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Clear Secure, Inc. (YOU)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered strong operational and financial execution: revenue rose 20.7% YoY to $206.3M and Adjusted EBITDA was $50.5M (24% margin), with free cash flow of $133.9M; GAAP EPS was inflated by a non‑recurring TRA accounting benefit and Adjusted EPS was $0.90 .
  • Clear beat its own Q4 guidance: revenue ($206.3M vs $202–$204M) and bookings ($228.9M vs $224–$226M), underscoring positive demand, member growth and pricing actions; management guided Q1 2025 revenue to $207–$209M and FY 2025 FCF of at least $310M, implying ≥20% YoY growth on a comparable basis .
  • Key KPIs remained healthy: Active CLEAR Plus Members reached 7.3M (+8.9% YoY), gross dollar retention was 88.5%, and cumulative enrollments hit 28.9M; TSA PreCheck locations expanded to 91 and CLEAR1 enterprise traction accelerated (Okta integration, record Q4 deals) .
  • Capital allocation stayed shareholder-friendly: Q4 repurchases of 1.8M shares at $26.36, a Q1 2025 special dividend of $0.27 plus regular $0.125, and an added ~$200M to buyback authorization (remaining ~$232M) .

What Went Well and What Went Wrong

What Went Well

  • Member growth and pricing drove the quarter: revenue +20.7% YoY to $206.3M and bookings +17.2% YoY to $228.9M; operating income reached $34.1M and Adjusted EBITDA $50.5M (24% margin) .
  • Operational innovation improved throughput: EnVe pods are “5x faster” and rolling out nationwide; 50% of members clear lanes in <2 minutes and 85% in <5 minutes; management emphasized “the lane of the future” with face‑first tech and eGate automation .
  • CLEAR1 enterprise momentum: record Q4 with “over 20 deals signed” and Okta biometric MFA integration reduces fraud/insider risk without dev work, broadening the enterprise use cases .

What Went Wrong

  • TRA accounting noise: Q4 GAAP EPS and net income were boosted by a non‑recurring TRA benefit ($165.5M tax benefit offset by $90.8M other expense; net TRA benefit $74.8M), distorting comparability; Adjusted EPS of $0.90 better reflects core performance .
  • Family tier repricing mixed effects: gross dollar retention stable at 88.5% but net member retention dipped slightly (81.4%), with fewer family adds at the higher price point; management will focus more on gross dollar retention and ARPU optimization .
  • Credit card partnership economics: management noted the wholesale price “depresses bookings and EBITDA,” albeit helping working capital; renewal assumed through June 2026 but unit economics require re‑balancing .

Financial Results

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$186.745 $198.424 $206.270
Operating Income ($USD Millions)$30.337 $35.087 $34.078
Adjusted EBITDA ($USD Millions)$47.452 $48.645 $50.523
Net Income ($USD Millions)$38.591 $38.024 $116.571 (TRA impact)
Diluted EPS (GAAP)$0.26 (Class A) $0.25 (Class A) $0.83 (Class A)
Adjusted EPS (Diluted)$0.34 $0.30 $0.90
Net Income Margin %21% 19% 57% (TRA impact)
Adjusted EBITDA Margin %25% 25% 24%
Cash from Operations ($USD Millions)$114.584 $(35.868) $136.612
Free Cash Flow ($USD Millions)$110.144 $(37.911) (annual partner outflow timing) $133.862

YoY comparison (Q4 2024 vs Q4 2023):

MetricQ4 2023Q4 2024
Revenue ($USD Millions)$170.965 $206.270
Diluted EPS (GAAP, Class A)$0.15 $0.83
Adjusted EBITDA ($USD Millions)$25.836 $50.523
Adjusted EPS (Diluted)$0.17 $0.90
Net Income ($USD Millions)$23.264 $116.571
Adjusted EBITDA Margin %15% 24%

KPIs

KPIQ2 2024Q3 2024Q4 2024
Active CLEAR Plus Members (Millions)7.095 7.150 7.3
Total Cumulative Enrollments (Millions)24.2 26.5 28.9
Total Cumulative Platform Uses (Millions)206.673 220.413 234.8
Annualized CLEAR Plus Member Usage (x)7.4x 7.1x 7.1x
Annual CLEAR Plus Gross Dollar Retention (%)89.3% 89.0% 88.5%
Annual CLEAR Plus Net Member Retention (%)83.2% 81.5% 81.4%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)Q4 2024$202–$204 Actual: $206.3 Beat vs guidance (above range)
Total Bookings ($USD Millions)Q4 2024$224–$226 Actual: $228.9 Beat vs guidance (above range)
Revenue ($USD Millions)Q1 2025N/A$207–$209 New
Total Bookings ($USD Millions)Q1 2025N/A$202–$204 New
Free Cash Flow ($USD Millions)FY 2024≥40% YoY growth Actual: $283.7 Achieved ≥40% growth
Free Cash Flow ($USD Millions)FY 2025N/A≥$310 (incl. $25M extra cash taxes; $9M EnVe capex, $5M incremental YoY) New (≥20% growth on comparable basis)
GAAP Tax Rate (%)FY 2025N/A17–20 New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
EnVe pods & lane automationLane-of-the-future rolling out; member experience improving EnVe rolling across country; 3x faster; handheld integration 55–60% done “5x faster,” completion near-term; eGate pilots; 50% <2 min/85% <5 min Accelerating deployment
TSA PreCheck expansion46 airports live 62 locations live; out-of-airport expansion (Oculus/Mall of America) 91 locations live; upsell to CLEAR ~20%; strong momentum Rapid scaling
CLEAR1 enterprise & OktaMember base >25M; enterprise integrations growing Growth in Verified; channel partnerships (Okta, healthcare) Okta biometric MFA; record Q4 with 20+ deals; healthcare wins Gaining traction
Pricing strategyPrice increases; ARPU focus; family tier impacts noted Continued pricing; gross dollar retention up 100 bps YoY Repricing free tiers; family attach moderated; focus on gross dollar retention Ongoing optimization
Credit card partnership economicsNot highlightedWholesale vs retail gap; depresses bookings/EBITDA Maintains awareness/distribution; depresses bookings/EBITDA; renewal assumed through June 2026 Rebalancing needed
Retention & net adds cadenceStrong gross dollar retention; usage 7.4x Net adds weakest in Q3; gross dollar retention 89.0% Net adds to skew Q2/Q4; gross dollar retention 88.5%; net member retention stable Stabilizing

Management Commentary

  • “We are piloting eGates in select airports today and absolutely believe this technology should be a cornerstone of modernized airport infrastructure... The opportunity for CLEAR to deploy end‑to‑end automated lanes at no cost to the government or taxpayers will be game changing” — Caryn Seidman‑Becker .
  • “Q4 gross dollar retention was 88.5%... Annual net member retention was 81.4%... We plan to report gross dollar retention instead of the annual net member retention metric going forward” — Kenneth Cornick .
  • “In the quarter, we recognized a one‑time non‑cash net gain of $75 million... Based on prevailing tax rates and our share ownership structure, we expect full year 2025 GAAP P&L taxes to range between 17% and 20%” — Kenneth Cornick (TRA and tax) .
  • “Q4 incidentally was a record deal signing quarter for CLEAR1 with over 20 deals signed... Slightly less pricing tailwind in Q1” — Kenneth Cornick (Q&A) .

Q&A Highlights

  • Pricing & member mix: Slightly reduced pricing tailwind in Q1; trial count % of members down YoY; family tier attach rates moderated at higher price points while ARPU/retention focus shifts to gross dollar retention .
  • Credit card partner economics: Wholesale pricing gap vs $199 retail depresses bookings/EBITDA while aiding working capital; renewal assumed through June 2026; management believes full-price renewal rates would be stronger than discounted rates .
  • TSA PreCheck conversion: Marketing opt-in >90%; upsell rate for non‑CLEAR PreCheck enrollees approaching 20%—a key cross‑sell driver .
  • Net-add cadence & seasonality: Annual billing and renewal backlog drive uneven quarterly net adds; 2025 skew expected toward Q2 and Q4 with lowest in Q1 and Q3 .
  • Public‑private partnerships: Engagement with Washington and drive for airport modernization likely to support margin‑positive automation (EnVe/eGates) .

Estimates Context

  • Wall Street consensus via S&P Global could not be retrieved due to an access limit at the time of request. As a result, we cannot quantify beats/misses vs Street for Q4 2024 or prior quarters. Comparisons are made against company guidance and actuals.

Key Takeaways for Investors

  • Strong quarter operationally with material beats vs internal guidance; underlying core profitability reflected in Adjusted EBITDA and Adjusted EPS (strip out TRA noise) .
  • CLEAR’s travel platform is being structurally upgraded (EnVe, eGates), which should sustain throughput gains, margin expansion, and member experience improvements through 2025 .
  • Enterprise CLEAR1 momentum (Okta integration, record deal volume) diversifies revenue drivers and enhances multi‑industry identity use cases; watch for incremental contribution to bookings .
  • Pricing strategy is shifting to optimize ARPU and gross dollar retention (repricing free tiers, bundles, value adds), with careful monitoring of family attach and net retention .
  • Credit card partner economics are a near‑term headwind to bookings/EBITDA; renegotiation or evolution of terms by/after June 2026 could be a medium‑term catalyst .
  • Capital returns remain robust (dividends, expanded buyback, ongoing repurchases); cash generation and balance sheet (year‑end liquidity ~$613M) provide flexibility .
  • FY 2025 FCF guidance (≥$310M) and Q1 2025 topline outlook support continued compounding; monitor deployment pace of automation, PreCheck scaling, and enterprise conversions .

Segment/KPI Supplementary Notes

  • TSA PreCheck Expansion: 91 locations live (airport and off‑airport), with strong cross‑sell; out‑of‑airport sites (e.g., Oculus, Mall of America) achieve quick cash flow positivity .
  • Membership Scale: Cumulative enrollments climbed to 28.9M in Q4, up 2.5M sequentially; Active CLEAR Plus Members reached 7.3M, up 8.9% YoY .
  • Operating Cost Mix: Shift away from commissions increased base wages in direct salaries; Q4 direct salaries $47.8M, up YoY as compensation structure evolved .

Dividends and Buybacks

  • Declared Q1 2025 dividends: $0.27 special and $0.125 regular, payable March 18, 2025; buyback authorization increased by $200M (remaining ~$232M) .
  • Repurchases: Q4 2024 repurchased 1.8M shares at $26.36; Q1 2025 to date repurchased ~0.9M shares at $23.08 .

Additional Cited Data

  • Balance sheet: year‑end 2024 cash, equivalents, marketable securities and restricted cash totaled $613.0M .
  • Share count: 136,870,675 total common shares outstanding as of Feb 21, 2025 (Class A 96.1M; B 0.68M; C 15.2M; D 24.9M) .

All figures reflect company-reported GAAP and non‑GAAP measures; reconciliations and definitions are in the shareholder letters and 8‑K filings .