• Revenue Growth: Fourth-quarter revenue grew by 21% year-over-year.
• Total Bookings Growth: Total bookings increased by 17% year-over-year.
• Incremental Operating Margins: Over 60% incremental operating margins.
• Incremental EBITDA Margins: 70% incremental EBITDA margins.
• Adjusted EBITDA Margin: 24% for the full year, up over 1,000 basis points year-over-year.
• Total Cumulative Enrollments: Ended the year at 28.9 million, up 2.5 million in the quarter.
• Active CLEAR Plus Members: Grew by 164,000 in the quarter.
• Gross Dollar Retention: Q4 gross dollar retention was 88.5%, down 50 basis points sequentially.
• Annual Net Member Retention: 81.4%, down 10 basis points sequentially.
• Free Cash Flow: Generated $284 million in 2024, a 42% increase year-over-year.
• Cash Position: Ended the year with $613 million in cash.
• Share Repurchase: Repurchased 1.8 million shares in Q4 at $26.36 each.
• Q1 2025 Revenue Guidance: Expected to be between $207 million and $209 million.
• Q1 2025 Total Bookings Guidance: Expected to be between $202 million and $204 million.
• 2025 Free Cash Flow Guidance: At least $310 million, including $25 million in incremental cash taxes and $9 million in EnVe CapEx.
• Dividend: Q1 2025 dividend totaling $0.395, including a $0.27 special cash dividend and a $0.125 regular quarterly dividend.

Release Date: February 26, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clear Secure Inc (NYSE:YOU) experienced a 21% growth in fourth-quarter revenue and a 17% increase in total bookings, driven by member growth, pricing, and strong member retention.
• The rollout of NextGen Identity and EnVes has significantly improved member experience, with 91% of members passing through CLEAR lanes in less than 7 minutes.
• The company has expanded its TSA PreCheck services to 91 locations, enhancing its public-private partnership and increasing accessibility for travelers.
• Clear Secure Inc (NYSE:YOU) ended the year with over 30 million members, reflecting strong traction and growth in its CLEAR1 platform.
• The company generated $284 million in free cash flow in 2024, a 42% increase year-over-year, and plans to continue capital allocation to maximize long-term shareholder value.

Negative Points

• Gross dollar retention was down 50 basis points sequentially, attributed to fewer parent members adding family members at higher price points.
• Annual net member retention decreased by 10 basis points sequentially, although it has stabilized with expectations for improvement in 2025.
• The gap between wholesale and retail pricing with partners like AMEX is significant, potentially suppressing total bookings and EBITDA.
• The company anticipates a disproportionate share of net member adds in Q2 and Q4 of 2025, with lower net adds expected in Q1 and Q3.
• Clear Secure Inc (NYSE:YOU) faces challenges in optimizing its business for gross dollar retention, as it plans to sunset early deep discount programs that have negatively impacted unit economics.

Q & A Highlights

Q: Can you review the guidance for Q1 bookings and the factors influencing the midpoint of $203 million or 12.5% year-over-year growth? A: Kenneth Cornick, President and CFO, explained that the bookings guidance implies around 30% year-over-year growth. January is seasonally slow for travel, and factors like the ramping of PreCheck locations and the closure of some CLEAR1 deals in Q4, which could have closed in Q1, contribute to this. Additionally, there is a slightly lower pricing tailwind in Q1.

Q: How do you view the balance between price and member count, and what is the target for dollar or member retention? A: Caryn Seidman-Becker, CEO, emphasized the importance of customer experience, which is linked to retention and gross adds. The rollout of EnVe pods and new technologies like e-passport and mobile enrollment are expected to drive growth. They anticipate net adds in at least the mid-single digits and are focused on gross dollar retention as they adjust pricing.

Q: What is the opportunity for greater public-private partnerships under a more welcoming administration? A: Caryn Seidman-Becker highlighted the alignment with the administration's focus on privatization and American companies. CLEAR is well-positioned as a made-in-America company focused on aviation security. They receive no federal funding and pay a percentage of revenue to airport partners and TSA, showcasing their value as partners.

Q: Can you provide an update on TSA PreCheck and the cross-sell between TSA PreCheck and CLEAR? A: Kenneth Cornick reported that TSA PreCheck is gaining momentum with 91 locations and a 90%+ marketing opt-in rate. The upsell rate for new PreCheck members who are not already CLEAR members is approaching 20%.

Q: How do you see air travel trends and the role of pricing in the upcoming fiscal year? A: Caryn Seidman-Becker expressed bullishness on travel, citing reports of increasing airport traffic and the need for automation. The out-of-airport enrollment network is scaling aggressively, and pricing opportunities include charging for historically free tiers. The focus is on driving value for customers and creating bundles with value-added benefits.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.