Clear Secure, Inc. (YOU) Earnings

Management highlights

### Overall Company Performance - Reached nearly 44 million total CLEAR members, delivered 33% year-over-year bookings growth and 60% year-over-year free cash flow growth in the quarter - Surpassed the 35% adjusted EBITDA margin target set at IPO, hitting a 36.4% adjusted EBITDA margin (900 basis points of year-over-year expansion) and generated a record quarterly free cash flow of $189 million - Ended the quarter with $959 million in cash and marketable securities, and repurchased ~$22 million of shares in Q3 to date at an average price of $52.73 ### Clear Travel Operational Highlights - Expanded the airport network to 62 airports, adding Indianapolis and Bentonville in Q3 to date; eGates now cover over 70% of the network, delivering consistent <5 second identity verification that improves retention and conversion - The relaunched mobile app now averages 1 million monthly active users, with features including calendar sync, personalized travel guidance, airport wayfinding, and live updates to support the home-to-gate strategy; app users have higher NPS scores - Expanded Concierge to 39 airports (7 new locations added recently), with significant room to grow via footprint expansion, awareness building, and new adoption channels - Launched new concessions partnerships (including a Starbucks pilot at LaGuardia following an initial launch at Newark) to enable pre-ordering for members as part of end-to-end travel journey simplification - Implemented a $10 standard membership price increase (from $209 to $219 annual) effective July 1, with family pricing unchanged at $125; early retention remains healthy post-increase ### Clear One Operational Highlights - Launched a new tiered identity framework with three proprietary products: Vertex (foundational identity verification beyond document-only checks), Apex (multi-layer validation for high-risk use cases like Medicare), and Helix (witness-verified highest-confidence identity for sensitive environments) - Building out the new GovTech vertical to address widespread fraud across U.S. federal programs, aligned with the administration's executive order to stop fraud before it occurs; already has long-standing partnerships with the Department of Homeland Security and meets strict federal security standards - Has strong growth momentum across multiple verticals including workforce identity, healthcare identity, government technology, and consumer online fraud protection; average deal size continues to increase as the business scales

Guidance

- For Q3 2026, management expects revenue of $284 to $287 million and total bookings of $311 to $316 million, representing 24.6% and 20.5% year-over-year growth at the midpoint, respectively - Upgraded full-year 2026 free cash flow guidance from at least $465 million to at least $480 million, which represents at least 40% year-over-year growth - Q3 2026 free cash flow will be negative due to the scheduled payout of an accrued $315 million partnership liability to a credit card partner; this payout was already included in full-year guidance - Management expects meaningful full-year 2026 adjusted EBITDA margin expansion year-over-year, and notes meaningful upside to current margin levels with no new specific fixed target set - Management confirms strong Q3 to date momentum in customer acquisition and retention that supports current guidance

Segment performance

1. **Clear Travel**: Revenue grew 26.6% year-over-year to $277.8 million, total bookings increased 32.8% to $295.9 million. Active Clear Plus members grew 15.2% year-over-year to 8.3 million. This segment accounts for approximately 86.4% of total company revenue. Direct salaries and benefits for the segment dropped to 17.3% of revenue, a 450 basis point year-over-year improvement driven by eGate labor efficiency. 2. **Clear One**: B2B segment revenue grew 30% year-over-year to $43.5 million in the second quarter, accounting for approximately 13.6% of total company revenue. The segment delivered strong momentum across all stages of the customer lifecycle: net new partner signings grew over 50% quarter-over-quarter, average deal size continues to increase, existing partner expansion is driving strong net revenue retention, and the total bookings growth rate matches the 30% revenue growth trend.

Risks & headwinds

No material new risks or operational failures were explicitly discussed on the call. Management noted that forward-looking statements are subject to general risks and uncertainties that could cause actual results to differ materially, which are detailed in the company's SEC filings.

Analyst Q&A

• Q: What is the medium-term adoption and monetization outlook for the home-to-gate strategy and Clear Concierge? /

  A: Management's home-to-gate vision is to unify all segments of the travel day, including mobility, wayfinding, bag drop, baggage claim, security, and concessions, via the mobile app as the core unifying layer. The app already has 1 million monthly users and drives higher NPS, but Concierge is still in early innings: it is not yet launched in major markets like New York and LA, marketing awareness is still building, and the corporate channel for bulk purchases remains largely untapped. Management plans to scale Concierge after completing a more complete network rollout to maximize return on marketing investment. The ongoing eGate rollout, which is just over two-thirds complete, will also drive additional home-to-gate growth. (438 characters)

• Q: How does CLEAR maintain its first mover advantage for ClearOne amid growing corporate budget demand for identity security solutions? /

  A: Management's core strategy to maintain leadership is continuous innovation, demonstrated by this quarter's launch of the Vertex, Apex, and Helix product tiering that addresses modern threats like synthetic identities and deepfakes that legacy solutions cannot stop. CLEAR has a unique position facilitating agentic authorization by connecting human identities to AI agents, built on 16 years and hundreds of millions of successful verifications. In government, CLEAR has long-standing, qualified security partnerships with the Department of Homeland Security that position it well to capture growing GovTech fraud-fighting opportunities. The growing embedded base of trusted identities creates a network effect that continues to accelerate ClearOne momentum. (497 characters)

• Q: What are the key growth drivers beyond travel and the medium-term margin outlook after exceeding the 35% adjusted EBITDA margin target? /

  A: Management sees no new fixed margin target but notes significant upside to current margin levels, as top-line growth continues to outpace cost growth even with heavy investment in new business lines and core platform improvements. For additional growth, Clear Travel has room to expand U.S. network coverage (still only ~75% of the eligible market), win back former members who left during a period of degraded customer experience, and grow ARPU through measured price increases and new paid services. For ClearOne, key growth verticals include workforce identity security, healthcare identity and interoperability, GovTech fraud reduction, and consumer online fraud protection, all of which have large addressable markets. (471 characters)

• Q: What is the outlook and timeline for international expansion? /

  A: Management's near-term priority is completing full U.S. domestic network coverage before pursuing broad international expansion, with current expansion focused on filling gaps in U.S. markets where customer demand is high. The most likely near-term international opportunities are in North America (Canada and Mexico), followed by Western Europe and South America, with multiple possible go-to-market structures. As an initial step, CLEAR already has approval to enroll international members from 42 visa waiver countries for use of its U.S. network, and is already seeing encouraging organic growth from these international users. (366 characters)