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What changed in Clear Secure, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Clear Secure, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+483 added−481 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-28)

Top changes in Clear Secure, Inc.'s 2024 10-K

483 paragraphs added · 481 removed · 370 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

88 edited+20 added−51 removed40 unchanged
Biggest changeIf we fail to comply with any of these requirements, we could be subject to significant liability, which can adversely affect our business as well as our ability to attract and retain new Members and their utilization of our platform .” International Operations As we expand internationally we become subject to the regulatory regimes in other countries in which we operate, which may be equally or more complex.
Biggest changeAmong other things, HITECH makes HIPAA’s security standards directly applicable to “business associates.” See “Risk Factors—Risks Related to Regulation and Litigation— Any actual or perceived failure to comply with applicable laws relating to privacy, biometrics, artificial intelligence, health information and data protection may result in significant liability, negative publicity and erosion of trust and commercial opportunities, and increased regulation could materially adversely affect our business, results of operations and financial condition” and “—The laws and regulations that we are subject to or may become subject to are constantly evolving. ” International Operations As we expand internationally we become subject to the regulatory regimes in other countries in which we operate, which may be equally or more complex.
CLEAR also offers services that are free to Members, both directly and under agreements with our partners who typically pay us based on the number of Members or transaction volume. New platform Members are largely driven to our platform by one of our partners who integrate with CLEAR to enable frictionless experiences for their customers.
CLEAR also offers services that are free to Members, both directly and under agreements with our B2B partners who typically pay us based on the number of Members or transaction volume. New platform Members are largely driven to our platform by one of our partners who integrate with CLEAR to enable frictionless experiences for their customers.
In October 2022, an Executive Order was signed that, together with regulations issued by the U.S. Department of Justice, implements a new data privacy framework for cross border transfers of EU personal data to the United States (the “EU-U.S. DPF”). The Company has voluntarily self-certified to the EU-U.S.
In 2022, an Executive Order was signed that, together with regulations issued by the U.S. Department of Justice, implements a new data privacy framework for cross border transfers of EU personal data to the United States (the “EU-U.S. DPF”). The Company has voluntarily self-certified to the EU-U.S.
We have built an extensive physical footprint with a nationwide network of airports, stadiums and partners to offer Members frictionless, trusted experiences as they move and transact throughout the day in both physical and digital environments.
We have built an extensive physical footprint with a nationwide network of airports and partners to offer Members frictionless, trusted experiences as they move and transact throughout the day in both physical and digital environments.
Our Business Since 2010 we have been expanding our network, investing in our technology platform, strengthening our operations and developing our team members to consistently deliver increased value to Members and partners, resulting in the growth and trust of the CLEAR brand.
Our Business Since 2010 we have been expanding our network, investing in our technology platform, strengthening our operations and developing our team members to consistently deliver increased value to Members and partners, resulting in the growth and trust of CLEAR.
See the discussion contained in the “Risk Factors” section of this annual report for the fiscal year ended December 31, 2023 (“Annual Report on Form 10-K”) for information regarding how actions by governmental stakeholders and regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have a material adverse effect on our business.
See the discussion contained in the “Risk Factors” section of this annual report for the fiscal year ended December 31, 2024 (“Annual Report on Form 10-K”) for information regarding how actions by governmental stakeholders and regulatory authorities or changes in legislation and regulation in the jurisdictions in which we operate may have a material adverse effect on our business.
See “Risk Factors—Risks Related to Regulation and Litigation— We must continue to meet the standards set for our airport operations by governmental stakeholders ” and “— Liability protections provided by the SAFETY Act may be limited .” The foregoing description does not include an exhaustive list of the laws and regulations governing or impacting our business.
See “Risk Factors—Risks Related to Regulation and Litigation— We must continue to meet the standards set for our airport operations by governmental stakeholders” and “—Liability protections provided by the SAFETY Act may be limited. ” The foregoing description does not include an exhaustive list of the laws and regulations governing or impacting our business.
Over time, as we continue to grow platform Members, potentially at faster rates than paying Members, we expect to see growth in Total Cumulative Enrollments and Total Cumulative Platform Uses per Total Cumulative Enrollments as well as a decrease in revenue per Total Cumulative Enrollments accompanied by a commensurate decline in the cost to acquire an incremental Total Cumulative Enrollment.
Over time, as we continue to grow platform Members, potentially at faster rates than paying CLEAR Plus Members, we expect to see growth in Total Cumulative Enrollments and Total Cumulative Platform Uses per Total Cumulative Enrollments as well as a decrease in revenue per Total Cumulative Enrollments accompanied by a commensurate decline in the cost to acquire an incremental Total Cumulative Enrollment.
The continued expansion of our capabilities enable our partners to integrate CLEAR Verified solutions and give our Members new places and new ways to use CLEAR. Today, our owned and operated business CLEAR Plus (our consumer aviation subscription service) is the largest user of our platform, followed by our CLEAR Verified partners.
The continued expansion of our capabilities enable our partners to integrate CLEAR1 solutions and give our Members new places and new ways to use CLEAR. Today, our owned and operated business CLEAR Plus (our consumer aviation subscription service) is the largest user of our platform, followed by our CLEAR1 partners.
We continue to operate in aviation security today, and we use the same foundational platform across all our use cases, which is then customized for our owned and operated businesses, such as CLEAR Plus, and for the CLEAR Verified experiences offered by our partners.
We continue to operate in aviation security today, and we use the same foundational platform across all our use cases, which is then customized for our owned and operated businesses, such as CLEAR Plus, and for the CLEAR1 experiences offered by our partners.
Operating and scaling our own consumer-facing service, CLEAR Plus, over the past 14 years has given us experience and capabilities that are hard to replicate, and an environment for innovation that benefits all of our partners.
Operating and scaling our own consumer-facing service, CLEAR Plus, over the past 15 years has given us experience and capabilities that are hard to replicate, and an environment for innovation that benefits all of our partners.
We have a deep organizational commitment to preserving our Members’ privacy and ensuring Members have control of their personal information. This commitment has been core to our Member pledge since our founding over 14 years ago.
We have a deep organizational commitment to preserving our Members’ privacy and ensuring Members have control of their personal information. This commitment has been core to our Member pledge since our founding over 15 years ago.
Lifetime Value is calculated by estimating the cumulative dollar contribution over the estimated lifetime of a CLEAR Plus Member. To estimate retention rates we use CLEAR Plus Member Retention across annual cohorts in 2023.
Lifetime Value is calculated by estimating the cumulative dollar contribution over the estimated lifetime of a CLEAR Plus Member. To estimate retention rates we use CLEAR Plus Member Retention across annual cohorts in 2024.
Our stockholders may also obtain these documents in paper format free of charge upon request made to our Investor Relations Department. Our Investor Relations Department can be contacted at Clear Secure, Inc., 85 10th Avenue, New York, NY 10011, Attn: Investor Relations, e-mail: ir@clearme.com.
Our stockholders may also obtain these documents in paper format free of charge upon request made to our Investor Relations Department. 11 Table of Contents Our Investor Relations Department can be contacted at Clear Secure, Inc., 85 10th Avenue, New York, NY 10011, Attn: Investor Relations, e-mail: ir@clearme.com.
ITEM 1. BUSINESS Overview Clear Secure, Inc. (the “Company” or “CLEAR”) is an identity company making experiences safer and easier digitally and physically. We make everyday experiences frictionless by connecting your identity to all the things that make you, YOU - transforming the way you live, work, and travel.
ITEM 1. BUSINESS Overview Clear Secure, Inc. (the “Company” or “CLEAR”) is a secure identity company making experiences safer and easier - both digitally and physically. We make everyday experiences frictionless by connecting your identity to all the things that make you, YOU - transforming the way you live, work, and travel.
We believe we have a proven platform business with numerous natural adjacencies and as our Member base and product portfolio grows, we believe we will have the opportunity to grow into new verticals. • Acquisitions and corporate development opportunities: We may opportunistically pursue selective acquisitions and other corporate development opportunities to complement our existing platform capabilities and further accelerate our growth and platform adoption.
We believe we have a proven platform business with numerous natural adjacencies and as our Member base and product portfolio grows, we believe we will have the opportunity to grow into new verticals. 8 Table of Contents • Acquisitions and corporate development opportunities: We may opportunistically pursue selective acquisitions and other corporate development opportunities to complement our existing platform capabilities and further accelerate our growth and platform adoption.
Our largest CLEAR Plus Member acquisition channel is in-airport (representing 65%, 66% and 58% of Member acquisitions for the years ended December 31, 2023, 2022 and 2021, respectively), where our prominent branding and expansive physical footprint allow prospective Members to engage with CLEAR’s brand, Ambassadors and technology firsthand.
Our largest CLEAR Plus Member acquisition channel is in-airport (representing 64%, 65%, and 66% of Member acquisitions for the years ended December 31, 2024, 2023 and 2022, respectively), where our prominent branding and expansive physical footprint allow prospective Members to engage with CLEAR’s brand, Ambassadors and technology firsthand.
CLEAR Plus CLEAR Plus is our consumer aviation subscription service, which enables access to predictable and fast experiences through dedicated entry Lanes in airport security checkpoints across the nation as well as access to our broader network. With CLEAR Plus, Members use our touchless biometric verification technology to validate their identity and travel credentials.
CLEAR Plus CLEAR Plus is our consumer aviation subscription service, which enables access to predictable and fast experiences through dedicated entry Lanes in airport security checkpoints across the nation as well as access to our broader network. With CLEAR Plus, Members use our biometric technology to verify their identity and travel credentials.
We offer free trials in-airport and online and promotional pricing to select partners including Delta Air Lines, United Airlines and Alaska Airlines frequent fliers, as well as a family plan for up to three household members at an additional $99 per year per family member.
We offer free trials in-airport and online and promotional pricing to select partners including Delta Air Lines, United Airlines, Alaska Airlines and Hawaiian Airlines frequent fliers, as well as a family plan for up to three Members at an additional $119 per year per Member.
As such, we bring our high standards of security, scalability, and reliability to every environment in which Members engage with CLEAR. Innovative and Scalable Platform We believe that the significant investments we have made in our technology platform are a key differentiator for our business. Our approximately 275 person technology team leads platform innovation inside CLEAR.
As such, we bring 7 Table of Contents our high standards of security, scalability, and reliability to every environment in which Members engage with CLEAR. Innovative and Scalable Platform We believe that the significant investments we have made in our technology platform are a key differentiator for our business. Our approximately 220 person technology team leads platform innovation inside CLEAR.
In addition, the system we use for the RT Program and similar programs has been certified by the DHS as a Qualified 12 Tabl e of Contents Anti-Terrorism Technology under the SAFETY Act. The SAFETY Act provides important legal liability protections for providers of qualified anti-terrorism products and services.
In addition, the system we use for the RT Program and similar programs has been certified by the DHS as a Qualified Anti-Terrorism Technology under the SAFETY Act. The SAFETY Act provides important legal liability protections for providers of qualified anti-terrorism products and services.
Our information security core tenets include the application of encryption at rest and in transit, firewalls, multi-factor authentication, specific role-based access control, physical and personnel security (including training), intrusion detection and data loss prevention. We have a commitment to Members being in control of their own information and never sell member data.
Our information security core tenets include the application of encryption at rest and in transit, firewalls, multi-factor authentication, specific role-based access control, physical and personnel security (including training), intrusion detection and data loss prevention. We have a commitment to Members being in control of their own information and we do not sell our Members’ data.
We also entered into strategic distribution partnerships with partners such as Delta Air Lines, United Airlines, Alaska Airlines and American Express that promote our services to their customers on a discounted or subsidized basis which allows us to efficiently scale membership in CLEAR Plus.
We also entered into strategic distribution partnerships with partners such as Delta Air Lines, United Airlines, Hawaiian Airlines, 6 Table of Contents Alaska Airlines and American Express that promote our services to their customers on a discounted or subsidized basis which allows us to efficiently scale membership in CLEAR Plus.
We also believe there are opportunities to continue to develop new features such as bag drop and concierge services to improve the member and partner experience. • Scale TSA PreCheck® enrollment program: We believe our TSA PreCheck® enrollment award will drive significant growth for TSA’s program and an incremental revenue opportunity to CLEAR as we manage renewal processing and new enrollments for TSA PreCheck® subscriptions.
We also believe there are opportunities to continue to develop new features to improve the Member and partner experience. • Scale TSA PreCheck® enrollment program: We believe our TSA PreCheck® enrollment award will drive significant growth for TSA’s program and an incremental revenue opportunity to CLEAR as we manage renewal processing and new enrollments for TSA PreCheck® subscriptions.
Our team of hospitality and security focused Ambassadors help bring our technology to life by delivering a frictionless journey alongside excellent service. CLEAR Plus currently retails for $189 per year per Member and is billed upfront.
Our team of hospitality and security focused Ambassadors help bring our technology to life by delivering a frictionless journey alongside excellent service in our Lanes. CLEAR Plus currently retails for $199 per year per Member and is billed upfront.
Our largest CLEAR Plus Member acquisition channel is our highly efficient in-airport channel, where our prominent branding and expansive physical footprint allows prospective Members to engage with CLEAR’s brand, Ambassadors and technology firsthand. Our passionate Member base drives viral, word-of-mouth marketing and high levels of retention.
Our largest CLEAR Plus Member acquisition channel is our highly efficient in-airport channel, where our prominent branding and expansive physical footprint allows prospective Members to engage with CLEAR’s brand, Ambassadors and technology firsthand. Our passionate Member base drives word-of-mouth marketing and strong retention rates.
CLEAR has been delivering secure, friction-free experiences in airports for over 14 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
CLEAR has been delivering secure, frictionless experiences in airports for over 15 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
See “Risk Factors—Risks Related to Our Business, Brand 10 Tabl e of Contents and Operations— We operate in a highly competitive market, and we may be unable to compete successfully against existing and future competitors .” Intellectual Property and Other Proprietary Rights Our intellectual property rights are valuable and important to our business.
See “Risk Factors—Risks Related to Our Business, Brand and Operations— We operate in a highly competitive market, and we may be unable to compete successfully against existing and future competitors .” Intellectual Property and Other Proprietary Rights Our intellectual property rights are valuable and important to our business.
These partnerships and channels are likely to include new airlines, credit card partners, professional sports leagues and teams, digital marketplaces, retail enterprises and various CLEAR Verified partners in target verticals. • Expand into new verticals and products: We anticipate adding new products within the Travel vertical so that we have offerings to support all travelers - whether a customer travels twice per year or twice per month.
These partnerships and channels are likely to include new airlines, credit card partners, digital marketplaces, retail enterprises and various CLEAR1 partners in target verticals. • Expand into new verticals and products: We anticipate adding new products within the Travel vertical so that we have offerings to support all travelers - whether a customer travels twice per year or twice per month.
Certain states have laws that specifically regulate the collection and use of biometric information, such as Illinois’s Biometric Information Privacy Act (“BIPA”), and numerous states and municipalities are considering similar legislation.
Certain states have laws that specifically regulate the collection and use of biometric information, such as Illinois’s Biometric Information Privacy Act (“BIPA”) and Texas’s Capture or Use of Biometric Information Act (“CUBI”), and numerous states and municipalities are considering similar legislation.
As of December 31, 2023, we have eight U.S. registered trademarks, and four trademark applications pending in the United States. These include registrations for the CLEAR name and other brand indicia. We also have registered the domain name www.clearme.com, and similar variations.
As of December 31, 2024, we have seven U.S. registered trademarks, and three trademark applications pending in the United States. These include registrations for the CLEAR name and other brand indicia. We also have registered the domain name www.clearme.com, and similar variations.
Our passionate Member base further drives word-of-mouth marketing and high annual Member retention rates. As we add partners, products and locations, our platform becomes more valuable to our Members. In turn, as we grow Membership, our platform is more valuable to our existing and prospective partners.
Our passionate Member base further drives word-of-mouth marketing and strong 3 Table of Contents retention rates. As we add partners, products and locations, our platform becomes more valuable to our Members. In turn, as we grow membership, our platform is more valuable to our existing and prospective partners.
This is evidenced by our approximately 16 times Lifetime Value relative to our Customer Acquisition Cost for CLEAR Plus Members who joined during 2023.
This is evidenced by our approximately 10 times Lifetime Value relative to our Customer Acquisition Cost for CLEAR Plus Members who joined during 2024.
We have significant expertise implementing and seamlessly operating our platform’s combination of Pod hardware, biometric technology and physical human interactions across 75 regulated or complex environments, such as airports and live sporting events.
We have significant expertise implementing and seamlessly operating our platform’s combination of Pod hardware, biometric technology and physical human interactions across 87 regulated or complex environments, such as airports and retail locations.
We have enabled approximately 181 million Total Cumulative Platform Uses across our network of airport, sports and CLEAR Verified partners as of December 31, 2023. Our approximately 3,700 hospitality and security focused part-time and full-time Ambassadors and field managers on the ground bring our technology to life in airports and work to deliver exceptional Member experiences every day.
We have enabled approximately 235 million Total Cumulative Platform Uses across our network of airport and CLEAR1 partners as of December 31, 2024. Our approximately 4,198 hospitality and security focused part-time and full-time Ambassadors and field managers on the ground bring our technology to life in airports and work to deliver exceptional Member experiences every day.
As of December 31, 2023, we have 75 issued United States patents (with five additional patents allowed) and 59 patent applications pending in the United States relating to certain aspects of our technology. We also have a limited number of patents issued and patent applications filed in other countries. Our issued patents expire between 2032 and 2041.
As of December 31, 2024, we have 107 issued United States patents (with four additional patent applications allowed) and 37 patent applications pending in the United States relating to certain aspects of our technology. We also have a limited number of patents issued and patent applications filed in other countries. Our issued patents expire between 2032 and 2042.
To ensure best-in-class Member service we monitor real-time Member feedback and quickly take action on information-driven insights. As we add new airport and non-airport locations (such as live sports and entertainment venues) and functionality, the power of network effects makes CLEAR Plus more valuable to our Members, further driving new Member acquisition and higher Member retention.
To ensure best-in-class Member service we monitor real-time Member feedback and quickly take action on data-driven insights. As we add new airport and non-airport locations, use cases, and partners, the power of network effects makes CLEAR Plus more valuable to our Members, further driving new Member acquisition and retention.
For our definitions of “Lifetime Value” and “Customer Acquisition Cost” and information about how we calculate these metrics, see “—Our Member Acquisition and Retention Strategy.” In addition, while we continue to invest in the platform we also are committed to returning capital to shareholders.
For our definitions of “Lifetime Value” and “Customer Acquisition Cost” and information about how we calculate these metrics, see “Our Member Acquisition and Retention Strategy.” In addition, while we continue to invest in the platform we also are committed to returning capital to shareholders. In 2024, we returned approximately $391 million to shareholders through share repurchases, regular and special dividends.
These laws and regulations pertain to matters including but not limited to, the collection and use of biometric or health information, data privacy and information protection, labor and employment, intellectual property, consumer contracting and others, and are often complex and subject to varying interpretations.
These laws and regulations pertain to matters including but not limited to, the collection and use of personal information, biometric and health information, data privacy, cybersecurity and information protection, labor and employment, intellectual property, consumer deception and unfair practices, artificial intelligence, recurring subscription payments, commercial contracting and others, and are often complex, novel and subject to varying interpretations.
Paying Members subscribe to our CLEAR Plus consumer aviation subscription service, which enables access to predictable and fast experiences through dedicated entry Lanes in airport security checkpoints across the nation as well as access to our broader network. Our business model is powered by network effects and characterized by efficient Member acquisition and high retention rates.
Paying Members subscribe to our annual CLEAR Plus consumer aviation subscription service, which enables access to predictable and frictionless experiences through dedicated entry Lanes in airport security checkpoints across the nation. Our business model is powered by network effects and characterized by efficient Member acquisition and strong retention rates. Our passionate Member base further drives word-of-mouth marketing.
These use cases can be applied across verticals such as aviation and travel, hospitality, live sports and entertainment, healthcare, financial services and e-commerce, among others. 4 Tabl e of Contents Our Offerings Secure Identity Platform Our secure identity platform is a multi-layered infrastructure consisting of both our front-end (including enrollment, verification and linking) and our robust, secure and scalable back-end.
These use cases can be applied across verticals such as aviation and travel, healthcare, hospitality, consumer use cases, and financial services, among others. Our Offerings Secure Identity Platform Our secure identity platform is multi-layered consisting of both our front-end (including enrollment, verification and linking) and our robust, secure and scalable back-end to deliver a multilayered proofing stack for identity.
To interact with our platform, first time users go through our fast, secure, and easy enrollment process. Once a Member is enrolled, each subsequent use of the platform to verify their identity is only a few simple steps. Our enroll once, verify everywhere approach benefits the entire CLEAR ecosystem by removing friction for Members and increasing conversion for partners.
To interact with our platform, first time users go through our fast, secure, and easy enrollment process. Once a Member is enrolled, each subsequent use of the platform to verify their identity is only a few simple steps.
We believe CLEAR Plus and TSA PreCheck® are highly complementary services and this channel is relevant to showcase not only the TSA PreCheck® value proposition, but also the power of the combined products and the extension of a holistic travel journey. The partnership does not extend to performing physical security screening, which continues to be operated by the TSA.
We believe CLEAR Plus and TSA PreCheck® are highly complementary services and this channel is relevant to showcase not only the TSA PreCheck® value proposition, but also the power of the combined products and the extension 5 Table of Contents of a holistic travel journey.
We have already made significant progress expanding from aviation into select new verticals with CLEAR Verified, including digital marketplaces, travel & hospitality, healthcare and financial services.
We have already made significant progress expanding from aviation into select new verticals with CLEAR1, including healthcare, financial services, travel and hospitality, workforce and other consumer use cases.
Platform Members use CLEAR for free while our partners pay to use our technology solutions. Typically, new platform Members are driven to enroll by one of our partners who integrate with CLEAR to enable frictionless experiences for their customers.
Typically, new platform Members are driven to enroll by one of our partners who integrate with CLEAR to enable frictionless experiences for their customers. Platform Members also may enroll directly with CLEAR to access our expanding portfolio of use cases.
Our comprehensive information security program uses industry best practices with administrative, technical and physical safeguards to protect against anticipated threats or hazards to the security, confidentiality or integrity of CLEAR systems and information.
By building our platform in this context, we invested in, and were held accountable for, industry leading security, scalability and reliability. Our comprehensive information security program uses industry best practices with administrative, technical and physical safeguards to protect against anticipated threats or hazards to the security, confidentiality or integrity of CLEAR systems and information.
Our strong brand has enabled our expansion into new markets such as live sports and entertainment venues as well as healthcare, financial services, digital marketplaces, and travel & hospitality. Operational Expertise at Scale Today, our owned and operated business CLEAR Plus (our consumer aviation subscription service) is the largest user of our platform.
Our passionate Member base drives word-of-mouth marketing and strong retention rates. Our strong brand has enabled our expansion into new markets such as healthcare, financial services, travel and hospitality, workforce, and other consumer use-cases. Operational Expertise at Scale Today, our owned and operated business CLEAR Plus (our consumer aviation subscription service) is the largest user of our platform.
DPF framework, entitling it to certain benefits under the program, as well as subjecting it to enforcement of its compliance with the EU-U.S. DPF principles under U.S. law. Aviation Our airport operations are subject to standards promulgated by the federal government related to aviation security.
DPF framework, entitling it to certain benefits under the program, as well as subjecting it to enforcement of its compliance with the EU-U.S. DPF principles under U.S. law.
At CLEAR, we are obsessed with the Member experience. Our network, technology platform, operational expertise and Ambassadors have helped us build a trusted brand and a passionate Member base. Our Members know when they see the CLEAR brand to expect a frictionless, predictable and trusted experience.
Our network, technology platform, operational expertise and Ambassadors have helped us build a trusted brand and a passionate Member base. Our Members know when they see the CLEAR brand to expect a frictionless, predictable, and secure experience. Similarly, our partners trust CLEAR to enable them to deliver the same frictionless and secure experiences to their own customers.
As of December 31, 2023, our airport coverage is approximately 68% of 2023 TSA checkpoint volume. 6% and 5% of all TSA checkpoint volume went through a CLEAR lane in 2023 and 2022, respectively.
We believe we can continue to open CLEAR Lanes in new airports and new CLEAR Lanes in our existing airports. As of December 31, 2024, our airport coverage is approximately 73% of 2024 TSA checkpoint volume. 5% and 6% of all TSA checkpoint volume went through a CLEAR lane in 2024 and 2023, respectively.
Our ability to recruit talent benefits from our unique workplace culture and brand. None of our employees are covered by collective bargaining agreements, and we consider our employee relations to be good. 11 Tabl e of Contents Government Regulation Data and Privacy Our business is subject to U.S. federal, state and local laws and regulations.
None of our employees are covered by collective bargaining agreements, and we believe our employee relations to be strong. Government Regulation Data, Privacy, and Technology Our business is subject to U.S. federal, state and local laws and regulations.
Our secure identity platform can power a wide range of use cases such as customer check-in, identity verification, account opening/KYC, licensing and professional credential verification, and age verification.
Our secure identity platform can power a wide range of use cases such as customer check-in, account opening, KYC, age verification and a suite of workforce products like employee onboarding, continuous verification, critical access control, and account recovery.
We started in airports and witnessed accelerating Member growth in both new markets and existing markets as our network expanded. Our largest CLEAR Plus Member acquisition channel continues to be our in-airport channel. As we launched new use cases in existing markets, we saw accelerated growth and improved retention.
The CLEAR Network Our platform is multi-faceted and a powerful network of networks. We started in airports and witnessed accelerating Member growth in both new markets and existing markets as our network expanded. Our largest CLEAR Plus Member acquisition channel continues to be our in-airport channel.
This one-time enrollment can be completed in minutes and gives Members access to our platform offerings and an easy upgrade path to CLEAR Plus at our airport locations. • Home to Gate —Members can have a predictable day-of-travel experience by inputting their flight number to access helpful information to assist their journey from the time they leave their home until they board the plane.
This one-time enrollment can be completed in minutes and gives Members access to our platform offerings and an easy upgrade path to CLEAR Plus at our airport locations. • e-Passport –— CLEAR Plus Members who have completed their NextGen Identity+ upgrade can add, store, and update their passport information directly into the CLEAR app, enabling them to get an even faster CLEAR Plus experience without having to go to an enrollment center or scan government-issued identification physically at a Pod, as well as a secure place to store and update their passport remotely and conveniently. • Home to Gate —Members can have a predictable day-of-travel experience by inputting their flight number to access helpful information to assist their journey from the time they leave their home until they board the plane.
See “Risk Factors—Risks Related to Regulation and Litigation— Any actual or perceived failure to comply with applicable laws relating to privacy and data protection may result in significant liability, negative publicity and erosion of trust, and increased regulation could materially adversely affect our business, results of operations and financial condition ” and “— The laws and regulations that we are subject to or may become subject to are constantly evolving. ” In addition, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their respective implementing regulations (collectively, “HIPAA”) impose specific requirements relating to the privacy, security and transmission of sensitive patient health information.
See “Risk Factors—Risks Related to Regulation and Litigation— Any actual or perceived failure to comply with applicable laws relating to privacy, biometrics, artificial intelligence, health information and data protection may result in significant liability, negative publicity and erosion of trust and commercial opportunities, and increased regulation could materially adversely affect our business, results of operations and financial condition” and “—The laws and regulations that we are subject to or may become subject to are constantly evolving. ” Aviation Our airport operations are subject to standards promulgated by the federal government related to aviation security.
Given the lengthy airport sales cycle and scarcity of airport real estate, it took us seven years to build a critical mass of airports to attract the first million Members. Once we achieved scale, the power of national network effects began to take hold.
Powerful Network Effects The power of network effects on our business became evident as we added additional locations and our membership growth accelerated. Given the lengthy airport sales cycle and scarcity of airport real estate, it took us seven years to build a critical mass of airports to attract the first million Members.
Members can also use CLEAR to confirm their identity or credentials in digital marketplaces – such as by verifying their account on LinkedIn – or in financial services – by using our KYC solution. Powerful Network Effects Our platform is multi-faceted and a powerful network of networks.
Members can also use CLEAR to confirm their identity or credentials in digital marketplaces – such as by verifying their account on LinkedIn and Uber – or in financial services – by using our KYC solution. At CLEAR, we are obsessed with the Member experience.
GDPR took effect in May 2018 and includes operational requirements for companies that are established in the European Economic Area (“EEA”) or process personal data of individuals located in the EEA. These requirements govern the processing of personal data and include significant penalties for non-compliance.
In addition, as we expand in Europe we are subject to the General Data Protection Regulation (“GDPR”). GDPR took effect in May 2018 and includes operational requirements for companies that are established in the European Economic Area (“EEA”) or process personal data of individuals located in the EEA.
We have been expanding our network, investing in our technology platform, strengthening our operations and developing our people to consistently deliver increased value to Members and partners, resulting in our trusted and valued brand. Our passionate Member base drives viral, word-of-mouth marketing and high annual retention rates.
Our Competitive Advantages Trusted and Extensible Brand with Passionate Member Base From our founding, we have been obsessed with the CLEAR Member experience. We have been expanding our network, investing in our technology platform, strengthening our operations and developing our people to consistently deliver increased value to Members and partners, resulting in our trusted and valued brand.
Customer Acquisition Cost is calculated by dividing total 2023 airport-related marketing spend, inclusive of commissions, by total new paying CLEAR Plus Members who joined during 2023.
Customer Acquisition Cost is calculated by dividing total 2024 airport-related marketing spend, inclusive of commissions, by total new paying CLEAR Plus Members who joined during 2024. On this basis, we achieved a Lifetime Value to Customer Acquisition Cost ratio of approximately 10 times for Members who joined during 2024.
CLEAR Verified, our business to business ("B2B") offering, enables our partners to leverage our digital identity technology and reusable member network to facilitate secure and frictionless experiences digitally and physically via our software development kits ("SDKs") and application programming interfaces ("APIs").
CLEAR1 (formerly CLEAR Verified), our business to business (“B2B”) offering, is our secure identity platform that maximizes security and minimizes friction for partners and consumers. CLEAR1 enables our partners to leverage our digital identity technology and embedded Member base to facilitate secure and frictionless experiences digitally and physically via our software development kits and application programming interfaces.
CLEAR confirms identity on an opt-in basis using document authentication (e.g., driver’s license, passport), best-of-breed biometric capture technology, liveness detection for anti-spoofing, biometric matching, backend identity proofing and other proprietary technologies to link an individual’s identity with their biometrics (e.g., eyes, face and fingerprints).
Our ‘enroll once, use everywhere’ approach benefits the entire CLEAR ecosystem by removing friction for Members and increasing conversion for partners. 4 Table of Contents CLEAR confirms identity on an opt-in basis using document authentication (e.g., driver’s license, passport), best-in-class biometric capture technology, liveness detection and other anti-spoofing technologies, biometric matching, source corroboration, and other proprietary technologies to link an individual’s identity with their biometrics (e.g., face).
We believe that there is a significant opportunity for us to process TSA PreCheck® membership renewals and that we can add a large number of new TSA PreCheck® subscribers on behalf of TSA. After a new TSA PreCheck® customer is enrolled or renewed, we offer the customer an opportunity to enroll in CLEAR Plus on an opt-in basis.
After a new TSA PreCheck® customer is enrolled or renewed, we offer the customer an opportunity to enroll in CLEAR Plus on an opt-in basis.
We speak up by displaying honesty to our Members, our team members, and ourselves. • Indefatigable: We tirelessly pursue our goals with passion and sometimes “no” simply means “not yet.” • Bias for Action: We encourage our team members to have a bias for action, using data to make calculated decisions.
We speak up by displaying honesty to our Members, our team members, and ourselves. 9 Table of Contents • Bias for Action: We encourage our team members to have a bias for action, using data to make calculated decisions.
Our Members can also use CLEAR nationwide across our CLEAR Verified footprint. These use cases include a growing list of B2B partners across travel, financial services, and healthcare locations. CLEAR Members can use our CLEAR Verified digital solution for a more frictionless experience at physical partner locations such as doctors’ offices, car rentals or hotels.
CLEAR Members can use our CLEAR1 digital solution for a more secure and frictionless experience at physical partner locations such as doctors’ offices, car rentals or hotels.
Additional services can be easily integrated into this platform. • Credentials —Members can access unique experiences by verifying their identity and health attributes. • Touchless Access —Members enjoy touchless access to select partner services and venues, such as stadiums and arenas.
Additional services can be easily integrated into this platform. • Fast Access —Members enjoy touchless access to select partner services and venues.
We expect to expand CLEAR Plus through airport network expansion, increased market penetration in existing markets, partnerships, and new products and services in the aviation space. Additionally, we have a robust pipeline of new CLEAR Verified partners who increasingly recognize the need to deliver a fast, easy and secure experience to their customers—a true frictionless journey.
Additionally, we have a robust pipeline of new CLEAR1 partners who increasingly recognize the need to deliver a fast, easy and secure experience to their customers—a true frictionless journey.
This structure allows us to facilitate safer, faster and more frictionless experiences for our partners’ customers, while enabling our partners to continue to control and manage the direct relationship with their customer under their own brand. Our CLEAR Verified partners are primarily from verticals where identity is critical such as healthcare, financial services, travel, and digital marketplaces.
Our SDKs and APIs enable our partners to quickly and seamlessly integrate directly with our platform. This structure allows us to facilitate safer, faster and more frictionless experiences for our partners’ customers, while enabling our partners to continue to control and manage the direct relationship with their customer under their own brand.
Key elements of our growth strategy include: • Grow CLEAR Plus Members: We see growth opportunities in our CLEAR Plus Member base. We believe we can continue to open CLEAR Lanes in new airports and new CLEAR Lanes in our existing airports.
Key elements of our growth strategy include: • Grow CLEAR Plus Members and grow revenue per CLEAR Plus Member: We see growth opportunities in our CLEAR Plus Member base and opportunities to increase the revenue per CLEAR Plus Member through pricing and ancillary revenue initiatives.
Our passionate Member base further drives viral, word-of-mouth marketing and high annual retention rates. Platform Members include Members who enrolled through our mobile app, our partners’ customers who have enrolled through our CLEAR Verified solutions, and formerly paying CLEAR Plus Members. Platform Members can use CLEAR anywhere in our network outside of our CLEAR Plus service.
Platform Members include Members who enrolled through our mobile app, our partners’ customers who have enrolled through our CLEAR1 solutions, and formerly paying CLEAR Plus Members. Platform Members can use CLEAR anywhere in our network outside of our CLEAR Plus service. Platform Members use CLEAR for free while our partners pay to use our technology solutions.
Our secure identity platform can power a wide range of use cases such as customer check-in, digital identity, account opening/KYC, virtual queuing, licensing and professional credential verification, and age verification.
Our secure identity platform can power a wide range of use cases such as customer check-in, account creation/KYC, account verification, age verification, and a suite of workforce products like employee onboarding, continuous verification, critical access control, and account recovery.
Cornick’s prior investment experience informs their efficient capital allocation strategy, and they have attracted a deeply experienced team to accelerate CLEAR’s next phase of growth. Our Growth Strategies We have a significant track record of Member growth within our domestic aviation vertical, and our platform has numerous adjacencies for further expansion.
Our Growth Strategies We have a significant track record of Member growth within our domestic aviation vertical, and our platform has numerous adjacencies for further expansion.
As of December 31, 2023, our expansive network of partners and use cases provide our Members with access to 147 CLEAR Plus Lanes across 56 airports nationwide, 19 sports and entertainment partners with priority Lanes, 20 airports globally with RESERVE Powered by CLEAR virtual queuing Lanes and a growing list of B2B CLEAR Verified partners.
As of December 31, 2024, our expansive network of partners and use cases provide our Members with access to 165 CLEAR Plus Lanes across 58 airports nationwide, 5 airports with Mobile Lanes, 52 airports and 24 retail locations with TSA PreCheck® Enrollment Provided by CLEAR, 17 sports and entertainment venues with priority Lanes and a growing list of B2B CLEAR1 partners.
While contract structure may vary by use case, CLEAR Verified partnerships are typically multi-year, recurring contracts that drive revenue primarily through transaction fees charged either per use or per user over a predefined time period, which sometimes includes tiered pricing. In addition, they may also include one-time implementation fees, licensing fees or incremental transaction fees.
CLEAR1 contract structures vary by use case, but are typically multi-year agreements that drive revenue through transaction fees (charged per use or per user) in addition to an annual platform fee. In addition, they may also include one-time implementation fees, licensing fees or incremental transaction fees.
For example, California has passed a comprehensive data privacy law, the California Consumer Privacy Act of 2018 (“CCPA”), and other states including Virginia and Colorado have also passed similar laws. Additionally, the California Privacy Rights Act (“CPRA”) took effect on January 1, 2023.
For example, California passed a comprehensive data privacy law, the California Consumer Privacy Act (“CCPA”), which went into effect in January 2020 and was amended by the California Privacy Rights Act (“CPRA”) which took effect on January 1, 2023.
More recently, our strategy expanded as our platform’s capabilities have evolved with CLEAR Verified. Members can now use CLEAR more frequently in their daily lives whether that be at the doctor’s office, renting a car, or transacting online.
Members can now use CLEAR more frequently in their daily lives whether that be at the doctor’s office, renting a car or equipment, or transacting online. Our investment in our platform and products and the expanding scale of our Membership have accelerated the addition of new partners that are enabling our membership growth and increasing verifications.
These partnerships allow us to scale our use cases and membership, which enhances the value of our network, and earn revenue from platform Members. Our expanding portfolio of use cases attracts new platform Members directly to our platform and creates enhanced value for our CLEAR Plus Members.
These partnerships allow us to scale our use cases and membership, which enhances the value of our network, and makes us a more valuable partner and Membership.
See “—Legal Proceedings” and “Risk Factors—Risks Related to Information Technology and Intellectual Property.” Employees Our organization’s core values are: • Embrace Change: Our growth requires that we embrace change. We pivot to overcome roadblocks and we are transparent on why decisions are made. • Own It: CLEAR is an organization of doers.
We love hearing from our Members so that we can continuously improve and come back better for them every day. • Embrace Change: Our growth requires that we embrace change. We pivot to overcome roadblocks and we are transparent on why decisions are made. • Own It: CLEAR is an organization of doers.
We own it by solving problems even if they “aren’t ours to solve” and commit to seeing them all the way through. • Our Great People: From our Ambassadors in the field, to our corporate team members, people are at the heart of all that we do. • Obsessed with Member Experience: We are obsessed with our Member experience.
We own it by solving problems even if they “aren’t ours to solve” and commit to seeing them all the way through. • Speak Up: We believe in challenging fearlessly and embracing the brutal truth.
We also manage a growing Ambassador and field manager part-time and full-time workforce of approximately 3,700 who are deployed across our expansive network of locations to implement our platform and continue to build our brand reputation. We combine our on-the-ground operational expertise with strong customer acquisition and retention, digital marketing, software and mobile application development and security capabilities.
We also manage a large Ambassador and field manager part-time and full-time workforce of approximately 4,198 who are deployed across our expansive network of locations to implement our platform and continue to build our brand reputation. Platform Originated in High Security Aviation Environment We started in aviation security, a highly regulated environment requiring a robust physical and information security posture.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor a more complete discussion of the material risks facing our business, please see below. • failure to add new and retain existing Members, increase CLEAR Plus memberships or increase the utilization of our platform; • failure to add new or retain existing partners or profit from partner relationships; • our inability to meet stakeholder expectations or maintain the value and reputation of our brand; • risks associated with our financial performance, including the risk of increased expenses and net losses in the near term and our ability to achieve or sustain profitability in the future; 13 Tabl e of Contents • failure to successfully compete against existing and future competitors, and the highly competitive market in which we operate; • risks associated with the increased adoption of new technological solutions and services, including third-party identity verification solutions and credential authentication solutions, at locations where we operate or may operate in the future; • public confidence in, and acceptance of, identity platforms and biometrics generally, and our platform specifically; • risks associated with our commercial agreements and strategic alliances, as well as potential indemnification obligations, and certain of our agreements with third parties; • risks associated with our growth and ability to develop and introduce platform features and offerings; • risks associated with any decline or disruption in the travel industry or a general economic downturn; • risks associated with breaches of our information technology systems, protection of our intellectual property, technology and confidential information and failures by third-party technology and devices on which our business relies; • our reliance on third-party technology and information systems to help complete critical business functions and our ability to find alternatives if such third-party technology and information systems fail; • limitations of the SAFETY Act’s liability protections; • our ability to meet the standards set for our airport operations by governmental stakeholders; and • failure to comply with the constantly evolving laws and regulations that we are subject to or may become subject to.
Biggest changeFor a more complete discussion of the material risks facing our business, please see below. • failure to add new and retain existing Members, including Active CLEAR Plus Members, or increase the utilization of our platform, and the failure to add new or retain existing partners; • our inability to meet stakeholder expectations or maintain the value and reputation of our brand; • failure to successfully compete against existing and future competitors, and the highly competitive market in which we operate; • risks associated with the increased adoption of new technological solutions and services, including third-party identity verification solutions and credential authentication solutions; • public confidence in, and acceptance of, identity platforms and biometrics generally, and our platform specifically; • failure to implement successful strategies to increase adoption of our platform or expand into new verticals; • risks associated with our commercial agreements and strategic alliances, as well as potential indemnification obligations, and certain of our agreements with third parties; • portions of our business and results of operations depend upon concessionaire agreements; • risks associated with our growth and ability to develop and introduce platform features and offerings, and the need for adequate research and development resources; • risks associated with any decline or disruption in the travel industry or a general economic downturn; • we may require additional capital to support our business growth and objectives, and this capital may not be available to us on reasonable terms (or at all) and may result in shareholder dilution; • risks associated with acquisitions and other strategic transactions; • the need for high-quality personnel; • risks associated with the complexity of our platform, including the negative impacts of any errors, system failures or the successful implementation of upgrades or new technology; • our marketing efforts may not be effective; • risks associated with changes in the Internet browsers and mobile device accessibility of Members; • the ability to maintain our corporate culture; • risks associated with payment processing; • potential adverse impacts of climate change; • our limited experience operating outside of the United States and risks associated with international operations; • risks associated with breaches of our information technology systems or those of third parties upon which we rely, protection of our intellectual property, technology and confidential information and failures by third-party technology and devices on which our business relies; • our reliance on third-party technology and information systems to help complete critical business functions and our ability to find alternatives if such third-party technology and information systems fail; • the potential for liability due to the infringement on third-party intellectual property by technologies that we incorporate into our products; • our ability to meet the standards set for our airport operations by governmental stakeholders; 12 Table of Contents • we may be sued by third parties for alleged infringement, misappropriation or other violations of intellectual property and other proprietary rights; • risks associated with the actual or perceived failure to comply with applicable biometrics, artificial intelligence, health information and data privacy laws; • failure to comply with the constantly evolving laws and regulations that we are or may become subject to; • the risk of potential legal proceedings, regulatory disputes and governmental inquiries; • the coverage afforded under our insurance policies may be inadequate; • risks associated with the use of “open source” software; • limitations of the SAFETY Act’s liability protections; • risks associated with our financial performance, including the risk of increased expenses and net losses in the near term and our ability to achieve or sustain profitability in the future; • the failure of our estimates or judgments relating to our critical accounting policies to prove correct; • our focus on delivering a safe, reliable, predictable and frictionless Member experience may not maximize short-term financial results, which may yield results that conflict with the market’s expectations and could result in our stock price being negatively affected; • risks associated with our structure as a holding company, and our reliance on Alclear for certain distributions; • risks associated with dividend payments and share repurchases; • risks associated with our organizational structure, including those related to our Tax Receivable Agreement, and tax related payments we may be required to make; • we are controlled by the Founder Post-IPO Members, whose interests in our business may be different than yours; • restrictions of our Credit Agreement; • the unpredictable nature of tax attributes that will impact our tax treatment; • substantial future sales of shares of our Class A Common Stock could cause our stock price to fall; • failure to maintain adequate internal controls; • provisions in our charter documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third party; • the volatility of our stock price; • risks related to the Founder PSUs; and • we may issue preferred securities, the terms of which could adversely affect the voting power or value of our Common Stock.
While it is our mission to continue to build and expand the trust in our brand and our platform from all stakeholders, any actual or perceived failure to do so could result in a decreased number of Members, decreased use of our platform by our Members, slower growth in our platform and business than we expect, a discontinuation of our partnerships and relationships, and a negative impact on our ability to expand into other sectors or industries, any of which could have a material and adverse effect on our business, prospects, results of operations and financial condition.
While it is our mission to continue to build and expand the trust in our brand and our platform from all stakeholders, any actual or perceived failure to do so could result in a decreased number of Members, decreased use of our platform by our Members, slower growth in our platform and business than we expect, a discontinuation of our partnerships and relationships, and a negative impact on our ability to continue in, or expand into, other sectors or industries, any of which could have a material and adverse effect on our business, prospects, results of operations and financial condition.
Additionally, platform usage beyond airports is driven by the operations of our partners, such as their ability to open and host events, provide hotel rooms, rent cars, and workplaces being open for workers.
Additionally, platform usage beyond airports is driven by the operations of our partners, such as their ability to host events, provide hotel rooms, rent cars, and workplaces being open for workers.
The attractiveness of our solutions to Members, partners and the locations where we operate is impacted by a number of factors, including the willingness of individuals to provide their personal information, including biometric information, to private or governmental entities, the level of confidence that such information can be stored safely and securely, and trust that such information will not be misused or breached.
The attractiveness of our solutions to Members, partners and the locations where we operate is impacted by a number of factors, including the willingness of individuals to provide their personal information, including biometric information, to private or governmental entities, the level of confidence that such information can be stored safely and securely, and trust that such information will not be misused.
If our partners stop trusting our platform or they or our Members have an unsatisfactory experience with our platform, we are unable to offer new and relevant offerings and features or we are unable to increase the adoption of our platform, we could be unsuccessful at continuing to grow our partner network or increase the revenue generated from existing partners, which could hamper our prospects.
If our partners stop trusting our platform, or if our partners or our Members have an unsatisfactory experience with our platform, we are unable to offer new and relevant offerings and features or we are unable to increase the adoption of our platform, we could be unsuccessful at continuing to grow our partner network or increase the revenue generated from existing partners, which could hamper our prospects.
We relaunched in 2010 at two U.S. airports as the only private company authorized by the DHS to automate the process for confirming traveler identity and validating travel documents for enrolled CLEAR Members, and we continue to provide airport services to our Members through the RT Program.
We relaunched in 2010 at two U.S. airports as the only private company authorized by the DHS to automate the process for confirming traveler identity and validating travel documents for enrolled CLEAR Plus Members, and we continue to provide airport services to our Members through the RT Program.
In addition, current and emerging legal and regulatory requirements with respect to climate change and other aspects of environmental, social, governance and other sustainability (“ESG”) (e.g., disclosure requirements) may result in increased compliance requirements on our business, which may increase our operating costs and cause disruptions in our operations.
In addition, current and emerging legal and regulatory requirements with respect to climate change and other aspects of environmental, social, governance and other sustainability (e.g., disclosure requirements) may result in increased compliance requirements on our business, which may increase our operating costs and cause disruptions in our operations.
If we were to experience a breach of our systems and were unable to protect sensitive data, we may not be able to remedy such breach, we may be required by law to notify regulators and individuals whose personal information was used or disclosed without authorization and compensate them for any damages, we may be subject to claims against us, including government enforcement actions or investigations, fines and litigation, and we may have to expend significant capital and other resources to mitigate the impact of such events, including developing and implementing protections to prevent future events of this nature from occurring.
If we were to experience a breach of our systems and were unable to protect sensitive data, we may not be able to remedy such breach, we may be required by law to notify regulators and individuals whose personal information was used or disclosed without authorization and compensate them for any damages, we may be subject to claims against us, including government enforcement actions or investigations, fines and litigation, and we may have to expend significant capital and other resources to mitigate the impact of such events, including developing and implementing protections to prevent future events of this nature.
These events include prolonged extreme weather, natural disasters or man-made disasters, travel-related health concerns (including pandemics and epidemics, such as COVID-19, Monkeypox, Ebola, Zika, Middle East Respiratory Syndrome or other outbreak of contagious diseases), restrictions related to travel, stay-at-home orders, wars and military actions, terrorist attacks, sources of political uncertainty or political events, protests, foreign policy changes, regional hostilities, general economic conditions (such as a recession or inflation), changes in regulations, labor unrest or travel-related accidents.
These events include prolonged extreme weather, natural disasters or man-made disasters, travel-related health concerns (including pandemics and epidemics, such as COVID-19, Monkeypox, Ebola, Zika, Middle East Respiratory Syndrome, bird flu or other outbreak of contagious diseases), restrictions related to travel, stay-at-home orders, wars and military actions, terrorist attacks, sources of political uncertainty or political events, protests, foreign policy changes, regional hostilities, general economic conditions (such as a recession or inflation), changes in regulations, labor unrest or travel-related accidents.
Member growth, retention and utilization of our platform is in part dependent on our ability to introduce new services to our Members, expand our airport footprint, promote and increase awareness of our existing and new offerings and satisfy or exceed the expectations of our Members with our platform and offerings.
Member growth, retention and utilization of our platform is in part dependent on our ability to introduce new services to our Members, expand our airport footprint, promote and increase awareness of our offerings and satisfy or exceed the expectations of our Members with our platform and offerings.
To the extent our CLEAR Plus Members are ever affected by such a breach experienced by us or a third party, affected Members would need to be contacted to obtain new credit card information and process any pending transactions.
To the extent our CLEAR Plus Members are affected by such a breach experienced by us or a third party, affected Members would need to be contacted to obtain new credit card information and process any pending transactions.
For example we are subject to various audits, reviews and evaluations overseen by the TSA, a sub-agency of the DHS, which include: annual operational audits at each airport where we operate our RT Program requiring us to demonstrate compliance with airport checkpoint security protocols; audits of certain of our information systems against a stringent FISMA High Rating designation for information security and an additional “Registered Traveler Security Overlay” framework; ongoing periodic reviews of our operational procedures and technology, such as the biometric matching technology and credential authentication systems that help power our system; ongoing special emphasis inspections of our compliance with operational and procedural obligations for RT Program providers; an evaluation by the Science and Technology Directorate of the DHS of our biometric enrollment and verification system for renewal of our SAFETY Act certification as a Qualified Anti-Terrorism Technology; and ongoing reporting requirements related to enrollments and verifications.
For example we are subject to various audits, reviews and evaluations overseen by the TSA, a sub-agency of the DHS, which include: annual operational audits at each airport where we operate our RT Program requiring us to demonstrate compliance with airport checkpoint security protocols; audits of certain of our information systems against a stringent FISMA High Rating designation for information security and an additional “Registered Traveler Security 26 Table of Contents Overlay” framework; ongoing periodic reviews of our operational procedures and technology, such as the biometric matching technology and credential authentication systems that help power our system; ongoing special emphasis inspections of our compliance with operational and procedural obligations for RT Program providers; an evaluation by the Science and Technology Directorate of the DHS of our biometric enrollment and verification system for renewal of our SAFETY Act certification as a Qualified Anti-Terrorism Technology; and ongoing reporting requirements related to enrollments and verifications.
As we continue to expand globally, we may incur significant additional operating expenses and may not be successful in our international expansion for a variety of reasons, including: • compliance with privacy and data protection laws, including laws regulating the use and collection of biometric information and health information (see “Risks Related to Regulation and Litigation—“ Any actual or perceived failure to comply with applicable laws relating to privacy and data protection may result in significant liability, negative publicity and erosion of trust, and increased regulation could materially adversely affect our business, results of operations and financial condition ” and “Business—Government Regulation”); • differing international norms and expectations, including but not limited to those related to the use of personal information; • challenges in confirming identities for non-U.S. residents; • expanded information security risk with expanded potential threat actors; • recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; • complying with varying laws and regulatory standards, including with respect to tax and local regulatory restrictions; • obtaining any required government approvals, licenses or other authorizations, particularly as may be necessary for the use and collection of personal information; • varying levels of Internet and mobile technology adoption and infrastructure; • currency exchange restrictions or costs and exchange rate fluctuations; • operating in jurisdictions that do not protect intellectual property rights to the same extent as the United States; • potential oppositions in foreign patent and trademark offices; and • limitations on the repatriation and investment of funds as well as foreign currency exchange restrictions.
As we continue to expand globally, we may incur significant additional operating expenses and may not be successful in our international expansion for a variety of reasons, including: • compliance with privacy and data protection laws, including laws regulating the use and collection of biometric information and health information (see “Risks Related to Regulation and Litigation— Any actual or perceived failure to comply with applicable laws relating to privacy, biometrics, artificial intelligence, health information and data protection may result in significant liability, negative publicity and erosion of trust and commercial opportunities, and increased regulation could materially adversely affect our business, results of operations and financial condition ” and “Business—Government Regulation”); • differing international norms and expectations, including but not limited to those related to the use of personal information; • challenges in confirming identities for non-U.S. residents; • expanded information security risk with expanded potential threat actors; • recruiting and retaining talented and capable employees in foreign countries and maintaining our company culture across all of our offices; • complying with varying laws and regulatory standards, including with respect to tax and local regulatory restrictions; • obtaining any required government approvals, licenses or other authorizations, particularly as may be necessary for the use and collection of personal information; • varying levels of Internet and mobile technology adoption and infrastructure; • currency exchange restrictions or costs and exchange rate fluctuations; • operating in jurisdictions that do not protect intellectual property rights to the same extent as the United States; • potential oppositions in foreign patent and trademark offices; and • limitations on the repatriation and investment of funds as well as foreign currency exchange restrictions.
We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to fulfill existing obligations, make enhancements, or develop new platforms and features could be limited.
We may be unable to make such changes and modifications in a commercially reasonable manner or at all, and our ability to fulfill existing commercial obligations, make enhancements, or develop new platforms and features could be limited.
We approved a quarterly dividend policy in August 2023, and have, at times, declared special cash dividends, to holders of our Class A and Class B Common Stock and may in the future pay cash dividends to our stockholders.
We initially approved a quarterly dividend policy in August 2023, and have, at times, declared special cash dividends, to holders of our Class A and Class B Common Stock and may in the future pay cash dividends to our stockholders.
Our systems and operations or those of our third-party providers and partners could be exposed to damage, interruption, security breach and other risks from, among other things, computer viruses and other malicious software, denial-of-service attacks and other cyberattacks, acts of terrorism, human error, fraud, sabotage, natural disasters, telecommunications failures, financial insolvency, bankruptcy and similar events, and may be subject to financial, legal or regulatory issues, each of which may impose additional costs or requirements on us, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach, or prevent these third parties from providing services to us or our Members on our behalf.
Our systems and operations or those of our third-party providers and partners could be exposed to damage, interruption, security breach and other risks from, among other things, computer viruses and other malicious software, denial-of-service attacks and other cyberattacks, acts of terrorism, human error, coding errors or vulnerabilities, fraud, sabotage, natural disasters, telecommunications failures, financial insolvency, bankruptcy and similar events, and may be subject to financial, legal or regulatory issues, each of which may impose additional costs or requirements on us, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach, or prevent these third parties from providing services to us or our Members on our behalf.
We may make statements on our website, in marketing materials, or in other settings about our data security measures and our compliance with, or our ability to facilitate our customers’ compliance with, these standards.
We may make statements on our website, in marketing materials, or in other settings about our data practices and security measures and our compliance with, or our ability to facilitate our customers’ compliance with, these standards.
In addition, the Tax Receivable Agreement provides that in the case of a change in control of the Company or a material breach of our obligations under the Tax Receivable Agreement, we are required to make a payment to the CLEAR Post-IPO Members in an amount equal to the present value of future payments (calculated using a discount rate equal to the lesser of 6.5% or London InterBank Offered Rate (“LIBOR”) (or, in the absence of LIBOR, its successor rate) plus 100 basis points, which may differ from our, or a potential acquirer’s, then-current cost of capital) under the Tax Receivable Agreement, which payment would be based on certain assumptions, including those relating to our future taxable income.
In addition, the Tax Receivable Agreement provides that in the case of a change in control of the Company or a material breach of our obligations under the Tax Receivable Agreement, we are required to make a payment to the CLEAR 36 Table of Contents Post-IPO Members in an amount equal to the present value of future payments (calculated using a discount rate equal to the lesser of 6.5% or London InterBank Offered Rate (“LIBOR”) (or, in the absence of LIBOR, its successor rate) plus 100 basis points, which may differ from our, or a potential acquirer’s, then-current cost of capital) under the Tax Receivable Agreement, which payment would be based on certain assumptions, including those relating to our future taxable income.
Cornick (the “Co- 38 Tabl e of Contents Founders”), together with the other persons in their permitted ownership groups (which include the Founder Post-IPO Members), collectively beneficially own, in aggregate, less than a majority of the combined voting power of our outstanding shares of Common Stock entitled to vote generally in the election of directors (the “Triggering Event”): • the 20 vote per share feature of our Class B Common Stock and Class D Common Stock; • after the Triggering Event, the sole ability of the Board to fill a vacancy on the board of directors; • prohibiting our stockholders from calling a special meeting of stockholders; • after the Triggering Event, no ability for our stockholders to take action by written consent; • after the Triggering Event, certain amendments to our Certificate of Incorporation or amendments to our by-laws will require the approval of 66 2/3% of the combined voting power of our outstanding shares of Common Stock; • after the Triggering Event, removal of directors will require the approval of holders of at least 66 2∕3% of the combined voting power of our outstanding shares of Common Stock; and • authorizing “blank check” preferred stock, the terms and issuance of which can be determined by our Board without any need for action by stockholders.
Cornick (the “Co-Founders”), together with the other persons in their permitted ownership groups (which include the Founder Post-IPO Members), collectively beneficially own, in aggregate, less than a majority of the combined voting power of our outstanding shares of Common Stock entitled to vote generally in the election of directors (the “Triggering Event”): • the 20 vote per share feature of our Class B Common Stock and Class D Common Stock; • after the Triggering Event, the sole ability of the Board to fill a vacancy on the board of directors; • prohibiting our stockholders from calling a special meeting of stockholders; after the Triggering Event, no ability for our stockholders to take action by written consent; • after the Triggering Event, certain amendments to our Certificate of Incorporation or amendments to our by-laws will require the approval of 66 2/3% of the combined voting power of our outstanding shares of Common Stock; • after the Triggering Event, removal of directors will require the approval of holders of at least 66 2∕3% of the combined voting power of our outstanding shares of Common Stock; and • authorizing “blank check” preferred stock, the terms and issuance of which can be determined by our Board without any need for action by stockholders.
The Tax Receivable Agreement provides for the payment by us to the CLEAR Post-IPO Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize 35 Tabl e of Contents (computed using simplifying assumptions to address the impact of state and local taxes) as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by the CLEAR Post-IPO Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A Common Stock or Class B Common Stock, as applicable, and purchases of Alclear Units and corresponding shares of Class C Common Stock or Class D Common Stock, as the case may be, from CLEAR Post-IPO Members (or their transferees or other assignees) or (b) payments under the Tax Receivable Agreement, and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement.
The Tax Receivable Agreement provides for the payment by us to the CLEAR Post-IPO Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by the CLEAR Post-IPO Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A Common Stock or Class B Common Stock, as applicable, and purchases of Alclear Units and corresponding shares of Class C Common Stock or Class D Common Stock, as the case may be, from CLEAR Post-IPO Members (or their transferees or other assignees) or (b) payments under the Tax Receivable Agreement, and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the Tax Receivable Agreement.
The growth of our business, including our membership base, geographic footprint and financial results, also depends on adding new partners and retaining existing partners, as well as increasing the revenue generated from both new and existing paying partners. Our partners help increase our opportunities to attract new Members and, in some cases, help subsidize new and existing memberships.
The growth of our business, including our membership base, geographic footprint and financial results, also depends on adding new and retaining existing partners, as well as increasing the revenue generated from partners. Our partners help increase our opportunities to attract new Members and, in some cases, help subsidize memberships.
Many of our existing and potential competitors have substantial competitive advantages, such as greater name recognition and longer operating histories, economies of scale, larger sales and marketing departments, budgets and resources, broader distribution and established relationships with channel partners and customers, greater customer support resources, greater resources to make acquisitions or to spend on research and development, lower labor and development costs, larger and more mature intellectual property portfolios and substantially greater financial, technical and other resources.
Many of our existing and potential competitors have substantial competitive advantages, such as greater name recognition and longer operating histories, economies of scale, larger sales and marketing departments, budgets and resources, broader distribution and established relationships with channel partners and customers, greater customer support resources, greater resources to make acquisitions or to spend on research and development, lower labor and development 15 Table of Contents costs, larger and more mature intellectual property portfolios and substantially greater financial, technical and other resources.
We rely on third-party technology for certain of our critical business functions, including credit card readers, scanners, third-party software, cameras and other technology to complete Member enrollments and verifications, as well as prevent fraud, network infrastructure for hosting our website and mobile application, software libraries, development environments and tools, services to allow Members to populate their accounts with personal information, and cloud storage platforms.
We rely on third-party technology and vendors and other service providers for certain of our critical business functions, including credit card readers, scanners, third-party software, cameras and other technology to complete Member enrollments and verifications, as well as prevent fraud, network infrastructure for hosting our website and mobile application, software libraries, development environments and tools, services to allow Members to populate their accounts with personal information, and cloud storage platforms.
As the sole managing member of Alclear, we intend to cause, and will rely on, Alclear to make distributions to us, entities controlled by our co-founders, Caryn Seidman Becker and Kenneth Cornick, (such entities, the "Founder Post-IPO Members") and the other CLEAR Post-IPO Members, in amounts sufficient to cover dividends, if any, all applicable taxes payable by us, any payments we are obligated to make under the tax receivable agreement entered into between the Company and the CLEAR Post-IPO Members on June 29, 2021 in connection with the reorganization transactions (the 33 Tabl e of Contents “Tax Receivable Agreement”) and other costs or expenses.
As the sole managing member of Alclear, we intend to cause, and will rely on, Alclear to make distributions to us, entities controlled by our co-founders, Caryn Seidman Becker and Kenneth Cornick, (such entities, the "Founder Post-IPO Members") and the other CLEAR Post-IPO Members, in amounts sufficient to cover dividends, if any, all applicable taxes payable by us, any payments we are obligated to make under the tax receivable agreement entered into between the Company and the CLEAR Post-IPO Members on June 29, 2021 in connection with the reorganization transactions (the “Tax Receivable Agreement”) and other costs or expenses.
It also requires us to understand the evolving expectations of our stakeholders rapidly, and to adjust our offerings to meet them.
It also requires us to understand the evolving expectations of our stakeholders, and to adjust our offerings to meet them.
Our failure, or the failure by our partners, to comply with applicable laws or regulations or any other obligations relating to our platform offerings, could harm our reputation and brand, discourage new and existing Members from using our platform, lead to refunds of membership fees or result in fines or proceedings by governmental agencies or private claims and litigation, any of which could adversely affect our business, financial condition and results of operations.
Our failure, or the failure by our partners, to comply with applicable laws or regulations or any other obligations relating to our platform offerings, could harm our reputation and brand, discourage new and existing Members from using our platform, impact commercial opportunities, lead to refunds of membership fees or result in fines or proceedings by governmental agencies or private claims and litigation, any of which could adversely affect our business, financial condition and results of operations.
During these peak periods, there are a significant number of Members concurrently accessing our platform and if we are unable to provide uninterrupted access, our Members’ or partners’ perception of our platform’s reliability may be damaged, our revenue could be reduced, our reputation could be harmed, which may negatively impact our growth, and we may be required to issue credits or refunds, or risk losing Members or partners.
During these peak periods, there are a significant number of Members concurrently accessing our platform and if we are unable to provide uninterrupted access, our Members’ or partners’ perception of our platform’s reliability may be damaged, our revenue could be reduced, our reputation could be harmed, which may negatively impact our growth, and we may be required to issue credits or refunds, 20 Table of Contents or risk losing Members or partners.
The covenants in our Credit Agreement, dated as of March 31, 2020 (as amended by Amendment No. 1 to Credit Agreement, dated as of April 29, 2021, and Amendment No. 2 to the Credit Agreement, dated June 28, 2023, and as may be further amended from time to time, the “Credit Agreement”), by and among Alclear, the other loan parties thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., may negatively impact our ability to finance future operations or capital needs or to engage in other business activities.
The covenants in our Credit Agreement, dated as of March 31, 2020 (as amended by Amendment No. 1 to Credit Agreement, dated as of April 29, 2021, Amendment No. 2 to the Credit Agreement, dated June 28, 2023, and Amendment No. 3 to the Credit Agreement, dated November 18, 2024 and as may be further amended from time to time, the “Credit Agreement”), by and among Alclear, the other loan parties thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., may negatively impact our ability to finance future operations or capital needs or to engage in other business activities.
We are dependent on the interoperability of our app with popular mobile operating systems that we do not control, such as Android and iOS, and CLEAR Verified with popular internet browsers. Any changes in such systems that degrade the functionality of our digital offerings or give preferential treatment to competitors could adversely affect our platform’s usage.
We are dependent on the interoperability of our app with popular mobile operating systems that we do not control, such as Android and iOS, and CLEAR1 with popular internet browsers. Any changes in such systems that degrade the functionality of our digital offerings or give preferential treatment to competitors could adversely affect our platform’s usage.
Our business requires us to use, store, process and transmit data, including a large amount of sensitive and confidential personal information, including personally identifiable information (“PII”) of Members, employees and partners. This may include, for example: biographic information, such as names, addresses, phone numbers, email addresses; biometric information; government-issued identification; health information; and payment information.
Our business requires us to use, store, process and transmit data, including a large amount of sensitive and confidential personal information, including personally identifiable information (“PII”). This may include, for example: biographic information, such as names, addresses, phone numbers, email addresses; biometric information; government-issued identification; health information; and payment information.
In the past year, TSA has provided us with additional technical and regulatory requirements, including technical integration specifications between TSA systems and CLEAR systems to enable transmittal of digital identity information to facilitate processing of each RT participant by TSA CAT; varying rates in the percentage of RT participants whose identities are randomly reverified at airport checkpoints, potentially up to all RT participants; enhanced enrollment standards for existing and new RT participants in line with new industry standards; and formalized audit requirements.
In addition, TSA has provided us with technical and regulatory requirements, including technical integration specifications between TSA systems and CLEAR systems to enable transmittal of digital identity information to facilitate processing of each RT participant by TSA CAT; varying rates in the percentage of RT participants whose identities are randomly reverified at airport checkpoints, potentially up to all RT participants; enhanced enrollment standards for existing and new RT participants in line with new industry standards; and formalized audit requirements.
The TSA has publicly stated its intent to require all travelers to be processed through CAT machines in the future, either through travelers presenting physical IDs or through the transmittal of digital ID credentials.
The TSA has publicly stated its intent to require all travelers to be processed through CAT machines in the future, either through travelers presenting physical IDs or through the transmission of digital ID credentials.
In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative consumer perceptions of our service. Our business may be vulnerable to the adverse effects of climate change, which may negatively impact our operations.
In addition, 21 Table of Contents from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative consumer perceptions of our service. Our business may be vulnerable to the adverse effects of climate change, which may negatively impact our operations.
Our efforts to protect our confidential and sensitive data and the personal information we receive may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or service provider error or malfeasance, including defects or vulnerabilities in our suppliers’ or service providers’ information technology systems or offerings, including products and offerings that we integrate into our products and services; breaches of physical security of our facilities or technical infrastructure; or other threats that may surface or evolve.
Our efforts to protect our confidential and sensitive 23 Table of Contents data and the personal information we receive may also be unsuccessful due to software bugs, defects, misconfigurations or other technical malfunctions; employee, contractor, or service provider error or malfeasance, including defects, misconfigurations or vulnerabilities in our suppliers’ or service providers’ information technology systems or offerings, including products and offerings that we integrate into our products and services; breaches of physical security of our facilities or technical infrastructure; or other threats that may surface or evolve.
These factors include, among others: • our operating and financial performance and prospects; • quarterly variations in the rate of growth (if any) of our financial or operational indicators, such as earnings per share, net income, revenues, Total Cumulative Enrollments, Total Cumulative platform Uses, Annual CLEAR Plus Net Member Retention, Total Bookings, Free Cash Flow and Adjusted Net Income (Loss) Per Common Share; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • strategic actions by our competitors or third parties; • changes in operating performance and the stock market valuations of other companies; • announcements related to litigation; • our failure to meet revenue or earnings estimates made by research analysts or other investors; 39 Tabl e of Contents • changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts; • speculation in the press or investment community; • sales of our Common Stock by us or our stockholders, or the perception that such sales may occur; • changes in accounting principles, policies, guidance, interpretations or standards; • additions or departures of key management personnel; • actions by our stockholders; • general market conditions; • domestic and international economic, legal and regulatory factors unrelated to our performance; • material weakness in our internal control over financial reporting; and • the realization of any risks described under this “Risk Factors” section, or other risks that may materialize in the future.
These factors include, among others: • our operating and financial performance and prospects; • quarterly variations in the rate of growth (if any) of our financial or operational indicators, such as earnings per share, net income, revenues, Adjusted EBITDA (Loss), Adjusted EBITDA Margin, Free Cash Flow, Total Bookings, Total Cumulative Enrollments, Total Cumulative Platform Uses, Annual CLEAR Plus Net Member Retention, Annual CLEAR Plus Gross Dollar Retention, Active CLEAR Plus Members, Annual CLEAR Plus Member Usage and Free Cash Flow; • the public reaction to our press releases, our other public announcements and our filings with the SEC; • strategic actions by our competitors or third parties; 39 Table of Contents • changes in operating performance and the stock market valuations of other companies; • announcements related to litigation; • our failure to meet revenue or earnings estimates made by research analysts or other investors; • changes in revenue or earnings estimates, or changes in recommendations or withdrawal of research coverage, by equity research analysts; • speculation in the press or investment community; • sales of our Common Stock by us or our stockholders, or the perception that such sales may occur; • changes in accounting principles, policies, guidance, interpretations or standards; • additions or departures of key management personnel; • actions by our stockholders; • general market conditions; • domestic and international economic, legal and regulatory factors unrelated to our performance; • material weakness in our internal control over financial reporting; and • the realization of any risks described under this “Risk Factors” section, or other risks that may materialize in the future.
For example, certain airlines, technology providers and the Transportation Security Administration (“TSA”) are exploring new technological solutions, in some cases including the use of identity verification technology or biometrics, that may gain widespread acceptance in locations where we operate, such as airports, or where we may operate in the future.
For example, certain airlines, technology providers and the Transportation Security Administration (“TSA”) are developing technological solutions, in some cases including the use of identity verification technology or biometrics, that may gain widespread acceptance in locations where we operate, such as airports, or where we may operate in the future.
Failure to meet the standards set forth by governmental stakeholders, changes in the rules, requirements or operational procedures applicable to our business or the RT Program generally, and evolving 27 Tabl e of Contents frameworks could negatively impact the level of service experienced by our customers and our ability to continue adding new services in regulated locations, add new locations for our existing services, or even continue to operate the same services we operate now.
Failure to meet the standards set forth by governmental stakeholders, changes in the rules, requirements or operational procedures applicable to our business or the RT Program generally, and evolving frameworks could negatively impact the level of service experienced by our customers and our ability to continue adding new services in regulated locations, add new locations for our existing services, or even continue to operate the same services we operate now.
In addition to threats from traditional computer “hackers,” malicious code (such as malware, viruses, worms, and ransomware), employee theft, error or misuse, password spraying, phishing, social engineering (predominantly spear phishing attacks), credential stuffing, and denial-of-service attacks, we also face an increasing number of threats (including advanced persistent threat intrusions) to our information technology systems from a broad range of actors, including sophisticated organized crime, nation-state and nation-state supported actors, and we cannot assure you that our systems will not be compromised or disrupted by these tactics.
In addition to threats from traditional computer “hackers,” malicious code (such as malware, viruses, worms, and ransomware), employee theft, error or misuse, password spraying, phishing, social engineering (predominantly spear phishing attacks), credential stuffing, and denial-of-service attacks, we also face an increasing number of threats (including advanced persistent threat intrusions) to our information technology systems from a broad range of actors, including sophisticated organized crime, nation-state and nation-state supported actors (independently or in connection with broader international conflicts), and we cannot assure you that our systems will not be compromised or disrupted by these tactics.
Compliance with such laws may require changes to our operations and business practices and may thereby increase compliance costs or have other material adverse effects on our business. In addition, even alleged violations of such laws could be costly to defend and divert management’s attention.
Compliance with such laws may require changes to our operations and business practices and may thereby increase compliance costs on CLEAR, our vendors or our partners or have other material adverse effects on our business. In addition, even alleged violations of such laws could be costly to defend and divert management’s attention.
Certain of our technologies and solutions are certified or designated by the DHS as Qualified Anti-Terrorism Technologies under the SAFETY Act. The SAFETY Act provides important legal liability protections for providers of qualified anti-terrorism products and services. Under the SAFETY Act, technology providers may apply to the DHS for coverage of the products and services.
Certain of our technologies and solutions are certified or designated by the DHS as Qualified Anti-Terrorism Technologies under the SAFETY Act. The SAFETY Act provides important legal liability protections for providers of 32 Table of Contents qualified anti-terrorism products and services. Under the SAFETY Act, technology providers may apply to the DHS for coverage of the products and services.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could harm our results of operations. In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer.
Acquisitions could also result in dilutive issuances of equity securities or the incurrence of 19 Table of Contents debt, which could harm our results of operations. In addition, if an acquired business fails to meet our expectations, our business, results of operations and financial condition may suffer.
We do this by incorporating processes aimed at 26 Tabl e of Contents identifying and seeking appropriate protection for newly-developed intellectual property, including patents, trade secrets, copyrights and trademarks, as well as policies aimed at identifying unauthorized use of such property. We are not aware that our current products infringe the intellectual property rights of any third parties.
We do this by incorporating processes aimed at identifying and seeking appropriate protection for newly-developed intellectual property, including patents, trade secrets, copyrights and trademarks, as well as policies aimed at identifying unauthorized use of such property. We are not aware that our current products infringe the intellectual property rights of any third parties.
Risks Related to Our Business, Brand and Operations If we fail to add new and retain existing Members, increase CLEAR Plus memberships or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected.
Risks Related to Our Business, Brand and Operations If we fail to add new and retain existing Members, including Active CLEAR Plus Members,or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay further expansion of our platform, impair the functionality of our platform, delay introductions of new platform functionality, or injure our reputation.
Our inability to protect our proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of our management’s attention and resources, could delay expansion or impair the functionality of our platform, or injure our reputation.
These tax attributes would not be available to us in the absence of those transactions. Both the existing and anticipated tax basis adjustments are expected to reduce the amount of tax that we would otherwise be required to pay in the future.
These tax attributes would not be available to us in the 35 Table of Contents absence of those transactions. Both the existing and anticipated tax basis adjustments are expected to reduce the amount of tax that we would otherwise be required to pay in the future.
This could in turn have an adverse impact on our ability to grow our membership base. If certain partners that subsidize new and existing memberships do not renew their agreements with us we could lose a portion of the affected Members, which could impact our revenue and retention rate.
This could in turn have an adverse impact on our ability to grow our membership base. If certain partners that subsidize memberships do not renew their agreements with us we could lose a portion of the affected Members, which could impact our revenue and retention rates.
Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected, which could lead to a decline in enrollments or renewals of CLEAR Plus, less interaction with our platform products related to travel (such as rental cars and hotel rooms) and lower attendance at events, and thus result in decreasing platform usage and lower revenue.
Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected, which could lead to a decline in enrollments or renewals of CLEAR Plus, less interaction with our platform products related to discretionary activities such as travel (such as rental cars and hotel rooms), and thus result in decreasing platform usage and lower revenue.
While we believe our applicable technologies and solutions will continue to meet with the approval of the DHS’s SAFETY Act office, we cannot be sure that the SAFETY Act certification and designation will be renewed in the future. Additionally, we do not enjoy coverage for every service we provide.
While we believe our applicable technologies and solutions will continue to meet with the approval of the DHS’s SAFETY Act office, we cannot be sure that the SAFETY Act certification and designation will be timely renewed, or at all, in the future. Additionally, we do not enjoy coverage for every service we provide.
In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our, or 36 Tabl e of Contents a potential acquirer’s, liquidity and could have the effect of delaying, deferring, modifying or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.
In these situations, our obligations under the Tax Receivable Agreement could have a substantial negative impact on our, or a potential acquirer’s, liquidity and could have the effect of delaying, deferring, modifying or preventing certain mergers, asset sales, other forms of business combinations or other changes of control.
If additional funds are raised through the issuance of equity or convertible debt securities, holders of our Class A Common Stock could suffer significant dilution, and any new shares we issue could have rights, preferences 19 Tabl e of Contents and privileges superior to those of our Class A Common Stock.
If additional funds are raised through the issuance of equity or convertible debt securities, holders of our Class A Common Stock could suffer significant dilution, and any new shares we issue could have rights, preferences and privileges superior to those of our Class A Common Stock.
Should the ultimate judgments or settlements in any future litigation or investigation significantly exceed our insurance coverage, they could adversely affect our business, results of operations and financial condition.
Should the ultimate judgments or settlements in any future litigation or investigation significantly exceed 31 Table of Contents our insurance coverage, they could adversely affect our business, results of operations and financial condition.
These laws and regulations pertain to matters, including but not limited to, the collection and use of biometric or health information, data privacy and information protection, labor and employment, intellectual property, consumer contracting and others, and are often complex and subject to varying interpretations.
These laws and regulations pertain to matters, including but not limited to, the collection and use of biometric or health information, data privacy and information protection, consumer protection, 30 Table of Contents labor and employment, intellectual property, consumer and commercial contracting and others, and are often complex and subject to varying interpretations.
Furthermore, because the interpretation and application of laws, standards, contractual obligations and other obligations relating to privacy, data protection, and information security are uncertain, these laws, standards, and contractual and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our data management practices, our policies or procedures, or the features of our platforms.
Furthermore, because the interpretation and application of laws, standards, contractual obligations and other obligations relating to privacy, data protection, and information security are uncertain, these laws, standards, and contractual and other obligations may be interpreted and applied in a manner that is, or is alleged to be, inconsistent with our data management practices, our policies or procedures, the features of our platforms or the manner in which our partners use CLEAR services.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the CLEAR Post-IPO Members that will not benefit holders of our Class A Common Stock to the same extent that it will benefit the CLEAR Post-IPO Members. 34 Tabl e of Contents Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the CLEAR Post-IPO Members that do not benefit the holders of our Class A Common Stock to the same extent that it benefits the CLEAR Post-IPO Members.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources.” Our organizational structure, including the Tax Receivable Agreement, confers certain benefits upon the CLEAR Post-IPO Members that will not benefit holders of our Class A Common Stock to the same extent that it will benefit the CLEAR Post-IPO Members.
Our growth has been accelerated by our expansion from the aviation industry into different verticals, including travel and hospitality, KYC, live events and sports and healthcare. Our business strategies include expanding our platform and Member base within these verticals and successfully identifying and expanding into new verticals.
Our growth has been accelerated by our expansion from the aviation industry into different verticals, including travel and hospitality, KYC, digital marketplaces, live events and healthcare. Our business strategies include expanding our platform and Member base within these verticals and identifying and expanding into new verticals.
Further, assuming no material changes in relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the tax receivable agreement, we expect that the tax savings associated with all tax attributes described above would aggregate to approximately $459.1 million over 15 years from December 31, 2023, assuming all future redemptions, purchases or exchanges occur on December 31, 2023.
Further, assuming no material changes in relevant tax law and that we earn sufficient taxable income to realize all tax benefits that are subject to the tax receivable agreement, we expect that the tax savings associated with all tax attributes described above would aggregate to approximately $544.3 million over 15 years from December 31, 2024, assuming all future redemptions, purchases or exchanges occur on December 31, 2024.
As of December 31, 2023, the Founder Post-IPO Members collectively control approximately 81.2% of the combined voting power of our outstanding shares of Common Stock as a result of its ownership of our Class B Common Stock and our Class D Common Stock, each share of which is entitled to 20 votes per share on all matters submitted to a vote of our stockholders.
As of December 31, 2024, the Founder Post-IPO Members collectively control approximately 82.1% of the combined voting power of our outstanding shares of Common Stock as a result of its ownership of our Class B Common Stock and our Class D Common Stock, each share of which is entitled to 20 votes per share on all matters submitted to a vote of our stockholders.
On May 13, 2022, our Board authorized a stock repurchase program, and in November 2023 our Board authorized an increase in such authorization, whereby we may purchase up to $200 million of the Company's Class A Common Stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans.
On May 13, 2022, our Board authorized a stock repurchase program, and in November 2023, March 2024, August 2024, and February 2025 our Board authorized an increase in such authorization, whereby we may purchase up to $600 million of the Company's Class A Common Stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans.
Private industry and governmental agencies have increased their efforts related to developing and launching identity verification and credential authentication solutions, and we expect this trend to continue.
Private industry and governmental agencies continue to increase their efforts related to developing and launching identity verification and credential authentication solutions, and we expect this trend to continue.
We cannot assure you that the relatively new market for our platform and certain of our existing and proposed offerings will remain viable. The market for identity verification solutions is still developing. The evolution of this market may result in the development of different technologies and industry standards that are not compatible with our current solutions, products, technologies or platform.
We cannot assure you that the market for our platform and our existing and proposed offerings will remain viable. The market for identity verification solutions is still developing. The evolution of this market may result in the development of different technologies and industry standards 16 Table of Contents that are not compatible with our current solutions, products, technologies or platform.
See “— We must continue to meet the standards set for our airport operations by governmental stakeholders .” 30 Tabl e of Contents As our industry evolves and we continue to expand our platform offerings and Member base, we may become subject to additional laws and regulations, which may differ or conflict from one jurisdiction to another.
See “— We must continue to meet the standards set for our airport operations by governmental stakeholders .” As our industry evolves and we continue to expand our platform offerings, Member base and partnerships, we may become subject to additional laws and regulations, which may differ or conflict from one jurisdiction to another.
We rely on third-party technology and information systems to help complete critical business functions. If that technology fails to adequately serve our needs, and we cannot find alternatives, it may negatively impact our business, financial condition and results of operations.
See “ We rely on third-party technology and information systems to help complete critical business functions. If that technology fails to adequately serve our needs, and we cannot find alternatives, it may negatively impact our business, financial condition and results of operations” below.
Increasing governmental and societal attention to ESG matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report.
Increasing governmental and societal attention to environmental, social, governance and other sustainability matters, including expanding mandatory and voluntary reporting, diligence, and disclosure on topics such as climate change, human capital, labor and risk oversight, could expand the nature, scope, and complexity of matters that we are required to control, assess and report.
Given our dependence on CLEAR Plus for a significant portion of our revenues, a decrease in demand for goods or services that 22 Tabl e of Contents produce significant greenhouse gas emissions or are related to carbon-based energy source, such as air travel, could have a material negative impact on our revenues.
Given our dependence on CLEAR Plus for a significant portion of our revenues, a decrease in demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources, such as air travel, could have a material negative impact on our revenues.
Failure to comply with these standards set for our operations by governmental stakeholders may have an adverse impact on our business, results of operations and financial condition.
Failure to comply with these standards set for our operations by governmental stakeholders or applicable government frameworks may have an adverse impact on our business, results of operations and financial condition.
We operate in a highly competitive market, and we may be unable to compete successfully against existing and future competitors. Our market is intensely competitive with respect to every aspect of our business, and we expect competition to increase in the future from established businesses and new market entrants.
We operate in a highly competitive market, and we may be unable to compete successfully against existing and future competitors. Our market is intensely competitive with respect to every aspect of our business, and we expect competition to increase in the future.
If we or our subcontractors are unable to meet the requirements of any of these business associate agreements, we could face contractual liability under the applicable business associate agreement as well as possible civil and criminal liability under HIPAA, all of which can have an adverse impact on our business and generate negative publicity, which, in turn, can have an adverse impact on our ability to attract and retain Members.
If we or our subcontractors are unable to meet the requirements of any of these business associate agreements, we could face contractual liability under the applicable business associate agreement as well as possible civil and criminal liability under HIPAA, all of which can have an adverse impact on our business and generate negative publicity, which, in turn, can have an adverse impact on our ability to attract and retain Members and to maintain existing or enter into new health care partnerships.
See “— If we fail to add new and retain existing Members, increase CLEAR Plus memberships or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected ” above.
See “— If we fail to add new and retain 14 Table of Contents existing Members, including Active CLEAR Plus Members, or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected ” above.
We may not be able to protect our 25 Tabl e of Contents intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property.
We may not be able to protect our intellectual property if we are unable to enforce our rights or if we do not detect unauthorized use of our intellectual property.
Accordingly, we may not be able to pay dividends even if our Board would otherwise deem it appropriate. See “Item 2.
Accordingly, we may not be able to pay dividends even if our Board would otherwise 34 Table of Contents deem it appropriate. See “Item 2.
We expect that the occurrence of infringement claims and allegations is likely to grow as the market for biometric solutions and identity products and services grows. Accordingly, our exposure to damages resulting from infringement claims could increase and this could further exhaust our financial and management resources.
We expect that the occurrence of infringement claims and allegations is likely to grow as the market for biometric solutions and identity products and services grows. Accordingly, our exposure to damages resulting from infringement claims could increase.
Additionally, such a breach could curtail or otherwise adversely impact 24 Tabl e of Contents access to our services, materially damage partner and Member relationships, and cause us to lose Members or partners.
Additionally, such a breach could curtail or otherwise adversely impact access to our services, materially damage partner and Member relationships, and cause us to lose Members or partners.
It may also lead to civil litigation, with the risks of damages or injunctive relief, or regulatory orders adversely impacting on the ways in which our business can use personal data.
It may also lead to regulatory inquiries initiated by data subjects as well as civil litigation, with the risks of damages or injunctive relief, or regulatory orders adversely impacting on the ways in which our business can use personal data.
We also face indirect competition from solutions that could be developed in-house by our existing and future partners, including companies in the airline, entertainment, healthcare and financial industries, and by governmental agencies, which could result in lost revenues and otherwise have a material adverse effect on our business, results of operations and financial condition.
We also face competition from solutions that could be developed in-house by our existing and future partners, and by governmental agencies, which could result in lost revenues and otherwise have a material adverse effect on our business, results of operations and financial condition.
In addition, we depend on the continued services and performance of our key personnel, including our Chairman and Chief Executive Officer, Ms. Seidman-Becker, and our President and Chief Financial Officer, Mr. Cornick, who founded our Company and have been instrumental in devising and implementing our strategies for growth and scaling our business. We do not have employment agreements with Ms.
In addition, we depend on the continued services and performance of our key personnel, including our Chairman and Chief Executive Officer, Ms. Seidman Becker who co-founded our Company and has been instrumental in devising and implementing our strategies for growth and scaling our business. We do not have an employment agreement with Ms.
Under this scenario, we would be required to pay the Alclear Members 85% of such amount, or approximately $390.3 million, over the 15-year period from December 31, 2023.
Under this scenario, we would be required to pay the Alclear Members 85% of such amount, or approximately $462.7 million, over the 15-year period from December 31, 2024.
Seidman-Becker, Mr. Cornick or other key members of our senior management team, who remain at-will employees. As these individuals are able to terminate their employment with us at any time, such termination could materially adversely affect our business, results of operations and financial condition, as 20 Tabl e of Contents well as our future prospects.
Seidman Becker, and she and, other key members of our senior management team, are at-will employees. As these individuals are able to terminate their employment with us at any time, such termination could materially adversely affect our business, results of operations and financial condition, as well as our future prospects.
Access to worldwide markets depends in part on the strength of our intellectual property portfolio. There can be no assurance that, as our business expands into new areas, we will be able to independently develop the technology, software or know-how necessary to conduct our business or that we can do so without infringing the intellectual property rights of others.
There can be no assurance that, as our business expands into new areas, we will be able to independently develop the technology, software or know-how necessary to conduct our business or that we can do so without infringing the intellectual property rights of others.
Any actual or perceived failure to comply with applicable laws relating to privacy and data protection may result in significant liability, negative publicity and erosion of trust, and increased regulation could materially adversely affect our business, results of operations and financial condition. As part of our normal operations, we collect, process and retain personal information about individuals.
Any actual or perceived failure to comply with applicable laws relating to privacy, biometrics, artificial intelligence, health information and data protection may result in significant liability, negative publicity and erosion of trust and commercial opportunities, and increased regulation could materially adversely affect our business, results of operations and financial condition. 27 Table of Contents As part of our normal operations, we collect, process and retain personal information about individuals, including sensitive personal information such as biometrics data.
We are subject to a wide variety of laws and regulations in the United States and other jurisdictions as well as regulations promulgated by government agencies.
The laws and regulations that we are subject to or may become subject to are constantly evolving. We are subject to a wide variety of laws and regulations in the United States and other jurisdictions as well as regulations promulgated by government agencies.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeITEM 1C. CYBERSECURITY CLEAR’s information security program is managed by a dedicated Chief Information Security Officer (“CISO”), whose team is responsible for leading the Company’s Enterprise Risk Management Program (“ERM Program”), which includes cybersecurity strategy, policy, standards, architecture, and processes.
Biggest changeOur CSO’s team is responsible for leading the Company’s Enterprise Risk Management Program (“ERM Program”), which integrates our cybersecurity strategy, policy, standards, architecture and processes, and through which we regularly discuss and assess identified cybersecurity risks. Our CSO attends ERM Program meetings where cybersecurity (and other) risks are identified.
The CISO provides periodic reports to our Board and Audit Committee, as well as our Chief Executive Officer and other members of our senior management as appropriate. These reports include updates on the Company’s cyber risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape.
These reports include updates on the Company’s cyber risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape.
We utilize a range of external experts, such as cybersecurity assessors, consultants and auditors, in evaluating and testing our cybersecurity systems.
We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds, utilize a range of external experts, such as cybersecurity assessors, consultants and auditors, in evaluating and testing our cybersecurity systems.
In addition, the Company has established the CLEAR Security Advisory Board, which provides guidance and advice on security risk and privacy to our Board and our CISO. 41 Tabl e of Contents The Audit Committee of the Board predominantly oversees risk, including data security and oversight of cybersecurity risks, providing regular updates to the Board.
In addition, the Company has established the CLEAR Security Advisory Board, which provides guidance and advice on security risk and privacy to our Board and our CSO.
In addition, the top 10 cybersecurity risks identified as part of the ERM Program are identified to our Audit Committee on a quarterly basis. Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Notwithstanding the extensive approach we take to cybersecurity, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. See Item 1A.
Removed
Our current CISO, together with his team, continues to implement, monitor, and maintain our cybersecurity program while we search for his successor. Cybersecurity risks are identified, discussed and assessed regularly as part of CLEAR’s ERM Program. We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds.
Added
ITEM 1C. CYBERSECURITY CLEAR’s information security program is managed by a dedicated Chief Security Officer (“CSO”), who has over 27 years of experience in various roles involving managing information security, developing cybersecurity strategy, implementing effective information and cybersecurity programs, as well as relevant academic degrees, formal military training, and industry certifications.
Removed
While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. See Item 1A. “Risk Factors” for a discussion of cybersecurity risks.
Added
Further, CLEAR recognizes the importance of managing cybersecurity risks associated with third-party relationships as part of its broader risk management framework, as we are an organization that relies on a variety of third-party vendors, service providers, and business partners, and are aware that these relationships present potential risks to the security and integrity of our information systems.
Added
To mitigate these risks, the company works closely with vendors using our risk framework to identify, assess, and monitor potential cybersecurity threats that arise from relationships with external entities. Our approach includes conducting due diligence, enforcing contractual cybersecurity requirements, and implementing third-party cybersecurity best practices designed to align with CLEAR’s risk management objectives.
Added
The CSAB is currently comprised of three external members with a range of executive national and international expertise in areas such as aviation and transportation security, physical security operations, cyber security, and privacy and data security. The CSAB meets in-person, together with management of the Company, at least annually, in addition to quarterly meetings by phone.
Added
The CSAB reports annually to our Board or our Audit Committee, and is an available resource to both management and members of the Board at any time.
Added
The full Board provides oversight of the cybersecurity program while the Audit Committee of the Board predominantly oversees risk, including data security and oversight of cybersecurity risks, providing regular updates to the full Board.
Added
The CSO is actively engaged in discussions with the Board regarding the identification, assessment, and mitigation of cybersecurity risks to ensure that appropriate resources are dedicated to managing such risks and addressing any potential adverse effects, and provides periodic reports to our Board and Audit Committee, as well as our Chief Executive Officer and other members of our senior management as appropriate.
Added
Although CLEAR has not experienced any material cybersecurity breaches during the reporting period, we acknowledge that cyber incidents, if they were to occur, could have a material adverse effect on our financial results.
Added
“Risk Factors” for a discussion of cybersecurity risks. 41 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES As of December 31, 2023, our headquarters and principal executive offices are located at 85 10th Avenue, 9th Floor, New York, New York 10011, consisting of approximately 120,000 square feet, under a lease which expires in April 2038, unless terminated earlier under certain circumstances specified in our leases.
Biggest changeITEM 2. PROPERTIES Our headquarters and principal executive offices are located at 85 10th Avenue, 9th Floor, New York, New York 10011, consisting of approximately 120,000 square feet, under a lease which expires in April 2038, unless terminated earlier under certain circumstances specified in our leases.
In most of the airports, stadiums and other venues where we operate, we typically operate under a concessionaire or services agreement with the airport or other venue. For the space we use under these agreements, we are typically responsible for maintenance, insurance and other facility-related expenses and services under these agreements.
In most of the airports and other venues where we operate, we typically operate under a concessionaire or services agreement with the airport or other venue. For the space we use under these agreements, we are typically responsible for maintenance, insurance and other facility-related expenses and services under these agreements.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIssuer Purchases of Equity Securities 43 Table of Contents Below is a summary of the repurchases during the three months ended December 31, 2023 (in millions, except share and per share amounts): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program October 1, 2023 - October 31, 2023 625,000 $ 16.77 625,000 28 November 1, 2023 - November 30, 2023 162,499 18.87 162,499 125 December 1, 2023 - December 31, 2023 — — — 125 Total 787,499 17.20 787,499 All purchases of Class A Common Stock reported in the above table were purchased by the Company pursuant to the Company’s share repurchase program, authorized by the Board on May 13, 2022 and publicly announced by the Company on May 16, 2022, and increased on November 8, 2023.
Biggest changeUnregistered Sales of Equity Securities Stock and Alclear Units Repurchases Pursuant to the exchange agreement (the “Exchange Agreement”) entered into on June 29, 2021 by and among the Company, Alclear and each of the CLEAR Post-IPO Members, Alclear Units (along with the corresponding shares of Class C Common Stock or Class D Common Stock, as applicable) may be exchanged for (i) shares of Class A Common Stock or Class B Common Stock, as applicable, on a one-for-one basis or (ii) cash from a substantially concurrent public offering or private sale of Class A Common Stock, at the Company’s option, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. 43 Table of Contents Issuer Purchases of Equity Securities Below is a summary of the repurchases during the three months ended December 31, 2024 (in millions, except share and per share amounts): Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan or Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plan or Program October 1, 2024 - October 31, 2024 1,000,000 $ 26.50 1,000,000 74 November 1, 2024 - November 30, 2024 812,043 26.18 812,043 53 December 1, 2024 - December 31, 2024 — — — 53 Total 1,812,043 $ 26.36 1,812,043 All purchases of Class A Common Stock reported in the above table were purchased by the Company pursuant to the Company’s share repurchase program, authorized by the Board on May 13, 2022 and publicly announced by the Company on May 16, 2022, and increased on November 8, 2023, March 21, 2024, August 5, 2024, and February 2025.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item is incorporated by reference to our proxy statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item is incorporated by reference to our proxy statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024.
The comparison assumes an investment of $100 on June 30, 2021 and reinvestment of dividends. The stock price performance included in this graph is not necessarily indicative of future stock performance. The S&P 500 and Nasdaq, Inc. indices are included for comparative purposes only.
The comparison assumes an investment of $100 on June 30, 2021 and reinvestment of dividends. The stock price performance included in this graph is not necessarily indicative of future stock performance. These indices are included for comparative purposes only.
The share repurchase program provides for the purchase by the Company of up to $200 million of the Company’s Class A Common Stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. As of December 31, 2023, $125,424 remains available under the repurchase authorization.
The share repurchase program provides for the purchase by the Company of up to $600 million of the Company’s Class A Common Stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans.
Below is a summary of the Company’s quarterly and special dividends declared and paid to holders of record of Class A Common Stock and Class B Common Stock during the year ended December 31, 2023: Dividend Type Dividend Declaration Date Record Date Payment Date Dividend per Share Quarterly August 2, 2023 August 11, 2023 August 18, 2023 $ 0.07 Quarterly November 8, 2023 November 16, 2023 November 22, 2023 $ 0.09 Special May 9, 2023 May 18, 2023 May 25, 2023 $ 0.20 Special November 8, 2023 November 16, 2023 November 22, 2023 $ 0.55 Stockholders Based on information made available to us by the transfer agent, as of February 23, 2024, we have 98 holders of record of our Class A Common Stock, one of which was Cede & Co., a nominee for The Depository Trust Company, two holders of record of our Class B Common Stock, 24 holders of record of our Class C Common Stock and two holders of record of our Class D Common Stock.
Below is a summary of the Company’s quarterly and special dividends declared and paid to holders of record of Class A Common Stock and Class B Common Stock during the year ended December 31, 2024: Dividend Type Dividend Declaration Date Record Date Payment Date Dividend per Share Quarterly February 15, 2024 February 26, 2024 March 5, 2024 $ 0.090 Quarterly May 7, 2024 June 10, 2024 June 18, 2024 $ 0.100 Quarterly August 2, 2024 September 10, 2024 September 17, 2024 $ 0.100 Quarterly October 31, 2024 December 10, 2024 December 17, 2024 $ 0.125 Special March 21, 2024 April 1, 2024 April 8, 2024 $ 0.320 Stockholders Based on information made available to us by the transfer agent, as of February 21, 2025, we have 74 holders of record of our Class A Common Stock, one of which was Cede & Co., a nominee for The Depository Trust Company, two holders of record of our Class B Common Stock, 23 holders of record of our Class C Common Stock and two holders of record of our Class D Common Stock.
Stock Performance Graph The following graph compares the relative performance of our Class A Common Stock, with the total cumulative return of the S&P 500 Index, S&P Software & Services Select Industry Index and NASDAQ Composite Index. This graph covers the period from June 30, 2021 through December 31, 2023.
Stock Performance Graph The following graph compares the relative performance of our Class A Common Stock, with the total cumulative return of the S&P 500 Index, S&P 600 Index, S&P Software & Services Select Industry Index, Russell 2000 Index and NASDAQ Composite Index.
The timing and actual number of shares repurchased will be determined by management depending on a variety of factors, including stock price, trading volume, market conditions, and other general business considerations. The repurchase program has no expiration date and may be modified, suspended, or terminated at any time.
As of December 31, 2024 and February 21, 2025, $52.7 million and $232.6 million, respectively, remained available under the repurchase authorization. The timing and actual number of shares repurchased will be determined by management depending on a variety of factors, including stock price, trading volume, market conditions, and other general business considerations.
The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards.
The repurchase program has no expiration date and may be modified, suspended, or terminated at any time. The above table excludes shares repurchased to settle employee tax withholding related to the vesting of stock awards.
Removed
Unregistered Sales of Equity Securities Stock and Alclear Units Repurchases Pursuant to the exchange agreement (the “Exchange Agreement”) entered into on June 29, 2021 by and among the Company, Alclear and each of the CLEAR Post-IPO Members, Alclear Units (along with the corresponding shares of Class C Common Stock or Class D Common Stock, as applicable) may be exchanged for (i) shares of Class A Common Stock or Class B Common Stock, as applicable, on a one-for-one basis or (ii) cash from a substantially concurrent public offering or private sale of Class A Common Stock, at the Company’s option, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications.
Added
We have updated the Stock Performance Graph to replace the S&P 500 and Nasdaq Composite with the S&P 600 and Russell 2000. This change reflects our inclusion in these indices, providing a more relevant comparison of our stock performance against similarly sized companies. This graph covers the period from June 30, 2021 through December 31, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

97 edited+29 added−23 removed66 unchanged
Biggest changeSummary and discussion of the years ended December 31, 2023, 2022 and 2021 (in millions): 54 Table of Contents Years ended December 31, 2023 2022 2021 Revenue $ 613.6 $ 437.4 $ 254.0 Operating expenses (1) : Cost of revenue share fee $ 88.6 $ 56.3 $ 37.2 Cost of direct salaries and benefits $ 142.8 $ 104.8 $ 67.7 Research and development $ 74.4 $ 66.8 $ 47.5 Sales and marketing $ 43.5 $ 41.7 $ 35.2 General and administrative $ 222.4 $ 278.1 $ 168.9 Depreciation and amortization $ 21.6 $ 18.8 $ 12.4 Operating income (loss) $ 20.1 $ (129.1) $ (114.9) Other income (expense) Interest income (expense), net $ 29.0 $ 6.6 $ (0.3) Other income (expense), net $ 1.5 $ 5.0 $ 0.3 Income (loss) before tax $ 50.6 $ (117.5) $ (114.9) Income tax benefit (expense) $ (0.7) $ 2.1 $ (0.2) Net income (loss) $ 49.9 $ (115.4) $ (115.1) (1) Amounts related to the Company’s total equity-based compensation expense including warrants (refer to Note 13 within the consolidated financial statements for a description for equity-based warrants) and excluding additional expense related to repurchases, as follows: Year Ended December 31, 2023 (in thousands) Pre-IPO employee performance awards Warrants Founder PSU Employee equity-based awards Total Cost of direct salaries and benefits $ (281) $ — $ — $ 515 $ 234 Research and development (1) (2,662) — — 8,635 5,973 Sales and marketing (239) — — 852 613 General and administrative (2) (3,028) 623 19,815 13,063 30,473 Total equity-based compensation $ (6,210) $ 623 $ 19,815 $ 23,065 $ 37,293 (1) Includes $12.7 million employee equity-based compensation forfeitures for the year ended December 31, 2023.
Biggest changeSummary and discussion of the years ended December 31, 2024, 2023 and 2022 (in millions): Years ended December 31, 2024 2023 2022 Revenue $ 770.5 $ 613.6 $ 437.4 Operating expenses: Cost of revenue share fee $ 108.1 $ 88.6 $ 56.3 Cost of direct salaries and benefits $ 173.0 $ 142.8 $ 104.8 Research and development $ 73.4 $ 74.4 $ 66.8 Sales and marketing $ 48.8 $ 43.5 $ 41.7 General and administrative $ 217.5 $ 222.4 $ 278.1 Depreciation and amortization $ 26.5 $ 21.6 $ 18.8 Operating income (loss) $ 123.2 $ 20.1 $ (129.1) Other income (expense) Interest income, net $ 32.5 $ 29.0 $ 6.6 Other (expense) income, net $ (89.1) $ 1.5 $ 5.0 Income (loss) before tax $ 66.6 $ 50.6 $ (117.5) Income tax benefit (expense) $ 158.6 $ (0.7) $ 2.1 Net income (loss) $ 225.3 $ 49.9 $ (115.4) Revenue Years ended December 31, 2024 2023 $ Change % Change Revenue $ 770.5 $ 613.6 $ 156.9 26 % Revenue increased by $156.9 million, or 26%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The Company offers certain limited-time free trials, family pricing, and other beneficial pricing through several channels including airline and credit card partnerships. Membership subscription revenue is presented net of taxes, refunds, credit card chargebacks.
The Company offers certain limited-time free trials, family pricing, and other beneficial pricing through several channels, including airline and credit card partnerships. Membership subscription revenue is presented net of taxes, refunds, and credit card chargebacks.
The membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to Members through a partnership with one credit card at the end of the contract period. The Company’s funded portion varies based on total number of Members enrolled each contract year.
Membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to Members through a partnership with one credit card at the end of the contract period. The Company’s funded portion varies based on total number of Members enrolled each contract year.
Adjusted Net Income (Loss) Per Common Share We compute Adjusted Net Income (Loss) per Common Share, Basic as Adjusted Net Income (Loss) divided by Adjusted Weighted-Average Shares Outstanding for our Class A Common Stock, Class B Common Stock, Class C Common Stock and Class D Common Stock assuming the exchange of all vested and outstanding common units in Alclear at the end of each period presented.
Adjusted Net Income per Common Share We compute Adjusted Net Income per Common Share, Basic as Adjusted Net Income divided by Adjusted Weighted-Average Shares Outstanding for our Class A Common Stock, Class B Common Stock, Class C Common Stock and Class D Common Stock assuming the exchange of all vested and outstanding common units in Alclear at the end of each period presented.
We do not present Adjusted Net Income (Loss) per Common Share on a dilutive basis for periods where we have Adjusted Net Loss since we do not assume the conversion of any potentially dilutive equity instruments as the result would be anti-dilutive.
We do not present Adjusted Net Income per Common Share on a dilutive basis for periods where we have Adjusted Net Income since we do not assume the conversion of any potentially dilutive equity instruments as the result would be anti-dilutive.
We do not present Adjusted Net Income (Loss) per Common Share for shares of our Class B Common Stock although they are participating securities based on the assumed conversion of those shares to our Class A Common Stock.
We do not present Adjusted Net Income per Common Share for shares of our Class B Common Stock although they are participating securities based on the assumed conversion of those shares to our Class A Common Stock.
Interest income (expense), net Interest income (expense), net primarily consists of interest income from our investment holdings and discount accretion on our marketable securities partially offset by issuance costs on our revolving credit facility.
Interest income, net Interest income, net primarily consists of interest income from our investment holdings and discount accretion on our marketable securities partially offset by issuance costs on our revolving credit facility.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Annual Report on Form 10-K. The discussion in this MD&A is generally related to 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Annual Report on Form 10-K. The discussion in this MD&A is generally related to 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report on Form 10-K can be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
The Credit Agreement contains customary affirmative covenants, such as 58 Table of Contents financial statement reporting requirements and delivery of borrowing base certificates, as well as customary covenants that restrict our ability to, among other things, incur additional indebtedness, sell certain assets, guarantee obligations of third parties, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions.
The Credit Agreement contains customary affirmative covenants, such as financial statement reporting requirements and delivery of borrowing base certificates, as well as customary covenants that restrict our ability to, among other things, incur additional indebtedness, sell certain assets, guarantee obligations of third parties, declare dividends or make certain distributions, and undergo a merger or consolidation or certain other transactions.
Tax Receivable Agreement In connection with the IPO we entered into the TRA with the Alclear Members that provides for the payment by us to the Alclear Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by the Alclear Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A common stock, $0.00001 par value per share (“Class A Common Stock”) or Class B common stock, $0.00001 par value per share (“Class B Common Stock”) as applicable, and purchases of Alclear Units and corresponding shares of Class C common stock, par value $0.00001 per share (“Class C Common Stock”) or Class D common stock, $0.00001 par value per share (“Class D Common Stock” and, together with the Class A Common Stock, Class B Common Stock and Class C Common Stock, collectively, “Common Stock”), as the case may be, from Alclear Members (or their transferees or other assignees) or (b) payments under the TRA, and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the TRA.
Tax Receivable Agreement The Company maintains a TRA with the Alclear Members that provides for the payment by us to the Alclear Members of 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that we actually realize (computed using simplifying assumptions to address the impact of state and local taxes) as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by the Alclear Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of our Class A common stock, $0.00001 par value per share (“Class A Common Stock”) or Class B common stock, $0.00001 par value per share (“Class B Common Stock”) as applicable, and purchases of Alclear Units and corresponding shares of Class C common stock, par value $0.00001 per share (“Class C Common Stock”) or Class D common stock, $0.00001 par value per share (“Class D Common Stock” and, together with the Class A Common Stock, Class B Common Stock and Class C Common Stock, collectively, “Common Stock”), as the case may be, from Alclear Members (or their transferees or other assignees) or (b) payments under the TRA, and (ii) tax benefits related to imputed interest deemed arising as a result of payments made under the TRA.
Following our IPO, we have and we expect to continue to incur increased amounts of compensation expense, including related to equity awards granted under the 2021 Omnibus Incentive Plan to both existing employees and newly-hired employees, and grants in connection with new hires could be significant.
We have and we expect to continue to incur increased amounts of compensation expense, including related to equity awards granted under the 2021 Omnibus Incentive Plan to both existing employees and newly-hired employees, and grants in connection with new hires could be significant.
The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or loss of Alclear, as well as any stand-alone income or loss generated by the Company. The Company is also subject to income taxes in Israel, Argentina, and Mexico.
The Company is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income or 54 Table of Contents loss of Alclear, as well as any stand-alone income or loss generated by the Company. The Company is also subject to income taxes in Israel, Argentina, and Mexico.
Revenues and operating income (loss) related to these acquisitions for the years ended December 31, 2023, 2022, and 2021 were insignificant to the consolidated financial statements for all periods presented. See Note 3 within the consolidated financial statements included in this document for more information on acquisitions.
Revenues and operating income (loss) related to these acquisitions for the years ended December 31, 2024 and 2023 were insignificant to the consolidated financial statements for all periods presented. See Note 3 within the consolidated financial statements included in this document for more information on acquisitions.
We are also subject to changes in discretionary consumer spending. 47 Table of Contents Taxation and Expenses After the consummation of our IPO, we became subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Alclear and will be taxed at the prevailing corporate tax rates.
We are also subject to changes in discretionary consumer spending. 47 Table of Contents Taxation and Expenses We are subject to U.S. federal, state and local income taxes with respect to our allocable share of any taxable income of Alclear and will be taxed at the prevailing corporate tax rates.
Adjusted Net Income (Loss) We define Adjusted Net Income (Loss) as Net income (loss) attributable to Clear Secure, Inc. adjusted for the net income (loss) attributable to non-controlling interests, equity-based compensation expense, amortization of acquired intangible assets, acquisition-related costs, changes in fair value of contingent consideration and the income tax effect of these adjustments.
Adjusted Net Income We define Adjusted Net Income as net income (loss) attributable to Clear Secure, Inc. adjusted for the net income (loss) attributable to non-controlling interests, equity-based compensation expense, amortization of acquired intangible assets, acquisition-related costs, changes in fair value of contingent consideration and the income tax effect of these adjustments, using an effective tax rate.
Employee- 53 Table of Contents related costs recorded in direct salaries and benefits consist of salaries, taxes, benefits and equity-based compensation and expenses under arrangements related to the use of certain space at airports.
Employee-related costs recorded in direct salaries and benefits consist of salaries, taxes, benefits and equity-based compensation and expenses under arrangements related to the use of certain space at airports.
Provision (benefit) for income taxes As a result of the IPO and Reorganization, the Company became the sole managing member of Alclear, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Alclear is not subject to U.S. federal and most state and local income taxes.
Provision (benefit) for income taxes The Company is the sole managing member of Alclear, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Alclear is not subject to U.S. federal and most state and local income taxes.
Overview CLEAR is an identity company making experiences safer and easier digitally and physically. We make everyday experiences frictionless by connecting your identity to all the things that make you, YOU - transforming the way you live, work, and travel.
Overview CLEAR is a secure identity company making experiences safer and easier - both digitally and physically. We make everyday experiences frictionless by connecting your identity to all the things that make you, YOU - transforming the way you live, work, and travel.
CLEAR has been delivering secure, friction-free experiences in airports for over 14 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
CLEAR has been delivering secure, frictionless experiences in airports for over 15 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
Changes to the macro environment Our business is dependent on macroeconomic and other events outside of our control, such as decreased levels of travel or attendance at events, terrorism, civil unrest, political instability, union and other transit related strikes and other general economic conditions.
Changes to the macro and regulatory environment Our business is dependent on macroeconomic and other events outside of our control, such as decreased levels of travel or attendance at events, changes in government policy and regulation, terrorism, civil unrest, political instability, union and other transit related strikes and other general economic conditions.
Key Performance Indicators To evaluate performance of the business, we utilize a variety of other non-GAAP financial reporting and performance measures. These key measures include Total Bookings, Total Cumulative Enrollments, Total Cumulative 48 Table of Contents Platform Uses, Annual CLEAR Plus Net Member Retention, Active CLEAR Plus Members, and Annual CLEAR Plus Member Usage.
Key Performance Indicators To evaluate performance of the business, we utilize a variety of other non-GAAP financial reporting and performance measures. These key measures include Total Bookings, Total Cumulative Enrollments, Total Cumulative Platform Uses, Annual CLEAR Plus Net Member Retention, Annual CLEAR Plus Gross Dollar Retention, Active CLEAR Plus Members, and Annual CLEAR Plus Member Usage.
The Company will retain the benefit of the remaining 15% of these net cash savings. As of December 31, 2023, the Company has not recognized the deferred tax asset for the step-up in tax basis, as the asset is not more-likely-than-not to be realized.
The Company will retain the benefit of the remaining 15% of these net cash savings. As of December 31, 2024, the Company has recognized the deferred tax asset of $231.7 million for the step-up in tax basis, as the asset is more-likely-than-not to be realized.
The Company offers certain limited-time free trials, family pricing, and other beneficial pricing through several channels, including airline and credit card partnerships. Membership subscription revenue is presented net of taxes, refunds, credit card chargebacks, and estimated amounts due to a credit card partner.
The Company offers certain limited-time free trials, family pricing, and other beneficial pricing through several channels including airline and credit card partnerships. Membership subscription revenue is presented net of taxes, refunds, and credit card chargebacks.
Membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to Members through a partnership with a credit card company at the end of the contract period. The Company’s funded portion varies based on total number of Members for the contract year. The Company also generates revenue in relation to CLEAR Verified.
Membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to Members through a partnership with a credit card company at the end of the contract period. The Company’s funded portion varies based on total number of Members for the contract year. The Company generates additional revenue from TSA PreCheck® Enrollment Provided by CLEAR.
As of December 31, 2023, we had future minimum payments of $55.0 million. See Note 18 within the consolidated financial statements. The Company has commitments for future marketing expenditures to sports stadiums of $9.3 million as of December 31, 2023.
As of December 31, 2024, we had future minimum payments of $67.3 million. See Note 18 within the consolidated financial statements. The Company has commitments for future marketing expenditures to sports stadiums of $3.5 million as of December 31, 2024.
In addition, our growth strategy relies on creating new revenue streams such as per partner, per Member or per use transaction fees. Although we believe our service provides significant value to our partners, our success depends on creating mutually beneficial partnership agreements.
Our future success depends on maintaining those relationships, adding new relationships and maintaining favorable business terms. In addition, our growth strategy relies on creating new revenue streams such as per partner, per Member or per use transaction fees. Although we believe our service provides significant value to our partners, our success depends on creating mutually beneficial partnership agreements.
These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income (loss), or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Our Non-GAAP financial measures are expressed in thousands.
These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, net cash provided by (used in) operating activities or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies.
As of December 31, 2023 2022 Change Annual CLEAR Plus Member Usage 8.1x 8.6x (6 %) Annual Usage was 8.1x as of December 31, 2023 and 8.6x as of as of December 31, 2022, which represented a 6% decrease.
As of December 31, 2024 2023 Change Annual CLEAR Plus Member Usage 7.1x 8.1x (12 %) Annual Usage was 7.1x as of December 31, 2024 and 8.1x as of as of December 31, 2023, which represented a 12% decrease.
Cost of direct salaries and benefits Years ended December 31, 2023 2022 $ Change % Change Cost of direct salaries and benefits $ 142.8 $ 104.8 $ 38.0 36 % Cost of direct salaries and benefits expenses increased by $38.0 million, or 36%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Cost of direct salaries and benefits Years ended December 31, 2024 2023 $ Change % Change Cost of direct salaries and benefits $ 173.0 $ 142.8 $ 30.2 21 % Cost of direct salaries and benefits expenses increased by $30.2 million, or 21%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
The change was driven primarily by an increase of $8.5 million, or a 52% increase, in fixed airport fees and $23.9 million, or a 60% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by $2.5 million and $5.3 million in the twelve months ended December 31, 2023 and 2022, respectively.
The change was driven primarily by an increase of $9.6 million, or a 39% increase, in fixed airport fees and $9.9 million, or a 15% increase, in Member fees. COVID-related concessions reduced Cost of revenue share fee by $2.3 million and $2.5 million in the years ended December 31, 2024 and 2023, respectively.
Cash flows from financing activities For the year ended December 31, 2023, net cash used in financing activities was $216.0 million compared to $48.9 million for the year ended December 31, 2022, an increase of $167.1 million.
Cash flows from financing activities For the year ended December 31, 2024, net cash used in financing activities was $401.5 million compared to $216.0 million for the year ended December 31, 2023, an increase of $185.5 million.
The amount of such quarterly dividends are subject to approval of the actual amount by the Board at the time of such dividend declaration. It is expected that the dividends will be funded by proportionate cash distributions by Alclear to all of its members as of the applicable record date, including holders of non-controlling interests in Alclear and the Company.
It is expected that the dividends will be funded by proportionate cash distributions by Alclear to all of its members as of the applicable record date, including holders of non-controlling interests in Alclear and the Company.
In June 2023, the Company entered into a second amendment to the Credit Agreement to transition from LIBOR to the Secured Overnight Financing Rate ("SOFR") as our benchmark interest rate and to extend the maturity date to June 28, 2026. We have the option to repay any borrowings under the Credit Agreement without premium or penalty prior to maturity.
In June 2023, the Company entered into a second amendment to the Credit Agreement to transition from LIBOR to the Secured Overnight Financing Rate ("SOFR") as our benchmark interest rate and to extend the maturity date to June 28, 2026.
As of December 31, 2023 2022 Change Annual CLEAR Plus Net Member Retention 86.3% 91.9% (5.6%) Annual CLEAR Plus Net Member Retention was 86.3% as of December 31, 2023 and 91.9% as of December 31, 2022, a year-over-year decrease of 560 basis points.
As of December 31, 2024 2023 Change Annual CLEAR Plus Net Member Retention 81.4% 86.3% (4.9%) Annual CLEAR Plus Net Member Retention was 81.4% as of December 31, 2024 and 86.3% as of December 31, 2023, a year-over-year decrease of 490 basis points.
As of December 31, 2023, we had future minimum payments of $207.7 million, with $15.0 million due within 12 months. See Note 8 within the consolidated financial statements for information related to our lease obligations. 59 Table of Contents We enter into agreements with airports for access to floor and office space.
Commitments and Contingencies We have non-cancelable operating lease arrangements for office space. As of December 31, 2024, we had future minimum payments of $192.3 million, with $15.0 million due within 12 months. See Note 8 within the consolidated financial statements for information related to our lease obligations. We enter into agreements with airports for access to floor and office space.
Sales and marketing Years ended December 31, 2023 2022 $ Change % Change Sales and marketing $ 43.5 $ 41.7 $ 1.8 4 % Sales and marketing expenses increased by $1.8 million, or 4%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Sales and marketing Years ended December 31, 2024 2023 $ Change % Change Sales and marketing $ 48.8 $ 43.5 $ 5.3 12 % Sales and marketing expenses increased by $5.3 million, or 12%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
As of December 31, 2023, the Company had a remaining borrowing capacity of $68.4 million, net of standby letters of credit, and had no outstanding debt obligations. Additionally, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement. Refer to Note 21 within the consolidated financial statements for further details.
As of December 31, 2024, the Company had a remaining borrowing capacity of $66.4 million, net of standby letters of credit, and had no outstanding debt obligations. Additionally, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement.
On November 8, 2023 the Company announced that its Board declared a quarterly dividend of $0.09 per share, payable on November 22, 2023 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on November 16, 2023.
On May 7, 2024, the Company announced that its Board declared a quarterly dividend of $0.10 per share, payable on June 18, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on June 10, 2024.
Adjusted Net Income (Loss) per Common Share is only applicable for periods after June 29, 2021, post the reorganization transactions and IPO. Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Common Share exclude, to the extent applicable, exclude the tax effected impact of non-cash expenses and other items that are not directly related to our core operations.
Adjusted Net Income and Adjusted Net Income per Common Share exclude, to the extent applicable, the tax effected impact of non-cash expenses and other items that are not directly related to our core operations.
Reconciliation of Net income (loss) to Adjusted EBITDA (Loss) 51 Table of Contents For the year ended December 31, (In thousands) 2023 2022 2021 Net income (loss) $ 49,888 $ (115,436) $ (115,171) Income tax expense (benefit) 724 (2,062) 233 Interest income (expense), net (29,013) (6,586) 349 Other income (expense), net 107 (4,850) (344) Depreciation and amortization 21,649 18,792 12,358 Acquisition-related costs 457 — 1,391 Impairment on assets 4,975 1,851 — Equity-based compensation expense 37,293 138,495 37,223 Warrant liabilities — — 12,796 Adjusted EBITDA (Loss) $ 86,080 $ 30,204 $ (51,165) Revenue $ 613,579 $ 437,434 $ 253,953 Net income Margin 8 % (26) % (45) % Adjusted EBITDA Margin 14 % 7 % (20) % Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) For the year ended December 31, (In thousands) 2023 2022 2021 Net income (loss) attributable to Clear Secure,.
Reconciliation of Net income (Loss) to Adjusted EBITDA For the year ended December 31, (In thousands) 2024 2023 2022 Net income (loss) 225,274 $ 49,888 $ (115,436) Income tax expense (benefit) (158,647) 724 (2,062) Interest income, net (32,509) (29,013) (6,586) Other (expense) income, net 90,850 107 (4,850) Depreciation and amortization 26,480 21,649 18,792 Impairment on assets 723 4,975 1,851 Equity-based compensation expense 35,339 37,293 138,495 Acquisition related costs — 457 — Adjusted EBITDA $ 187,510 $ 86,080 $ 30,204 Revenue $ 770,488 $ 613,579 $ 437,434 Net income Margin 29 % 8 % (26) % Adjusted EBITDA Margin 24 % 14 % 7 % Reconciliation of Net Income (Loss) to Adjusted Net Income For the year ended December 31, (In thousands) 2024 2023 2022 Net income (loss) attributable to Clear Secure,.
Any future dividends will be at the discretion of, and subject to the approval of, the Board. On August 2, 2023, the Company announced that our Board adopted a dividend policy (the "Dividend Policy") of paying a quarterly cash dividend to holders of Class A Common Stock and Class B Common Stock.
On August 2, 2023, the Company announced that its Board adopted a dividend policy (the "Dividend Policy") of paying a quarterly cash dividend to holders of Class A Common Stock and Class B Common Stock. The amount of such quarterly dividends is subject to approval of the actual amount by the Board at the time of such dividend declaration.
General and administrative Years ended December 31, 2023 2022 $ Change % Change General and administrative $ 222.4 $ 278.1 $ (55.7) (20) % General and administrative expenses decreased by $55.7 million, or 20%, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
General and administrative Years ended December 31, 2024 2023 $ Change % Change General and administrative $ 217.5 $ 222.4 $ (4.9) (2) % General and administrative expenses decreased by $4.9 million, or 2%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Non-GAAP Financial Measures In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA (Loss), Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per Common Share, Diluted as non-GAAP financial measures that management believes provide useful information to investors.
The decrease was driven by both lower utilization for newer Members and decreased in utilization for existing Members. 50 Table of Contents Non-GAAP Financial Measures In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income and Adjusted Net Income per Common Share, Basic and Diluted as non-GAAP financial measures that management believes provide useful information to investors.
We periodically reassess the components of our Non-GAAP adjustments for changes in how we evaluate our performance and changes in how we make financial and operational decisions to ensure the adjustments remain relevant and meaningful. 50 Table of Contents Adjusted EBITDA (Loss) and Adjusted EBITDA Margin We define Adjusted EBITDA (Loss) as net income (loss) adjusted for income taxes, interest (income) expense net, depreciation and amortization, impairment and losses on asset disposals, equity-based compensation expense, mark to market of warrant liabilities, net other income (expense) excluding sublease rental income, acquisition-related costs and changes in fair value of contingent consideration.
Adjusted EBITDA and Adjusted EBITDA Margin We define Adjusted EBITDA as net income adjusted for income taxes, interest income, net, depreciation and amortization, impairment and losses on asset disposals, equity-based compensation expense, mark to market of warrant liabilities, net other income (expense) excluding sublease rental income, acquisition-related costs and changes in fair value of contingent consideration.
Business Combinations Accounting for business combinations requires us to make significant estimates and assumptions with respect to the the fair value of identifiable assets and liabilities acquired in a business combination, especially with respect to intangible assets.
Additionally, the Company has determined the TRA liability is probable and therefore has recorded a tax receivable liability of $196.8 million. Business Combinations Accounting for business combinations requires us to make significant estimates and assumptions with respect to the fair value of identifiable assets and liabilities acquired in a business combination, especially with respect to intangible assets.
We may also use our cash and cash equivalents to repurchase our Class A Common Stock, pay cash dividends (and distributions in respect thereof) and distribute to members for tax payments.
We may also use our cash and cash equivalents to repurchase our Class A Common Stock, pay cash dividends (and distributions in respect thereof) and distribute to members for tax payments. We plan to finance our operations, future stock repurchases, cash dividends, and distributions (to the extent declared), and capital expenditures largely through cash generated from operations.
Further, to the extent that other companies use similar methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the company’s relative performance against other companies that also report non-GAAP operating results.
Further, to the extent that other companies use similar methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP operating results. 51 Table of Contents Free Cash Flow We define Free Cash Flow as net cash provided by operating activities adjusted for purchases of property and equipment.
The change was primarily due to an increase in the net sales and maturities of marketable securities of $348.1 million and a decrease in capital expenditures of $5.8 million offset by a purchase of a strategic investment of $6.0 million and cash consideration paid as part of business combination of $3.8 million.
The change was primarily due to an increase in the net sales of marketable securities of $106.7 million, a decrease in the purchase of a strategic investment of $5.0 million, decrease in business combinations of $3.8 million, and a decrease in capital expenditures of $13.5 million.
The year over year increase was driven by growth in CLEAR Plus enrollments, as well as increased contributions from CLEAR Verified. Total Cumulative Platform Uses We define Total Cumulative Platform Uses as the number of individual engagements across CLEAR use cases, including CLEAR Plus, our flagship app and CLEAR Verified, since inception as of the end of the period.
Total Cumulative Platform Uses We define Total Cumulative Platform Uses as the number of individual engagements across CLEAR use cases, including CLEAR Plus, our flagship app and CLEAR1, since inception as of the end of the period.
On May 9, 2023, the Company announced that a special committee of its Board declared a special cash dividend in the amount of $0.20 per share payable on May 25, 2023 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on May 18, 2023.
On February 21, 2025, the Company announced that its Board declared a quarterly dividend of $0.125 per share and a special cash dividend of $0.27 per share, payable on March 18, 2025 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on March 10, 2025 (the “Record Date”).
Ability to Grow Total Cumulative Enrollments We are focused on growing Total Cumulative Enrollments and the number of Members that engage with our platform. Our operating results and growth opportunities depend, in part, on our ability to attract new Members, including paying Members (CLEAR Plus Members) as well as new platform Members.
Our operating results and growth opportunities depend, in part, on our ability to attract new Members, including paying Members (CLEAR Plus Members) as well as new platform Members.
Income tax benefit (expense) Years ended December 31, 2023 2022 $ Change % Change Income tax benefit (expense) $ (0.7) $ 2.1 $ (2.8) N/A Income tax expense increased by $2.8 million for the year ended December 31, 2023 compared to the year ended December 31, 2022 .
Income tax benefit (expense) Years ended December 31, 2024 2023 $ Change % Change Income tax benefit (expense) $ 158.6 $ (0.7) $ 159.3 22,757 % Income tax benefit increased by $159.3 million for the year ended December 31, 2024 compared to the year ended December 31, 2023 .
The value of the CLEAR platform to our Members increases as we add more use cases and partnerships, which in turn drives more frequent usage and increases retention. Historically, CLEAR Plus Members who used CLEAR in both aviation and non-aviation venues renewed at rates materially above those who used CLEAR only in aviation.
The value of the CLEAR platform to our Members increases as we add more use cases and partnerships, which in turn drives more frequent usage and strong retention.
The Company uses a time-based output measure and revenue is recognized over the period in which each of the performance obligations are satisfied, as services are rendered, which is generally over the arrangement term as all arrangements are for a period of less than 12 months. 60 Table of Contents The Company uses the practical expedient permitted to not adjust the transaction price of contracts with a duration of one year or less for the effects of a significant financing component at contract inception.
The Company uses a time-based output measure and revenue is recognized over the period in which each of the performance obligations are satisfied, as services are rendered, which is generally over the arrangement term as all arrangements are for a period of less than 12 months.
Cash Flow The following summarizes our cash flows for the years ended December 31, 2023, 2022 and 2021 (in millions): Years Ended December 31, 2023 2022 2021 $ Change 2023 vs 2022 $ Change 2023 vs 2022 Net cash provided by (used in) operating activities $ 225.0 $ 168.3 $ 69.7 $ 56.7 34 % Net cash used in investing activities (15.5) (359.6) (403.2) 344.1 (96) % Net cash provided by (used in) financing activities (216.0) (48.9) 503.4 (167.1) 342 % Net increase (decrease) in cash, cash equivalents, and restricted cash (6.5) (240.2) 169.9 233.7 (97) % Exchange rate effect on cash and cash equivalents, and restricted cash — — — N/A N/A Cash, cash equivalents, and restricted cash, beginning of year 68.9 309.1 139.1 (240.2) (78) % Cash, cash equivalents, and restricted cash, end of period $ 62.4 $ 68.9 $ 309.0 $ (6.5) (9) % Cash flows from operating activities For the year ended December 31, 2023, net cash provided by operating activities was $225.0 million compared to $168.3 million for the year ended December 31, 2022, an increase of $56.7 million.
Refer to Note 21 within the consolidated financial statements for further details. 58 Table of Contents Cash Flow The following summarizes our cash flows for the years ended December 31, 2024, 2023 and 2022 (in millions): Years Ended December 31, 2024 2023 2022 $ Change 2024 vs 2023 $ Change 2024 vs 2023 Net cash provided by operating activities $ 295.7 $ 225.0 $ 168.3 $ 70.6 31 % Net cash provided by (used in) investing activities 113.8 (15.5) (359.6) 129.3 (834) % Net cash used in financing activities (401.5) (216.0) (48.9) (185.5) 86 % Net increase in cash, cash equivalents, and restricted cash 7.9 (6.5) (240.2) 14.4 (222) % Cash, cash equivalents, and restricted cash, beginning of year — — — N/A N/A Net exchange differences on cash, cash equivalents, and restricted cash 62.4 68.9 309.1 (6.5) (9) % Cash, cash equivalents, and restricted cash, end of period $ 70.3 $ 62.4 $ 68.9 $ 7.9 13 % Cash flows from operating activities For the year ended December 31, 2024, net cash provided by operating activities was $295.7 million compared to $225.0 million for the year ended December 31, 2023, an increase of $70.6 million.
Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods.
As of December 31, 2024, the Company is subject to certain minimum spend commitments of approximately $13.6 million over the next three years under service arrangements. 59 Table of Contents Critical Accounting Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods.
Cash flows from investing activities For the year ended December 31, 2023, net cash used in investing activities was $15.5 million compared to $359.6 million for the year ended December 31, 2022, a decrease of $344.1 million.
Cash flows from investing activities For the year ended December 31, 2024, net cash provided by investing activities was $113.8 million compared to net cash used in investing activities of $15.5 million for the year ended December 31, 2023, an increase of $129.3 million.
Revenues from our partners, and the percentage of our total revenue from these partners, have historically been immaterial. Operating Expenses Cost of revenue share fee The Company operates as a concessionaire in airports and shares a portion of the gross receipts generated from the Company’s Members with the host airports and airlines (“Revenue Share”).
Although platform Members may not contribute directly to our revenues, they are valuable to our platform as they indirectly contribute revenues and drive new partners to CLEAR. 53 Table of Contents Operating Expenses Cost of revenue share fee The Company operates as a concessionaire in airports and shares a portion of the gross receipts generated from the Company’s Members with the host airports and airlines (“Revenue Share”).
The change was primarily due to $4.6 million of increased allocated overhead costs, $2.2 million of increased non-cash impairment of certain assets, and $1.2 million of increased professional fees. These increases were partially offset by a $0.4 million decrease in employee related costs.
The change was primarily due to a $1.7 million decrease in non-cash impairment of certain assets, partially offset by a $1.0 million increase in technology costs.
These items are excluded because they are connected to the Company’s long term growth plan and not intended to increase short term revenue in a specific period.
These items are excluded because they are connected to the Company’s long term growth plan and not intended to increase short term revenue in a specific period. Historically, we believed these adjustments assist investors in evaluating the performance of the Company’s core operations assuming the exchange of all vested and outstanding common units in Alclear.
This includes CLEAR Plus Members who have an activated payment method, plus associated family accounts and is inclusive of Members who are in a limited time free trial; it excludes duplicate and/or purged accounts. Management views this as an important tool to measure the growth of its CLEAR Plus product.
This includes CLEAR Plus members who have an activated payment method, plus associated family accounts and is inclusive of members who are in a limited time free trial or in a billing grace period after a billing failure during which time we attempt to collect payment; we exclude duplicate and/or purged accounts.
Management believes that Total Bookings is an important measure of the current health and growth of the business and views it as a leading indicator.
Total Bookings in any particular period reflect sales to new and renewing CLEAR Plus subscribers plus any accrued billings to partners. 48 Table of Contents Management believes that Total Bookings is an important measure of the current health and growth of the business and views it as a leading indicator.
In addition, the Board declared a special cash dividend of $0.55 per share, payable on November 22, 2023 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on November 16, 2023.
On March 21, 2024, the Company announced the declaration of a special cash dividend in the amount of $0.32 per share payable on April 8, 2024 to holders of record of the Class A Common Stock and Class B Common Stock as of the close of business on April 1, 2024.
As of December 31, 2023 2022 Change % Change Total Cumulative Platform Uses (in thousands) 180,807 129,617 51,190 39% Total Cumulative Platform Uses was 180,807 as of December 31, 2023 and 129,617 as of December 31, 2022, which represented a 39% increase, driven by the continued strength in air travel leading to increases in CLEAR Plus verifications combined with an increased contributions from CLEAR Verified uses.
As of December 31, 2024 2023 Change % Change Total Cumulative Platform Uses (in thousands) 234,821 180,807 54,014 30% Total Cumulative Platform Uses was 234,821 as of December 31, 2024 and 180,807 as of December 31, 2023, which represented a 30% increase, driven by Active CLEAR Plus Member verifications combined with increased contributions from CLEAR1 uses.
On May 13, 2022, the Company's Board authorized a share repurchase program pursuant to which the Company may purchase up to $100 million of its Class A Common Stock. On November 8, 2023, the Company announced that its Board authorized a $100 million increase to its existing Class A Common Stock share repurchase program.
On each of November 8, 2023, March 21, 2024 and August 5, 2024, the Company announced that its Board authorized a $100 million increase to its existing Class A Common Stock share repurchase program, and in February 2025, the Company announced that its Board authorized an additional $200 million increase.
On August 2, 2023, we announced that our Board declared the initial quarterly dividend under the Dividend Policy in the amount of $0.07 per share, payable on August 18, 2023 to holders of record of the Class A Common Stock and Class B Common Stock as of the close of business on August 11, 2023.
On October 31, 2024, the Company announced that its Board declared a quarterly dividend of $0.125 per share, payable on December 17, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on December 10, 2024.
Years ended December 31, 2023 2022 $ Change % Change Total Bookings (in millions) $711.8 $527.0 $184.8 35% Total Bookings increased by $184.8 million, or 35%, for the year ended December 31, 2023 compared to the year ended December 31, 2022. The increase was primarily driven by new Member enrollments, pricing increases, and strong retention of existing Members.
Years ended December 31, 2024 2023 $ Change % Change Total Bookings (in millions) $834.0 $711.8 $122.2 17% Total Bookings increased by $122.2 million, or 17%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily driven by growth in Active CLEAR Plus Members combined with price increases.
The change was driven primarily by a $2.0 million increase in employee compensation costs, $1.8 million increase in discretionary marketing expense, and $0.8 million related to increased allocated overhead costs, partially offset by a $2.7 million decrease in Ambassador commission expense.
The change was primarily driven by a $9.6 million increase in discretionary marketing expense, partially offset by a $4.1 million decrease in Ambassador commission expense resulting from changes to our compensation structure.
Alclear, is treated as flow-through entities for U.S. federal income tax purposes, and as such, has generally not been subject to U.S. federal income tax at the entity level.
Alclear is treated as a flow-through entity for U.S. federal income tax purposes, and as such, has generally not been subject to U.S. federal income tax at the entity level. In addition to tax expense, we incur expenses related to our operations, plus payments under the tax receivable agreement (“TRA”) described below, which we expect to be significant.
Calculation of Adjusted Weighted-Average Shares Outstanding As of December 31, 2023 2022 Weighted-average number of shares outstanding, basic for Class A Common Stock 89,695,439 81,117,184 Adjustments Assumed weighted-average conversion of issued and outstanding Class B Common Stock 907,234 1,007,686 Assumed weighted-average conversion of issued and outstanding Class C Common Stock 35,586,829 41,265,522 Assumed weighted-average conversion of issued and outstanding Class D Common Stock 25,796,690 26,501,898 Assumed weighted-average conversion of vested and outstanding warrants — 164,623 Adjusted Weighted-Average Number of Shares Outstanding, Basic 151,986,192 150,056,913 Weighted-average impact of unvested RSAs 37,861 863,904 Weighted-average impact of unvested RSUs 955,661 631,104 Weighted-average impact of unvested performance based RSUs 20,850 — Total incremental shares 1,014,372 1,495,008 Adjusted Weighted-Average Number of Shares Outstanding, Diluted 153,000,564 151,551,921 Calculation of Adjusted Net Income per Common Share, Basic For the year ended December 31, 2023 2022 Adjusted Net Income in thousands $ 89,296 $ 24,616 Adjusted Weighted-Average Number of Shares Outstanding, Basic 151,986,192 150,056,913 Adjusted Net Income per Common Share, Basic $ 0.59 $ 0.16 52 Table of Contents Calculation of Adjusted Net Income per Common Share, Diluted For the year ended December 31, 2023 2022 Adjusted Net Income in thousands $ 89,296 $ 24,616 Adjusted Weighted-Average Number of Shares Outstanding, Diluted 153,000,564 151,551,921 Adjusted Net Income per Common Share, Diluted $ 0.58 $ 0.16 Summary of Adjusted Net Income per Common Share: For the year ended December 31, 2023 2022 Adjusted Net Income per Common Share, Basic $ 0.59 $ 0.16 Adjusted Net Income per Common Share, Diluted $ 0.58 $ 0.16 Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow For the year ended December 31, (In thousands) 2023 2022 2021 Net cash provided by (used in) operating activities $ 225,033 $ 168,310 $ 69,707 Purchases of property and equipment (25,555) (31,362) $ (28,148) Share repurchases over fair value — — $ 712 Free Cash Flow $ 199,478 $ 136,948 $ 42,271 Components of Results of Operations Revenue The Company derives substantially all of its revenue from subscriptions to its consumer aviation service, CLEAR Plus.
Inc $ 169,676 $ 28,108 $ (65,573) Reallocation of net income (loss) attributable to non-controlling interests 55,598 21,780 (49,863) Net income (loss) per above 225,274 49,888 (115,436) Equity-based compensation expense 35,339 37,293 138,495 Amortization of acquired intangibles 4,604 3,268 3,161 Acquisition-related costs — 457 — Income tax effect (4,815) (1,610) (1,604) Adjusted Net Income $ 260,402 $ 89,296 $ 24,616 Calculation of Adjusted Weighted-Average Shares Outstanding As of December 31, 2024 2023 Weighted-average number of shares outstanding, basic for Class A Common Stock 93,010,960 89,695,439 Adjustments Assumed weighted-average conversion of issued and outstanding Class B Common Stock 884,283 907,234 Assumed weighted-average conversion of issued and outstanding Class C Common Stock 23,753,535 35,586,829 Assumed weighted-average conversion of issued and outstanding Class D Common Stock 25,544,999 25,796,690 Adjusted Weighted-Average Number of Shares Outstanding, Basic 143,193,777 151,986,192 Weighted-average impact of unvested RSAs — 37,861 Weighted-average impact of unvested RSUs 1,307,363 955,661 Weighted-average impact of unvested performance based RSUs 9,504 20,850 Total incremental shares 1,316,867 1,014,372 Adjusted Weighted-Average Number of Shares Outstanding, Diluted 144,510,644 153,000,564 52 Table of Contents Calculation of Adjusted Net Income per Common Share, Basic For the year ended December 31, 2024 2023 Adjusted Net Income in thousands $ 260,402 $ 89,296 Adjusted Weighted-Average Number of Shares Outstanding, Basic 143,193,777 151,986,192 Adjusted Net Income per Common Share, Basic $ 1.82 $ 0.59 Calculation of Adjusted Net Income per Common Share, Diluted For the year ended December 31, 2024 2023 Adjusted Net Income in thousands $ 260,402 $ 89,296 Adjusted Weighted-Average Number of Shares Outstanding, Diluted 144,510,644 153,000,564 Adjusted Net Income per Common Share, Diluted $ 1.80 $ 0.58 Summary of Adjusted Net Income per Common Share: For the year ended December 31, 2024 2023 Adjusted Net Income per Common Share, Basic $ 1.82 $ 0.59 Adjusted Net Income per Common Share, Diluted $ 1.80 $ 0.58 Reconciliation of Net cash provided by operating activities to Free Cash Flow For the year ended December 31, (In thousands) 2024 2023 2022 Net cash provided by operating activities $ 295,677 $ 225,033 $ 168,310 Purchases of property and equipment (12,009) (25,555) $ (31,362) Free Cash Flow $ 283,668 $ 199,478 $ 136,948 Components of Results of Operations Revenue The Company derives substantially all of its revenue from subscriptions to its consumer aviation service, CLEAR Plus.
Other income (expense), net Other income (expense), net consists of certain non-recurring non-operating items including income recognized in relation to a minimum annual guarantee paid to us by a marketing partner and other items such as sublease income and changes in the fair value of contingent consideration.
Other (expense) income, net Other income (expense), net consists of certain non-recurring non-operating items including income recognized in relation to a minimum annual guarantee paid to us by a marketing partner and the establishment of the tax receivable agreement liability for exchanges of Alclear units which occurred when the related deferred tax assets required a valuation allowance.
As of December 31, 2023 2022 Change Active Clear Plus Members 6,720 5,448 23% Active CLEAR Plus Members was 6,720 as of December 31, 2023 and 5,448 as of December 31, 2022, which represented a 23% increase, driven by new Members added through airport, partner and organic channels in existing and new airports.
As of December 31, 2024 2023 Change Active CLEAR Plus Members 7,315 6,720 9% Active CLEAR Plus Members was 7,315 as of December 31, 2024 and 6,720 as of December 31, 2023, which represented a 9% increase, driven by new Active CLEAR Plus Members added through airport, partner and organic channels in existing and new airports. 49 Table of Contents Annual CLEAR Plus Gross Dollar Retention We define Annual CLEAR Plus Gross Dollar Retention as the net bookings collected from a Fixed Cohort of Members during the Current Period as a percentage of the net bookings collected from the same Fixed Cohort during the Prior Period.
Years ended December 31, 2023 2022 $ Change % Change Other income $ 1.6 $ 7.3 $ (5.7) N/A Other expense $ (0.1) $ (2.4) $ 2.3 N/A Other income (expense), net $ 1.5 $ 5.0 $ (3.5) (71) % Other income, net decreased by $3.5 million, for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Years ended December 31, 2024 2023 $ Change % Change Other (expense) income, net $ (89.1) $ 1.5 $ (90.6) (6,197) % Other (expense) income, net decreased by $90.6 million, for the year ended December 31, 2024 compared to the year ended December 31, 2023. This change was primarily due to establishing the TRA liability of $90.8 million.
The change was primarily due to an increase in the number of CLEAR Plus Members.
The change was primarily due to 9% increase in the number of Active CLEAR Plus Members as of December 31, 2024 compared to December 31, 2023 and increases to the price of a CLEAR Plus membership compared to the price as of December 31, 2023.
Total Bookings Total Bookings represent our total revenue plus the change in deferred revenue during the period. Total Bookings in any particular period reflect sales to new and renewing CLEAR Plus subscribers plus any accrued billings to partners.
Total Bookings Total Bookings represent our total revenue plus the change in deferred revenue during the period.
Active CLEAR Plus Members are defined as Members who have completed enrollment with CLEAR and have activated a payment method for our in-airport CLEAR Plus service, including their registered family plan Members.
The Fixed Cohort is defined as all Active CLEAR Plus Members as of the last day of the Prior Period who have activated a payment method for our in-airport CLEAR Plus service, including their registered family plan Members. Bookings received from a third party as part of a partnership agreement are excluded from both periods.
As of December 31, 2023 2022 Change % Change Total Cumulative Enrollments (in thousands) 20,194 15,384 4,810 31% Total Cumulative Enrollments were 20,194 as of December 31, 2023 and 15,384 as of December 31, 2022, which represented a 31% increase.
As of December 31, 2024 2023 Change % Change Total Cumulative Enrollments (in thousands) 28,906 20,194 8,712 43% Total Cumulative Enrollments were 28,906 as of December 31, 2024 and 20,194 as of December 31, 2023, which represented a 43% increase. The year-over-year increase was driven by CLEAR1 and CLEAR Plus Member enrollments.
This change was due to a year-over-year increase in net income of $165.3 million offset by a decrease in working capital changes of $5.6 million and a decrease in non-cash adjustments to net income of $102.9 million primarily driven by $101.2 million decrease in equity-based compensation.
This change was due to a year-over-year increase in net income of $175.4 million and favorable changes to working capital of $55.2 million, driven by the establishment of the tax receivable agreement liability, and offset by a decrease to non-cash adjustments to net income of $159.9 million driven by the release of the portion of the valuation allowance for deferred tax assets and current year tax benefits recorded, .
Annual CLEAR Plus Net Member Retention We define Annual CLEAR Plus Net Member Retention as one minus the CLEAR Plus net Member churn on a rolling 12 month basis.
The year-over-year change was driven by a decrease in Member retention and a lower number of Family Members added to existing accounts partially offset by price increases. Annual CLEAR Plus Net Member Retention We define Annual CLEAR Plus Net Member Retention as one minus the CLEAR Plus net Member churn on a rolling 12 month basis.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeInvestments in Marketable Securities We had marketable securities totaling $665.2 million as of December 31, 2023. This amount was invested primarily in government securities, money market funds, commercial paper, corporate notes and bonds. Our investments are made for capital preservation purposes and we do not enter into investments for trading or speculative purposes.
Biggest changeAs of December 31, 2024, we had no outstanding borrowings under the revolving credit facility. 61 Table of Contents Investments in Marketable Securities We had marketable securities totaling $543 million as of December 31, 2024. This amount was invested primarily in government securities, money market funds, commercial paper, corporate notes and bonds.
The effect of a hypothetical 100 basis points increase or decrease in overall interest rate would result in unrealized loss or gain to our “available for sale” investment fair value of approximately $4.5 million that would be recognized in accumulated other comprehensive loss within the consolidated balance sheets.
The effect of a hypothetical 100 basis points increase or decrease in overall interest rate would result in unrealized loss or gain to our “available for sale” investment fair value of approximately $3.4 million that would be recognized in accumulated other comprehensive loss within the consolidated balance sheets.
Foreign Currency Translation Risk 61 Table of Contents Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD.
Foreign Currency Translation Risk Fluctuations in foreign currencies impact the amount of total assets, liabilities, revenues, operating expenses and cash flows that we report for our foreign subsidiaries upon the translation of these amounts into USD.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, we are subject to a variety of risks which can affect our operations and profitability. Interest Rate Risk We had cash and cash equivalents of $57.9 million as of December 31, 2023.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK In the normal course of business, we are subject to a variety of risks which can affect our operations and profitability. Interest Rate Risk We had cash and cash equivalents of $66.9 million as of December 31, 2024.
Since the majority of our business are transacted in the U.S. dollar, foreign currency translation risk was insignificant for the year ended December 31, 2023.
Since the majority of our business are transacted in the U.S. dollar, foreign currency translation risk was insignificant for the year ended December 31, 2024. 62 Table of Contents
Debt Interest payable on our revolving credit facility is variable. Borrowings generally will bear interest based on the greater of the prime rate, SOFR or NYFRB rate, plus an applicable margin for specific interest periods. As of December 31, 2023, we had no outstanding borrowings under the revolving credit facility.
Debt Interest payable on our revolving credit facility is variable. Borrowings generally will bear interest based on the greater of the prime rate, SOFR or NYFRB rate, plus an applicable margin for specific interest periods.
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Our investments are made for capital preservation purposes and we do not enter into investments for trading or speculative purposes.

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