Clear Secure(US:YOU)2025-05-08 12:21Financial Performance - Revenue for the three months ended March 31, 2025, was $211.4 million, an 18% increase from $179.0 million in 2024 [175]. - Net income for the three months ended March 31, 2025, was $38.6 million, a 20% increase from $32.1 million in 2024 [175]. - Adjusted EBITDA for the three months ended March 31, 2025, was $52.2 million, compared to $40.9 million in 2024 [161]. - Free Cash Flow for the three months ended March 31, 2025, was $91.3 million, up from $77.6 million in 2024 [162]. - Operating income increased to $37.4 million for the three months ended March 31, 2025, a 58% increase from $23.7 million in 2024 [175]. Membership Growth - Total Bookings increased by $26.6 million, or 15%, for the three months ended March 31, 2025, compared to the same period in 2024, primarily driven by growth in Active CLEAR+ Members and price increases [146]. - Total Cumulative Enrollments reached 31,215 thousand as of March 31, 2025, representing a 42% increase from 21,941 thousand in the same period of 2024, driven by CLEAR1 and CLEAR+ Member enrollments [148]. - Active CLEAR+ Members increased to 7,415 thousand as of March 31, 2025, representing a 9% growth from 6,798 thousand in 2024 [152]. Usage Metrics - Total Cumulative Platform Uses was 248,895 thousand as of March 31, 2025, a 29% increase from 192,610 thousand in the same period of 2024, driven by CLEAR+ verifications and increased contributions from CLEAR1 uses [150]. - Annual CLEAR+ Gross Dollar Retention decreased to 87.1% as of March 31, 2025, down from 89.8% in 2024, a decline of 270 basis points [154]. - Annual CLEAR+ Member Usage declined to 7.1x as of March 31, 2025, a 9% decrease from 7.8x in 2024 [156]. Expenses and Costs - Cost of revenue share fee rose to $29.6 million for the three months ended March 31, 2025, a 21% increase from $24.4 million in 2024 [177]. - Cost of direct salaries and benefits increased by $10.6 million, or 26%, to $50.7 million for the three months ended March 31, 2025, compared to $40.3 million in the same period of 2024 [178]. - Research and development expenses decreased by $1.1 million, or 5%, to $19.0 million for the three months ended March 31, 2025, down from $20.1 million in 2024 [179]. - Sales and marketing expenses increased by $1.8 million, or 15%, to $13.4 million for the three months ended March 31, 2025, compared to $11.6 million in 2024 [180]. - General and administrative expenses rose by $1.8 million, or 3%, to $54.7 million for the three months ended March 31, 2025, from $52.9 million in 2024 [181]. Cash Flow and Investments - Net cash provided by operating activities increased by $18.0 million to $98.3 million for the three months ended March 31, 2025, compared to $80.3 million in 2024 [198]. - Net cash provided by investing activities increased by $67.1 million to $93.3 million for the three months ended March 31, 2025, from $26.2 million in 2024 [199]. - Net cash used in financing activities increased by $70.0 million to $(171.3) million for the three months ended March 31, 2025, compared to $(101.3) million in 2024 [200]. - As of March 31, 2025, the company had cash and cash equivalents of $87.6 million and marketable securities of $442.3 million [185]. - The company reported marketable securities amounting to $442.3 million, primarily invested in money market funds, commercial paper, corporate notes and bonds, and government securities [209]. Strategic Initiatives - The company relies on multiple channels to attract new CLEAR+ Members, including in-airport engagement and digital channels such as paid search and partnerships [128]. - The company has renewed its partnership with American Express for the second of two one-year renewal terms in March 2025, which helps efficiently scale membership in CLEAR+ [128]. - The company aims to innovate its product and platform to improve Member experience and introduce new use cases, which is essential for maintaining partnerships and generating new revenue streams [133]. - The timing of new partner, product, and location launches can significantly impact financial performance, with potential delays affecting results [134]. - The company plans to continue expanding TSA PreCheck® Enrollment locations, subject to TSA approval, to drive additional revenue [164]. Risks and Other Considerations - The company expects to incur increased compensation expenses related to equity awards granted under the 2021 Omnibus Incentive Plan [141]. - The business model is characterized by efficient Member acquisition and high retention rates, but increasing market penetration may raise acquisition costs and affect retention [137]. - Interest income, net decreased by $3.8 million, or 38%, to $6.2 million for the three months ended March 31, 2025, compared to $9.9 million in 2024 [182]. - Income tax expense increased by $3.5 million, or 176%, to $(5.4) million for the three months ended March 31, 2025, from $(2.0) million in 2024 [184]. - A hypothetical 100 basis points increase or decrease in overall interest rates would result in an unrealized loss or gain of approximately $2.9 million in the fair value of the company's "available for sale" investments [209]. - The company had no outstanding borrowings under its revolving credit facility as of March 31, 2025 [208]. - Foreign currency transaction and translation risk was insignificant for the three months ended March 31, 2025, as the majority of business is transacted in U.S. dollars [210].