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
Adjusted EBITDA Increased to
Conference Call and Webcast on
First Half 2024 Financial Results
- Total revenue increased by 27% to
$203.1 million for the six months endedJune 30, 2024 , from$159.4 million for the six months endedJune 30, 2023 .- Auto Services ' revenue increased by 9% to
$107.5 million for the six months endedJune 30, 2024 , from$98.8 million for the six months endedJune 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 endedJune 30, 2024 , from$47.7 million for the six months endedJune 30, 2023 , which was driven by the increased number of insurance policies sold in the six months endedJune 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.
- SunCar ranked First in
- Technology Services revenue increased by 70% to
$21.9 million for the six months endedJune 30, 2024 , from$12.9 million for the six months endedJune 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.
- Auto Services ' revenue increased by 9% to
- Operating costs and expenses increased to
$261.7 million for the six months endingJune 30, 2024 , and$158.3 million for the six months endingJune 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 endedJune 30, 2024 compared to$5 .8 million in the six months endedJune 30, 2023 .
Year-to-Date Operational Highlights
SunCar continues expanding its long-standing partnerships with
In the eInsurance business, the Company has made significant progress in its partnership with leading electric vehicle manufacturers, including
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 toRMB 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 ofPing An Insurance , the largest insuer inChina , marking the seventh Ping An branch to partner with SunCar for premium airport pickup services. - Established a new partnership with the
Inner Mongolia branch ofChina Continent Insurance , recognized as one of the Top 10 Insurance Service Innovations byChina 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
CONFERENCE CALL & AUDIO WEBCAST
SunCar will host a conference call on
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
Founded in 2007, SunCar is transforming the customer journey for auto services and auto insurance in
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
Contact Information:
SunCar:
Investor Relations: Ms.
Email: IR@suncartech.com
Legal: Ms.
Email: chenli@suncartech.com
President
Strategic Investor Relations, LLC
Tel: 347-947-2093
Email: matthew@strategic-ir.com
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In
|
|
|
|
As of |
|
|
As of |
|
|
|
|
2023 |
|
|
2024 |
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
Cash |
|
$ |
30,854 |
|
$ |
20,886 |
|
Restricted cash |
|
|
2,741 |
|
|
2,843 |
|
Short-term investments |
|
|
21,596 |
|
|
20,913 |
|
Accounts receivable, net |
|
|
56,043 |
|
|
76,630 |
|
Prepaid expenses and other current assets, net |
|
|
63,963 |
|
|
69,564 |
|
Total current assets |
|
|
175,197 |
|
|
190,836 |
|
|
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Long-term investment |
|
|
282 |
|
|
275 |
|
Software and equipment, net |
|
|
22,466 |
|
|
19,977 |
|
Deferred tax assets, net |
|
|
11,998 |
|
|
12,467 |
|
Other non-current assets |
|
|
12,012 |
|
|
19,403 |
|
Right-of-use assets |
|
|
1,280 |
|
|
978 |
|
Total non-current assets |
|
|
48,038 |
|
|
53,100 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
223,235 |
|
$ |
243,936 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Short-term loan |
|
$ |
83,029 |
|
$ |
81,324 |
|
Accounts payable |
|
|
26,641 |
|
|
52,115 |
|
Deferred revenue |
|
|
3,050 |
|
|
1,959 |
|
Tax payable |
|
|
1,364 |
|
|
1,695 |
|
Accrued expenses and other current liabilities |
|
|
4,809 |
|
|
2,262 |
|
Amount due to a related party-current |
|
|
4,751 |
|
|
4,557 |
|
Operating lease liability-current |
|
|
748 |
|
|
765 |
|
Total current liabilities |
|
|
124,392 |
|
|
144,677 |
|
|
|
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
|
Operating lease liability-non-current |
|
|
504 |
|
|
154 |
|
Amount due to a related party, non-current |
|
|
29,688 |
|
|
29,004 |
|
Warrant liabilities |
|
|
661 |
|
|
661 |
|
Total non-current liabilities |
|
|
30,853 |
|
|
29,819 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
$ |
155,245 |
|
$ |
174,496 |
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 16) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
|
|
|
|
|
Class A Ordinary shares* (par value of |
|
$ |
4 |
|
$ |
5 |
|
Class |
|
|
5 |
|
|
5 |
|
Additional paid in capital |
|
|
144,160 |
|
|
206,199 |
|
Accumulated deficit |
|
|
(126,724) |
|
|
(189,307) |
|
Accumulated other comprehensive loss |
|
|
(1,367) |
|
|
(1,283) |
|
Total |
|
|
16,078 |
|
|
15,619 |
|
Non-controlling interests |
|
|
51,912 |
|
|
53,821 |
|
Total equity |
|
|
67,990 |
|
|
69,440 |
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND EQUITY |
|
$ |
223,235 |
|
$ |
243,936 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(In
|
|
|
For the six months ended |
|
||||
|
|
|
|
2023 |
|
|
2024 |
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
|
|
|
|
|
|
|
Auto service |
|
$ |
98,813 |
|
$ |
107,451 |
|
|
Auto eInsurance service |
|
|
47,710 |
|
|
73,747 |
|
|
Technology service |
|
|
12,855 |
|
|
21,888 |
|
|
Total revenues |
|
|
159,378 |
|
|
203,086 |
|
|
|
|
|
|
|
|
|
|
|
Operating cost and expenses |
|
|
|
|
|
|
|
|
Integrated service cost |
|
|
(87,854) |
|
|
(107,621) |
|
|
Promotional service expenses |
|
|
(49,563) |
|
|
(71,135) |
|
|
Selling expenses |
|
|
(12,793) |
|
|
(10,199) |
|
|
General and administrative expenses |
|
|
(4,020) |
|
|
(40,537) |
|
|
Research and development expenses |
|
|
(4,020) |
|
|
(32,205) |
|
|
Total operating costs and expenses |
|
|
(158,250) |
|
|
(261,697) |
|
|
|
|
|
|
|
|
|
|
|
Operating profit/(loss) |
|
|
1,128 |
|
|
(58,611) |
|
|
|
|
|
|
|
|
|
|
|
Other income/(expenses) |
|
|
|
|
|
|
|
|
Financial expenses, net |
|
|
(1,915) |
|
|
(2,302) |
|
|
Investment income |
|
|
323 |
|
|
306 |
|
|
Other income, net |
|
|
2,450 |
|
|
734 |
|
|
Total other income/(loss), net |
|
|
858 |
|
|
(1,262) |
|
|
|
|
|
|
|
|
|
|
|
Income/(Loss) before income tax expense |
|
|
1,986 |
|
|
(59,873) |
|
|
Income tax expense |
|
|
(850) |
|
|
(267) |
|
|
Net income/(loss) |
|
|
1,136 |
|
|
(60,140) |
|
|
|
|
|
|
|
|
|
|
|
Less: Net income/(loss) attributable to non-controlling interests |
|
|
4,515 |
|
|
2,443 |
|
|
Net loss attributable to the Company's ordinary shareholders |
|
|
(3,379) |
|
|
(62,583) |
|
|
|
|
|
|
|
|
|
|
|
Net loss per ordinary share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.04) |
|
$ |
(0.67) |
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding used in calculating basic and diluted loss per share |
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
81,374,609 |
|
|
93,663,300 |
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income/(loss) |
|
|
|
|
|
|
|
|
Foreign currency translation difference |
|
|
(2,614) |
|
|
(1,195) |
|
|
Total other comprehensive loss |
|
|
(2,614) |
|
|
(1,195) |
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
|
(1,478) |
|
|
(61,335) |
|
|
Less: total comprehensive income attributable to non-controlling interest |
|
|
2,068 |
|
|
1,164 |
|
|
Total comprehensive loss attributable to the |
|
$ |
(3,546) |
|
$ |
(62,499) |
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
|
|
For the six months ended |
|
|||
|
|
|
2023 |
|
2024 |
|
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
Net income/(loss) |
$ |
1,136 |
$ |
(60,140) |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
Provision (Reversal)for credit losses |
|
(3,694) |
|
2,654 |
|
|
Depreciation and amortization |
|
2,840 |
|
1,813 |
|
|
Amortization of right-of-use assets |
|
350 |
|
392 |
|
|
Share-based compensation of subsidiary |
|
776 |
|
745 |
|
|
Share-based compensation of the Group |
|
- |
|
62,040 |
|
|
Deferred income tax benefit |
|
(207) |
|
(750) |
|
|
Fair value income from short-term investments |
|
(323) |
|
(493) |
|
|
Financing expense related to issuance of GEM Warrants |
|
- |
|
303 |
|
|
Property and equipment written off |
|
- |
|
12 |
|
|
Interest expense |
|
- |
|
146 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
10,353 |
|
(24,689) |
|
|
Prepaid expenses and other current assets |
|
(38,757) |
|
(7,492) |
|
|
Accounts payable |
|
7,647 |
|
26,277 |
|
|
Deferred revenue |
|
497 |
|
(1,029) |
|
|
Accrued expenses and other current liabilities |
|
(787) |
|
(2,458) |
|
|
Tax payable |
|
(202) |
|
365 |
|
|
Operating lease liabilities |
|
(321) |
|
(321) |
|
|
Amount due to a related party |
|
167 |
|
- |
|
|
Net cash used in operating activities |
|
(20,525) |
|
(2,625) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
Purchase of software and equipment |
|
(577) |
|
(245) |
|
|
Purchase of short-term investment |
|
- |
|
(20,603) |
|
|
Proceeds from the redemption of short-term investment |
|
4,784 |
|
21,283 |
|
|
Purchase of other non-current assets |
|
(3,310) |
|
(7,725) |
|
|
Net cash provided by/(used in) investing activities |
|
897 |
|
(7,290) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
Proceeds from short-term loan |
|
68,271 |
|
56,979 |
|
|
Repayments of short-term loan |
|
(53,418) |
|
(56,771) |
|
|
Cash required on reverse recapitalization |
|
(482) |
|
- |
|
|
Proceeds from Private Placement |
|
21,737 |
|
- |
|
|
Payment for offering cost related to Business Combination |
|
(623) |
|
- |
|
|
Net cash provided by financing activities |
|
35,485 |
|
208 |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes |
|
(1,661) |
|
(159) |
|
|
|
|
|
|
|
|
|
Net change in cash and restricted cash |
|
14,196 |
|
(9,866) |
|
|
|
|
|
|
|
|
|
Cash and restricted cash, beginning of the period |
$ |
23,917 |
$ |
33,595 |
|
|
Cash and restricted cash, end of the period |
$ |
38,113 |
$ |
23,729 |
|
|
|
|
|
|
|
|
|
Reconciliation of cash and restricted cash to the consolidated balance sheets: |
|
|
|
|
|
|
Cash |
$ |
35,460 |
$ |
20,886 |
|
|
Restricted cash |
$ |
2,653 |
$ |
2,843 |
|
|
Total cash and restricted cash |
$ |
38,113 |
$ |
23,729 |
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
Income tax paid |
$ |
1,128 |
$ |
535 |
|
|
Interest expense paid |
$ |
1,704 |
$ |
1,872 |
|
|
|
|
|
|
|
|
|
Supplemental disclosures of non-cash activities: |
|
|
|
|
|
|
Obtaining right-of-use assets in exchange for operating lease liabilities |
$ |
1,552 |
$ |
88 |
|
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
|
|
For the Six Months Ended |
|||
|
|
|
2023 |
|
2024 |
|
|
|
(In thousands) |
||
|
Operating profit (loss) |
$ |
1,128 |
$ |
(58,611) |
|
Depreciation and amortization (1) |
|
2,840 |
|
1,813 |
|
Share-based compensation (2) |
|
776 |
|
62,785 |
|
Transaction fees (3) |
|
1,071 |
|
53 |
|
Adjusted EBITDA |
$ |
5,815 |
$ |
6,040 |
|
Adjusted EBITDA Margin |
|
3.6 % |
|
3.0 % |
(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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