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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

Fiscal Year 2023 Operational Highlights

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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