CLEAR Secure (NYSE:YOU) Posts Quarterly Earnings Results, Beats Estimates By $0.09 EPS

Key Points

• CLEAR Secure beat quarterly expectations: EPS was $0.49 versus the $0.40 consensus, while revenue reached $277.8 million, up 26.6% year over year.
• Operating momentum remained strong: Bookings rose 33%, free cash flow increased 60% to a record $189 million, and adjusted EBITDA margin expanded to 36.4%. CLEAR+ members grew 15.2% to 8.3 million.
• Cash flow faces a near-term headwind: The company expects to settle approximately $315 million of accrued partnership liability in the third quarter, though it raised full-year free-cash-flow guidance to at least $480 million.

CLEAR Secure (NYSE:YOU - Get Free Report) issued its quarterly earnings results on Wednesday. The company reported $0.49 EPS for the quarter, topping the consensus estimate of $0.40 by $0.09, RTT News reports. The firm had revenue of $277.76 million for the quarter, compared to analysts' expectations of $269.71 million. CLEAR Secure had a net margin of 13.01% and a return on equity of 68.98%. CLEAR Secure's revenue for the quarter was up 26.6% compared to the same quarter last year. During the same period in the previous year, the business earned $0.26 earnings per share.

Here are the key takeaways from CLEAR Secure's conference call:

• Positive Sentiment: CLEAR reported strong Q2 momentum, with bookings up 33% year over year to $295.9 million, revenue up 26.6% to $277.8 million, and free cash flow up 60% to a record $189 million.
• Positive Sentiment: Profitability exceeded the company’s IPO-era target, as adjusted EBITDA margin reached 36.4%, up approximately 900 basis points year over year, supported by eGate-driven labor efficiencies and roughly 70% EBITDA flow-through.
• Positive Sentiment: CLEAR Travel active CLEAR+ members grew 15.2% to 8.3 million, while management cited record customer-experience scores, healthy retention after the July price increase to $219, and further opportunities from airport expansion, Concierge, eGates, and international members.
• Positive Sentiment: CLEAR1 momentum continued, with total members reaching 43.5 million, more than 50% sequential growth in new customer signings and pipeline, and increasing interest across government, healthcare, workforce, and consumer identity applications.
• Negative Sentiment: Q3 free cash flow is expected to be negatively affected by the planned settlement of approximately $315 million in accrued partnership liability with the company’s credit-card partner, although the payment is included in full-year guidance, which was raised to at least $480 million.

CLEAR Secure Stock Up 4.5%

Shares of CLEAR Secure stock traded up $2.50 during mid-day trading on Wednesday, hitting $58.23. The stock had a trading volume of 2,864,248 shares, compared to its average volume of 1,589,433. The firm has a 50-day moving average of $54.35 and a two-hundred day moving average of $49.23. CLEAR Secure has a 12-month low of $29.43 and a 12-month high of $69.07. The firm has a market cap of $7.76 billion, a P/E ratio of 46.90 and a beta of 1.06.

Analyst Ratings Changes

A number of equities analysts have weighed in on the stock. Wells Fargo & Company boosted their target price on shares of CLEAR Secure from $33.00 to $40.00 and gave the stock an "underweight" rating in a research note on Thursday, May 7th. Needham & Company LLC boosted their price objective on shares of CLEAR Secure from $60.00 to $70.00 and gave the company a "buy" rating in a research report on Wednesday, May 6th. Zacks Research lowered shares of CLEAR Secure from a "strong-buy" rating to a "hold" rating in a report on Monday, July 6th. The Goldman Sachs Group set a $70.00 target price on CLEAR Secure in a research report on Monday, July 20th. Finally, DA Davidson dropped their price target on CLEAR Secure from $60.00 to $55.00 and set a "neutral" rating for the company in a research note on Tuesday, July 28th. Five equities research analysts have rated the stock with a Buy rating, three have issued a Hold rating and one has given a Sell rating to the company. According to data from MarketBeat, the company has a consensus rating of "Hold" and a consensus price target of $58.57.

Insider Activity

In related news, EVP Kyle Mclaughlin sold 8,000 shares of CLEAR Secure stock in a transaction on Tuesday, June 2nd. The shares were sold at an average price of $56.20, for a total transaction of $449,600.00. Following the sale, the executive vice president directly owned 29,519 shares in the company, valued at $1,658,967.80. This trade represents a 21.32% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Jonathan Schlegel sold 4,412 shares of the firm's stock in a transaction dated Friday, May 15th. The shares were sold at an average price of $59.02, for a total transaction of $260,396.24. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 23,962 shares of company stock worth $1,360,146. 29.70% of the stock is currently owned by corporate insiders.

Hedge Funds Weigh In On CLEAR Secure

Institutional investors and hedge funds have recently added to or reduced their stakes in the business. Durable Capital Partners LP lifted its stake in CLEAR Secure by 153.1% during the second quarter. Durable Capital Partners LP now owns 7,490,351 shares of the company's stock valued at $207,932,000 after purchasing an additional 4,531,161 shares during the last quarter. State Street Corp boosted its position in CLEAR Secure by 1.8% during the fourth quarter. State Street Corp now owns 3,312,235 shares of the company's stock worth $116,193,000 after purchasing an additional 59,067 shares during the period. Morgan Stanley boosted its stake in CLEAR Secure by 6.0% during the 4th quarter. Morgan Stanley now owns 2,696,837 shares of the company's stock valued at $94,605,000 after purchasing an additional 152,074 shares during the period. Wellington Management Group LLP grew its position in CLEAR Secure by 5.5% in the 4th quarter. Wellington Management Group LLP now owns 2,626,856 shares of the company's stock worth $92,150,000 after purchasing an additional 137,249 shares during the last quarter. Finally, Dimensional Fund Advisors LP lifted its position in shares of CLEAR Secure by 4.3% in the 4th quarter. Dimensional Fund Advisors LP now owns 1,670,411 shares of the company's stock worth $58,600,000 after acquiring an additional 68,560 shares during the period. 73.80% of the stock is owned by institutional investors.

About CLEAR Secure

CLEAR Secure, Inc operates a biometric identity platform designed to expedite identity verification for air travelers and venue guests. The company’s core offering is the CLEAR membership service, which uses fingerprint and iris scans to confirm a member’s identity and provide access to dedicated security lanes at participating airports. Members link government-issued IDs and personal biometric data via the CLEAR app, enabling faster processing through Transportation Security Administration (TSA) checkpoints and select event entrances.

Founded in 2010 by Caryn Seidman‐Becker and Ken Cornick, CLEAR is headquartered in New York City.

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