Sarang Vora

Sarang Vora inquired about Clear's marketing strategy for its international expansion to 40 countries, including potential airline or credit card partnerships, and its expected meaningfulness over the next two years.

Answer

Michael Barkin, President of Clear Secure, expressed excitement about enrolling international travelers from 42 countries, noting strong early enrollment with limited marketing. He outlined plans for Clear's own marketing efforts and strategic partnerships, similar to its domestic business, to drive awareness and enrollment, especially targeting travelers for events like the World Cup. Caryn Seidman-Becker, CEO, added that Clear is preparing for a travel boom, emphasizing public-private partnerships and innovation to enhance U.S. infrastructure and traveler experience.

Sarang Vora inquired about the impact of eGates, an exclusive Clear Plus benefit, on member experience and operations, seeking statistics on verification speed, clearance process, and capital investment. He also asked about Clear Secure's marketing strategy for its international expansion to 40 countries, including potential airline or credit card partnerships, and its expected significance over the next two years.

Answer

Caryn Seidman-Becker, Co-Founder, Chair and CEO, Clear Secure, described eGate member feedback as 'magical,' noting significant improvements in member experience and NPS, with verification in under five seconds. She highlighted the predictability and consistency eGates offer, especially for international travelers. Michael Barkin, President, Clear Secure, added that eGates unlock ambassadors for hospitality. Jen Hsu, CFO, Clear Secure, confirmed incremental CapEx for eGates, reflected in revised FCF guidance, and noted ROI from labor savings. For international expansion, Mr. Barkin mentioned early success with limited marketing and plans for own marketing efforts and strategic partnerships, particularly for events like the World Cup. Ms. Seidman-Becker emphasized the broader travel boom and the opportunity for public-private partnerships.

Sarang Vora of Telsey Advisory Group asked about the rollout speed for the new, faster 'NV' hardware across busy airports and followed up on the potential for a tiered membership structure as an alternative to simple price increases.

Answer

Executive Caryn Seidman-Becker confirmed the new NV hardware is 3x faster and is beginning its rollout, with JFK and San Francisco as initial test sites. She also noted the digital identity integration is 55-60% complete and expected to reach 90% by year-end. Executive Kenneth Cornick addressed tiered memberships, stating that while it's a consideration for the future, the current focus is on adding value through perks. He mentioned Ambassador Assist is currently a paid transactional perk but could be bundled into a higher tier later.

Sarang Vora of Telsey Advisory Group asked about WestRock's current and future market share in the single-serve coffee space with the new facility coming online. He also questioned how the company is managing its sourcing strategy in light of the new 50% tariff on coffee imports from Brazil.

Answer

CEO Scott Ford described the single-serve market as a scale-driven business dominated by Keurig, positioning WestRock as one of the few significant competitors in the remaining market segment. He noted the new facility is modular and will expand as they win contracts. Regarding tariffs, Ford explained that managing the Brazilian tariff is a 'mixed bag.' While they can sometimes substitute beans from other regions, it's not always possible due to specific customer or contract requirements, making it impossible to completely avoid the impact.

Sarang Vora from B. Riley Securities inquired about the production timeline at the Conway facility, asking for specific start dates for the can and glass lines, and also questioned the volume ramp-up and expectations for the single-serve coffee business.

Answer

CEO Scott Ford detailed the Conway ramp-up, stating the first can line began production in the current month, a second will launch in Q3, and the glass line also starts in Q3, with all three expected to be at full capacity by Q1 2026. For single-serve, Ford attributed recent wins to the company's integrated 'one-stop shop' model. CFO Chris Pledger added that a significant single-serve volume ramp is expected in the latter half of Q2 and will continue growing throughout the year.

Sarang Vora requested a deeper dive into the significant volume decline in the single-serve segment and asked about the Conway facility, questioning if delaying one large customer could negatively impact other new clients and why production couldn't be started sooner with more shifts.

Answer

CEO Scott Ford attributed the single-serve decline to consumers trading down to smaller pack sizes and a loss of some distribution centers earlier in the year. CFO Chris Pledger addressed the Conway question, stating the delay was a strategic choice to complete all commercialization work upfront, ensuring a highly efficient, steep ramp-up for all customers starting in Q1 2025, which ultimately benefits everyone involved.

Sarang Vora asked about the ramp-up of family farms needed to support the new $900 million revenue capacity at the Seymour, Indiana facility, inquiring about the expected timeline for adding the roughly 500 farms required.

Answer

CEO Russell Diez-Canseco responded that providing a specific curve for new farm additions would be equivalent to issuing a long-term guide, which the company is not prepared to do at this time. He stated that the current plan is to continue adding new family farms at the current pace.

Sarang Vora requested an overview of the factors impacting the 2025 gross margin outlook and asked for details on the new Accelerator Farms initiative.

Answer

CFO Thilo Wrede explained that H1 2025 gross margins face a difficult comparison due to last year's exceptional operational performance and falling commodity costs. He cited current weather disruptions and rising corn prices as headwinds. President and CEO Russell Diez-Canseco described the Accelerator Farms as an R&D lab for testing new equipment and practices to benefit their entire farm network, rather than a significant source of volume.

Sarang Vora of Telsey Advisory Group inquired about the primary drivers of strong Q2 sales, seeking to understand the split between channel fill and existing channel growth, and the impact of new flavors. He also asked for details on the source of the incremental $5 million in productivity savings.

Answer

President & CEO Amy Taylor responded that growth was balanced, stemming from new distribution at Walmart, positive momentum in grocery from spring resets, and strong performance from new items like Strawberry Lemon Burst. CFO Girish Satya added that the incremental savings are from supply chain efficiencies in COGS and selling expenses, expected to be realized starting in late 2025 and more fully in 2026.

Sarang Vora asked about the rollout timing for new distribution at Albertsons and Walgreens, whether the company is done lapping prior distribution losses, and about the current pricing strategy.

Answer

CFO Girish Satya stated the Walgreens distribution will primarily impact Q2 and Q3, while Albertsons is rolling out now. He confirmed the lapping of prior distribution losses was mainly a Q1 event and will be behind them from Q3 onward. On pricing, CEO Amy Taylor and CFO Girish Satya noted that while there is room for adjustments, they are balancing this with productivity gains and have not announced specific price increases.

Asked for an update on the DSD pilot program, its impact on the business, and details about the 2025 marketing strategy, including spend levels and observed ROI.

Answer

The DSD pilot in the Northwest has successfully driven outsized grocery growth by improving in-store execution and is now expanding to the Southwest for further learning. Marketing investment is increasing significantly to the low double-digits as a percentage of sales, funded by cost savings, with a focus on building awareness through campaigns that have shown strong positive consumer sentiment.

Sarang Vora from Telsey Advisory Group inquired about the development pipeline and scaling strategy for Coursera Produced Content (CPC), including any specific focus areas.

Answer

CEO Greg Hart confirmed that Coursera is increasing its investment in its content engine, including CPC, which provides favorable economics, exclusivity, and a testbed for new features. He noted that the company invested $6 million in CPC in the first half of 2025 and plans to increase the full-year investment over the prior year, signaling it will remain a key strategic area.

Sarang Vora inquired about early feedback on the new energy drink launch regarding taste and distribution, and asked for details on the incremental cost-saving initiatives that support the maintained EBITDA guidance despite new headwinds.

Answer

CEO Chris Mondzelewski stated that while it's early, the energy drink launch is exceeding distribution expectations and receiving positive feedback on its clean flavor profile. CFO Steve Kadenacy addressed cost savings at a high level, mentioning a continuous focus on efficiency and agility across the business to offset headwinds, without detailing specific initiatives.

Sarang Vora requested more detail on the energy drink distribution ramp-up across different channels in the 12 priority markets and inquired about the product innovation pipeline, particularly for RTD coffee.

Answer

CEO Chris Mondzelewski detailed the energy launch strategy, which involves a 'blitz' in 12 key markets through early spring. He explained that convenience stores are the primary focus for driving trial, leveraging the Keurig Dr Pepper DSD network, while mass market retailers will drive repeat volume. Regarding innovation, Mondzelewski confirmed they are actively developing new products for all segments, including RTD coffee, to add depth with existing retail partners, but declined to share specifics on unlaunched items.

Sarang Vora from Telsey Advisory Group inquired about the drivers for the projected Q4 sales growth, excluding prior-year barter transactions, and asked for details on the 2025 ramp-up, margin structure, and distribution strategy for the new energy drinks.

Answer

CFO Stephen Kadenacy highlighted that strong wholesale growth is offsetting declines in DTC and Outposts. Executive Chris Mondzelewski added that effective promotional activity is boosting grocery performance. Regarding energy drinks, Mondzelewski detailed the strategic partnership with KDP for a C-store focused rollout aiming for 80% ACV over several years. Kadenacy noted that energy margins will be under 40% in the first year due to launch costs but will be strong long-term.