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PR Newswire - SunCar Technology Reports 29% Revenue Growth, Including 79% Increase in Auto e-Insurance Business in FY 2023
Adjusted EBITDA increased by $7.2 million to $1.6 million in 2023
Conference Call and Webcast on April 30th at 5 PM ET
NEW YORK, April 29, 2024 /PRNewswire/ -- SunCar Technology Group Inc. (the "Company" or "SunCar") (NASDAQ: SDA), an innovative leader in cloud-based B2B auto services and auto e-insurance in China, today provided a business update and reported financial results for the year ended December 31, 2023.
Fiscal Year 2023 Financial Results
For the fiscal year ended December 31, 2023, total revenues were $364 million, up 29% from $282 million in 2022. Our auto service segment reported revenue of $215 million in fiscal year 2023, an increase of 8% from $199 million in fiscal year 2022. The increase was driven by the increase in service orders in 2023. This segment is enabled by SunCar's technology platform, which facilitates auto services, such as car wash, maintenance, driving service, and road assistance. Our auto eInsurance segment generated $118 million in fiscal year 2023, a 75% increase over fiscal year 2022. This growth was driven by an increase in gross premiums written and the number of insurance policies issued compared to the year ended December 31, 2022. Specifically, we experienced over 100% YoY revenue growth driven by our strong relationships with electric vehicle manufacturers, including Tesla (NASDAQ: TSLA), NIO (NYSE: NIO), X Peng (NYSE: XPEV), and Li Auto (NASDAQ: LI), Xiaomi (HKSE: 01810), BYD (HKSE: 01211), Seres Group (SHSE: 601127), ZEEKR, Lotus Technology (NASDAQ: LOT), Leapmotor (HKSE: 09863), JIDU Auto (a joint venture between Baidu (NASDAQ: BIDU) and Geely (HKSE: 0175), and others. Our technology service business generated revenues of $31 million for the year ended December 31, 2023, a 98% increase over 2022. This increase is due to our continuous expansion in new business to acquire more market share and to the increasing adoption of insurance companies of our eInsurance technology. Our net losses were $18 million and $12 million for the year ended December 31, 2023 and 2022, respectively. We continue to strategically invest in technology and business development as we increase our presence with some of the largest enterprise customers in China. 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 $7.2 million from the year ended December 31, 2022, to a positive $1.6 million in the year ended December 31, 2023.
Fiscal Year 2023 Operational Highlights
For our auto service business, the Company was working with over 1,400 enterprise clients and over 47,000 auto service providers (compared to 45,000 as of December 31, 2022), covering over 350 cities and all 33 provinces of China. Announced auto service agreements and renewals with China Minsheng Banking Corp., Ltd. (CMBC), Bank of Communications Limited (BoComm), China CITIC Bank, and the Heilongjiang Branch of the Agricultural Bank of China. For our auto eInsurance business, the Company was working with 85 insurance companies (including the top 10 insurance companies with a combined over 90% market share), over 900 insurance company branches, and over 64,000 insurance sales partners (compared to 62,000 in 2022) in China. Announced auto eInsurance agreements and renewals with Tesla (NASDAQ: TSLA), Nio (NYSE: NIO), Li Auto (NASDAQ: LI), XPeng (NYSE: XPEV). Closed our business combination with Goldenbridge Acquisition Limited and listed our shares on the Nasdaq in May 2023.
We released Version 7.9.0 of our eInsurance system with new features, including enhanced automatic storage and management of insurance image data. Currently deployed by 18 leading NEV companies, it aims to enhance user experience to the best-in-class in the industry.
Management Commentary
Ye Zaichang, CEO and Chairman of SunCar commented, "At SunCar, we're leveraging cutting-edge technology to revolutionize the auto services and eInsurance sectors in China, the world's largest and rapidly growing vehicle market. Our cloud-based platform seamlessly connects car owners with a vast array of services and eInsurance options, tapping into a network of over 47,000 service providers and more than 64,000 insurance sales partners nationwide."
"In 2023, we achieved a significant revenue increase to $364 million, up 29% from the previous year, demonstrating the strong synergy between our auto services and eInsurance segments. Our robust technology infrastructure propels this success, including seamless API integrations and an AI-powered purchasing process that significantly enhances customer experience. With our strategic focus on the burgeoning electric vehicle sector and partnerships with top EV manufacturers, we are uniquely positioned to drive continued growth and innovation in this dynamic industry."
"I extend my heartfelt thanks to our team, partners, and shareholders for their unwavering support as we move forward with our vision to transform automotive service and insurance in China."
CONFERENCE CALL & AUDIO WEBCAST
SunCar will host a conference call on Tuesday, April 30, at 5:00 PM ET (2:00 PM 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=1668638&tp_key=73879e5f16.
A webcast replay will also be available for a limited time at the following link: https://viavid.webcasts.com/starthere.jsp?ei=1668638&tp_key=73879e5f16.
About SunCar Technology Group Inc.
Originally 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 multi-tenant, cloud-based 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
*** tables follow ***
SUNCAR TECHNOLOGY GROUP INC
CONSOLIDATED BALANCE SHEETS
(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)
As of December 31,
2022
2023
ASSETS
Current assets
Cash
$
21,200
$
30,854
Restricted cash
2,717
2,741
Short-term investments
26,544
21,596
Accounts receivable, net
85,619
56,043
Prepaid expenses and other current assets, net
9,270
63,963
Total current assets
145,350
175,197
Non-current assets
Long-term investment
290
282
Software and equipment, net
18,491
22,466
Deferred tax assets, net
13,070
11,998
Other non-current assets
14,423
12,012
Right-of-use assets
344
1,280
Total non-current assets
46,618
48,038
TOTAL ASSETS
$
191,968
$
223,235
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term loan
$
74,653
$
83,029
Accounts payable
24,200
26,641
Deferred revenue
3,569
3,050
Tax payables
2,042
1,364
Accrued expenses and other current liabilities
4,849
4,809
Amount due to a related party, current
45,564
4,751
Operating lease liability, current
315
748
Total current liabilities
155,192
124,392
Non-current liabilities
Operating lease liability, non-current
-
504
Amount due to a related party, non-current
-
29,688
Warrant liabilities
-
661
Total non-current liabilities
-
30,853
Total liabilities
$
155,192
$
155,245
Shareholders'(deficit)/equity
Class A Ordinary shares* (par value of US$0.0001 per share;
400,000,000 Class A Ordinary shares authorized as of December 31,
2022 and 2023, respectively; 31,971,435 and 39,876,493 Class A
Ordinary shares issued and outstanding as of December 31, 2022 and
2023, respectively)
$
3
$
4
Class B Ordinary shares* (par value of US$0.0001 per share;
100,000,000 Class B Ordinary shares authorized as of December 31,
2022 and 2023, respectively; 49,628,565 and 49,628,565 Class B
Ordinary shares issued and outstanding as of December 31, 2022 and
2023, respectively)
5
5
Additional paid in capital
95,764
144,160
Accumulated deficit
(99,580)
(129,724)
Accumulated other comprehensive loss
(1,476)
(1,367)
Total SUNCAR TECHNOLOGY GROUP INC's shareholders'
(deficit)/equity
(5,284)
16,078
Non-controlling interests
42,060
51,912
Total equity
36,776
67,990
TOTAL LIABILITIES AND EQUITY
$
191,968
$
223,235
SUNCAR TECHNOLOGY GROUP INC
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (LOSS)
(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)
For the year ended December 31,
2021
2022
2023
Revenues
Auto service
$
187,880
$
199,294
$
214,979
Auto eInsurance
56,766
67,640
118,109
Technology service
4,589
15,479
30,658
Total revenues
249,235
282,413
363,746
Operating cost and expenses
Integrated service cost
(156,852)
(166,793)
(209,553)
Promotional service expenses
(55,222)
(65,500)
(112,504)
Selling expenses
(12,731)
(16,477)
(20,578)
General and administrative expenses
(10,420)
(37,742)
(22,462)
Research and development expenses
(3,651)
(8,478)
(14,111)
Total operating costs and expenses
(238,876)
(294,990)
(379,208)
Operating profit/(loss)
10,359
(12,577)
(15,462)
Other income/(expenses)
Financial expenses, net
(3,045)
(3,659)
(4,435)
Investment income
759
441
518
Change of fair value of warrant liabilities
-
-
(629)
Other income, net
2,457
5,121
5,001
Total other income, net
171
1,903
455
Income/(loss) before income tax expense
10,530
(10,674)
(15,007)
Income tax expense
(938)
(231)
(2,572)
Income/(Loss) from continuing operations, net of
tax
9,592
(10,905)
(17,579)
Discontinued operations:
Net loss from the operations of the discontinued
operations, net of tax
(27,682)
(994)
-
Net loss
(18,090)
(11,899)
(17,579)
Net income/(loss) from continuing operations
9,592
(10,905)
(17,579)
Less: Net income/(loss) attributable to non-controlling
interests of continuing operations
5,650
(5,230)
9,333
Net income/(loss) from continuing operations
attributable to the Company's ordinary
shareholders
3,942
(5,675)
(26,912)
Loss from discontinued operations, net of tax
(27,682)
(994)
-
Less: Net loss attributable to non-controlling interests of
discontinue operations
(19)
-
-
Net loss from discontinued operations attributable
to the Company's ordinary shareholders
(27,663)
(994)
-
Net loss attributable to the Company's ordinary
shareholders
(23,721)
(6,669)
(26,912)
Net income/(loss) per ordinary share from continuing
operations:
Basic and diluted
$
0.05
$
(0.07)
$
(0.31)
Net loss per ordinary share from discontinued
operations:
Basic and diluted
$
(0.34)
$
(0.01)
$
-
Net loss attributable to the Company's ordinary
shareholders per ordinary share
Basic and diluted
$
(0.29)
$
(0.08)
$
(0.31)
Weighted average shares outstanding used in
calculating basic and diluted loss per share
Basic and diluted
81,600,000
81,600,000
85,441,057
Income/ (loss) from continuing operations before non-
controlling interests
$
9,592
$
(10,905)
$
(17,579)
Loss from discontinued operations, net of tax
(27,682)
(994)
-
Net loss
(18,090)
(11,899)
(17,579)
Other comprehensive income/(loss)
Foreign currency translation difference
907
(2,410)
(1,137)
Total other comprehensive income/(loss)
907
(2,410)
(1,137)
Total comprehensive loss
(17,183)
(14,309)
(18,716)
Less: total comprehensive income/(loss) attributable to
non-controlling interest
6,839
(9,801)
8,087
Total comprehensive loss attributable to the
SUNCAR TECHNOLOGY GROUP INC's
shareholders
$
(24,022)
$
(4,508)
$
(26,803)
SUNCAR TECHNOLOGY GROUP INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In U.S. Dollar thousands, except for share and per share data, or otherwise noted)
For the years ended
December 31,
2021
2022
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income/(loss) from continuing operations
$
9,592
$
(10,905)
$
(17,579)
Net loss from discontinued operations
(27,682)
(994)
-
Net loss
(18,090)
(11,899)
(17,579)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Provision (Reversal) for credit losses
148
25,981
(4,112)
Depreciation and amortization
4,055
5,078
4,114
Amortization of right-of-use assets
-
619
754
Share-based compensation of subsidiary
1,668
1,599
1,519
Share-based compensation of the Group
-
-
9,776
Loss/(gain) on disposal of software and equipment
27
-
(27)
Deferred income tax (benefit) expense
(1,124)
(1,951)
701
Fair value changes of warrant liabilities
-
-
629
Financing expense related to issuance of GEM Warrants
-
-
377
Changes in operating assets and liabilities:
Accounts receivable
(35,071)
(32,640)
30,822
Prepaid expenses and other current assets
3,181
(3,850)
(55,908)
Accounts payable
13,608
(5,019)
3,140
Deferred revenue
813
1,858
(418)
Accrued expenses and other current liabilities
(14,976)
2,548
(288)
Tax payable
(1,026)
(280)
(621)
Operating lease liabilities
-
(615)
(680)
Amount due to a related party
-
1,485
150
Net cash used in operating activities of continuing
operations
(19,105)
(16,092)
(27,651)
Net cash used in operating activities of discontinued
operations
(6,462)
(52)
-
Total net cash used in operating activities
(25,567)
(16,144)
(27,651)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of software and equipment
(1,284)
(4,351)
(4,928)
Proceeds from disposal of software and equipment
-
-
54
Purchase of short-term investment
(9,839)
-
(518)
Proceeds from the redemption of short-term investment
-
149
4,719
Purchase of other non-current assets
(8,968)
(1,200)
(1,721)
Net cash (used in) provided by investing activities of
continuing operations
(20,091)
(5,402)
(2,394)
Net cash used in investing activities of discontinued
operations
(591)
(517)
-
Total net cash (used in) provided by investing activities
(20,682)
(5,919)
(2,394)
CASH FLOWS FORM FINANCING ACTIVITIES
Proceeds from short-term loan
76,812
122,249
104,506
Repayments of short-term loan
(70,193)
(111,103)
(93,970)
Repayments of payables to a related party
-
-
(10,000)
Proceeds from issuance of ordinary shares, net of issuance
cost
-
-
18,468
Cash required on reverse recapitalization
-
-
68
Proceeds from Private Placement
-
-
21,737
Payment for offering cost related to Business Combination
-
-
(588)
Shares repurchase
-
-
(2,000)
Exercise of warrants
-
-
2,213
Repurchase of non-controlling interests
(1,184)
(510)
-
Dividend paid to non-controlling shareholders
(6,620)
-
-
Net cash (used in) provided by financing activities of
continuing operations
(1,185)
10,636
40,434
Net cash provided by financing activities of discontinued
operations
1,119
-
-
Total net cash (used in) provided by financing activities
(66)
10,636
40,434
Effect of exchange rate changes
1,827
(2,573)
(711)
Net change in cash and restricted cash
(44,488)
(14,000)
9,678
Cash and restricted cash, beginning of the year
$
82,405
$
37,917
$
23,917
Cash and restricted cash, end of the year
$
37,917
$
23,917
$
33,595
Less: cash of discontinued operations at end of year
570
-
-
Cash and restricted cash at end of year for continuing
operations
$
37,347
$
23,917
$
33,595
Reconciliation of cash and restricted cash to the
consolidated balance sheets:
Cash
$
34,517
$
21,200
$
30,854
Restricted cash
$
2,830
$
2,717
$
2,741
Total cash and restricted cash
$
37,347
$
23,917
$
33,595
Supplemental disclosures of cash flow information:
Income tax paid
$
3,472
$
2,459
$
-
Interest expense paid
$
3,087
$
3,780
$
2,577
Supplemental disclosures of non-cash activities:
Disposal of Shengda Group
-
23,222
-
Decrease of accrued expenses and other current liabilities due
to vest of restricted shares
$
311
$
311
$
-
Purchase of software and equipment by using accrued
expenses and other current liabilities
$
-
$
-
$
-
Obtaining right-of-use assets in exchange for operating lease
liabilities and prepaid expenses
$
-
$
972
$
1,702
Software and equipment transferred from other non-current
assets
$
-
$
12,150
$
3,727,781
Prepaid financing expense related to issuance of GEM
Warrants
$
-
$
-
$
1,441,826
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
(In thousands)
For the years ended December 31,
2022
2023
Operating profit (loss)
$
(12,577)
$
(15,462)
Depreciation and amortization (1)
5,078
4,114
Share-based compensation (2)
1,599
11,295
Transaction fees (3)
357
1,702
Adjusted EBITDA
$
(5,543)
$
1,649
Adjusted EBITDA Margin
(2.0) %
0.5 %
(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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