SDA

Greetings, and welcome to SunCar Technologies Full Year 2024 Earnings Conference Call. At this time, all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Jennifer Jiang, IR Director. Thank you. You may begin.

Thank you, and thanks everyone for joining us today for SunCar's full year 2024 earnings call. Please note that our earnings press release was issued yesterday, and Annual Report on Form 20-F was filed with the Securities and Exchange Commission on April 28. Both are available in the Investor Relations section of our website at http.suncartech.com. Joining us on the call today are Suncar's Chairman, CEO, Zaichang Ye; and Breaux Walker, Chief Strategy Officer. The format of today's call will begin with the opening remarks from Chairman Ye followed by our financial and business update from Mr. Walker. Afterwards, we'll move into a question-and-answer session addressing the questions submitted by investors. We thank everyone for submitting these questions. Before we get started, I'm going to review the Safe Harbor statement. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor provision of The U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may differ materially from the views expressed today. Further information regarding this and other risks and uncertainties are included in the company's Annual Report on Form 20-F for the year ended December 31st, 2024, and in other documents filed with the U.S. Securities and Exchange Commission. SunCar Technology does not assume any obligation to update any forward looking statements, except as required under applicable law. With that, I would like to turn over the call to our first speaker, Mr. Zaichang Ye, Suncar's Chairman and CEO.

Good morning. Thank you, Jennifer. SunCar's business is 100% focused on digitalizing China's domestic auto insurance and services markets. Whatever happens in international politics, China still has the largest auto market in the world. Our target market has over 330 million drivers who still buy auto insurance and services offline. We remain dedicated to offering digital solutions to make those drivers' auto insurance and services experience more efficient and cost effective. I'm incredibly proud of the SunCar team's hard work in achieving this year's record revenue and profitability. I also appreciate our customers including some of the world's most respected companies. Our revenue of $442 million and an almost 500% increase in adjusted EBITDA demonstrates sustainable growth as we scale the business. In 2024, our reinsurance business continued to experience strong growth due to our auto partners increasing focus on capturing insurance revenue. We are excited about the Tesla partnership which grew to 48 cities from six earlier in the year. For Xiaomi, we built a customized insurance product that entered the market early in the year. We are excited about the innovation we are working on with all our auto partners. In the Gas Vehicle segment, we signed a contract with SAIC Maxus to enable its dealers to sell insurance more effectively. While EV sales have multiplied in China, the gas vehicle market is still much larger in terms of existing vehicles and insurance renewals. This largely untapped market represents a significant growth opportunity for SunCar as car dealers desperately need our technology to capture downstream insurance revenue. In our auto services business, we see exciting growth opportunities in the retail and Internet sectors, while continuing to expand within our traditional bank and insurance customers. Our contract with Sam's Club demonstrates that the retail industry realizes SunCar's auto services can increase customer lifetime value. We supported Chanel's 2024 Honjo show in the luxury sector by providing high quality transportation services for its VIP guests. Finally, SunCar is excited about innovation at its NGAI technology service center. Our investment in AI technology and software has had a very positive ROI as the products we are developing are proprietary and have significant value to our customers. We look forward to continued growth in 2025 as we execute on our considerable market opportunity, build deeper partnerships with our customers and accelerate our exciting product development efforts. With that, I'll turn it over to Breaux.

Thank you, Zaichang, and thank you all again for joining us. As many of you likely saw, I recently transitioned to the Chief Strategy Officer role at SunCar after serving as a consultant to the company for the past year. During this time, come to gain a deep respect for SunCar's team and the significant market opportunity in front of us. China's auto insurance market is rapidly transitioning away from the outdated offline processes and realizing the value in digitalization, because the SunCar team has been in this market for almost twenty years, they deeply understand the nuances of this market transition. They saw this digitalization trend in advance and responded to the market opportunity. Our customers have clearly shifted their focus from new vehicle sales to optimizing and monetizing the customer's post sale experience. This is where SunCar really shines as our platform is very effective at driving downstream insurance, insurance renewal, and services revenue. As I have learned more about our customer relationships, I realize how much value our auto partners place on SunCar's platform that they have a strong interest in working with us to develop new products. As the company increases its focus on software and AI-related product development, I'm excited about the increased value we're delivering to our partners. I didn't fully appreciate the breadth of the products we were co-developing with our partners until I went to our ANGI AI technology center and saw the product demos. They were compelling in the innovative features inside the driver apps and the customized management platforms for our EV partners. For those of you knew to SunCar, I'll provide a deep brief background on the company and our business before discussing the year's operational and financial highlights, followed then by Q&A. Since our founding in 2007, SunCar has built technology to improve the process of buying and selling auto insurance and auto services in China. We operate in three segments, auto insurance, technology services and auto services. In our auto insurance business, our cloud and mobile apps facilitate the sale of auto insurance underwritten by major insurance companies and sold by our network of over 64,000 sales partners. We received commissions from the insurance companies based on a percentage of the premium paid by the policyholder. We have sales branches in 20 provinces in China giving us extensive coverage of the Chinese market. On the supply side, we have relationships and network integrations with 85 insurance companies, including the top 10 insurers with a combined market share of over 90%. Our cloud platform empowers our insurance company partners to manage all aspects of their business, including customer orders, products, commissions, and reports. Suncar has innovated extensively around the insurance sales process. Most notably, we have invented technology that produces an accurate quote within two minutes simply by scanning a license plate. For insurance buyers, our online and mobile insurance interfaces provide real-time quotes, pricing, underwriting, payment information, and access to a full spectrum of insurance products. Our hybrid cloud infrastructure provides secure storage and robust data analytics capabilities to support insurance companies and their end customers. In our Auto Services segment, we offer a network of customized auto services to enterprise customers, including major banks, insurance companies, and enterprises that have end customer demand for auto services. In a country without AAA or convenient access to high-quality auto or transportation services, SunCar provides a valuable service to Chinese drivers. Our enterprise customers purchase access to our auto services as a benefit for the members of their rewards or similar customer marketing programs. Our extensive service network serves over 1,400 enterprise customers and customers. We have built our business on an industry-specific technology platform that enables and facilitates market-leading B2B auto services. We have secured 160 registered copyrights of computer software in this area. Our proprietary technology is based on a multitenant platform and cloud infrastructure. Our digital platform provides APIs, front end interface interfaces, integration for enterprise customers, and efficient user friendly management and operations tools for service providers. Our technology service business offers customers modular software management tools such as customer relationship management, order management, finance management, and visual analysis systems running on our proprietary hybrid cloud platform. Auto service providers and insurance sales partners may use all or some of these online tools to manage their daily work, allowing us the opportunity to monetize the online software we built. In our Insurance segment, one of the key themes of 2024 was the rapid growth of our partnerships with auto partners to develop new products and help them remain connected to drivers after the initial vehicle sale. As I mentioned above, the auto industry's new focus on downstream wholesale revenue is a significant trend that positively impacts our business. We are developing applications in conjunction with our EV customers that enable them to stay better connected to customers and sell more downstream services such as insurance and maintenance. With SunCar's ability to embed or integrate its insurance app into our customers' existing vehicle apps, our increased collaboration with these partners continues to drive strong growth. In 2024, we launched a customized insurance product with Tesla China, which received very positive customer feedback for being user-friendly and valuable. Our product is helping Tesla acquire insurance customers more cost-effectively while creating downstream revenue opportunities in maintenance and other services. SunCar is very excited about the success of our ongoing collaboration with Tesla, which is expanded to 48 cities nationwide from an initial six at the start of the year. We are working together to offer drivers the best possible insurance experience. We continue to develop our partnership with Xiaomi, where we began selling customized insurance products with their first vehicle deliveries. With Zeekr, we've signed a contract that utilizes our SaaS platform to develop and integrate our insurance product into Zeekr's app ecosystem. Our partnerships with other leading EV manufacturers have also progressed. These partners include Nio, Zeekr, Li Auto, Xiaopeng, Series, Leapmotor, SAIC, and Changan Avatr. The success of our collaborations and the effectiveness of our insurance products have driven GMV growth beyond expectations. The company continues to expand its e insurance business into the gas vehicle market. We secured a two year agreement with SAIC Maxus, a leading commercial vehicle manufacturer to enhance insurance sales management across its dealership network. For gas vehicle dealers, we are integrating our insurance systems directly into the dealer's existing insurance management systems. Starting with the Changan Avatr dealer group, we enable seamless insurance product sales at the point of vehicle purchase. We've hired four regional managers to support this rollout and drive adoption and dealer engagement. In our auto services business, we're excited about the growth in new segments such as retail and luxury and the expansion of our long standing partnerships with China's leading banks, insurance and auto companies. Committed to remaining the technology leader in the market, the company is utilizing AI extensively to improve the efficiency of our auto services network. Our luxury concierge service continues to experience significant expansion into new sectors. We provided high end limousine services for leading luxury brands including Chanel, Dior, and Omega, most notably supporting Chanel's 2024 Hangzhou show by providing high-quality transportation services for its VIP guests. In the retail sector, we signed an exclusive partnership with Sam's Club to offer car wash services for premium members across 17 major cities in China. Suncar is excited about our increased cooperation with China's major Internet companies. Last year, we renewed car wash service agreements with Didi, Meituan, and Alipay and signed a new car wash partnership with GoYin. We expanded our Alipay collaboration with their car life channel discounts into their Car God program. Finally, we launched a strategic partnership with AntFortune to offer exclusive airport limousine services to Ant Fortune Black Card v3 members targeting high-net-worth clients. We continue to increase our cooperation with bank customers by offering new auto services to existing customers and expanding into new geographies. We increased our portfolio of 400 plus bank sector projects by adding 39 new projects in 2024. Key collaborations with national banks included working with CITIC Private Banking, ICBC, China Merchants, Bank of China, and Bank of Communications for airport transfers and travel services. On the regional bank front, we provided retail travel services to the Shanghai Rural Commercial Bank, designated driver services for Mengshan Bank and agricultural bank, and car wash and smart outbound calling services in three provinces for CCB, DragonCard, and ICBC, respectively. Our relationship with insurance customers is multifaceted. We sell an increasing amount of auto insurance for them while also being a supplier of auto services. SunCar has partnered with over 100 insurance branches, including the top 10P and C branches of Ping an Insurance and 20 plus branches of China Continent Insurance. We have broadened our service scope beyond traditional offerings to include limousine transfers and EV charging, aligning with evolving customer and market demands. We will continue to leverage AI software and automation technologies to enhance operational efficiency, improve customer experience and drive scalable growth. Regarding product development, we continue to build new features such as real-time fleet delayed notifications, intelligent order reminders and call quality monitoring. These new features also streamline workflows and elevate service quality across our platform. SunCar has established its ANGI AI Technology Service Center to further extend its technology leadership position. We are leveraging proprietary AI development capabilities to co-develop products with our auto partners, which will increase the sales of new insurance policies, renewals and extended warranties. Our development of AI-enhanced customer engagement features has shortened service response times, enhanced the cross-selling of insurance and non-insurance products and increased customer satisfaction. We have expanded our insurance product portfolio by building customized vehicle-specific insurance products, which will now include loaner vehicles and repair subsidies for various sales channels. I'll now move to our financial report, which will be presented in US dollars. For the full year 2024, we are pleased to report total revenue of $441.9 million up 21.5% from $363.7 million compared to the full year 2023. This growth underscores the value we are providing to our large partners in the auto insurance business, the strength of our new insurance products and our ability to meet the broad auto services needs of our enterprise customers. Auto insurance revenue increased 44.4% to $170.5 million for the year ended December 31, 2024, compared to $118.1 million for the year ended December 31, 2023. This growth was driven by the leverage from our strong partnerships with automakers and an increase in insurance policy sold in the 12 months ended December 31, 2024. Technology services revenue increased 46.4% to $44.9 million for the year ended December 31, 2024, up from $30.7 million in the prior year. This increase is driven by strong demand from insurance companies and their sales partners for our software and services. The company's ongoing upgrades to its technology stack and use of a private cloud platform have simplified development and enhanced service capacity enabling this rapid growth. Auto services revenue increased 5.3% to $226.5 million for the year ended December 31, 2024, up from $215 million for the year ended December 31, 2023. The increase was driven by the addition of 39 new bank sector customers and an increased number of completed service orders. Our operating costs and expenses increased to $500.3 million for the year ended December 31, 2024, compared to $379.2 million for the year ended December 31, 2023. Integrated service costs were $226.2 million in 2024 from $209.6 million in the previous year. These increases align with the growth in revenue from our auto services business and the significant expansion of our technology services business. Selling expenses were $22.6 million in the year ended December 31, 2024, compared to $20.6 million in the year ended December 31, 2023. This increase was mainly due to an increase in promotional expenses. General and administrative expenses increased from $22.5 million in 2023 to $47 million in 2024. This increase was primarily due to a $31 million increase in share-based compensation expenses related to the 2024 equity incentive plan and a $5.4 million increase in expected credit losses on accounts receivable. Research and development expenses increased from $14.1 million in the year ended December 31, 2023, to $40.2 million in the year ended December 31, 2024. The primary driver of this increase was the million $31 million share-based compensation expense related to 2024 equity incentive plan, which was partially offset by a decrease of $4.9 million in technology service fees due to reduction in purchases of external services. We continue to strategically invest in R&D and business development as we grow our business relationships with some of the largest enterprises in China. Adjusted EBITDA, a non-GAAP metric that excludes certain non-recurring items and non-cash expenses such as the compensation expenses related to the 2024 equity incentive plan, helps evaluate our operational performance in addition to the GAAP metrics. Our adjusted EBITDA increased by 492% to $9.8 million for the year ended December 31, 2024, compared to $1.6 million in the prior year period. We believe this measure provides useful information about our operating results by excluding certain expenses that may not be indicative of our core business operating results. Reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP measure is provided in our earnings releases and investor presentations available on the Investor Relations section of our website. To close, 2024 was a year of meaningful progress for SunCar as we advanced our auto partnerships and AI cloud-enabled SaaS model. We have strengthened our recurring revenue base and positioned the company for sustained, scalable growth. Subject to risks such as regulatory changes, market competition, we remain focused on expanding our technology footprint, broadening our software and service offerings and deepening the partnerships that fuel our success. The continued focus of our EV partners on enhancing the post-sale customer journey provides a powerful long-term tailwind for our business. For a detailed discussion of risks, please refer to our Form 20-F filed on April 28, 2025. Our ability to deliver personalized driver experience powered by AI and our cloud platform remains at the heart of our strategy, and we believe it will continue to drive value for our customers and shareholders. With that, we'll now begin the question-and-answer session.

So first question we have, what impact, if any, will U. S. Tariffs have on SunCar's business?

We don't currently expect U.S. tariffs will have a material direct impact on SunCar's business as our business is 100% focused on China's domestic auto market. We continue to monitor indirect effects such as potential supply chain disruptions for our partners. The rapid adoption of EVs and the digitalization of China's entire domestic auto market remain the primary positive trends for SunCar because we believe we are the leader in digitalizing this market.

Thank you. Our next question is why have so many EV manufacturers been interested in partnering with SunCar and using your technology?

Our team has been in the market for almost twenty years and understands the evolving needs of the EV companies very well. Additionally, SunCar has invested approximately $100 million in its industry specific cloud, AI, mobile apps and data infrastructure. This investment is paying off as we built a very differentiated solution in the market. As our EV partners focus on their customers' post sale journey, they realize that SunCar's insurance technology is the most mature and feature rich in the market.

How do you see your Tesla relationship evolving over time?

Tesla continues to be a strong partner in expanding our portfolio of insurance products and sharing our vision of delivering customized full featured services to each driver.

Thank you. Our next question is, what do you attribute the rapid growth of your insurance business to?

Differentiation is key. The competition among EV and gas vehicle manufacturers has grown incredibly tough. For this reason, they are looking at other ways to monetize customer relationships beyond just the vehicle sale. Our technology plays a key role in their digitalization strategy and enables additional downstream revenue opportunities through sales and service options for vehicle owners. We are working collaboratively with these manufacturers to add additional services. This information is consistent with our prior public disclosures regarding market trends and our business strategy.

Congratulations on your strong adjusted EBITDA growth. How do you view your profitability tracking over the next year?

Thank you. We're encouraged by our adjusted EBITDA growth and see the continued strong growth of our insurance business as a key contributor to this. Additionally, we are leveraging AI and other technologies to optimize our operations, positively impacting profitability.

Thank you. How do you view AI impacting your business in 2025?

We've been using AI in our business for well over a year. Its impact on our business has been significant as our team is finding new ways to use AI to optimize our operations and add new product features. On the product development front, we plan to integrate AI into as many features as possible to optimize the driver's experience and accelerate our customers' monetization efforts.

Thank you, Breaux. How impactful will gas vehicle customers be on your insurance business this year?

As you heard in our Insurance segment review, we're making great progress in penetrating the gas vehicle market. SunCar executives have been the featured speakers two years in a row at the largest gas vehicle dealer industry conference. Customer wins at SAIC and Chang'an Deepal dealer group testified that the gas market is accelerating its adoption of digital solutions to drive downstream insurance and maintenance revenue. We have had gas vehicle dealerships successfully using our products for some time. What is more recent is the industry's economic pressures have dramatically increased demand for our solutions from gas vehicle dealers. Their search for new revenue streams has reached a tipping point where they must digitalize to effectively capture as much downstream insurance and maintenance revenue as possible because the gas vehicle market is so much larger than the EV market in terms of existing vehicles, we think it can be very impactful to our business.

Our next question, what do you see as the future of your Anji AI Technology Services Center?

We see Anji and our engineering and product development teams playing an increasingly important role in our business. As we further develop our AI and software development capabilities, the Anji teams will play a critical role in innovating new insurance products. The Anji center is key to working with our auto partners to co-develop custom insurance solutions that meet each of their specific needs and objectives.

Thank you. What do you see as the most exciting aspect of your services business?

Clearly, the emergence of customers from new sectors such as retail and luxury offer new areas of growth for this segment. Additionally, there exists opportunities to explore additional synergies with our insurance business. We believe an increasing number of our EV company insurance customers will want to add our auto services module to their existing insurance and other driver software.

Thank you, Breaux. Next question, will you be issuing guidance this year?

We currently plan to issue guidance with our first quarter 2025 earnings release subject to market conditions and Board approval.

Thank you. Our last question, do you expect there will be another large employee stock compensation expense this year?

No, we don't. Last year's employee stock compensation program was a one-time event under the 2024 equity incentive plan to retain and reward a core group of long-term SunCar employees who had been with the company for many years and were critical to our growth. We do not expect to incur a similar expense in the near future.

We have reached the end of our question-and-answer session, which concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.

Thank you for standing by and welcome to the SunCar Technology Group's First Half 2024 Earnings Call. Please note that today's call is being recorded. I will now turn the meeting over to Jennifer Jiang, Director of Investor Relations for SunCar Technology Group.

Thank you, and thanks to everyone who joined us today for SunCar's First Half of 2024 Earnings Call. Please note that our earnings press release was issued earlier today, and our Semi-Annual Report on Form 6-K was filed with the Securities and Exchange Commission last Friday. Both are available in the Investor Relations section of our website at https.suncartech.com. Joining us on the call today are SunCar’s Chairman, CEO, Zaichang Ye, and the Breaux Walker, US-based Consultant. The format of today's call will begin with the opening remarks from Chairman Ye, followed by a financial and business update from Mr. Walker. Afterward, we'll move into a question-and-answer session addressing the questions submitted by investors. We thank everyone for submitting these questions. Before we get started, I'm going to review the Safe Harbor Statement. Please note that today's discussion will contain forward-looking statements made under the Safe Harbor Provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our results may differ materially from the views expressed today. Further information regarding this and other risks and uncertainties are included in the Company's Semi-Annual report on Form 6-K for the half-year ended June 30, 2024, and in other documents filed with the US Securities and Exchange Commission. SunCar Technology does not assume any obligations to update any forward-looking statements, except as required under applicable law. With that, I would like to turn over the call to our first speaker, Mr. Zaichang Ye, SunCar's Chairman, CEO.

17 years ago, I founded SunCar to improve the auto services and auto insurance customer experience in China. SunCar is proud to have achieved the set goal and for the value of our $100 million investment in SunCar's Technology platform delivers to our customers. It is a credit to our unique technology and the team's hard work that we have won the trust of China's largest bankers, insurers, and auto companies. We will adhere to our mission to meet our customers rapidly changing needs, as we digitalize China's auto services and e-insurance markets. We have been a leader in bringing digital auto services and e-insurance tailored to the EV market. According to the Wall Street Journal, China's August EV and hybrid sales rose 43% from a year earlier making up 59% of all vehicle sales. SunCar continues to benefit from the EV market's rapid growth and strong relationships with our EV partners. These partners continue to innovate globally, while growing their partnerships with SunCar. From January 2024, our e-insurance partnership with world's leading EV companies has grown regularly from $400,000 to over $36 million in premium value. As the EV market becomes hyper competitive, there is a greater need for EV companies to leverage auto services and insurance sales to increase their competitive advantage. SunCar has an even stronger advantage with new EV market entrance. This new market entrance faces stiff competition. The newer EV companies understand the synergies between our e-insurance and auto services business, where SunCar's e-insurance technology can drive the sale of other auto services and new vehicles purchased. Our partnership with Li Auto to develop its new broker system is an example of our mission to continue to innovate in the EV insurance market. We are honored that the exciting new EV companies Xiaomi and Jiyue, a joint venture between Geely and Baidu, have decided to offer our integrated auto services and e-insurance platform to their customers. We estimate that this year's new EV sales will reach 10 million units, while there are over 300 million ICE vehicles, a much larger market. Due to the entry of many EV competitors in the market, ICE vehicles are facing increased competition. Through SunCar’s e-insurance platform, ICE companies hope to encourage repeat customers and increase insurance-related service revenues. As part of their competitive strategy, our ability to have our ICE vehicle partners captures this large insurance market opportunity is one of the company's biggest revenue opportunities. ICE companies are quickly realizing the benefits they can achieve by digitalizing and using SunCar's leading e-insurance and auto services platform to accelerate that process. SunCar's recent partnership with SAIC, China's largest car company, is one example of this trade. Finally, we continue to invest in our R&D. We will continue to build upon our unique AI-based technology, which allows us to provide drivers insurance quotes in under two minutes. This technology is a game changer for our e-insurance customers.

Thank you, Zaichang. This is Breaux Walker. Thank you all again for joining us. SunCar is a leader in cloud-based and software-focused B2B auto services and e-insurance in China. The company leverages unique technology to provide valuable customer loyalty and e-insurance solutions to its customers who are some of China's leading corporations. China is the world's largest and fastest growing car market and a market that is importantly rapidly digitalizing. At the same time, large enterprises are facing significant competitive pressure in retaining and adding new customers. Together, these trends give SunCar an exciting and substantial addressable market opportunity. SunCar operates in three business segments, auto services, auto e-insurance, and technology services. In our auto services business, we offer access to a digital auto services platform and network of over 47,000 auto service providers, as a customer loyalty solution to enterprise clients, which includes China's largest financial institutions and auto manufacturers. Our extensive auto services cover a wide range of services such as car wash, oil change, car detailing, roadside assistance, flight pickup, designated driving, VIP lounge access, and many others. In a country that doesn't have AAA or access to detailed information on auto service providers, SunCar’s auto services are of high value to customers and drive increased customer loyalty for our large enterprise customers. We automate and streamline the insurance buying process through a proprietary cloud platform and mobile app, which integrate the full spectrum of products from leading insurers in China. We sell insurance policies through a network of over 64,000 external sales partners, including auto manufacturers and auto service providers. In this segment, we facilitate the sales of auto e-insurance products underwritten by major insurance companies in China and receive commissions from these insurance company customers, which are typically calculated on a percentage of the premiums paid. Finally, our fast-growing technology services business provides technology -- technical software, and consulting services to our auto services and e-insurance customers. With a growing need to manage their businesses more efficiently, our customers are rapidly implementing our digital tools to streamline their business workflows, manage their customer relationships, and automate order processing. We are continuously upgrading our technology to meet customers' needs and are in the process of developing a SaaS product offering design to convert our auto service providers into technology service customers. We expect the transition of auto service partners to our SaaS platform will accelerate as we offer them new AI-based services. What sets our business apart from would-be competitors, is our unique technology and the fact that we have both a comprehensive digital auto service solution and a one-stop auto e-insurance solution. Other strategic advantages include our ability to provide nationwide auto service coverage in China, access to a large high-quality service provider network, competitive prices, and an e-insurance product that enables customers to purchase an e-insurance policy in under two minutes. With a $120 billion addressable market for insurance services and a $20 billion market for B2B auto services, there is a tremendous opportunity for us to grow in our existing markets. In addition to having large addressable markets, we're benefiting from the joint tailwinds of China's auto market digitalization and the increased competition our customers are experiencing, leading them to digitalize and seek effective customer loyalty solutions. We will now transition to our operational performance. In the first half of 2024, we continue to drive significant revenue growth and expand our presence within our large high-quality customer accounts. In the auto services segment, we signed multiple exclusive service contracts with China Construction Bank, a leading bank in China. These include two-year vehicle service contract with the bank's Fujian branch, where SunCar delivers tailored auto services to tens of thousands of CCB customers from 460 car wash locations. Other contracts were signed with the Bank’s Sichuan and Yunnan branches. Our destination pickup service business continues to grow rapidly with top-tier customer additions including CITIC, China Merchants, Ant Fortune, and Ping An Insurance. Earlier this year, we launched a three-year partnership with CITIC Bank International to provide exclusive airport concierge car services for its private banking clients. In April, 2024, we collaborated with Ant Fortune to offer luxury airport concierge services to their Black Card V3 members. Demonstrating the quality and longevity of our auto services customer base, we expanded our partnership with Ping An Insurance, China's leading insurance company, to include new agreements with the Shenzhen branch, where SunCar will provide premium airport pickup. This marks the seventh Ping An branch to partner with SunCar for premium airport pickup services. SunCar was also selected as the provider of concierge car services for China Merchants Bank private banking clients through a two-year agreement. Demonstrating our commitment to providing our customers with innovative solutions, we established a new partnership with China Continent Insurance's Inner Mongolia branch, helping to create innovative service bundles, which boosted China Continent's services sales by 30% in the first half of 2024. In our e-insurance business, we execute on multiple strategic and operational funds to further grow this segment. We signed a two-year agreement with SAIC Maxus, a leading commercial vehicle manufacturer, to enhance e-insurance management across its dealership network with first year service fees estimated at $14 million. This customer win is indicative of the large potential opportunity SunCar has in the ICE market. We began an innovative partnership with Beijing Li Auto Insurance to develop the Li Auto Insurance Broker System, which aims to improve brokerage operations with the support of SunCar's advanced IT solutions. Additionally, we expanded our collaboration with Beijing Houji Insurance Brokerage to deliver insurance services in 14 cities, all utilizing SunCar's e-insurance platform. We extended our partnership with Zeekr Intelligent Technology, a premium EV manufacturer partner now listed on the New York Stock Exchange. For Zeekr We're providing insurance services using SunCar's intelligent platform. Finally, we formed a strategic partnership with Lotus Technology to offer comprehensive automotive services and e-insurance to Lotus car owners. We will now transition to our financial performance, all of which will be presented in US Dollars. For the first half of fiscal year 2024, we are very pleased to report total revenue of $203 million, up 27% from $159 million in the first half of fiscal year 2023. This growth underscores our leading position in the auto service and e-insurance sectors, the strength of our innovative cloud-based solutions, and our ability to meet the evolving needs of enterprise clients across China's automotive and financial services sectors. Our Auto Service segment reported revenue of $107 million in the first half of fiscal year 2024, an increase of 9% from $99 million in the first half of 2023. Growth in this segment was driven by an increase in service orders in 2024. Our Auto E-Insurance segment reported revenue of $74 million in the first half of 2024, an increase of 55% from $48 million in the first half of 2023. This growth was driven by a 250% increase in the number of EV insurance policies sold for the six months ended June 30, 2024. The company experienced a 21% decline in the associated average commission rate due to normal fluctuations in regulatory guidelines. Our Technology Service segment generated revenues of $22 million in the first half of fiscal year 2024, representing a 70% increase compared to the prior year period. This increase was due to increasing demand from automotive service providers for online tools that streamline workflows, manage customer relationships, and automate order processing. Our ongoing technology upgrades, including a shift towards a SaaS model and the use of a private cloud platform, have simplified development and enhanced service capacity driving this growth. We recorded a net loss of $60 million in the first half of fiscal year 2024 compared to a net income of $1 million in the first half of 2023. The net loss was primarily attributable to increased share-based compensation expenses related to the 2024 equity incentive plan. We continue to strategically invest in R&D and business development as we increase our presence in some of the largest enterprise customers in China. We believe that adjusted EBITDA, a non-GAAP metric that excludes certain non-recurring items and non-cash expenses, helps evaluate our operational performance in addition to the GAAP metrics. Our adjusted EBITDA increased by 4% to $6 million in the first half of 2024 compared to $5.8 million in the prior year period. In conclusion, we continue to add large, high-quality customers and experience strong revenue growth in the first half of 2024. SunCar remains well positioned as the preferred cloud-based and software-focused B2B auto services and e-insurance provider in China. We will continue to invest in our differentiated technology platform, develop new AI based and intelligent cloud solutions, and expand our high-quality auto services and high-growth e-insurance business. Before we focus on the question and answer portion of the call, Chairman Ye, would like to thank our employees, partners, customers, as well as our loyal shareholders for their continued support and belief in our vision. We look forward to updating you on our business on upcoming earnings calls. We will now transition to the Q&A portion of the call. Thank you to everyone who submitted questions.

Question number 1, how do you view AI impacting your business?

We see significant growth opportunities from AI given that we are the only nationwide digital auto service and e-insurance platform. We expect that our cloud platform and strong database of automotive service providers give us a unique opportunity to leverage AI. To be successful in implementing AI, a company needs scale. With our scale, we believe SunCar is uniquely positioned to take further market share from regional and non-automated competitors. Specifically, there's tremendous opportunity to provide predictive maintenance applications to our customers, which will increase their maintenance and insurance premium revenue. Additionally, we believe the nascent AV, robotaxi markets will provide SunCar with significant new revenue opportunities as we tailor services to those markets.

Question number 2. The SAIC transaction seems very significant to the company. How would you put that deal in the perspective for your investors?

The SAIC transaction is significant for the company, not only for its size, but also for the fact that it represents the large market opportunity SunCar has in our emerging traditional fuel or ICE market. In the past we have primarily been focused on the EV market but we now see the traditional ICE market rapidly digitalizing to better compete with the EV players. ICE is a bigger market than the EV market, so this is a very good trend for our business.

Question number 3, what is the biggest risk to your business?

We continue to be in high growth mode and as such our team needs to continue driving towards our objectives, especially the opportunities we see to further integrate our auto services and e-insurance products, develop new AI-based products, and attack the ICE market opportunity.

Question number 4. The company's technology service business saw a significant increase of 70.3% in the first half of 2024, reaching $21.9 million. What were the main driving forces behind this growth? What are the company's plans for sustained growth in the future?

The company's technology services business mainly provides industry-specific technology solutions to EV manufacturers and ICE vehicle 4S dealers. The rapid growth of this business during the period was driven by demand for both new energy EV vehicle manufacturers and the ICE market who view SunCar’s integrated services and insurance platforms giving them a competitive advantage. With regards to our SaaS services aimed at the EV market, the company signed a strategic service agreement with the leading global EV manufacturer to provide a SaaS based vehicle specific insurance system. SunCar also provided advanced vehicle insurance sales systems to Xiaomi, Nio, Zeekr, and 18 other companies. It is expected that this part of the business will continue to grow rapidly in the future, strengthening the company's market leadership position.

Question number 5. The company's administrative expenses increased significantly by $37 million in the first half of 2024, corresponding to a more than 10 times increase year-on-year. What is the main reason for this growth?

The increase of $37 million in administrative expenses for the first half of 2024 was primarily due to a one-time equity incentive expense of $31 million which was granted to recognize and motivate the management and administrative employees who have made outstanding contributions. Additionally, $6 million was set aside for bad debt provisions for accounts receivable.

Question number 6. The company's R&D expenses increased significantly by $28.2 million in the first half of 2024, corresponding to a 701% increase year-on-year. What is the main reason for this growth?

The increase of $28.2 million in R&D expenses for the first half of 2024 includes a one-time R&D-related personnel equity incentive plan of $31 million. After excluding this impact, the actual R&D expenses decreased by 2.8 million year-on-year. This is mainly due to the company's current development of its big data platform, [pan gu] (ph) system, which has been capitalized according to the actual progress made during the period.

Question number 7. The company’s adjusted EBITDA for the first half of 2024 increased to $6 million. What is the reason for significant change in operating profit or loss.

The main reason for the change in the company's issued equity incentives for approximately $62.8 million in the first half of 2024. These were granted to recognize and motivate employees who have made outstanding contributions to the company's development, especially those teams and individuals who have played a key role in our technology innovation, market expansion, and management optimization. The equity incentive plan is a one-time expenditure. Other differences are mainly due to a depreciation expense of $1.8 million generated from normal operations.

Question number 8. Besides the continuing rapid development of the China business, does the company have any plans for international expansion?

The company's future international growth will be mainly driven by the availability of strategic M&A opportunities. We believe that acquiring an existing synergistic company in the US Could lower our market entry risk, as we pursue the opportunities in that market. We have conducted extensive research in the US And Southeast Asia and plan to select targets with similar and core technologies for those markets, with the US Market being the top priority. In terms of the US Market, the company's existing Advanced Automotive Service cloud platform can be used directly in the US Market, through a localization process already identified by the company. The company plans to enter the US market as the first step in its overseas expansion and then expand its platform to other countries when it is matured enough to be transferable to other geographies.

Question number 9. Are there any direct or indirect competitors in your industry?

In terms of auto services, the company has a leading and nationwide automotive services platform that is differentiated by both its technology and scope. In certain provinces, we have some competitors who have not invested in their technology stack to the same extent. Most of these competitors rely on manual processes, which are relatively inefficient. Compared to the company's comprehensive offering of post-sales automotive services, their services are also more limited. Regarding automotive insurance, the company is the first nationwide online car insurance platform in the country. Leading the development of the industry, the company offers an innovative insurance quote system which can generate a quote within two minutes based on a vehicle license plate. Our EV specific products in particular are extremely differentiated from would-be competitors. That concludes the Q&A. We want to thank everyone again for participating on today's call. We look forward to providing additional updates soon. In the meantime, we can be reached at IR at Suncartech.com.

Ladies and gentlemen, that concludes our conference for today. Thank you for your participation. You may now disconnect.