SunCar Technology Reports 27% Revenue Growth, Including 55% Increase in Auto e-Insurance Business and Over 250% Increase in the Number of Electric Vehicle Insurance Policies in 1H 2024

PRNewswire 16-Sep-2024 7:00 AM

Adjusted EBITDA Increased to $6.4 Million for the First Half of 2024

Conference Call and Webcast on September 16^th at 8 AM ET

NEW YORK, Sept. 16, 2024 /PRNewswire/ -- SunCar Technology Group Inc. (the "Company" or "SunCar") (NASDAQ:SDA), an innovative leader in cloud-based B2B software-focused auto services and auto e-insurance in China, today provided a business update and reported financial results for the first half of fiscal year 2024.

First Half 2024 Financial Results

• Total revenue increased by 27% to $203.1 million for the six months ended June 30, 2024, from $159.4 million for the six months ended June 30, 2023.
  
  
  • Auto Services ' revenue increased by 9% to $107.5 million for the six months ended June 30, 2024, from $98.8 million for the six months ended June 30, 2023. The increase was driven by an increase in the number of completed service orders and the addition of new enterprise clients. This segment leverages SunCar's software platform, facilitating a wide variety of auto services such as car wash, airport pickup, concierge services, courtesy car, and roadside assistance.
    
    
  • Auto eInsurance revenue increased by 55% to $73.7 million for the six months ended June 30, 2024, from $47.7 million for the six months ended June 30, 2023, which was driven by the increased number of insurance policies sold in the six months ended June 30, 2024.
    
    
    • SunCar ranked First in China in selling auto insurance premiums tailored to EV owners. EV sales increased rapidly in the first half of the year, and our auto insurance business expanded rapidly.
      
      
    • Customer growth remained strong, as demonstrated by an over 250% increase in new insurance policies.
      
      
  • Technology Services revenue increased by 70% to $21.9 million for the six months ended June 30, 2024, from $12.9 million for the six months ended June 30, 2023. This increase was due to an increased demand from insurance companies and their sales partners for our software, which streamlines workflows, manages customer relationships, and automates order processing. The Company's ongoing technology upgrades and use of a private cloud platform have simplified development and enhanced service capacity, enabling this rapid growth.
    
    
• Operating costs and expenses increased to $261.7 million for the six months ending June 30, 2024, and $158.3 million for the six months ending June 30, 2023. Of the $261.7 million in operating costs and expenses, $62.8 million were related to the Company's Equity Incentive Plan.
  
  
• Integrated service costs rose by 22%, from $87.9 million in the first half of 2023 to $107.6 million in 2024. These increases align with the growth in revenue from our Auto Services business and the significant expansion in our Technology Services business.
  
  
• Selling expenses decreased by 20%, from $12.8 million in the first half of 2023 to $10.2 million in 2024. This $1.8 million decrease in on-site promotion expenses was driven by the synergistic growth between our auto service and auto eInsurance business lines, which enhanced promotion efficiency. 
  
  
• General and administrative expenses increased from $4.0 million in the first half of 2023 to $40.5 million in the first half of 2024. This increase was primarily due to a $31.0 million increase in share-based compensation expenses related to the 2024 Equity Incentive Plan and a $6.3 million increase in expected credit losses on account receivables. Excluding these two items, there was a slight decrease in general and administrative expenses compared to the previous year.
  
  
• Research and development expenses increased from $4.0 million in the first six months of 2023 to $32.2 million in 2024. The primary driver of this increase was the $31.0 million share-based compensation expense related to the 2024 Equity Incentive Plan.
  
  
• Adjusted EBITDA, a non-GAAP metric that excludes certain non-recurring items and non-cash expenses, is useful in evaluating our operational performance in addition to the GAAP metrics. Our Adjusted EBITDA increased by 4% to $6.0 million for the six months ended June 30, 2024 compared to $5.8 million in the six months ended June 30, 2023.

Year-to-Date Operational Highlights

SunCar continues expanding its long-standing partnerships with China's leading banks, insurance companies, and auto companies in its Auto Services business.

In the eInsurance business, the Company has made significant progress in its partnership with leading electric vehicle manufacturers, including Tesla (NASDAQ:TSLA), Xiaomi (1810.HK), Nio (NYSE:NIO), Zeekr (NYSE:ZK), Li Auto (NASDAQ:LI), XPeng (NYSE:XPEV), Seres (601127.SHH), Leapmotor (9863.HK), SAIC Motor (600104.SS), and Changan Avatar (000625.SHE). These collaborations have driven growth beyond expectations.

New Collaborations and Technological Advancements: 

• Partnered with Beijing Li Auto Insurance to develop the 'Li Auto Insurance Broker System' to improve brokerage operations through advanced insurance software solutions.
• Expanded collaboration with Beijing Houji Insurance Brokerage (Xiaomi Group) to deliver software-based insurance services in 14 cities, utilizing SunCar's intelligent insurance platform. Extended partnership with premium electric vehicle brands Zeekr Intelligent Technology and Jiyue Auto, providing software-based insurance services using SunCar's intelligent platform.
• Formed a strategic partnership with Lotus Technology to offer Lotus car owners comprehensive software-based automotive services and insurance.
• Additionally, SunCar is delivering insurance technology services to a leading global electric vehicle manufacturer in over 40 cities, with insurance premiums growing from RMB 3 million in January to RMB 260 million in August, and further city expansion is ongoing.

Expansion of eInsurance Business into ICE Vehicle Sector: 

• Secured a two-year agreement with SAIC Maxus, a leading commercial vehicle manufacturer, to enhance e-insurance management across its dealership network.
• The Company is also actively engaging in discussions with major ICE manufacturers regarding the significant opportunity for its eInsurance business in the traditional ICE market.

Luxury Concierge Services Expansion: Launched multi-year partnerships to provide exclusive concierge car services for preferred clients:

• China CITIC Bank International
• Ant Fortune
• China Merchants Bank

Increased Collaborations with Major Insurance Firms: 

• Expanded collaboration with the Shenzhen Branch of Ping An Insurance, the largest insuer in China, marking the seventh Ping An branch to partner with SunCar for premium airport pickup services.
• Established a new partnership with the Inner Mongolia branch of China Continent Insurance, recognized as one of the Top 10 Insurance Service Innovations by China Insurance News, utilizing innovative service package deals and boosting service sales by 30% in the first half of 2024.

Exclusive Service Contracts with China Construction Bank ("CCB"): 

• Signed a two-year exclusive vehicle service contract with CCB Fujian Branch, offering automotive services to tens of thousands of customers.
• Awarded a one-year exclusive service contract with CCB Sichuan Branch.

Management Commentary

Ye Zaichang, CEO and Chairman of SunCar commented, "We are incredibly proud of SunCar's remarkable performance in the first half of 2024, with  27% revenue growth and a significant 55% increase in our auto eInsurance business. These achievements reflect the strength of our industry-specific software solutions and our ability to meet the evolving needs of enterprise clients across China's banking, automotive, and insurance sectors. We continue to leverage our unique technology platform to meet the evolving needs of our enterprise customers. As we expand our technology capabilities, service offerings, and partnerships, we are well-positioned to maintain this upward trajectory and deliver sustained value to our shareholders and customers. We look forward to building on this momentum in the second half of the year and beyond."

CONFERENCE CALL & AUDIO WEBCAST
SunCar will host a conference call on Monday, September 16^th  at 8:00 AM ET (5:00 AM PT) with the investment community to discuss the Company's financial results and provide a business update.

To access the call by phone, please dial 1-877-407-0752 (international callers please dial 1-201-389-0912) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://viavid.webcasts.com/starthere.jsp?ei=1688435&tp_key=b4a21ff1d5.

A webcast replay will also be available for a limited time at the following link:https://viavid.webcasts.com/starthere.jsp?ei=1688435&tp_key=b4a21ff1d5.

About SunCar Technology Group Inc.
Founded in 2007, SunCar is transforming the customer journey for auto services and auto insurance in China, the largest passenger vehicle market in the world. SunCar develops and operates cloud-based platforms that seamlessly connect drivers with a wide range of auto services and insurance coverage options through a nationwide network of sales partners. As a result, SunCar has established itself as the leader in China in the B2B auto services market and the auto eInsurance market for electric vehicles. The Company's intelligent cloud platform empowers its enterprise clients to access and manage their customer database and offerings optimally, and drivers gain access to hundreds of services from tens of thousands of independent providers in a single application. For more information, please visit: https://suncartech.com.  

Forward-Looking Statements
This press release contains information about the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. The Company encourages you to review other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange Commission.

Contact Information:
SunCar:
Investor Relations: Ms. Hui Jiang
Email: IR@suncartech.com 
Legal: Ms. Li Chen
Email: chenli@suncartech.com

U.S. Investor Relations
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com 

SUNCAR TECHNOLOGY GROUP INC
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
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Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, the Company's management believes that Adjusted EBITDA, which is a non-GAAP measure that excludes certain non-recurring items such as costs and expenses related to the Business Combination and prior and subsequent capital raises, is useful in evaluating our operational performance. The Company uses this non-GAAP financial information to evaluate our ongoing operations and for internal planning, budgeting and forecasting purposes. We believe that this non-GAAP financial information, when taken collectively with GAAP measures, may be helpful to investors in assessing our operating performance and comparing our performance with competitors and other comparable companies, which may or may not present similar non-GAAP financial measures to investors. Our computation of these non-GAAP measures may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate these measures in the same fashion. We endeavor to compensate for the limitation of the non-GAAP measure presented by also providing the most directly comparable GAAP measure and a description of the reconciling items and adjustments to derive the non-GAAP measure. This non-GAAP measure should be considered in addition to results prepared in accordance with GAAP, but should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures on a supplemental basis.

Adjusted EBITDA

We believe that Adjusted EBITDA, as defined below, is useful in evaluating our operational performance distinct and apart from certain expenses that may not be indicative of our recurring core business operating results and non-operational expenses. Adjusted EBITDA is defined as Operating profit (loss) adjusted for depreciation and amortization, share-based compensation and non-recurring expenses related to the Business Combination and prior and subsequent capital raises. Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Total revenues.

RECONCILIATION OF OPERATING PROFIT (LOSS) TO ADJUSTED EBITDA

(1) Non-cash expenses related to depreciation and amortization

(2) Non-cash expense related to compensation costs for equity classified awards (both for the subsidiary and the Group)

(3) Includes non-recurring transaction related fees and expenses associated with the Company's Business Combination and prior and subsequent capital raises

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SOURCE SunCar Technology Group Inc.