Clear Secure(US:YOU)2025-11-06 13:30Financial Performance - Total Bookings increased by $32.6 million, or 14%, for the three months ended September 30, 2025, compared to the same period in 2024, driven primarily by growth in Active CLEAR+ Members and price increases [158]. - Revenue for the three months ended September 30, 2025, was $229,193,000, an increase from $198,424,000 in the same period of 2024 [176]. - Revenue for the three months ended September 30, 2025, increased by $30.8 million, or 16%, to $229.2 million compared to $198.4 million in 2024, driven by a 7% increase in CLEAR+ Members and price increases [192]. - For the nine months ended September 30, 2025, revenue rose by $95.8 million, or 17%, totaling $660.0 million, attributed to the same factors as the quarterly results [194]. - Adjusted EBITDA for the three months ended September 30, 2025, was $70,063,000, compared to $48,645,000 in 2024, reflecting strong operational performance [176]. - Operating income for the three months ended September 30, 2025, was $52.6 million, a 50% increase from $35.1 million in 2024 [192]. - Net income for the three months ended September 30, 2025, was $45.1 million, up 19% from $38.0 million in 2024 [192]. - Free Cash Flow for the nine months ended September 30, 2025, was $155,714,000, compared to $149,806,000 in 2024, indicating positive cash generation [177]. Membership and Engagement - Total Cumulative Enrollments reached 35,751 thousand as of September 30, 2025, representing a 35% increase from 26,453 thousand in 2024, attributed to CLEAR1 and CLEAR+ Member enrollments [161]. - Total Cumulative Platform Uses increased by 59,916 thousand, or 27%, from 220,413 thousand in 2024 to 280,329 thousand in 2025, indicating higher engagement levels among Members [163]. - Active CLEAR+ Members rose by 7% to 7,683 as of September 30, 2025, up from 7,150 in 2024, driven by new members from airports and digital channels [166]. - Annual CLEAR+ Gross Dollar Retention decreased by 2.1% to 86.9% as of September 30, 2025, down from 89.0% in 2024, primarily due to lower pricing increases [168]. - Annual CLEAR+ Member Usage declined by 1% to 7.0x as of September 30, 2025, from 7.1x in 2024, attributed to lower utilization among both new and existing members [170]. Operational Efficiency - The company relies on multiple channels to attract new CLEAR+ Members, including in-airport engagement and digital channels, with strategic partnerships with airlines and American Express to promote services [140]. - The ability to retain existing CLEAR+ Members is crucial, with frequency and recency of usage being key indicators of retention [143]. - The business model is characterized by efficient Member acquisition and high retention rates, but increasing market penetration may raise acquisition costs and affect retention [148]. - Operating expenses include costs related to revenue share fees, direct salaries, and general administrative expenses, which are essential for maintaining service quality and operational efficiency [181][186]. Research and Development - Research and development expenses are focused on developing new products and improving existing services, with costs primarily related to employee expenses and contractor fees [183]. - Research and development expenses increased by $0.6 million, or 3%, for the three months ended September 30, 2025, primarily due to increased employee compensation costs [199]. Cash Flow and Investments - As of September 30, 2025, the company had cash and cash equivalents of $75.8 million and marketable securities of $454.9 million [212]. - Net cash provided by operating activities was $174.0 million for the nine months ended September 30, 2025, an increase of $15.0 million compared to $159.1 million in 2024 [230][231]. - Net cash provided by investing activities decreased by $75.0 million to $73.0 million for the nine months ended September 30, 2025, primarily due to a decrease in net sales of marketable securities [232]. - Net cash used in financing activities was $238.9 million for the nine months ended September 30, 2025, a decrease of $94.3 million compared to $333.2 million in 2024 [233]. - The company repurchased 5,294,598 shares for $126.3 million during the nine months ended September 30, 2025, with $126.5 million remaining available under the repurchase authorization [214]. Market Risks - The company is subject to various macroeconomic factors that could impact travel levels and consumer spending, which are beyond its control [149]. - The company is exposed to market risk related to interest rate changes, with a hypothetical 100 basis points increase or decrease potentially resulting in an unrealized loss or gain of approximately $3.1 million in the fair value of "available for sale" investments [243]. - Foreign currency transaction and translation risk was insignificant for the three and nine months ended September 30, 2025, as the majority of business is transacted in U.S. dollars [244]. Tax and Other Expenses - Income tax expense increased by $11.0 million (231%) for the three months ended September 30, 2025, and by $20.5 million (287%) for the nine months ended September 30, 2025, primarily due to the realization of U.S. deferred tax expense [210][211]. - General and administrative expenses rose by $4.9 million, or 9%, for the three months ended September 30, 2025, mainly due to higher credit card fees and employee compensation costs [204]. - Sales and marketing expenses increased by $1.3 million, or 11%, for the three months ended September 30, 2025, driven by higher employee compensation and commissions [202]. - Cost of revenue share fee increased by $3.1 million, or 11%, for the three months ended September 30, 2025, primarily due to a 16% increase in fixed airport fees [195].