auctions, for which the trust dissolved and distributed
the underlying preferred security during the first quarter of
2009. The result of this distribution is a realizable event in
which we recognized a loss in the statement of operations of $0.3
million on the decreased fair value from December 31, 2008
through the dissolution of the trust. Subsequent to the trust dissolution the fair value of the preferred securities are now based upon
quoted market prices in active markets and were reclassed from a Level 2 asset to a Level 1 asset.
For the three months ended June 30, 2009 we sold one preferred security for approximately $2.1
million and recorded a gain of $0.9 million in the statement of operations. As of June 30, 2009,
the remaining preferred securities in our portfolio increased during the second quarter and a $0.3
million unrealized gain was recorded in other comprehensive income.(3)
    
    Level 3 long-term investments includes $1.6 million in auction
rate securities (ARS) invested in tax-exempt state government
obligations that was valued at par. Our intent is not to hold the
ARS invested in tax-exempt state government obligations to
maturity, but rather to use the interest reset feature to provide
liquidity, if applicable. We have classified this as long-term
due to the maturity date of the security being in 2011, coupled
with ongoing failed auctions in the marketplace.Level 3 long-term investments also includes $2.4 million of
tax-advantaged preferred stock of a financial institution. It is
uncertain whether we will be able to liquidate these securities
within the next twelve months, as such we have classified them as
long-term on our consolidated balance sheets. Due to the lack of
observable market quotes we utilized valuation models that rely
exclusively on Level 3 inputs including those that are based on
expected cash flow streams, including assessments of counterparty
credit quality, default risk underlying the security, discount
rates and overall capital market liquidity.  7




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##### Table of Contents



During the three months ended March 31, 2009 our investment in
ARS invested in certain tax-advantaged preferred stock trusts as
of December 31, 2008 dissolved and the trustee distributed the
underlying preferred stock instruments. As a result of these
conversions we measured the fair value of the Level 3 long-term
tax-advantaged preferred stock on the distribution date and
determined that the value increased from December 31, 2008. This
resulted in a realized gain being recorded in the statement of
operations of $0.7 million during the first quarter of 2009. As
of June 30, 2009, the value of these preferred stock instruments
had increased and as a result we recorded an unrealized gain of
$0.3 million for the three months ended June 30, 2009 in other
comprehensive income.  Balance as of January 1, 2009
    
    $
    1,550Reclassification from Level 2 investments to Level 3 investments
    
    
    1,360Realized gain on securities included in the statement of operations
    
    
    716Unrealized gain on securities recorded in other comprehensive income
    
    
    338Balance as of June 30, 2009
    
    $
    3,964
 5. Net Income (Loss) per Share
 .
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(2)
    
    
    
    
    
    (2)Numerator:Net income (loss)
    
    $
    2,187
    
    
    $
    3,066
    
    
    $
    (3,438
    )
    
    $
    5,404Net income allocated to participating securities
under two-class method
    
    
    (33
    )
    
    
    (64
    )
    
    
    
    
    
    
    (112
    )Net income (loss) applicable to common stockholders
    
    $
    2,154
    
    
    $
    3,002
    
    
    $
    (3,438
    )
    
    $
    5,292Denominator:Weighted average common stock outstanding (basic)
    
    
    39,499,313
    
    
    
    41,505,451
    
    
    
    39,298,637
    
    
    
    41,569,417Common equivalent shares from options to purchase
common stock and restricted common stock units (1)
    
    
    958,861
    
    
    
    1,103,891
    
    
    
    
    
    
    
    1,135,445Weighted average common stock outstanding (diluted)
    
    
    40,458,174
    
    
    
    42,609,342
    
    
    
    39,298,637
    
    
    
    42,704,862Basic net income (loss) per share
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    (0.09
    )
    
    $
    0.13Diluted net income (loss) per share
    
    $
    0.05
    
    
    $
    0.07
    
    
    $
    (0.09
    )
    
    $
    0.12
 
 (1)
    
    Our restricted common stock units are not considered participating
securities since they do not contain a non-forfeitable right to
dividends and have, therefore, not been included in the denominator
for basic earnings per share calculations.(2)
    
    EPS data presented was adjusted retroactively to conform with the
provisions of FSP No. EITF 03-6-1. FSP No. EITF 03-6-1 did not have a
significant impact on the per share calculations for the three and six
months ended June 30, 2008.  8




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(2)
    
    
    
    
    
    (2)Stock options
    
    
    2,905,849
    
    
    
    2,335,898
    
    
    
    4,883,287
    
    
    
    2,202,333Restricted stock units
    
    
    8,816
    
    
    
    
    
    
    
    577,781
    
    
    
    Total antidilutive awards
    
    
    2,914,665
    
    
    
    2,335,898
    
    
    
    5,461,068
    
    
    
    2,202,233
 6. Comprehensive Income (Loss)
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net income (loss)
    
    $
    2,187
    
    
    $
    3,066
    
    
    $
    (3,438
    )
    
    $
    5,404Foreign currency translation adjustments
    
    
    3,856
    
    
    
    406
    
    
    
    2,541
    
    
    
    (1,633
    )Unrealized gain (loss) on available for sale securities
    
    
    809
    
    
    
    (56
    )
    
    
    570
    
    
    
    (342
    )Total comprehensive income (loss)
    
    $
    6,852
    
    
    $
    3,416
    
    
    $
    (327
    )
    
    $
    3,429
  7. Stock-Based Compensation Expense
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Stock options
    
    $
    1,858
    
    
    $
    2,083
    
    
    $
    7,190
    
    
    $
    4,013Restricted common stock
    
    
    1,080
    
    
    
    1,378
    
    
    
    2,684
    
    
    
    2,789Restricted stock units
    
    
    468
    
    
    
    
    
    
    
    878
    
    
    
    ESPP
    
    
    
    
    
    
    73
    
    
    
    60
    
    
    
    193Total stock-based compensation expense
    
    $
    3,406
    
    
    $
    3,534
    
    
    $
    10,812
    
    
    $
    6,995
   9




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##### Table of Contents



8. Business Combinations
 AAX Acquisition
 ®
  Current assets
    
    $
    489Property and equipment
    
    
    1,035Intangible assets
    
    
    16,639Goodwill
    
    
    15,283Total assets acquired
    
    
    33,446Total liabilities assumed
    
    
    (2,571
    )Net assets acquired
    
    $
    30,875
      10




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##### Table of Contents



Other AAX deal terms
 Service Credits
  Purchase Price Adjustment
   Unaudited Pro Forma Summary of Operations
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008(in thousands, except share and
    
    
    (in thousands, except share andper share amounts)
    
    
    per share amounts)(Unaudited)
    
    
    (Unaudited)Net revenue
    
    $
    57,870
    
    
    $
    69,679
    
    
    $
    115,153
    
    
    $
    140,398Net income (loss)
    
    $
    2,187
    
    
    $
    1,870
    
    
    $
    (3,664
    )
    
    $
    2,613Basic net income
(loss) per share
applicable to
common stockholders
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    (0.09
    )
    
    $
    0.06Diluted net income
(loss) per share
applicable to
common stockholders
    
    $
    0.05
    
    
    $
    0.04
    
    
    $
    (0.09
    )
    
    $
    0.06
 Curomax Acquisition
  9. Stock Repurchase Program
   11




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##### Table of Contents



10. Property and Equipment
  EstimatedUseful Life
    
    
    June 30,
    
    
    December 31,(Years)
    
    
    2009
    
    
    2008Computer equipment
    
    
    3-5
    
    
    $
    21,531
    
    
    $
    20,431Office equipment
    
    
    5
    
    
    
    3,209
    
    
    
    2,896Furniture and fixtures
    
    
    5
    
    
    
    3,241
    
    
    
    3,068Leasehold improvements
    
    
    5-11
    
    
    
    3,051
    
    
    
    1,233Total property and equipment, gross
    
    
    
    
    
    
    31,032
    
    
    
    27,628Less: Accumulated depreciation and amortization
    
    
    
    
    
    
    (16,682
    )
    
    
    (14,180
    )Total property and equipment, net
    
    
    
    
    
    $
    14,350
    
    
    $
    13,448
  11. Intangible Assets
  June 30, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Gross
    
    
    
    
    
    
    AmortizationBook
    
    
    Accumulated
    
    
    Book
    
    
    Accumulated
    
    
    PeriodValue
    
    
    Amortization
    
    
    Value
    
    
    Amortization
    
    
    (Years)Customer contracts
    
    $
    39,869
    
    
    $
    (20,410
    )
    
    $
    33,673
    
    
    $
    (17,289
    )
    
    
    2-7Database
    
    
    13,825
    
    
    
    (9,881
    )
    
    
    13,333
    
    
    
    (8,818
    )
    
    
    3-6Trade names
    
    
    12,510
    
    
    
    (6,239
    )
    
    
    10,500
    
    
    
    (5,469
    )
    
    
    5-10Technology
    
    
    27,170
    
    
    
    (8,520
    )
    
    
    22,684
    
    
    
    (7,209
    )
    
    
    1-5Non-compete agreement
    
    
    7,805
    
    
    
    (5,230
    )
    
    
    10,697
    
    
    
    (7,697
    )
    
    
    2-5Total
    
    $
    101,179
    
    
    $
    (50,280
    )
    
    $
    90,887
    
    
    $
    (46,482
    )
   12. Goodwill
  Balance as of January 1, 2009
    
    $
    114,886Acquisition of AAX (see Note 8)
    
    
    15,283Impact of change in Canadian dollar exchange rate
    
    
    1,127Exit from
SCS business (See Note 19)
    
    
    (200
    )Other
    
    
    (12
    )Balance as of June 30, 2009
    
    $
    131,084
  12




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##### Table of Contents



13. Other Accrued Liabilities
  June 30,
    
    
    December 31,2009
    
    
    2008Revenue share
    
    $
    2,006
    
    
    $
    1,700Customer deposits
    
    
    2,645
    
    
    
    2,749Sales taxes
    
    
    1,475
    
    
    
    1,511Severance
    
    
    1,475
    
    
    
    34Software licenses
    
    
    752
    
    
    
    1,341Professional fees
    
    
    1,559
    
    
    
    1,158Accrued Curomax contingent consideration (Note 8)
    
    
    
    
    
    
    1,837Other
    
    
    2,454
    
    
    
    1,055Total other accrued liabilities
    
    $
    12,366
    
    
    $
    11,385
 14. Income Taxes
    15. Long-Term Incentive Equity Awards
    13




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008EBITDA Performance Award
    
    $
    118
    
    
    $
    167
    
    
    $
    238
    
    
    $
    334Market Value Award
    
    
    149
    
    
    
    187
    
    
    
    43
    
    
    
    374Total
    
    $
    267
    
    
    $
    354
    
    
    $
    281
    
    
    $
    708
  16. Commitments and Contingencies
 Retail Sales Tax
      Commitments
   14




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##### Table of Contents



Legal Proceedings
  DealerTrack Inc. v. RouteOne LLC
   DealerTrack, Inc. v. Finance Express et al., CV-06-2335;
 DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864; and
 DealerTrack Inc. v. RouteOne and Finance Express et al., CV-07-215
    Markman
   15




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##### Table of Contents



17. Segment Information
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Transaction services revenue
    
    $
    24,645
    
    
    $
    36,321
    
    
    $
    48,686
    
    
    $
    74,488Subscription services revenue
    
    
    29,028
    
    
    
    22,877
    
    
    
    56,971
    
    
    
    45,263Other
    
    
    4,197
    
    
    
    3,983
    
    
    
    7,913
    
    
    
    7,738Total net revenue
    
    $
    57,870
    
    
    $
    63,181
    
    
    $
    113,570
    
    
    $
    127,489
 18. Realignment of Workforce and Business
   Balance as of
    
    
    
    
    
    
    
    
    
    
    Balance as ofJanuary 1, 2009
    
    
    Charges
    
    
    Cash Payments
    
    
    June 30, 2009Severance
    
    $
    
    
    
    $
    2,689
    
    
    $
    1,389
    
    
    $
    1,300Other benefits
    
    
    
    
    
    
    149
    
    
    
    149
    
    
    
    Total
    
    $
    
    
    
    $
    2,838
    
    
    $
    1,538
    
    
    $
    1,300
  19. Exit from SCS Business
    16




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##### Table of Contents



20. 401(k) Plan
  21. Employee Stock Purchase Plan
  22. Third Amended and Restated 2005 Incentive Award Plan
   
 Item 2.

    Managements Discussion and Analysis of Financial Condition and Results of Operations
 You should read the following discussion and analysis of our financial condition and
results of operations in conjunction with our consolidated financial statements. Certain statements
in this Quarterly Report on Form 10-Q are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the
Securities Exchange Act of 1934, as amended (the Exchange Act). These statements involve a number
of risks, uncertainties and other factors that could cause our actual results, performance or
achievements to be materially different from any future results, performance or achievements
expressed or implied by these forward-looking statements. Factors that could materially affect such
forward-looking statements can be found in the sections entitled Risk Factors in Part II,
Item 1A. in this Quarterly Report on Form 10-Q and in Part I, Item 1A. in our Annual Report on Form
10-K for the year ended December 31, 2008 filed with the SEC on February 24, 2009 and amended on
April 30, 2009. Investors are urged to consider these factors carefully in evaluating the
forward-looking statements and are cautioned not to place undue reliance on such forward-looking
statements. The forward-looking statements made herein are only made as of the date hereof and we
will undertake no obligation to publicly update such forward-looking statements to reflect
subsequent events or circumstances.
 Overview
   17




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##### Table of Contents



Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008EBITDA and Other Business Statistics:EBITDA (1)
    
    $
    10,315
    
    
    $
    13,894
    
    
    $
    9,686
    
    
    $
    27,238Capital expenditures, software and web site development costs
    
    $
    5,819
    
    
    $
    5,027
    
    
    $
    11,053
    
    
    $
    7,941Active dealers in our network as of end of the period (2)
    
    
    18,047
    
    
    
    21,735
    
    
    
    18,047
    
    
    
    21,735Active financing sources in our network as of end of period (3)
    
    
    755
    
    
    
    659
    
    
    
    755
    
    
    
    659Active lender to dealer relationships (4)
    
    
    123,885
    
    
    
    195,886
    
    
    
    123,885
    
    
    
    195,886Subscribing dealers in our network as of end of the period (5)
    
    
    14,115
    
    
    
    13,957
    
    
    
    14,115
    
    
    
    13,957Transactions processed (6)
    
    
    13,157
    
    
    
    22,251
    
    
    
    27,484
    
    
    
    46,140Average transaction price (7)
    
    $
    1.87
    
    
    $
    1.63
    
    
    $
    1.78
    
    
    $
    1.62Average monthly subscription revenue per subscribing dealership (8)
    
    $
    686
    
    
    $
    546
    
    
    $
    673
    
    
    $
    541
 
 (1)
    
    EBITDA represents net income (loss) before interest
(income) expense, taxes, depreciation and amortization. We
present EBITDA because we believe that EBITDA provides useful
information with respect to the performance of our fundamental
business activities and is also frequently used by securities
analysts, investors and other interested parties in the
evaluation of comparable companies. We rely on EBITDA as a
primary measure to review and assess the operating performance of
our company and management team in connection with our executive
compensation plan incentive payments.EBITDA has limitations as an analytical tool and you should not
consider it in isolation, or as a substitute for analysis of our
results as reported under Generally Accepted Accounting
Principles in the United States of America (GAAP). Some of these
limitations are: 
    
    EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
    
    EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
    
    EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or
principal payments, on our debts;
    
    Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have
to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; and
  18




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##### Table of Contents




    
    Other companies may calculate EBITDA differently than we do, limiting its usefulness as a comparative measure.Because of these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth
of our business. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA only supplementally.
EBITDA is a measure of our performance that is not required by, or presented in accordance with, GAAP. EBITDA is not a measurement of
our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other
performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our
liquidity.
  Three Months Ended June 30,
    
    
    Six Months Ended June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008GAAP net income (loss)
    
    $
    2,187
    
    
    $
    3,066
    
    
    $
    (3,438
    )
    
    $
    5,404Interest income
    
    
    (341
    )
    
    
    (1,145
    )
    
    
    (743
    )
    
    
    (2,708
    )Interest expense
    
    
    76
    
    
    
    74
    
    
    
    126
    
    
    
    166(Benefit) provision for income taxes
    
    
    (766
    )
    
    
    2,213
    
    
    
    (4,147
    )
    
    
    4,168Depreciation of property and equipment and
amortization of capitalized software and website
costs
    
    
    4,023
    
    
    
    3,185
    
    
    
    7,466
    
    
    
    6,081Amortization of acquired identifiable intangibles
    
    
    5,136
    
    
    
    6,501
    
    
    
    10,422
    
    
    
    14,127EBITDA (Non-GAAP)
    
    $
    10,315
    
    
    $
    13,894
    
    
    $
    9,686
    
    
    $
    27,238
 
 (2)
    
    We consider a dealer to be active as of a date if the dealer completed at least one revenue-generating credit
application processing transaction using the DealerTrack network during the most recently ended calendar month.(3)
    
    We consider a financing source to be active in our network as of a date if it is accepting credit application data
electronically from dealers in the DealerTrack network, including financing sources visible to dealers through drop
down menus. This counting methodology reflects revisions made in July 2008 to more accurately reflect the number of
financing sources available on the network.(4)
    
    Lender to dealer relationships are made up of two components, the number of financing sources on the DealerTrack
network and the number of active dealers submitting applications. Lender to dealer relationships are counted by pair.
For example, one lenders relationship with 50 dealerships is counted as fifty relationships; the next lenders
relationship with the same 50 dealership would bring our relationship count to 100. The number of lender to dealer
relationships is impacted by both the loss of lenders or dealers. For example, if a lender goes out of business,
exits indirect auto financing or reduces the number of dealers it does business with, our relationship count is
negatively impacted by each of the dealers that are no longer doing business with that lender. If a dealer goes out
of business our relationship count is also negatively impacted.(5)
    
    Represents the number of dealerships with a current subscription in the DealerTrack or DealerTrack Canada network at
the end of a given period.(6)
    
    Represents revenue-generating transactions processed in the DealerTrack, DealerTrack Digital Services and DealerTrack
Canada networks at the end of a given period.(7)
    
    Represents the average revenue earned per transaction processed in the DealerTrack, DealerTrack Digital Services and
DealerTrack Canada networks during a given period.(8)
    
    Represents net subscription revenue divided by subscribing
dealers at the end of a given period in the DealerTrack and DealerTrack Canada networks. Revenue
 Transaction Services Revenue.
  19




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##### Table of Contents



Subscription Services Revenue.
 Other Revenue.
 Cost of Revenue and Operating Expenses
 Cost of Revenue.
 Product Development Expenses.
 Selling, General and Administrative Expenses.
   Fair Value Measurements
  
    
    Level 1  Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or
liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.
    
    Level 2  Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.
    
    Level 3  Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives
the lowest priority to Level 3 inputs.
   Quoted
    
    
    SignificantPrices in
    
    
    Other
    
    
    SignificantActive
    
    
    Observable
    
    
    UnobservableMarkets
    
    
    Inputs
    
    
    Inputs
    
    
    June 30,(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    2009Cash equivalents (1)
    
    $
    132,980
    
    
    $
    
    
    
    $
    
    
    
    $
    132,980Short-term investments (2)
    
    
    1,108
    
    
    
    
    
    
    
    
    
    
    
    1,108Long-term investments (3)
    
    
    
    
    
    
    
    
    
    
    3,964
    
    
    
    3,964Total
    
    $
    134,088
    
    
    $
    
    
    
    $
    3,964
    
    
    $
    138,052
 
 (1)
    
    Cash equivalents consist primarily of money market funds with
original maturity dates of three months or less, for which we
determine fair value through quoted market prices.  20




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##### Table of Contents



(2)
    
    As of December 31, 2008, we had $2.3 million (net of impairment
charge) of Level 2 auction rate securities (ARS) invested in
tax-advantaged preferred stock trusts in which the underlying
equities are preferred stock. These ARS were associated with
failed auctions, for which the trust dissolved and distributed
the underlying preferred security during the first quarter of
2009. The result of this distribution is a realizable event in
which we recognized a loss in the statement of operations of $0.3
million on the decreased fair value from December 31, 2008
through the dissolution of the trust. Subsequent to the trust dissolution the fair value of the preferred securities are now based upon
quoted market prices in active markets and were reclassed from a Level 2 asset to a Level 1 asset.
For the three months ended June 30, 2009 we sold one preferred security for approximately $2.1
million and recorded a gain of $0.9 million in the statement of operations. As of June 30, 2009,
the remaining preferred securities in our portfolio increased during the second quarter and a $0.3
million unrealized gain was recorded in other comprehensive income.(3)
    
    Level 3 long-term investments includes $1.6 million in auction
rate securities (ARS) invested in tax-exempt state government
obligations that was valued at par. Our intent is not to hold the
ARS invested in tax-exempt state government obligations to
maturity, but rather to use the interest reset feature to provide
liquidity, if applicable. We have classified this as long-term
due to the maturity date of the security being in 2011, coupled
with ongoing failed auctions in the marketplace.Level 3 long-term investments also includes $2.4 million of
tax-advantaged preferred stock of a financial institution. It is
uncertain whether we will be able to liquidate these securities
within the next twelve months, as such we have classified them as
long-term on our consolidated balance sheets. Due to the lack of
observable market quotes we utilized valuation models that rely
exclusively on Level 3 inputs including those that are based on
expected cash flow streams, including assessments of counterparty
credit quality, default risk underlying the security, discount
rates and overall capital market liquidity.During the three months ended March 31, 2009 our investment in
ARS invested in certain tax-advantaged preferred stock trusts as
of December 31, 2008 dissolved and the trustee distributed the
underlying preferred stock instruments. As a result of these
conversions we measured the fair value of the Level 3 long-term
tax-advantaged preferred stock on the distribution date and
determined that the value increased from December 31, 2008. This
resulted in a realized gain being recorded in the statement of
operations of $0.7 million during the first quarter of 2009. As
of June 30, 2009, the value of these preferred stock instruments
had increased and as a result we recorded an unrealized gain of
$0.3 million for the three months ended June 30, 2009 in other
comprehensive income.  Balance as of January 1, 2009
    
    $
    1,550Reclassification from Level 2 investments to Level 3 investments
    
    
    1,360Realized gain on securities included in the statement of operations
    
    
    716Unrealized gain on securities recorded in other comprehensive income
    
    
    338Balance as of June 30, 2009
    
    $
    3,964
 Realignment of Workforce and Business
   Balance as of
    
    
    
    
    
    
    
    
    
    
    Balance as ofJanuary 1, 2009
    
    
    Charges
    
    
    Cash Payments
    
    
    June 30, 2009Severance
    
    $
    
    
    
    $
    2,689
    
    
    $
    1,389
    
    
    $
    1,300Other benefits
    
    
    
    
    
    
    149
    
    
    
    149
    
    
    
    Total
    
    $
    
    
    
    $
    2,838
    
    
    $
    1,538
    
    
    $
    1,300
   21




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##### Table of Contents



Critical Accounting Policies and Estimates
    Results of Operations
  Three Months June 30,
    
    
    Six Months June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008% of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net
    
    
    
    
    
    
    % of Net$ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue
    
    
    $ Amount
    
    
    Revenue(In thousands, except percentages)
    
    
    (In thousands, except percentages)Consolidated Statements
of Operations Data:Net revenue
    
    $
    57,870
    
    
    
    100.0
    %
    
    $
    63,181
    
    
    
    100.0
    %
    
    $
    113,570
    
    
    
    100.0
    %
    
    $
    127,489
    
    
    
    100.0
    %Operating costs and expenses:Cost of revenue
    
    
    28,852
    
    
    
    49.9
    
    
    
    27,879
    
    
    
    44.1
    
    
    
    57,973
    
    
    
    51.0
    
    
    
    56,491
    
    
    
    44.3Product development
    
    
    3,514
    
    
    
    6.1
    
    
    
    3,084
    
    
    
    4.9
    
    
    
    7,646
    
    
    
    6.7
    
    
    
    6,226
    
    
    
    4.9Selling, general and
administrative
    
    
    25,280
    
    
    
    43.6
    
    
    
    28,010
    
    
    
    44.3
    
    
    
    57,598
    
    
    
    50.8
    
    
    
    57,742
    
    
    
    45.3Total operating costs and
expenses
    
    
    57,646
    
    
    
    99.6
    
    
    
    58,973
    
    
    
    93.3
    
    
    
    123,217
    
    
    
    108.5
    
    
    
    120,459
    
    
    
    94.5Income (loss) from operations
    
    
    224
    
    
    
    0.4
    
    
    
    4,208
    
    
    
    6.7
    
    
    
    (9,647
    )
    
    
    (8.5
    )
    
    
    7,030
    
    
    
    5.5Interest income
    
    
    341
    
    
    
    0.6
    
    
    
    1,145
    
    
    
    1.8
    
    
    
    743
    
    
    
    0.7
    
    
    
    2,708
    
    
    
    2.1Other income, net
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    
    
    
    
    
    
    
    
    Interest expense
    
    
    (76
    )
    
    
    (0.1
    )
    
    
    (74
    )
    
    
    (0.1
    )
    
    
    (126
    )
    
    
    (0.1
    )
    
    
    (166
    )
    
    
    (0.1
    )Realized gain on securities
    
    
    930
    
    
    
    1.6
    
    
    
    
    
    
    
    
    
    
    
    1,393
    
    
    
    1.2
    
    
    
    
    
    
    
    Income (loss) before benefit
(provision) for income taxes
    
    
    1,421
    
    
    
    2.5
    
    
    
    5,279
    
    
    
    8.4
    
    
    
    (7,585
    )
    
    
    (6.7
    )
    
    
    9,572
    
    
    
    7.5Benefit (provision) for
income taxes, net
    
    
    766
    
    
    
    1.3
    
    
    
    (2,213
    )
    
    
    (3.5
    )
    
    
    4,147
    
    
    
    3.7
    
    
    
    (4,168
    )
    
    
    (3.3
    )Net income (loss)
    
    $
    2,187
    
    
    
    3.8
    %
    
    $
    3,066
    
    
    
    4.9
    %
    
    $
    (3,438
    )
    
    
    (3.0
    )%
    
    $
    5,404
    
    
    
    4.2
    %
  22




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##### Table of Contents



Three Months Ended June 30, 2009 and 2008
 Revenue
 Three Months Ended June 30,2009
    
    
    2008Transaction services revenue
    
    $
    24,645
    
    
    $
    36,321Subscription services revenue
    
    
    29,028
    
    
    
    22,877Other
    
    
    4,197
    
    
    
    3,983Total net revenue
    
    $
    57,870
    
    
    $
    63,181
  Transaction Services Revenue.
 Subscription Services Revenue.
 Cost of Revenue and Operating Expenses
 Three Months Ended June 30,2009
    
    
    2008Cost of revenue
    
    $
    28,852
    
    
    $
    27,879Product development
    
    
    3,514
    
    
    
    3,084Selling, general and administrative
    
    
    25,280
    
    
    
    28,010Total cost of revenue and operating expenses
    
    $
    57,646
    
    
    $
    58,973
 Cost of Revenue.
  23




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##### Table of Contents



Product Development Expenses.
 Selling, General and Administrative Expenses.
 Interest Income
 Three Months Ended June 30,2009
    
    
    2008Interest income
    
    $
    341
    
    
    $
    1,145
  Benefit (Provision) for Income Taxes
 Three Months Ended June 30,2009
    
    
    2008Benefit (provision) for income taxes, net
    
    $
    766
    
    
    $
    (2,213
    )
  Six Months Ended June 30, 2009 and 2008
 Revenue
 Six Months Ended June 30,2009
    
    
    2008Transaction services revenue
    
    $
    48,686
    
    
    $
    74,488Subscription services revenue
    
    
    56,971
    
    
    
    45,263Other
    
    
    7,913
    
    
    
    7,738Total net revenue
    
    $
    113,570
    
    
    $
    127,489
  24




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##### Table of Contents



Transaction Services Revenue.
 Subscription Services Revenue.
 Cost of Revenue and Operating Expenses
 Six Months Ended June 30,2009
    
    
    2008Cost of revenue
    
    $
    57,973
    
    
    $
    56,491Product development
    
    
    7,646
    
    
    
    6,226Selling, general and administrative
    
    
    57,598
    
    
    
    57,742Total cost of revenue and operating expenses
    
    $
    123,217
    
    
    $
    120,459
 Cost of Revenue.
 Product Development Expenses.
 Selling, General and Administrative Expenses.
  25




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##### Table of Contents



Interest Income
 Six Months Ended June 30,2009
    
    
    2008Interest income
    
    $
    743
    
    
    $
    2,708
  Benefit (Provision) for Income Taxes
 Six Months Ended June 30,2009
    
    
    2008Benefit (provision) for income taxes, net
    
    $
    4,147
    
    
    $
    (4,168
    )
  Liquidity and Capital Resources
       26




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##### Table of Contents



Six Months Ended June 30,2009
    
    
    2008Net cash provided by operating activities
    
    $
    18,643
    
    
    $
    24,296Net cash provided by investing activities
    
    $
    574
    
    
    $
    111,071Net cash provided by (used in) financing activities
    
    $
    2,733
    
    
    $
    (17,504
    )
 Operating Activities
  Investing Activities
  Financing Activities
  Contractual Obligations
   Off-Balance Sheet Arrangements
   27




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##### Table of Contents



Industry Trends
   Effects of Inflation
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Foreign Currency Exposure
  Interest Rate Exposure
    28




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##### Table of Contents



Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  DealerTrack Inc. v. RouteOne LLC
   DealerTrack, Inc. v. Finance Express et al., CV-06-2335;
 DealerTrack Inc. v. RouteOne and Finance Express et al., CV-06-6864; and
 DealerTrack Inc. v. RouteOne and Finance Express et al., CV-07-215
    Markman
     29




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##### Table of Contents



Item 1A. Risk Factors
  Planned significant reductions in the number of automobile dealers will have a negative effect on
our subscription business.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 Purchases of Equity Securities by the Issuer
   Total
    
    
    MaximumNumber of
    
    
    NumberShares
    
    
    of SharesPurchased
    
    
    ThatTotal
    
    
    Average
    
    
    as Part of
    
    
    May Yet beNumber
    
    
    Price
    
    
    Publicly
    
    
    Purchasedof Shares
    
    
    Paid per
    
    
    Announced
    
    
    Under thePeriod
    
    Purchased
    
    
    Share
    
    
    Program
    
    
    ProgramApril 2009
    
    
    
    
    
    $
    
    
    
    
    n/a
    
    
    
    n/aMay 2009
    
    
    604
    
    
    $
    14.61
    
    
    
    n/a
    
    
    
    n/aJune 2009
    
    
    
    
    
    $
    
    
    
    
    n/a
    
    
    
    n/aTotal
    
    
    604
  30




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
   Name
    
    Votes Received
    
    
    Votes WithheldJames Foy
    
    
    38,800,676
    
    
    
    247,749Howard L. Tischler
    
    
    38,490,292
    
    
    
    558,133James David Power IIII
    
    
    38,912,198
    
    
    
    136,227
     
 Item 6. Exhibits
 ExhibitNumber
    
    Description of Document10.1
    
    
    Third Amended and Restated 2005 Incentive Award Plan of
DealerTrack Holdings, Inc. (incorporated herein by reference
to Exhibit I to the Companys Definitive Proxy Statement,
filed on May 13, 2009).31.1
    
    
    Certification of Mark F. ONeil, Chairman, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.31.2
    
    
    Certification of Eric D. Jacobs, Senior Vice President, Chief
Financial and Administrative Officer, pursuant to
Rule 13a-14(a)and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certifications of Mark F. ONeil, Chairman, President and
Chief Executive Officer, and Eric D. Jacobs, Senior Vice
President, Chief Financial and Administrative Officer,
pursuant to 18 U.S.C Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
  31




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##### Table of Contents



SIGNATURE
  DealerTrack Holdings, Inc.(Registrant)Date: August 6, 2009
    
    /s/ Eric D. JacobsEric D. JacobsSenior Vice President, Chief Financial andAdministrative Officer(Principal Financial and Accounting Officer)
 
 EXHIBIT INDEX
 ExhibitNumber
    
    Description of Document10.1
    
    
    Third Amended and Restated 2005 Incentive Award Plan of
DealerTrack Holdings, Inc. (incorporated herein by reference
to Exhibit I to the Companys Definitive Proxy Statement,
filed on May 13, 2009).31.1
    
    
    Certification of Mark F. ONeil, Chairman, President and Chief
Executive Officer, pursuant to Rule 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.31.2
    
    
    Certification of Eric D. Jacobs, Senior Vice President, Chief
Financial and Administrative Officer, pursuant to
Rule 13a-14(a)and 15d-14(a), as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certifications of Mark F. ONeil, Chairman, President and
Chief Executive Officer, and Eric D. Jacobs, Senior Vice
President, Chief Financial and Administrative Officer,
pursuant to 18 U.S.C Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
  32