CLEAR Secure Q1 2025 Earnings Report

CLEAR Secure EPS Results

• Actual EPS: $0.26
• Consensus EPS: $0.30
• Beat/Miss: Missed by -$0.04
• One Year Ago EPS: $0.28

CLEAR Secure Revenue Results

• Actual Revenue: $211.40 million
• Expected Revenue: $208.02 million
• Beat/Miss: Beat by +$3.38 million
• YoY Revenue Growth: +18.10%

CLEAR Secure Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 8:00AM ET

CLEAR Secure (NYSE:YOU) (NYSE: YOU) operates as a trusted identity verification platform designed to streamline and secure access across multiple industries. The company leverages biometric technology—primarily iris and fingerprint scanning—alongside secure digital credentials to confirm user identities in seconds. Its core offering, CLEAR Plus, provides expedited entry at airport security checkpoints, allowing enrolled members to bypass traditional document checks and move directly to physical screening lanes. Beyond airports, CLEAR has extended its platform to stadiums, arenas and large-scale events, where it accelerates entry processes and enhances attendee safety and convenience.

Founded in 2010 under the name Verified Identity Pass, Inc., the business rebranded as CLEAR Secure in 2016. Early partnerships focused on major U.S. airports, with collaborations involving the Transportation Security Administration (TSA) to integrate CLEAR’s biometric lanes within the TSA PreCheck program. Over time, the company diversified its portfolio by launching CLEAR Health Pass during the COVID-19 pandemic, a digital health credential solution that helps organizations verify testing and vaccination status for employees, fans and travelers. These innovations reflect CLEAR’s commitment to harnessing biometric verification for broader public health and security use cases.

CLEAR’s services are available in more than 50 airports nationwide, including major hubs such as Hartsfield-Jackson Atlanta International Airport and Los Angeles International Airport. The platform also extends to over 60 sports and entertainment venues, encompassing venues like Chase Center in San Francisco and State Farm Arena in Atlanta. In addition, CLEAR has pursued partnerships with professional sports leagues and concert promoters to integrate identity verification into ticketing and venue access, underscoring its growth beyond travel into live events and hospitality.

Leadership at CLEAR is spearheaded by co-founder and CEO Caryn Seidman Becker, who has guided the company through rapid scale-up and its transition to a publicly traded entity. Chief Financial Officer John G. Brinker oversees financial strategy and investor relations, while a board of directors with backgrounds in technology, security and consumer services provides governance and strategic direction. As CLEAR continues to expand its biometric platform, the company aims to broaden its footprint across new verticals and international markets, reinforcing its mission to make identity verification both seamless and secure.

CLEAR Secure Q1 2025 Earnings Call Transcript

Key Takeaways

• Clear reported 31.2 million members (up 42% YoY), bookings of $207 million, and free cash flow of $91 million (up 17.6%), alongside 7.4 million active Clear Plus members (up 9.1%).
• The rollout of eSuite products—including NV enrollment verification pods (Red Dot Award), one-step at-home ePassport enrollment, and pilot eGates—is enhancing member experience and driving operational efficiencies.
• ClearOne is gaining enterprise traction with over 31 million embedded members and a strategic partnership with DocuSign to embed secure digital identity in high-trust agreements across industries.
• Gross dollar retention dipped to 87.1%, down 140 basis points sequentially, due to prior “step function” price increases that will normalize over the next 12–24 months.
• Q2 guidance targets revenue of $214–216 million and bookings of $215–220 million (approx. 15% growth), with reaffirmed full-year free cash flow guidance of at least $310 million amid macro uncertainty.

Presentation

[Operator]

Good morning, and welcome to Clear's Fiscal First Quarter twenty twenty five Conference Call. We have with us today Karen Seidman Becker, Co Founder, Chair and Chief Executive Officer Michael Barkin, President and Jen Hsu, Chief Financial Officer. As a reminder, before we begin, today's discussion contains forward looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from these statements are included in the documents the company has filed and furnished with the SEC, including today's shareholder letter.

[Operator]

The company disclaims any obligations to update any forward looking statements that may be discussed during this call. During this call, unless otherwise stated, all comparisons will be against the comparable period of fiscal year twenty twenty four. Additionally, the company will discuss both GAAP and non GAAP financial measures. The reconciliation of GAAP to non GAAP financial measures is provided in today's shareholder letter and the most recently filed quarterly report Form 10 Q. These items can be found on the Investor Relations section of CLEAR's website.

[Operator]

With that, I'll turn the call over to Karen. The floor is yours.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Good morning, and thank you for joining our first quarter twenty twenty five earnings call. I want to welcome our new President, Michael Barkin and our new CFO, Jen Hsu to their first Clear earnings call. I'm absolutely thrilled to have them as partners and an integral part of Clear's leadership team. Clear is building the leading secure identity platform, making it safer and easier for people to move through the world. In the first quarter, we saw momentum across our travel footprint, continued scaling of our TSA PreCheck enrollment program and exciting traction with ClearOne.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

We have introduced important new products to improve the member experience, enrollment process and our technology platform. With the REAL ID deadline here and our ePassport product fully rolled out, Clear is helping to ensure Americans across the country are REAL ID ready. Clear's travel business saw continued strong growth in the first quarter, a reflection of our opportunity to continue to grow the top and bottom line through focus on the member experience, network and product expansion. Clear is active in 59 Clear plus airports and four domestic Clear mobile airports, with 167 lanes reaching 74% of U. S.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Airline passengers. In the first quarter of twenty twenty five, U. S. Air travel demand continued upward. TSA checkpoint volumes grew almost 1%, normalizing for leap day.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

For Clear, we care about the absolute volume of travelers at our airports and their demand for frictionless, predictable experiences, akin to their experiences elsewhere in the consumer economy. A recent survey conducted by the U. S. Travel Association highlighted the primary challenges faced by American air travelers. The biggest pain point for 64% of respondents was long lines at airport security, with over half of travelers waiting over twenty minutes in security lines.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Importantly, the survey suggested that biometrics are crucial to create a travel environment where safety and security are assured without sacrificing efficiency or privacy, something we have long believed. This data reflects the need for a universal predictable and frictionless experience. Clear is building the solution with the lane of the future. At the core of this transformation is what we call our e suite products, NV, ePassport and eGates, designed to lead the future of secure seamless travel experiences. NV, our new enrollment verification pods, have now been deployed across our network.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Our NV Pods are driving material benefits to the member experience through facial recognition and faster verification. Envis are also enabling labor productivity enhancements, proving the value of automation in high volume environments. Finally, we are proud that our Envy just received the Red Dot Design Award given for great innovation in design. EPassport is a breakthrough in identity verification. It has unlocked true one step enrollment.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

For the first time ever, members can now fully enroll at home, digitizing their passport in less than two minutes by scanning their passport chip directly within the CLEAR app. No more stopping at the airport to enroll, travelers can arrive at the airport and zip straight to the CLEAR lane. Today, this is available to U. S. Travelers, and we will be bringing this to international travelers in the near future, which will expand our total addressable market.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

E gates represent the next leap forward, software driven intelligent hardware built for faster and more secure experiences. They are vertically integrated, automated and built for scale. Pilots are underway at select airports, and we believe they should be a cornerstone of next generation travel. Major global events like the World Cup in 2026 and the Olympics in 2028 are on the horizon and will put U. S.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Airports in the global spotlight. Clear is ready to meet the moment, offering end to end automated lanes at no cost to the government or taxpayers. We are proud to be delivering TSA PreCheck enrollment to more Americans than ever, With 165 locations now live, including airports, city centers and transit hubs, CLEAR is creating more ways for people to enroll at the airport. We recently rolled out our Passport Lookup feature, which means as long as travelers have a passport, they don't need to have it physically with them to enroll. We believe this will be an important accelerant to TSA PreCheck enrollment.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

With the federal REAL ID enforcement date here, the stakes are high. Millions of Americans risk showing up at the airport unprepared. CLEAR is built to solve this. Members can now upload and digitize their passport directly in the CLEAR app and be travel ready. Our NV rollout and e port solutions are great examples of CLEAR solving big problems with thoughtful member first technology.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

CLEAR1 is the one vertically integrated identity platform that helps enterprises prevent fraud, reduce insider risk and build trust. ClearOne's embedded base of over 31,000,000 members today and Smart Network maximizes security and minimizes friction. ClearOne continues to gain traction as we bring digital identity to life across new categories. Our recent partnership with DocuSign is a game changer. Customers count on DocuSign for critical agreements and contracts, and we believe there is no greater way to build trust in those documents than total identity integrity provided by Clear.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Our solution will allow users to verify their identity instantly and securely when signing high trust agreements, streamlining processes in real estate finance and legal industries. Together, we are setting a new standard for secure digital first workflows, and it sets the foundation for expanded enterprise adoption of Clear. Overall, ClearONE continues to make great progress across the consumer, healthcare and finance industries. Identity is becoming more foundational to trust and access across sectors, and Clear is uniquely positioned to lead. With that, I will turn it over to Jen.

[Jennifer Hsu, CFO at Clear Secure]

Thank you, Karen, and thanks to the entire Clear team for such a warm welcome. There's a tremendous amount of opportunity for the business as we look ahead, and I'm thrilled to be joining Clear at such an exciting time. Let me now turn to our first quarter financial results. We continue to execute against our broader strategy, which is to grow members, bookings and free cash flow. We ended the quarter with 31,200,000 total members on the Clear network, up 42.3% year over year, underscoring the continued growth and traction of ClearONE.

[Jennifer Hsu, CFO at Clear Secure]

We delivered $2.00 $7,000,000 of total bookings and $91,000,000 of free cash flow, representing 14.817.6% growth, respectively. Active Clear plus members grew to 7,400,000, representing 9.1% growth. Our continued innovation, including the Lane of the Future, is elevating member experience and fueling member acquisition. Q1 gross dollar retention was 87.1%, down 140 basis points sequentially, driven by comping large step function price increases from 2023 and 2024. As an annual subscription biller, any pricing action that we take affects gross dollar retention over a twenty four month time period from the date we implement the pricing change.

[Jennifer Hsu, CFO at Clear Secure]

The pricing impact builds over the first twelve months and then tails off over the subsequent twelve months. Since 2023, general airline pricing increased 59% from $119 to $189 and family pricing doubled from $60 to 119 These price increases had the greatest impact on gross dollar retention throughout 2024 and are now beginning to normalize. We have demonstrated our ability to consistently grow both active Clear plus members and average price over time. We continue to see meaningful price opportunities across our member base as we continue to enhance our value proposition. Shifting gears, we are making strong progress on TSA PreCheck and while we currently operate approximately 15% of total PreCheck enrollment locations, we are gaining outsized market share and volume.

[Jennifer Hsu, CFO at Clear Secure]

We are rapidly ramping our footprint with 165 total locations today across airports, flagships and our retail partners. Furthermore, we are encouraged by our ability to upsell TSA PreCheck new enrollments into Clear plus as a bundled product. Moving on to profitability, we generated $37,000,000 of operating income, representing a 17.7% operating margin and $52,000,000 of adjusted EBITDA representing a 24.7% adjusted EBITDA margin. Cost of direct salaries and benefits represented 24% of revenue, up 150 basis points year over year. This increase reflects the first full quarter under our new ambassador compensation structure, which shifted to higher base salaries and lower commissions.

[Jennifer Hsu, CFO at Clear Secure]

This change was designed to improve retention across our ambassador team and is showing success. Direct salaries and benefits in Q1 also included the impact of new TSA PreCheck flagship locations. Excluding these impacts, cost of direct salaries and benefits demonstrated year over year operating leverage. Additionally, we continue to drive efficiencies in G and A, which represented 25.9% of revenue, an improvement of three sixty basis points year over year, reflecting our disciplined corporate expense management. In Q1, we generated $91,000,000 of free cash flow, up 17.6% year over year as a result of continued operating leverage and the capital efficiency of our business model.

[Jennifer Hsu, CFO at Clear Secure]

We ended the quarter with $533,000,000 of cash and marketable securities after returning $168,000,000 of capital to shareholders, including approximately $102,000,000 under our share repurchase program and approximately $67,000,000 in dividends and distributions. Turning to guidance for Q2 and in consideration of the external environment, we expect revenue of $214,000,000 to $216,000,000 and total bookings of $215,000,000 to $220,000,000 representing 15.110.4% growth at the midpoint, respectively. For the full year 2025, we are reaffirming our free cash flow guidance of at least $310,000,000 And finally, we continue to expect full year 2025 GAAP tax rates to range between 1720%. With that, I'm looking forward to working with many of you, and we'll turn it back to Karen for some closing remarks.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Thanks, Jen. Thank you for joining us. The past two years have been a challenging environment from an operating and regulatory perspective, which impacted member experience and member retention. Importantly, we are thrilled with our engagement with the current administration and their alignment with private sector partnership and innovation. We are emerging from this period with an improving member experience, a growing network, new technology and continued pricing opportunities, leading to growth in our member base, bookings and free cash flow.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

I want to close by thanking all of our great Clear ambassadors and team members across the country for their dedication in serving our members with excellence every day. With that, we'll open the call for Q and A.

[Operator]

Thank you. The floor is now open for questions. And our first question comes from Joshua Riley from Needham. Go ahead, Josh. Your line is live.

[Joshua Reilly, Senior Analyst at Needham & Company]

All right. Well, thanks for taking my questions and welcome to the team here, Jim and Michael. As we're thinking about the bookings guidance for Q2, can you just discuss the macro factors you're considering, including any potential disruption from the Real ID implementation? And can you just speak more broadly, what are you seeing in real time at the airports with regards to Real ID? And is that impacting bookings or your business at all?

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Thanks, Josh. In terms of the macro, to date, both gross adds and conversion rates from trial to paid memberships remain healthy. We are not seeing softness in our business as a result of any broader macro sentiment. Certainly, there is a lot of noise right now from both the economic backdrop and so like you look at Newark, for example, and it's in the news every day. I think what's really important is that we're a subscription based business that's oriented to how many travelers are coming through airports versus airfares.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

And so just as an example, the first quarter, I think we talked about on the call growing 1% and April has pretty much been flat. So I think yesterday started Real ID, Wednesday can be a pretty quiet day. So I think net net yesterday, I'm really proud of how our team executed and it was pretty much business as usual. But certainly, every airport is handling it differently. And I think you have to be thoughtful of just how it could work its way through the system.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

There is a lot of gratitude that Clear members and we've really been focused on Clear members being Real ID ready and that the Clearlane is the calm in the chaos. So we didn't see it yesterday. It is day one. We are partnering closely at both the federal and the local level. And I think that really is a great reflection of the strength with this administration in the public private partnership.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

And so we're excited about that. We're really pleased that we have ePassport rolled out before that. So I think that guidance is just a reflection of the noise in the world and being thoughtful of it with the new management team and making sure that we execute with strength going forward. Josh, I would just

[Jennifer Hsu, CFO at Clear Secure]

Karen shared, we are not seeing any softness in the business today as a result of macro. But having said that, the market is obviously volatile and Real ID is just one example of that. It's an area where we think we can drive a lot of positive impact, but, it also just creates some degrees of variability and unknown. So we felt it was appropriate to widen bookings by one percentage point just to give ourselves a bit of room for a wider range of outcomes. I'd also add, we did reiterate the free cash flow guidance.

[Jennifer Hsu, CFO at Clear Secure]

So I think that's a testament to the visibility we have in the business and the levers that we have as well going forward.

[Joshua Reilly, Senior Analyst at Needham & Company]

Got it. That's helpful. And then as we look at retention, the dollar retention obviously ticked down sequentially. I wanted to get some color on what's happening more broadly with family members now that you've lapsed the larger price increases for these customers relative to what you're seeing for individual members. Are you seeing the family churn normalize, now that we've lapsed those big price increases? Thanks, guys.

[Jennifer Hsu, CFO at Clear Secure]

Yes. I would just say, overall, on member retention, those trends remain consistent, and you can see that in the net adds additions that we added this quarter. So 100,000 net adds sequentially Q4 to Q1, which is an improvement relative to Q1 of prior year, where we added 78,000 quarter on quarter.

[Operator]

Thank you. And the next question comes from Ben Miller from Goldman Sachs. Ben, your line is live.

[Benjamin Miller, VP - Global Investment Research at Goldman Sachs]

Great. Thanks for taking the questions. Given the uncertain macro backdrop, I'm curious how the team might express flexibility around long term investments and or capital returns in a downturn. And as you think about the ranges of outcomes in the macro, curious what's contemplated in the reiteration of the free cash flow guide?

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

I'd like to take the macro, Ben, because I think it's really important when you think about both the investments that we've made and the automation that we're focused on driving. And that is our biggest opportunity set, which is not only, does the next gen identity create operating leverage, and you've seen that through the improvement, of what you're seeing in the lane. The EnVies create operating efficiencies and eGates create enormous operating efficiencies. In addition to that, e passport or one step enrollment is a big opportunity for us as it both, expands our enrollment capacity and our TAM. And so 40% of people today who enroll come and complete at the airport.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Those folks can go straight to the lane. And so on that side of the business, we're really focused on automation to improve the member experience, predictability and security. And I think that's where you see the operating leverage there. From a ClearONE perspective and a PreCheck perspective, what we've been saying is that we've put the expenses forward over the past year or two, and now we're leveraging that with revenue. And you see that in the PreCheck growth, I think we had 90 something locations last quarter and now we're talking about 165 today.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

So you're seeing that ramp. And so and certainly, there is a small labor component with that if it's our own flagship location versus one of our partner locations where we don't have labor, but there's a really good ROI to that. So I would just say we're seeing the operating leverage, and we're driving automation on the more labor intensive side of our business.

[Jennifer Hsu, CFO at Clear Secure]

That's right. I would just add on the investment side, Karen shared, much of the fixed cost investment is behind us, as we've talked about in the past. And you can see the Clear plus business continuing to drive overall operating leverage. Karen mentioned, PreCheck, most of those costs are embedded and that business is very much still scaling and we're rapidly growing our market share and volumes in PreCheck. On your capital allocation, capital return question, I would say, we ended the quarter with $500,000,000 in cash.

[Jennifer Hsu, CFO at Clear Secure]

We still have about just under $150,000,000 remaining in our share repurchase authorization. So I think couple that with our free cash flow generation, we have a lot of flexibility to access a range of capital allocation alternatives, and we'll continue to do that going forward.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

And then I would just add one more thing to what Jen said, which is, we've been focused on bringing AI to every work stream, of our business to drive productivity and outcomes. And you're seeing that across the board here at Clear and that's something that we'll continue to focus on.

[Benjamin Miller, VP - Global Investment Research at Goldman Sachs]

Great. Thanks for that. And just as a follow-up, I'm curious how you think about pricing as a lever from here? And has the current uncertain economic environment changed maybe how you think about the price versus user growth algorithm in the business over the near to medium term? Thanks so much.

[Michael Barkin, President & Director at Clear Secure]

Yes. On pricing, I think the company has been really strategic about pricing. And I think there's definitely a continued opportunity to refine our strategy, particularly using a data driven approach. I think it's important in a consumer subscription business like Clear. I think pricing is a key lever to drive bookings and revenue.

[Michael Barkin, President & Director at Clear Secure]

And I think overall, we've been relatively conservative over time with our top line price, which today is $199 which is only $20 more than the original price from fifteen years ago. And so I think a lot of it is about maintaining the strong value proposition of our product. And I do think we have an opportunity over time to focus on lifetime value of our members. And I think that one of the key pieces of that is to continue to look at the top line price, the areas where we've been able to acquire members with discounted prices and our opportunity to continue to close the gap, which I think the company has done a great job of over time and we'll continue to focus on that.

[Operator]

Thank you. And our next question comes from Mark Kelley from Stifel. Go ahead,

[Mark Kelley, MD - Internet at Stifel Financial]

Great. Thanks very much. Good morning, everyone. Two quick ones, if I could. First, just on the ePassport product rolling out internationally.

[Mark Kelley, MD - Internet at Stifel Financial]

I guess, when you look across the whole product portfolio, are there other opportunities to maybe be more ingrained and grow your business outside of The U. S? That's the first one. And then the second question, on the last call, you expressed the desire, Karen, to close that wholesale to retail price gap. And obviously, we saw your announcement that you renewed with Amex again.

[Mark Kelley, MD - Internet at Stifel Financial]

Just can you walk through the dynamics a bit there and just maybe help us think through the free cash flow component, particularly in Q3 with your credit card partners? Thank you.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Sure. So I'll talk about ePassport and then I'll turn it over to Michael to talk about credit cards. Just in terms of ePassport, the opportunity to upload your passport and digitize it is really powerful. And today, international travelers do not have a way to get through, U. S.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Airport security in a differentiated, expedited, innovative and secure way. And so when you look at the total addressable market there in just the four countries that we'll be starting with, which is The U. K, Canada, Australia and New Zealand, we think there's about 2,000,000, travelers there from a total addressable market. And then after that, we'll be expanding to other countries. So first things first, which is we're going to continue to expand our network in The U.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

S, and we want to make that network available to international travelers. I think that's a win win when we look at both strengthening security and delighting customers. And then from there, I'm not sure if you mean will we expand our business operationally internationally. As of now, that is not our focus. It's expanding the TAM and serving international members.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

I will say on CLEAR1, we are expanding internationally, and serving our domestic partners with international businesses, which is something that we couldn't do with strength before. So we're really focused on that opportunity set. When you look at the DocuSigns or the LinkedIns, LinkedIns, etcetera, they have global businesses. So following our customers around the world, is our first objective. And quite frankly, it's also, from an economic perspective, quite efficient for us. So it's a win win. With that, Michael?

[Michael Barkin, President & Director at Clear Secure]

Thanks, Karen. To the earlier question on pricing, I think one of the things that we're very focused on is ensuring that our price remains both affordable and really is something that the broad population of travelers can access, but also one that reflects the value proposition that our product and services offer. And so certainly, we look at that in terms of pricing overall and we definitely look at that as it relates to all of our products, some of which through various partners are at lower prices. As it relates to our credit card partnership, we deeply value that the partnership that we've created with American Express. I think that the partnership underscores our customer and brand alignment, which is mutually beneficial and has definitely supported our growth and engagement among our respective member bases throughout the partnership.

[Michael Barkin, President & Director at Clear Secure]

I think it's important to realize that these partnerships are so important because it's actually estimated travel spend represents over 20% of total spending on premium credit cards, which really highlights the alignment and value of our shared interest in this. For us, credit card partnership services an important acquisition channel and it definitely delivers members with attractive demographics and ultimately strong lifetime value, which is why it makes sense for us to engage in this with a lower effective net price. And as our business has scaled and our network has grown and we've invested significantly as Karen walked through, the value proposition of our product has improved and we expect that we'll continue to look for ways to ensure that our most important partnerships including on the credit card side reflect that shared value that we each bring and hopefully we can increase our member level LTV and growth in our bookings and free cash flow through partnerships like this.

[Mark Kelley, MD - Internet at Stifel Financial]

All right. Thank you, Michael. Thank you, Karen. Very helpful.

[Operator]

Thank you. And our next question comes from Joe Feldman from Telsey Advisory. Go ahead, Joe.

[Joseph Feldman, Senior MD & Assistant Director - Research at Telsey Advisory Group]

Yes. Thanks for taking the question on behalf of Dan and Telsey. So I wanted to ask about the B2B business. And maybe if you could talk more about the progress you're seeing across like Healthcare and Financial and Social. I know you mentioned it briefly in the prepared remarks, but maybe you could dive in a little bit more about some of the trends you're seeing?

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Absolutely. I think there's two important trends that we're seeing. One is in Healthcare and the other is in Workforce. And Workforce is both in Healthcare and beyond. So we'll start with Healthcare.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

And I think there's several announcements over the past quarter on partnerships that we have with different healthcare providers. So whether that be SureScript and IAL2, which is really important, or hospital systems. And those hospital systems can be for both workforce or for patients. And it's across various products. And I think one of the things that's really important for Healthcare is not single point solutions, but the power of the platform.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

So one, implementation and our integration with Epic is really important as we go forward to be part of their toolbox to make integration simple for our health care partners, again, for both of the I would actually say not just for their workforce and their patients, but also for their visitors. So we're seeing industry demand on account recovery. We're seeing and that could be, again, for either workforce or for the patients. That is a pretty painful customer experience. It's an expensive experience in a HIPAA compliant world, of which we are.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

And it also can create security vulnerabilities if not done well. In addition to that account creation, account check-in, the ability to verify your insurance information as a patient is really important. And so we continue to grow our product suite in Healthcare, and that's helping us not only sign new partners, but also serve our current partners in a bigger way. And then from a workforce perspective, what you're seeing across critical infrastructure is really important. The threat of North Koreans, the threat of foreign adversaries having access to critical infrastructure and data is a huge problem.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

It's a compliance problem. It's a trust and a brand problem. And so the costs there are much greater than you would even think at the beginning. And so helping secure workforce is really important, both through our own direct products and integrations. But then again, DocuSign is workforce.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Our Okta integration is workforce. And so I think that's a really important segment for us across multiple sectors.

[Joseph Feldman, Senior MD & Assistant Director - Research at Telsey Advisory Group]

That's great. Thank you. And then, maybe from Michael and Jim, I'm just curious, now that you guys have been here a little while, short while, but just curious, kind of what you guys have seen so far and where you are spending more of your time these days, maybe anything you've learned in the last few months where you see some opportunities? Thanks.

[Michael Barkin, President & Director at Clear Secure]

Sure. Thanks. Yes, I mean, I've had the privilege of being on the Board for five years and seeing the great work that Karen and the team did to build the business to where it is today and somewhat unique perspective in joining. And yes, I think for me, it's the opportunity and this kind of moment for the company. And I think a real potential for an inflection point as identity and security really move to the forefront of both the physical and the digital world. And yes, I think in the travel business with everything that's happening, the way that we can extend our products, the value proposition in a world that is getting increasingly more difficult to navigate, offers us a lot of opportunity. And I think the product and technology investments that we've made in ClearONE really position us to be on the cutting edge of digital identity integration at a moment when trust and security, I think, have never been more important. And so for me, the opportunity to get to have a seat at the table for what I think is a really exciting time and a really exciting ecosystem with a great team and a lot of investment and a really yes, a really incredible member base and team both on the ground and working towards the future of the company makes me really excited. And I think my background is as an investor and a former CFO. And so certainly, the financial profile of the business gives me a lot of comfort around how we can both invest and ultimately grow free cash flow and deliver shareholder value here.

[Michael Barkin, President & Director at Clear Secure]

So I'm really excited to be a part of it, certainly learning a lot as we go every day and looking forward to what's ahead.

[Jennifer Hsu, CFO at Clear Secure]

And I would say, I think the first month here has been thesis validating for me personally. Karen, Ken and the team have obviously built a fantastic business, but I think also a culture of financial discipline and that really comes through, I think, in the operating leverage that you've seen in the business and expanding free cash flow generation. And by the way, that margin expansion and free cash flow has come at a time when the business has navigated some pretty challenging operating environments. And I think looking ahead, I see a lot of opportunity. I think on the Clear plus side, we have a lot of growth ahead of us, both on the member and pricing side of the growth equation.

[Jennifer Hsu, CFO at Clear Secure]

And on top of that, we feel like we're early, early innings in expanding the broader Clear network and building a really large and sticky B2B business. I'd also say, I think, organizationally, I'm optimistic about the team. And I think we have a really healthy balance between fresh thinking and operators that have been at the company for a long standing time to really continue scaling and maturing the company effectively. On the feedback side, I guess what I would say is, I do think we have an opportunity to bring more clarity in our communication to the market. And so that is something that we are constantly reviewing, and the goal is really to provide simplification and consistency when we speak to you all in the market.

[Operator]

Thank you. And our next question comes from Michael Turrin from Wells Fargo. Your line is now live.

[Michael Turrin, Managing Director, Software Equity Research Analyst at Wells Fargo]

Hey, great. Thanks. On booking seasonality, the backdrop sounds stable. Could you maybe expand on what you're seeing year to date on bookings thus far and how you're thinking through or planning for any potential variability in summer travel? And if there are offsets you'd note if volumes do start to slow, whether it's price or just some of the other new product areas you're highlighting, which of those you'd maybe focus us in on? Thank you.

[Jennifer Hsu, CFO at Clear Secure]

Yes. I would say, we're not seeing anything surprising from a macro perspective as we've articulated on this call. Perhaps on seasonality, I'd just come back to what we have shared in the past, we do expect a disreport. We've talked about it from perspective, but that translates to bookings, obviously. We expect kind of Q2 and Q4 to be our larger share of net adds, that's relative to kind of lower based on Q1 and Q3.

[Michael Turrin, Managing Director, Software Equity Research Analyst at Wells Fargo]

Okay. And then on the gross dollar retention metrics, the commentary and then I think the comment on the materials sounds like you're expecting that to stabilize after some of the price impacts. Can you walk us through just what you're seeing that's driving the confidence there and whether this is sort of the right zip code for us to think about, just in evaluating that metric as we roll through the course of the year?

[Jennifer Hsu, CFO at Clear Secure]

Sure. I would say what we described in our earlier remarks is really it's a technical factor that is affecting that metric. And so whenever we have made pricing changes in the past, those pricing actions have an impact on the metric for a twenty four month period. And because we made large price increases in step functions as opposed to kind of gradual price increases over time, there's a mathematical impact to gross dollar retention. I would come back to say, I think our overall objective, and you've heard us share this on this call is, the goal is to bring discounted members in line with our growing value proposition.

[Jennifer Hsu, CFO at Clear Secure]

And I think we've done that successfully, and we've consistently been able to grow our Clear plus members and our average price over time, which has translated into bookings growth. So I think, the price increases that we took were the right thing to do, and you see that in our output, of members bookings and ultimately free cash flow.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

If I can just add to that. Our focus is on driving the member experience and making sure that we are creating value for our customers. As we've talked about in the past few quarters, there are too many customers who are not right, the price does not match the value. Number one, continue to drive the value and then price follows.

[Michael Turrin, Managing Director, Software Equity Research Analyst at Wells Fargo]

Thank you.

[Operator]

At this time, I would like to turn it back to Karen for any closing remarks.

[Caryn Seidman-Becker, Chairman & CEO at Clear Secure]

Thank you for joining our call. I'm proud of how our team is executing and extremely excited for the opportunities in front of us. So thank you.

[Operator]

Thank you. This does conclude today's conference. We thank you for your participation. You may disconnect your lines at this time and have a wonderful day.

Participants

Analysts

• Caryn Seidman-Becker, Chairman & CEO at Clear Secure
• Jennifer Hsu, CFO at Clear Secure
• Joshua Reilly, Senior Analyst at Needham & Company
• Benjamin Miller, VP - Global Investment Research at Goldman Sachs
• Michael Barkin, President & Director at Clear Secure
• Mark Kelley, MD - Internet at Stifel Financial
• Joseph Feldman, Senior MD & Assistant Director - Research at Telsey Advisory Group
• Michael Turrin, Managing Director, Software Equity Research Analyst at Wells Fargo