Clear Secure, Inc. Q1 FY2025 earnings call

• CLEAR is building a leading secure identity platform. Travel business had strong growth with 59 CLEAR+ airports and 4 domestic CLEAR Mobile airports, 167 lanes reaching 74% of U.S. airline passengers. • EnVe Pods deployed, driving member experience and labor productivity enhancements, and received Red Dot Design Award. • ePassport enables one-step enrollment at home, available to U.S. travelers and expanding to international. • eGates pilots underway, offering end-to-end automated lanes. • Delivering TSA PreCheck enrollment to more Americans with 165 locations, including Passport Lookup feature. • CLEAR1's partnership with DocuSign allows instant identity verification in high-trust agreements, progressing across industries.

CLEAR's travel business saw strong growth in the first quarter. They ended the quarter with 31.2 million total members, $207 million of total bookings, and $91 million of free cash flow. Active CLEAR+ members grew to 7.4 million, representing 9.1% growth. CLEAR1 has an embedded base of over 31 million members and is gaining traction through partnerships like with DocuSign, driving progress across consumer, healthcare, and finance industries.

• Q2 revenue expected to be $214 million to $216 million, total bookings $215 million to $220 million. • Full-year 2025 free cash flow guidance reaffirmed at least $310 million. • Full-year 2025 GAAP tax rate expected to range between 17% and 20%.

• Macro factors and Real ID implementation variability could impact bookings. • Uncertain macroeconomic environment creates degrees of variability and unknowns.

Q: How do you consider macro factors in bookings guidance, including Real ID implementation impact and what's seen at airports?

A: Caryn Seidman-Becker said growth ads and conversion rates from trial to paid memberships remain healthy, not seeing softness from broader macro sentiment. Jen Hsu added market is volatile, widened bookings range for variability.

Q: On retention, how are family members faring after large price increases?

A: Jen Hsu noted net adds improved sequentially, with 100,000 net adds from Q4 to Q1 compared to $78,000 prior year.

Q: How to express flexibility around long-term investments and capital returns in downturn?

A: Caryn Seidman-Becker emphasized automation and operating leverage from NextGen identity, ePassport, etc. Jen Hsu said $500 million cash, remaining share repurchase authorization, and free cash flow visibility.

Q: Opportunities outside U.S. for ePassport and B2B?

A: Caryn Seidman-Becker said ePassport expanding to international travelers from 4 countries, CLEAR1 expanding internationally to serve domestic partners with global businesses.

Q: B2B progress in healthcare and workforce?

A: Caryn Seidman-Becker discussed healthcare partnerships for account recovery, check-in, insurance verification, and workforce security through integrations like DocuSign.

Q: Booking seasonality and gross dollar retention?

A: Jen Hsu mentioned seasonality with Q2 and Q4 expected to have larger net adds. Gross dollar retention impacted by past pricing changes, but focus on growing value proposition to align price and value.