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What changed in Clear Secure, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Clear Secure, Inc.'s 2024 and 2025 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 2025 report.

+367 added−437 removedSource: 10-K (2026-02-25) vs 10-K (2025-02-26)

Top changes in Clear Secure, Inc.'s 2025 10-K

367 paragraphs added · 437 removed · 325 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

69 edited+17 added−31 removed48 unchanged
Biggest changeThis 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.
Biggest changeThis one-time enrollment can be completed in minutes and gives Members access to our platform offerings. • Home to Gate — Members can have a predictable day-of-travel experience by accessing helpful information to assist their journey from the time they leave their home until they board the plane.
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.
CLEAR also offers services that are free to Members, both directly and under agreements with our CLEAR1 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.
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.
Our CLEAR1 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.
Our TSA PreCheck® award also offers a significant top-of-funnel opportunity to acquire new CLEAR Plus Members as we intend to offer a CLEAR/TSA PreCheck® bundled product for customers who are new to both CLEAR and to TSA PreCheck®. • Expand our partnerships and distribution channels: We intend to continue to pursue commercial partners as a means to broaden our distribution channel reach and accelerate Member growth.
TSA PreCheck® also offers a significant top-of-funnel opportunity to acquire new CLEAR+ Members as we offer a CLEAR/TSA PreCheck® bundled product for customers who are new to both CLEAR and to TSA PreCheck®. • Expand our partnerships and distribution channels: We intend to continue to pursue commercial partners as a means to broaden our distribution channel reach and accelerate Member growth.
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.
CLEAR+ CLEAR+ is our consumer travel 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+, Members use our biometric technology to verify their identity and travel credentials.
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.
As of December 31, 2025, 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 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.
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.
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.
CLEAR has been delivering secure, frictionless experiences in airports for over 15 years, achieving exceptional user delight and trust with CLEAR+, our consumer travel subscription service. CLEAR+ enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
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.
In addition, the Health Insurance Portability and Accountability Act of 1996, as amended by the Health 9 Table of Contents 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.
We also offer discounted military and government pricing, and children under 18 can use CLEAR Plus for free with an adult Member. In 2024, we launched our Lane of the Future - including our new EnVe (“enrollment and verification”) hardware - to offer a face-first verification experience that is approximately 5x faster.
We also offer discounted military and government pricing, and children under 18 can use CLEAR+ for free with an adult Member. In 2024, we launched our Lane of the Future - including our new EnVe (“enrollment and verification”) hardware - to offer a face-first verification experience that is approximately 5x faster than legacy pods.
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 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+ currently retails for $209 per year per Member and is billed upfront.
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.
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+, and for the CLEAR1 experiences offered through our partners.
We built a multi-platform experience that can be embedded into a partner's native ecosystem so the partner can leverage our verification and enrollment technology.
We built a horizontal platform experience that can be embedded into a partner's native ecosystem so the partner can leverage our verification and enrollment technology.
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.
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 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 significant expertise implementing and seamlessly operating our platform’s combination of hardware, biometric technology and physical human interactions across 401 regulated or complex environments, such as airports and retail locations.
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.
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 211 person technology team leads platform innovation inside CLEAR.
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.
We believe we can continue to open CLEAR Lanes in new airports and new CLEAR Lanes in our existing airports. As of December 31, 2025, our airport coverage is approximately 79% of 2025 TSA checkpoint volume. 6% and 5% of all TSA checkpoint volume went through a CLEAR lane in 2025 and 2024, respectively.
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 entered into strategic distribution partnerships with partners such as Delta Air Lines, United Airlines, Hawaiian 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+.
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.
We also believe there are opportunities to continue to develop new features to improve the Member experience experience to further grow CLEAR+ Members. • Scale TSA PreCheck® enrollment program: We believe our TSA PreCheck® enrollment 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.
Once we achieved scale, the power of national network effects began to take hold. As the likelihood that a domestic traveler would have access to a CLEAR Plus Lane increased, the value proposition of our CLEAR Plus offering increased substantially. Alongside the growth in CLEAR Plus, our strategy expanded to extend our platform’s capabilities with CLEAR1.
Once we achieved scale, the power of national network effects began to take hold. As the likelihood that a domestic traveler would have access to a CLEAR+ Lane increased, the value proposition of our CLEAR+ offering increased substantially. Alongside the growth in CLEAR+, our strategy expanded to extend our platform’s capabilities through additional CLEAR Travel offerings and with CLEAR1.
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.
Operational Expertise at Scale Operating and scaling our own consumer-facing service, CLEAR+, 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 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.
We offer trials in-airport and online, as well as promotional pricing through select partners and channels, including Delta Air Lines, United Airlines, Alaska Airlines and Hawaiian Airlines frequent fliers. We also offer a family plan for up to three Members at an additional $125 per year per Member.
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.
As of December 31, 2025, we have 114 issued United States patents (with four additional patent applications allowed) and 28 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.
We plan to continue investing in each of these verticals to increase the growth of our platform, Member base and our network locations where our Members can use and our partners can integrate with CLEAR.
We plan to continue investing to increase the growth of our platform, Member base and our network locations where our Members can use and our partners can integrate with CLEAR.
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.
We speak up by displaying honesty to our Members, our team members, and ourselves. • Bias for Action: We encourage our team members to have a bias for action, using data to make calculated decisions.
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 Growth Strategies Key elements of our growth strategy include: 7 Table of Contents • Grow CLEAR+ Members and grow revenue per CLEAR+ Member: We see growth opportunities in our CLEAR+ Member base and opportunities to increase the revenue per CLEAR+ Member through pricing and ancillary revenue initiatives.
We have confidence in our decisions and learn from our mistakes. • Indefatigable: We tirelessly pursue our goals with passion and sometimes “no” simply means “not yet.” As of December 31, 2024, we had 4,022 full-time employees with our largest workforces in New York, Los Angeles and Atlanta.
We have confidence in our decisions and learn from our mistakes. • Indefatigable: We tirelessly pursue our goals with passion and sometimes “no” simply means “not yet.” As of December 31, 2025, we had 3,301 full-time employees with our largest workforces in New York, New Jersey, and Los Angeles.
It's used to enroll new Members and improve the experience for existing Members. The app has several features, including: • Enroll in CLEAR and manage your membership —enrolling as a CLEAR Member is a quick and easy process that can be handled directly through the CLEAR app via facial biometric recognition technology and validating a government-issued identification.
The app has several features, including: • Enroll in CLEAR and manage your membership — enrolling as a CLEAR Member is a quick and easy process that can be handled directly through the CLEAR app via facial biometric recognition technology and validating a government-issued identification.
We have been certified at the highest level of security by our government regulators. The Department of Homeland Security (“DHS”) has certified our information security program under their purview at a FISMA High Rating (the highest designation according to the Federal Information Security Modernization Act).
The Department of Homeland Security (“DHS”) has certified our information security program under their purview at a FISMA High Rating (the highest designation according to the Federal Information Security Modernization Act).
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.
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. Mobile App We also engage with our Members via the flagship CLEAR mobile app.
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.
Our largest CLEAR+ Member acquisition channel is in-airport (representing 66%, 64%, and 65% of Member acquisitions for the years ended December 31, 2025, 2024 and 2023, respectively), where our prominent branding and expansive physical footprint allow prospective Members to engage with CLEAR’s brand, Ambassadors and technology firsthand. Our passionate Member base further drives word-of-mouth marketing and strong retention rates.
As we continue to grow our partners and use cases, we see the increasing need for secure identity verification for partners to achieve business goals and create a more frictionless experience for their customers. Mobile App We also engage with our Members via the flagship CLEAR mobile app.
As we continue to grow our partners and use cases, we see the increasing need for secure identity verification for partners to achieve business goals and create a more frictionless experience for their customers.
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.
This structure allows us to facilitate safer, faster and more 5 Table of Contents 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 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.
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.
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.
Our largest CLEAR+ 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. To ensure best-in-class Member service we monitor real-time Member feedback and quickly take action on data-driven insights.
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.
As of December 31, 2025, our expansive network of partners and use cases provide our 38 million Total CLEAR Members with access to 166 CLEAR+ Lanes across 60 airports nationwide, 61 airports and 340 retail locations with TSA PreCheck® Enrollment Provided by CLEAR, 9 sports and entertainment venues with priority Lanes and a growing list of B2B CLEAR1 partners.
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 believe CLEAR+ 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.
For example, in 2021, we acquired Whyline, Inc., our virtual queuing technology used for CLEAR Mobile, which had partnerships across international markets. In addition, in 2023, our LinkedIn partnership was extended to Members in Mexico and Canada. Further, in 2024, CLEAR Mobile was expanded to Members in Costa Rica.
For example, in 2021, we acquired Whyline, Inc., our virtual queuing technology used for CLEAR Mobile, which had partnerships across international markets. In addition, in 2023, our LinkedIn partnership was extended to Members in Mexico and Canada. In addition, as we expand in Europe we are subject to the General Data Protection Regulation (“GDPR”).
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 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 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.
Our physical and digital network, technology platform, operational expertise and 3,708 Ambassadors and field managers across our airport partners have helped us build a trusted brand and a passionate Member base. Our Members know to expect a frictionless, predictable, and secure experience when they see the CLEAR brand.
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).
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).
Through our partnership with American Express, eligible cardmembers receive statement credits for all or a portion of their CLEAR Plus membership. We entered into our partnership with American Express in 2019. In March 2024, we renewed our partnership for the first of two one-year renewal terms through June 2025.
Through our partnership with American Express, eligible card members receive statement credits for all or a portion of their CLEAR Plus membership. We initially entered into our partnership with American Express in 2019. In February 2026, we executed a multi-year renewal of the partnership with American Express.
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.
As we add new airport and non-airport locations, use cases, and partners, the power of network effects makes CLEAR+ more valuable to our Members, further driving new Member acquisition and retention.
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 the discussion contained in the “Risk Factors” section of this annual report for the fiscal year ended December 31, 2025 (“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. 10 Table of Contents Corporate History The Company (together with its consolidated subsidiaries, ”CLEAR,” “we,” “us,” “our”) is a holding company and its principal asset is the controlling equity interest in Alclear Holdings, LLC (“Alclear”) and its wholly owned subsidiaries.
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.
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 word-of-mouth marketing and strong retention rates.
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.
We also manage a large Ambassador and field manager part-time and full-time workforce of approximately 3,708 employees who are deployed across our expansive network of locations to implement our platform and continue to build our brand reputation.
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.
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.
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.
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.
Companies engaged in related businesses or even unrelated businesses may have patents, copyrights, trademarks, trade secrets and other intellectual property rights which such companies may assert are infringed by our technology or business activities.
In addition, should we expand, the laws of various foreign countries where we may expand may not protect our intellectual property rights to the same extent as laws in the United States. 8 Table of Contents Companies engaged in related businesses or even unrelated businesses may have patents, copyrights, trademarks, trade secrets and other intellectual property rights which such companies may assert are infringed by our technology or business activities.
Through CLEAR Perks, we partner with other brands and service providers to tailor additional offers for CLEAR Plus Members to help them win the day of travel.
We also offer additional CLEAR Perks, which are a suite of added benefits that help CLEAR+ Members get an even more seamless experience, Home to Gate. Through CLEAR Perks, we partner with other brands and service providers to tailor additional offers for CLEAR+ Members to help them win the day of travel.
Other jurisdictions where we may operate in the future like Canada, Brazil and India have implemented comprehensive data protection regulations that also may 10 Table of Contents diverge from or overlap with these laws.
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. Other jurisdictions where we may operate in the future like Canada, Brazil and India have implemented comprehensive data protection regulations that also may diverge from or overlap with these laws.
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.
Platform Members can use CLEAR anywhere in our network outside of CLEAR+ service for free, while our CLEAR1 partners pay to use our technology solutions. Typically, new platform Members are driven to enroll by one of our CLEAR1 partners who integrate with CLEAR to enable frictionless experiences for their customers.
TSA PreCheck® Enrollment Provided by CLEAR In February 2024, we launched TSA PreCheck® Enrollment Provided by CLEAR, which as of December 31, 2024 was available in 52 airports and 24 retail locations nationwide. We expect to scale this offering to additional locations across our airport network and in other partner retail locations on a rolling basis, subject to TSA approval.
We expect to scale this offering to additional locations across our airport network and in other partner retail locations on a rolling basis, subject to TSA approval. CLEAR also provides online renewal services. The TSA PreCheck® Enrollment Provided by CLEAR program represents a growing source of revenue.
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.
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 continuing to add new products within the Travel vertical. We have also made significant progress expanding from Travel into select new verticals through CLEAR1.
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 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® customers on behalf of TSA. After a new TSA PreCheck® customer is enrolled or renewed, we offer the customer an opportunity to enroll in CLEAR+ on an opt-in basis.
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.
We also expect to continue adding new airport and retail locations offering TSA PreCheck® provided by CLEAR. Additionally, we have a robust pipeline of new CLEAR1 partners who increasingly recognize the need to deliver a seamless and secure experience to their customers.
Our business model is powered by network effects and characterized by efficient Member acquisition and maintaining strong retention rates.
Similarly, our partners trust CLEAR to enable them to deliver the same frictionless and secure experiences to their own customers. Our business model is powered by network effects and characterized by efficient Member acquisition and maintaining strong retention rates.
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.
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 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.
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.
Home to Gate integrates flight departure times, traffic data, security screening, gate number and terminal walking times to their exact gate. Our integration with Uber allows customers to book a car to depart at the right time for a seamless travel journey.
Home to Gate integrates flight departure times, traffic data, security screening, gate number and terminal walking times to their exact gate.
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.
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. At CLEAR, we are obsessed with the Member experience.
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.
As we grow Members, this further enhances the value of our network, and makes us a more valuable CLEAR1 partner.
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.
Once a Member is enrolled, each subsequent use of the platform to verify their identity is only a few simple steps. Our ‘enroll once, use everywhere’ approach benefits the entire CLEAR ecosystem by removing friction for Members and increasing conversion for partners.
We believe this dynamic will grow the long-term economic value of our platform by increasing total engagement, expanding our margins and maximizing our revenue. We measure our CLEAR Plus Member Lifetime Value and Customer Acquisition Cost in an effort to measure the efficiency of our Member acquisition and retention strategy.
We believe that as we continue to grow platform Members, this will grow the long-term economic value of our platform by increasing total engagement, expanding our margins and maximizing our revenue. 6 Table of Contents Our Competitive Advantages Trusted and Extensible Brand with Passionate Member Base From our founding, we have been obsessed with the CLEAR Member experience.
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.
In 2025, we expanded CLEAR+ and related offerings to serve international travelers from 42 countries, broadening the addressable market for our platform and increasing the relevance of CLEAR+ for a global traveler base. CLEAR Platform Members include Members who enrolled through our mobile app, our partners’ customers who have enrolled through our CLEAR1 solutions, and formerly paying CLEAR+ Members.
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.
CLEAR+ Members pay for our annual CLEAR+ consumer travel subscription service. We started in airports and witnessed accelerating Member growth in both new markets and existing markets as our network expanded. The ability to 3 Table of Contents use CLEAR in more locations and in more ways increases our utility to our Members.
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.
CLEAR1 CLEAR1 is our B2B offering that extends our secure identity platform to partners to create frictionless experiences for their customers. Our software development kits and application programming interfaces enable our partners to quickly and seamlessly integrate directly with our platform.
Additional services can be easily integrated into this platform. • Fast Access —Members enjoy touchless access to select partner services and venues.
CLEAR ID extends our secure identity platform into mobile-first and reinforces our “enroll once, use everywhere” approach across the CLEAR network . • 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 such as CLEAR Perks. We also expect to continue adding new airport and retail locations offering TSA PreCheck® provided by CLEAR and to broaden our network of regional airports offering CLEAR Mobile lanes.
Platform Members also may enroll directly with CLEAR to access our expanding portfolio of use cases. We believe there is a significant opportunity to expand our reach. We expect to expand CLEAR+ through airport network expansion, increased market penetration in existing markets, partnerships, new products and services, and our digital marketing efforts.
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As we continue to innovate on the travel experience, we are proud to offer TSA PreCheck® Enrollment Provided by CLEAR – offering consumers increased choice in how and where to sign up for this popular trusted traveler program.
Added
Additionally, our CLEAR Travel portfolio includes TSA PreCheck® Enrollment Provided by CLEAR, premium services such as CLEAR Concierge, other travel benefits such as expedited passport services, our free CLEAR app which helps travelers plan their trip Home to Gate, and other mobile-first identity solutions such as CLEAR ID.
Removed
Our free flagship CLEAR app offers several consumer products, including: Home to Gate, a feature to help travelers plan and time their trip to the airport; CLEAR Mobile, which delivers predictable airport security for travelers by accessing a dedicated lane at airport security, simply by showing a QR code, that is free to CLEAR Plus Members and available to all travelers by purchasing a day pass; Ambassador Assist, our curb-to-gate service where our Ambassadors guide Members through the airport; and CLEAR Perks, our suite of benefits to help CLEAR Plus Members win every step of their travel journey.
Added
Our CLEAR Travel portfolio extends CLEAR’s value proposition beyond the airport lane and supports our strategy to expand use cases, increase engagement and address new customer segments such as international travelers. CLEAR1 is our business to business (“B2B”) multi-layered identity verification solution.
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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.
Added
We combine biometric, document and device signals with verified data sources to ensure users are who they claim to be. Our B2B partners can select which verification layers to deploy, based on their specific security requirements, risk tolerance and user experience goals.
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Our Members can also use the CLEAR network nationwide across our CLEAR1 footprint. These use cases include a growing list of B2B partners across healthcare, financial services, hospitality and travel, and other consumer services, and healthcare locations.
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We partner with a breadth of organizations, with a particular focus on Healthcare, Workforce and Governmental organizations where high fidelity identity security is paramount to their operational success. Our scaled Member base and comprehensive secure identity platform underpin our CLEAR Travel and CLEAR1 businesses, maximizing security and minimizing friction for consumers and our enterprise partners.
Removed
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.
Added
In addition, we have grown Total CLEAR Members 31% year over year to 38.0 million, further increasing the scale and value of our secure identity platform to current and prospective CLEAR1 partners. The CLEAR Network Our platform is multi-faceted and a powerful network of networks. Our Member base includes CLEAR+ Members and CLEAR Platform Members.
Removed
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.

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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, 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.
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+ 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; 11 Table of Contents • 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; • we may enter into agreements with strategic partners that include exclusivity provisions that limit our ability to enter into agreements with additional partners • risks associated with inherent measurement limitations and any real or perceived inaccuracies in our metrics; • 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; • 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 (as defined below), 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; 12 Table of Contents • 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.
In many cases these initiatives also include use of biometrics, either via centralized or decentralized platforms, and any of these platforms or standards may become universally accepted and preferred by the industry, the TSA, airlines, and our other partners.
In many cases these initiatives also include the use of biometrics, either via centralized or decentralized platforms, and any of these platforms or standards may become universally accepted and preferred by the industry, the TSA, airlines, and our other partners.
If we elect not to or are unable to develop solutions internally, we may choose to, or be required to, expand into a certain market or strategy via an acquisition for which we could potentially pay too much or fail to successfully integrate into our operations.
If we elect not to or are unable to develop solutions internally, we may choose or be required to expand into a certain market or strategy via an acquisition for which we could potentially pay too much or fail to successfully integrate into our operations.
Accordingly, we may need to engage in equity or debt financings to secure additional funds. There can be no assurance that such additional funding will be available on terms attractive to us, or at all. Our inability to obtain additional funding when needed could have an adverse effect on our business, financial condition and operating results.
Accordingly, we may need to engage in equity or debt financings to secure additional funds. There can be no assurance that such funding will be available on terms attractive to us, or at all. Our inability to obtain additional funding when needed could have an adverse effect on our business, financial condition and operating results.
If we issue significant equity to attract employees or to retain our existing employees, we would incur substantial additional equity-based compensation expense and the ownership of our existing stockholders would be further diluted.
If we issue significant equity to attract or retain employees, we would incur substantial additional equity-based compensation expense and the ownership of our existing stockholders would be further diluted.
We leverage our third-party payment processors to bill Members on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact Member acquisition and retention.
We leverage third-party payment processors to bill Members on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact Member acquisition and retention.
We are subject to various federal and state laws and rules regarding the collection, use, disclosure, storage, transmission, and destruction of this personal information, and as we move into new markets, we will be subject to international laws applicable to our data practices as well.
We are subject to various international, federal, and state laws and rules regarding the collection, use, disclosure, storage, transmission, and destruction of this personal information, and as we move into new markets, we are and will be subject to international laws applicable to our data practices as well.
In addition to government regulation, self-regulatory standards and other industry standards may legally or contractually apply to us, be argued to apply to us, or we may elect to comply with such standards or to facilitate our customers’ compliance with such standards.
In addition to government regulation, self-regulatory standards and other industry standards may legally or contractually apply to us, be argued to apply to us, or we may elect to comply with such standards or to facilitate our customers’ compliance with such standards.
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.
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.
If so, in addition to the possibility of fines, lawsuits, and other claims, we could be required to fundamentally change our business activities and practices or modify our platforms, which could have an adverse effect on our business.
If so, in addition to the possibility of fines, lawsuits, and other claims, we could be required to fundamentally change our business activities and practices or modify our platforms, which could have an adverse effect on our business.
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 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.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our platforms.
Furthermore, the costs of compliance with, and other burdens imposed by, the laws, regulations, and policies that are applicable to the businesses of our customers may limit the use and adoption of, and reduce the overall demand for, our platforms.
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.
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 consumer protection, 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, limitations on the repatriation and investment of funds or costs and exchange rate fluctuations; • operating in jurisdictions that do not protect intellectual property rights to the same extent as the United States; and • potential oppositions in foreign patent and trademark offices.
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.
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+, 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.
Additionally, the United Kingdom has transposed GDPR into domestic law with a United Kingdom version of GDPR (combining GDPR and the Data Protection Act of 2018) that took effect in January 2021, which exposes us to two parallel regimes, each of which authorizes similar fines and other potentially divergent enforcement actions for certain violations.
Additionally, the United Kingdom has transposed GDPR into domestic law with a United Kingdom version of GDPR (combining GDPR and the Data Protection Act of 2018) that took effect in 2021, which exposes us to two parallel regimes, each of which authorizes similar fines and other potentially divergent enforcement actions for certain violations.
If CLEAR Plus Members do not perceive our aviation subscription service to be of value, including if we adjust pricing in a manner that is not favorably received by CLEAR Plus Members, we may not be able to attract and retain CLEAR Plus Members, and accordingly, our revenue, including revenue per paying CLEAR Plus Member, and results of operations may be adversely affected.
If CLEAR+ Members do not perceive our aviation subscription service to be of value, including if we adjust pricing in a manner that is not favorably received by CLEAR+ Members, we may not be able to attract and retain CLEAR+ Members, and accordingly, our revenue, including revenue per paying CLEAR+ Member, and results of operations may be adversely affected.
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.
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 34 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.
Our business and financial results depend significantly on adding new and retaining existing Members, increasing the number of CLEAR Plus Members, including by converting non-paying Members to paying Members, and the utilization of our platform by our Members. There can be no assurances that we will be successful at accomplishing any of the foregoing.
Our business and financial results depend significantly on adding new and retaining existing Members, increasing the number of CLEAR+ Members, including by converting non-paying Members to paying Members, and the utilization of our platform by our Members. There can be no assurances that we will be successful at accomplishing any of the foregoing.
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.
Given our dependence on CLEAR+ 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.
If our efforts to develop and offer more benefits are not valued by our current and future CLEAR Plus Members, our ability to attract and retain CLEAR Plus Members, or increase pricing, may be negatively impacted. We have and may, from time to time, adjust our CLEAR Plus membership pricing, our family plans, or our pricing model itself.
If our efforts to develop and offer more benefits are not valued by our current and future CLEAR+ Members, our ability to attract and retain CLEAR+ Members, or increase pricing, may be negatively impacted. We have and may, from time to time, adjust our CLEAR+ membership pricing, our family plans, or our pricing model itself.
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.
Risks Related to Our Business, Brand and Operations If we fail to add new and retain existing Members, including Active CLEAR+ Members, or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected.
We might not implement successful strategies to increase adoption of our platform or expand into new verticals, which would limit our growth. Our future profitability depends, in part, on our ability to successfully implement our strategies to increase adoption of our platform, expand into new verticals and develop new offerings.
We might not implement successful strategies to increase the adoption of our platform or expand into new verticals, which would limit our growth. Our future profitability depends, in part, on our ability to successfully increase the adoption of our platform, expand into new verticals and develop new offerings.
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.
To the extent our CLEAR+ 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.
Other jurisdictions where we may operate in the future like Canada, Brazil and India have implemented comprehensive data protection regulations that also may diverge from or overlap with these laws.
Other jurisdictions where we currently operate or may operate in the future like Canada, Brazil and India have implemented comprehensive data protection regulations that also may diverge from or overlap with these laws.
Our action or inaction with respect to such environmental, social, governance and other sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, it could negatively impact our reputation and our business results.
Our action or inaction with respect to such environmental, social, governance and other sustainability matters or fail to comply with all laws, regulations, policies and related interpretations, could negatively impact our reputation and our business results.
These and other adjustments may not be well-received by CLEAR Plus Members, and could negatively impact our ability to attract and retain CLEAR Plus Members, revenues per paying CLEAR Plus Member, revenue and our results of operations.
These and other adjustments may not be well-received by CLEAR+ Members, and could negatively impact our ability to attract and retain CLEAR+ Members, revenues per paying CLEAR+ Member, revenue and our results of operations.
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.
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, Adjusted EBITDA Margin, Free Cash Flow, Total Bookings, Total CLEAR Members, Total Cumulative Platform Uses, Annual CLEAR+ Gross Dollar Retention, Active CLEAR+ Members, and Annual CLEAR+ Member Usage; • 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; 37 Table 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.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our stock. 38 Table of Contents Provisions in our charter documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third party.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the market price of our stock. 36 Table of Contents Provisions in our charter documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third-party.
We have in the past, and may in the future, expand CLEAR Plus membership to include benefits in addition to use at our partner airports, such as free access to CLEAR Mobile and CLEAR Perks.
We have in the past, and may in the future, expand CLEAR+ membership to include benefits in addition to use at our partner airports, such as free access to CLEAR Mobile and CLEAR Perks.
Our ability to attract and retain Members, as well as to increase the number of Active CLEAR Plus Members and the utilization of our platform by our Members, could be materially adversely affected by a number of factors discussed elsewhere in these “Risk Factors,” including: • increased competition and use of our competitors’ platforms and services; • our failure to attract new partners or retain existing partners who in turn drive membership; • negative associations or perceptions with, reduced awareness of, or negative publicity about, our brand, platform or biometrics in general; • security incidents that may involve or are alleged to involve us, such as breaches of our information technology systems; and • macroeconomic and other conditions and events outside of our control, such as pandemics and health concerns, decreased levels of travel or attendance at events, terrorism, war or military actions, civil unrest, political instability and general economic conditions, including an economic downturn, recession, financial instability, inflation or changes in consumer tastes and preferences.
Our ability to attract and retain Members, as well as to increase the number of Active CLEAR+ Members and the utilization of our platform by our Members, could be materially adversely affected by a number of factors discussed elsewhere in these “Risk Factors,” including: • increased competition and use of our competitors’ platforms and services; • our failure to attract new partners or retain existing partners who in turn drive membership; • negative associations or perceptions with, reduced awareness of, or negative publicity about, our brand, platform or biometrics in general; • security incidents that may involve or are alleged to involve us, such as breaches of our information technology systems; and 13 Table of Contents • macroeconomic and other conditions and events outside of our control, such as pandemics and health concerns, decreased levels of travel or attendance at events, terrorism, war or military actions, civil unrest, political instability and general economic conditions, including an economic downturn, recession, financial instability, inflation or changes in consumer tastes and preferences.
The scope and interpretation of this emerging area of regulation and legislation, and the application to CLEAR’s business or business roadmap is unclear, but these laws could be interpreted or applied in ways that would impose new costly and burdensome requirements on CLEAR or its commercial partners and could increase the risk of regulatory actions directed to CLEAR or otherwise adversely impact our business.
The scope and interpretation of this emerging area of regulation and legislation, and the application to CLEAR’s business or business roadmap is evolving, but these laws could be interpreted or applied in ways that would impose new costly and burdensome requirements on CLEAR or its commercial partners and could increase the risk of regulatory actions directed to CLEAR or otherwise adversely impact our business.
We are dependent on CLEAR Plus memberships for a significant portion of our revenue, and a significant reduction in CLEAR Plus memberships would reduce our future revenue and harm our anticipated operating results.
We are dependent on CLEAR+ memberships for a significant portion of our revenue, and a significant reduction in CLEAR+ memberships would reduce our future revenue and harm our anticipated operating results.
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.
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.
In addition, in the event that we recruit employees from other technology companies, including certain potential competitors, and these employees are used in the development of portions of products which are similar to the development in which they were involved at their former employers, we may become subject to claims that such employees have improperly used or disclosed trade secrets or other proprietary information.
In addition, in the event that we recruit employees from other technology companies, including potential competitors, and these employees are used in the development of products which are similar to the development in which they were involved at their former employers, we may become subject to claims that such employees have improperly used or disclosed trade secrets or other proprietary information.
For example, large, well-established technology platforms, such as Alphabet/Google, Amazon, Apple, Microsoft or Meta or well-known companies in the credit card industry may currently be developing, or in the future could acquire, develop or expand, a platform that competes directly with some or all of our solutions.
For example, large, well-established technology platforms, such as Alphabet/Google, Amazon, Apple, Microsoft or Meta or well-known companies in the credit card industry may have developed, may currently be developing, or in the future could acquire, develop or expand, a platform that competes directly with some or all of our solutions.
Our business is dependent on our ability to build, maintain and expand trust in our brand and our platform from a variety of different stakeholders. Building and maintaining our brand depends on our ability to provide consistent, accurate, high-quality services to our Members and partners, as well as protect the information that we gather, which may include personal information.
Our business is dependent on our ability to build, maintain and expand trust in our brand and our platform from a variety of different stakeholders, which depends on our ability to provide consistent, accurate, high-quality services to our Members and partners, as well as protect the information that we gather (which may include personal information).
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.
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. 20 Table of Contents Our business may be vulnerable to the adverse effects of climate change, which may negatively impact our operations.
Regardless of any company’s efforts to comply with the requirements of BIPA, the private right of action available under laws like BIPA have created strong incentives for plaintiffs counsel to push the interpretation of BIPA in new areas and has increased the general likelihood of, and costs and risks associated with, biometrics litigation.
Regardless of any company’s efforts to comply with the requirements of BIPA, the private right of action available under laws like BIPA have created strong incentives for plaintiffs’ counsel to push the interpretation of BIPA in new areas and has increased the general likelihood of, and costs and risks associated with, biometrics litigation.
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.
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.
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.
We also face competition from solutions that were developed or 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.
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.
Our efforts to protect our confidential and sensitive 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.
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.
In addition, 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.
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.
Our growth has been accelerated by our expansion from the aviation industry into different verticals, including travel and hospitality, workforce, 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.
We have no independent means of generating revenue, and our ability to pay dividends, taxes and operating expenses is 33 Table of Contents dependent upon the financial results and cash flows of Alclear and its subsidiaries and distributions we receive from Alclear.
We have no independent means of generating revenue, and our ability to pay dividends, taxes and operating expenses is 31 Table of Contents dependent upon the financial results and cash flows of Alclear and its subsidiaries and distributions we receive from Alclear.
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.
These tax attributes would not be available to us in the 33 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.
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.
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.
When we process PHI on behalf of a covered entity, we are required by HIPAA to maintain HIPAA-compliant business associate agreements with our partners that are HIPAA covered entities and service providers, as well as certain of our subcontractors, that access, maintain, create or transmit sensitive patient health information on our behalf for the rendering of services to our HIPAA covered entity and service provider Members.
When we process PHI on behalf of a covered entity, we are required by HIPAA to maintain HIPAA-compliant business associate agreements with our partners that are HIPAA covered entities and service providers, as well as certain of 27 Table of Contents our subcontractors, that access, maintain, create or transmit sensitive patient health information on our behalf for the rendering of services to our HIPAA covered entity and service provider Members.
As examples, numerous states and municipalities have enacted or are in the process of enacting state level data privacy laws and regulations governing the collection, use and processing of state residents’ personal data. For example, CCPA took effect on January 1, 2020 and was amended by the Consumer Privacy Rights Act, which went into effect in 2023.
As examples, numerous states and municipalities have enacted or are in the process of enacting state level data privacy laws and regulations governing the collection, use and processing of state residents’ personal data. For example, CCPA took effect in 2020 and was amended by the Consumer Privacy Rights Act, which went into effect in 2023.
Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions, and could impose additional restrictions on our ability to make distributions or pay dividends to our stockholders, or make it less likely that our Board will declare such distributions or dividends.
Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions, and could impose additional restrictions on our ability to make 18 Table of Contents distributions or pay dividends to our stockholders, or make it less likely that our Board will declare such distributions or dividends.
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.
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 that are not compatible with our current solutions, products, technologies or platform.
These regulations have become particularly relevant to us as we expand our operations beyond the United States. For example, GDPR, which became effective on May 25, 2018, includes operational requirements for companies that are established in the EEA or process personal data of individuals located in the EEA.
These regulations have become particularly relevant to us as we expand our operations beyond the United States. For example, GDPR, which became effective in 2018, includes operational requirements for companies that are established in, or process personal data of individuals located in, the EEA.
We also are not aware of any third party intellectual property rights that may hamper our ability to provide future products and services. However, we recognize that the development of our services or products may require that we acquire intellectual property licenses from third parties so as to avoid infringement of those parties’ intellectual property rights.
We also are not aware of any third-party intellectual property rights that may hamper our ability to provide future products and services. However, we recognize that the development of our services or products may require that we acquire intellectual property 24 Table of Contents licenses from third parties so as to avoid infringement of those parties’ intellectual property rights.
Any claim, litigation or allegation could cause us to incur significant expenses and, if successfully asserted against us, could require that we pay substantial damages, ongoing royalty payments or licensing fees, prevent us from offering our platform or services or using certain technologies, require us to develop alternative technology or obtain additional licenses, force us to implement expensive workarounds, or be subject to other unfavorable terms.
Any claim, litigation or allegation could cause us to incur significant expenses and, if successful, could require that we pay substantial damages, ongoing royalty payments or licensing fees, prevent us from offering our platform or services or using certain technologies, require us to develop alternative technology or obtain additional licenses, force us to implement expensive workarounds, or be subject to other unfavorable terms.
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.
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, labor and employment, intellectual property, consumer and commercial contracting and others, and are often complex and subject to varying interpretations.
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.
Accordingly, we may not be able to pay dividends even if our Board would otherwise 32 Table of Contents deem it appropriate. See “Item 2.
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.
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.
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.
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 and medical centers being open for workers and patients.
Downturns in worldwide or regional economic conditions, such as the downturn resulting from the COVID-19 pandemic, inflation, and the potential for a recession, have in the past led to a general decrease in travel and travel spending, as well as discretionary spending generally, and similar downturns in the future may materially adversely impact demand for our platform and services.
Downturns in worldwide or regional economic conditions, such as downturn resulting from the pandemics, inflation, and the potential for a recession, have in the past led to a general decrease in travel and travel spending, as well as discretionary spending generally, and similar downturns in the future may materially adversely impact demand for our platform and services.
Likewise, some open source projects have known security and other vulnerabilities and architectural instabilities, or are otherwise subject to cyberattacks due to their wide availability, and are provided on an “as-is” basis. Liability protections provided by the SAFETY Act may be limited.
Likewise, some open source projects have known security and other vulnerabilities and architectural instabilities, or are otherwise subject to cyberattacks due to their wide availability, and are provided on an “as-is” basis. 30 Table of Contents Liability protections provided by the SAFETY Act may be limited.
We may in the future seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our current platform, enhance our technical capabilities or otherwise offer growth opportunities.
We have in the past and may in the future seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our current platform, enhance our technical capabilities or otherwise offer growth opportunities.
Our business depends on earning and maintaining the trust of our Members and our partners and any actual or alleged breaches of our systems could adversely affect our business, including by impacting the trust that we have gained.
Our business depends on earning and maintaining the trust of our Members and our partners and any actual or alleged breaches of our systems could adversely 21 Table of Contents affect our business, including by impacting the trust that we have gained.
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.
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.
We have derived substantially all of our historical revenue from CLEAR Plus, our consumer aviation subscription service. To grow and diversify our revenue, we will need to increase the number of Active CLEAR Plus Members and the utilization of our platform, and continue to offer services 13 Table of Contents that are considered valuable to our CLEAR Plus Members.
We have derived substantially all of our historical revenue from CLEAR+, our consumer aviation subscription service. To grow and diversify our revenue, we will need to increase the number of Active CLEAR+ Members and the utilization of our platform, and continue to offer services that are considered valuable to our CLEAR+ Members.
The ability to access credit card information on a real-time basis without having to proactively reach out to the Members each time we process an auto-renewal payment is critical to our success and a seamless experience for our users.
The ability to access credit card information on a real-time basis without having 22 Table of Contents to proactively reach out to the Members each time we process an auto-renewal payment is critical to our success and a seamless experience for our users.
Further, as regulatory frameworks evolve, they may increase our operating expenses, make compliance more difficult or impact our operating protocols, impact our Members’ experience, require us to add new staffing, and divert management’s attention from other growth initiatives.
Further, as regulatory frameworks evolve, they may increase our operating expenses, make 25 Table of Contents compliance more difficult or impact our operating protocols, impact our Members’ experience, require us to add new staffing, and divert management’s attention from other growth initiatives.
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.
See “— If we fail to add new and retain existing Members, including Active CLEAR+ Members, or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected ” above.
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.
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 $615.1 million over 15 years from December 31, 2025, assuming all future redemptions, purchases or exchanges occur on December 31, 2025.
Accordingly, our performance is dependent on the strength of the travel industry and our revenue is susceptible to declines in or disruptions to leisure and business travel that may be caused by factors entirely out of our control, such as COVID-19.
Accordingly, our performance is dependent on the strength of the travel industry and our revenue is susceptible to declines in or disruptions to leisure and business travel that may be caused by factors entirely out of our control, such as global pandemics.
We rely on third-party technology and information systems to help complete critical business functions. If that technology is subject to a security breach or fails to adequately serve our needs, and we cannot find alternatives, it may negatively impact our business, financial condition and results of operations.
We rely on third-party technology and information systems, like Amazon Web Services (“AWS”), to help complete critical business functions. If that technology is subject to a security breach or fails to adequately serve our needs, and we cannot find alternatives, it may negatively impact our business, financial condition and results of operations.
Certain of these matters may include speculative claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant.
Certain of these matters may include speculative 29 Table of Contents claims for substantial or indeterminate amounts of damages and include claims for injunctive relief. Additionally, our litigation costs could be significant.
We have, from time to time, found defects or errors in our system and software limitations that have resulted in, and may discover additional issues in the future that could result in, operational, enrollment or verification errors, platform unavailability or system disruption.
We have, from 19 Table of Contents time to time, found defects or errors in our system and software limitations that have resulted in, and may discover additional issues in the future that could result in, operational, enrollment or verification errors, platform unavailability or system disruption.
We may in the future be required to enter into amendments or new agreements on less favorable terms, which could adversely affect our business, results of operations and financial condition. Portions of our business and results of operations depend upon concessionaire agreements.
We may in the future be required to enter into amendments or new agreements on less favorable terms, which could adversely affect our business, results of operations and financial condition.
Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our technology and intellectual property. We rely in part on patent protection to maintain our competitive position.
Accordingly, despite our efforts, we may be unable to prevent third parties from infringing upon or misappropriating our technology and intellectual property. 23 Table of Contents We rely in part on patent protection to maintain our competitive position.
In particular, a significant and growing portion of our Members access our platform through the CLEAR mobile application (the “app”) and through our secure identity platform, CLEAR1. There is no guarantee that popular mobile devices and browsers will continue to support such platform, app or service, or that our Members will use our platform or app rather than competing products.
In particular, a significant and growing portion of our Members access our platform through the CLEAR mobile application (the “app”) and through our secure identity platform, CLEAR1. There is no guarantee that popular mobile devices and browsers will continue to support such platform, app or service.
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.
For example we are subject to various audits, reviews and evaluations overseen by the TSA, an 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; a TSA-CLEAR Quality Assurance program which includes monthly reviews of RT Program activities including a monthly report delivered to TSA, 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.
Other events or factors beyond our control can disrupt, and have in the past disrupted, travel and operations within the 18 Table of Contents United States and globally or otherwise result in declines in travel demand and the demand to attend events.
Other events or factors beyond our control can disrupt, and have in the past disrupted, travel and operations within the United States and globally or otherwise result in declines in travel demand and the demand to attend events.
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’ 29 Table of Contents 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.
We have limited experience operating outside the United States and any future international expansion strategy will subject us to additional costs and risks and our plans may not be successful. We have, and in the future we may continue to, expand our operations internationally.
We have limited experience operating outside the United States and any future international expansion strategy will subject us to additional costs and risks and our plans may not be successful. We have, and in the future we may continue to, expand our operations internationally. Operating outside of the United States requires significant management attention.
For example, in November 2024, the California Privacy Protection Agency issued draft regulations under CCPA governing the use of automated decisionmaking technology that would apply to the use of “physical or biological identification or profiling” in certain contexts, and the EU has implemented the AI Act which prohibits certain types of high risk biometric systems from being deployed.
For example, in September 2025, the California Privacy Protection Agency approved regulations under CCPA governing the use of automated decisionmaking technology that would apply to the use of “physical or biological identification or profiling” in certain contexts, and the EU has implemented the AI Act which prohibits certain types of high risk biometric systems from being deployed.
This concentration of ownership and voting power may also delay, defer or even prevent an acquisition by a third party or other change of control of our Company and may make some transactions more difficult or impossible without the support of the Founder Post-IPO Members, even if such events are in the best interests of minority stockholders.
This concentration of ownership and voting power may also delay, defer or even prevent an acquisition by a third-party or other change of control of our Company and may make some transactions more difficult or impossible without the support of Ms. Seidman Becker, even if such events are in the best interests of minority stockholders.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeIn 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.
Biggest changeOur 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. 38 Table of Contents 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.
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.
We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests and threat intelligence feeds, and utilize a range of external experts, such as cybersecurity assessors, consultants and auditors, in evaluating and testing our cybersecurity systems.
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.
ITEM 1C. CYBERSECURITY CLEAR’s information security program is managed by a dedicated Chief Security Officer (“CSO”), who has over 28 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.
“Risk Factors” for a discussion of cybersecurity risks. 41 Table of Contents
“Risk Factors” for a discussion of cybersecurity risks. 39 Table of Contents
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.
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.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee “Risk Factors—Risks Related to Regulation and Litigation— We may be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, financial condition and operating results .” ITEM 4. MINE SAFETY DISCLOSURES Not applicable 42 Table of Contents PART II - OTHER INFORMATION
Biggest changeSee “Risk Factors—Risks Related to Regulation and Litigation— We may be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause us to incur significant expenses, divert our management’s attention and materially harm our business, financial condition and operating results .” ITEM 4. MINE SAFETY DISCLOSURES Not applicable 40 Table of Contents PART II - OTHER INFORMATION

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeBelow 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.
Biggest changeBelow 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, 2025: Dividend Type Dividend Declaration Date Record Date Payment Date Dividend per Share Quarterly February 21, 2025 March 10, 2025 March 18, 2025 $ 0.125 Quarterly May 6, 2025 June 10, 2025 June 17, 2025 $ 0.125 Quarterly August 5, 2025 September 10, 2025 September 17, 2025 $ 0.125 Quarterly November 6, 2025 December 10, 2025 December 24, 2025 $ 0.125 Special February 21, 2025 March 10, 2025 March 18, 2025 $ 0.270 Stockholders Based on information made available to us by the transfer agent, as of February 20, 2026, we have 71 holders of record of our Class A Common Stock, one of which was Cede & Co., a nominee for The Depository Trust Company, one of record of our Class B Common Stock, 24 holders of record of our Class C Common Stock and one holder of record of our Class D Common Stock.
They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved and they are not intended to forecast or be indicative of possible future performance of our Common Stock. 44 Table of Contents This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Securities Act except as expressly set forth by specific reference in such filing.
They do not necessarily reflect management’s opinion that such indices are an appropriate measure of the relative performance of the stock involved and they are not intended to forecast or be indicative of possible future performance of our Common Stock. 42 Table of Contents This performance graph shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference into any of our filings under the Securities Act except as expressly set forth by specific reference in such filing.
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.
Securities Authorized for Issuance Under Equity Compensation Plans The information required by this Item is incorporated by reference to our proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2025.
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. 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.
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. 41 Table of Contents Issuer Purchases of Equity Securities Below is a summary of the repurchases during the three months ended December 31, 2025 (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, 2025 - October 31, 2025 — $ — — 126.5 November 1, 2025 - November 30, 2025 — — — 126.5 December 1, 2025 - December 31, 2025 — — — 126.5 Total — $ — — 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 increased on November 8, 2023, March 21, 2024, August 5, 2024, February 2025, and February 2026.
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.
As of December 31, 2025 and February 20, 2026, $126.5 million and $250.3 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.
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.
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 600 Index, S&P Software & Services Select Industry Index, and Russell 2000 Index. This graph covers the period from June 30, 2021 through December 31, 2025.
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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

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Biggest changeOn 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”).
Biggest changeDividends 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 years ended December 31, 2025 and 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 Quarterly February 21, 2025 March 10, 2025 March 18, 2025 $ 0.125 Quarterly May 6, 2025 June 10, 2025 June 17, 2025 $ 0.125 Quarterly August 5, 2025 September 10, 2025 September 17, 2025 $ 0.125 Quarterly November 6, 2025 December 10, 2025 December 24, 2025 $ 0.125 Special February 21, 2025 March 10, 2025 March 18, 2025 $ 0.270 On February 25, 2026, the Company announced that its Board declared a quarterly dividend of $0.15 per share and a special cash dividend of $0.20 per share, payable on March 24, 2026 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on March 10, 2026 (the “Record Date”).
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.
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.
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.
The Fixed Cohort is defined as all Active CLEAR+ Members as of the last day of the Prior Period who have activated a payment method for our in-airport CLEAR+ service, including their registered family plan Members. Bookings received from a third-party as part of a partnership agreement are excluded from both periods.
If our efforts to develop and offer more benefits are not valued by our current and future CLEAR Plus Members, our ability to attract and retain CLEAR Plus Members, or increase pricing, may be negatively impacted. Ability to add new partners, retain existing partners and generate new revenue streams Our partners include local airport authorities, airlines and other businesses.
If our efforts to develop and offer more benefits are not valued by our current and future CLEAR+ Members, our ability to attract and retain CLEAR+ Members, or increase pricing, may be negatively impacted. Ability to add new partners, retain existing partners and generate new revenue streams Our partners include local airport authorities, airlines and other businesses.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. Revenue recognition The Company has derived substantially all of its historical revenue from subscriptions to its consumer aviation service, CLEAR Plus.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. Revenue recognition The Company has derived substantially all of its historical revenue from subscriptions to its consumer aviation service, CLEAR+.
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.
These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, net income margin, 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.
Annual CLEAR Plus Member Usage We define Annual CLEAR Plus Member Usage as the total number of unique CLEAR Plus airport verifications in the 365 days prior to the end of the period divided by Active CLEAR Plus Members as of the end of the period who have been enrolled for at least 365 days.
Annual CLEAR+ Member Usage We define Annual CLEAR+ Member Usage as the total number of unique CLEAR+ airport verifications in the 365 days prior to the end of the period divided by Active CLEAR+ Members as of the end of the period who have been enrolled for at least 365 days.
We believe Free Cash Flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. With regards to our CLEAR Plus subscription service, we generally collect cash from our Members upfront for annual subscriptions.
We believe Free Cash Flow provides useful information to management and investors about the Company’s liquidity and cash flow trends.With regards to our CLEAR+ subscription service, we generally collect cash from our Members upfront for annual subscriptions.
If the TSA materially increases randomized reverification rates for CLEAR Plus Members at the checkpoint or makes other adjustments to checkpoint processes, it may negatively impact the Lane experience and therefore may impact our ability to retain CLEAR Plus Members.
If the TSA materially increases randomized reverification rates for CLEAR+ Members at the checkpoint or makes other adjustments to checkpoint processes, it may negatively impact the Lane experience and therefore may impact our ability to retain CLEAR+ Members.
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 Company offers certain limited-time 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 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 Company offers certain limited-time 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.
Although we believe that these forward-looking statements are based upon reasonable assumptions, you should be aware that many factors, including those described under the heading “Risk Factors,” in this Annual Report on Form 10-K, could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. 45 Table of Contents Our forward-looking statements made herein are made only as of the date of this Annual Report on Form 10-K.
Although we believe that these forward-looking statements are based upon reasonable assumptions, you should be aware that many factors, including those described under the heading “Risk Factors,” in this Annual Report on Form 10-K, could affect our actual financial results or results of operations and could cause actual results to differ materially from those in the forward-looking statements. 43 Table of Contents Our forward-looking statements made herein are made only as of the date of this Annual Report on Form 10-K.
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.
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 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
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.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 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, 2024.
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+ Members) as well as new platform Members.
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.
We are also subject to changes in discretionary consumer spending. 45 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.
The Revenue Share fee is generally prepaid to the host airport in the period collected from the Member. The Revenue Share fee is capitalized and subsequently amortized to operating expense over each Member’s subscription period. Such prepayments are recorded in “Prepaid revenue share fee” in the Company’s consolidated balance sheets.
The Revenue Share fee from CLEAR+ Members is generally prepaid to the host airport in the period collected from the Member. The Revenue Share fee is generally capitalized and subsequently amortized to operating expense over each Member’s subscription period. Such prepayments are recorded in “Prepaid revenue share fee” in the Company’s consolidated balance sheets.
We also entered into strategic distribution partnerships with partners such as Delta Air Lines, United Airlines, Alaska Airlines, Hawaiian 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, Alaska Airlines, Hawaiian Airlines and American Express that promote our services to their customers on a discounted or subsidized basis which helps us to efficiently scale membership in CLEAR+.
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.
Total Cumulative Platform Uses We define Total Cumulative Platform Uses as the number of individual engagements across CLEAR use cases, including CLEAR+, CLEAR Mobile, our flagship app, and CLEAR1, since inception as of the end of the period.
In April 2021, the Company increased the size of the revolving credit facility to $100 million, which matures three years from the date of the increase. The revolving credit facility includes a letter of credit sub-facility.
In April 2021, the Company increased the size of the revolving credit facility to $100 million, which matures three years from the date of the increase. The revolving credit facility includes a letter of credit sub-facility, in the amount of $50 million.
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.
CLEAR has been delivering secure, frictionless experiences in airports for over 15 years, achieving exceptional user delight and trust with CLEAR+, our consumer travel subscription service. CLEAR+ enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide.
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.
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.
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.
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 CLEAR Members , Total Cumulative Platform Uses, Active CLEAR+ Members, Annual CLEAR+ Gross Dollar Retention, and Annual CLEAR+ Member Usage.
Key Factors Affecting Performance We believe that our current and future financial growth are dependent upon many factors, including the key factors affecting performance described below. Ability to Grow Total Cumulative Enrollments We are focused on growing Total Cumulative Enrollments and the number of Members that engage with our platform.
Key Factors Affecting Performance We believe that our current and future financial growth are dependent upon many factors, including the key factors affecting performance described below. Ability to Grow Total CLEAR Members We are focused on growing Total CLEAR Members and the number of Members that engage with our platform.
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.
Membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to certain Members through a partnership with a credit card company. 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.
Active CLEAR Plus Members, including those on a free or discounted plan, or who receive a full statement credit, only impact Annual CLEAR Plus Gross Dollar Retention to the extent that they are paying anything out-of-pocket on behalf of themselves or a registered family plan Member. Management views this metric to be reflective of our business objective of optimizing revenue.
Active CLEAR+ Members, including those on a free or discounted plan, or who receive a full statement credit, only impact Annual CLEAR+ Gross Dollar Retention to the extent that they are paying anything out-of-pocket on behalf of themselves or a registered family plan Member. Management has historically viewed this metric to be reflective of our business objective of optimizing revenue.
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.
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.
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.
Revenues and operating income related to this acquisitions for the years ended December 31, 2025 and 2024 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 rely on multiple channels to attract new CLEAR Plus Members, including in-airport (our largest channel) which in turn is dependent on the ongoing ability of our Ambassadors to successfully engage with the traveling public. We also rely on numerous digital channels such as paid search and partnerships.
We rely on multiple channels to attract new CLEAR+ Members, including in-airport (our largest channel) which in turn is dependent on the ongoing ability of our Ambassadors to successfully engage with the traveling public. We also rely on numerous digital channels such as our website, mobile app and paid search.
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.
Provision for income taxes 50 Table of Contents 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.
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.
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, net other (income) expense excluding sublease rental income, acquisition-related costs and changes in fair value of contingent consideration.
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 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 and February 2026, the Company announced that its Board authorized additional increases of $200 million and $125 million, respectively.
Cost of direct salaries and benefits Cost of direct salaries and benefits includes employee-related expenses and allocated overhead associated with our field Ambassadors and field managers directly assisting Members and their corresponding travel related costs.
Cost of direct salaries and benefits Cost of direct salaries and benefits includes employee-related expenses and allocated overhead associated with our field Ambassadors, field managers directly assisting Members, their corresponding travel related costs, and costs incurred in Member support.
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.
The change was primarily due to 6% increase in the number of Active CLEAR+ Members as of December 31, 2025 compared to December 31, 2024 and increases to the price of a CLEAR+ membership compared to the price as of December 31, 2024.
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.
As of December 31, 2025, the Company is subject to certain minimum spend commitments of approximately $2.4 million over the next two years under service arrangements. fother 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.
Management views this metric as an important tool to analyze the level of engagement of our Member base which can be a leading indicator of future growth, retention and revenue.
Management has historically viewed this metric as a tool to analyze the level of engagement of our Member base which can be a leading indicator of future growth, retention and revenue.
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.
As of December 31, 2025, we had future minimum payments of $174.3 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.
To the extent that any of the dividends discussed above exceed the Company's current and accumulated earnings and profits, a portion of the dividend may be deemed a return of or a capital gain to the holders of our Class A Common Stock or Class B Common Stock, as applicable.
To the extent the quarterly or special dividends exceed the Company's current and accumulated earnings and profits, a portion of such dividends may be deemed a return of capital gain to the holders of our Class A Common Stock or Class B Common Stock, as applicable.
Approximately 28% and 30% of paying Active CLEAR Plus Members were on a family plan as of December 31, 2024 and 2023, respectively.
Approximately 27% and 28% of paying Active CLEAR+ Members were on a family plan as of December 31, 2025 and 2024, respectively.
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, .
This change was due to an increase 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 tax benefits recorded in prior year, offset by a decrease in net income of $57.2 million and unfavorable changes to working capital of $77.6 million, driven by the establishment of the tax receivable agreement liability in the prior year.
The Company will fund the quarterly dividend from proportionate cash distributions by Alclear to all of its members as of the Record Date, including holders of non-controlling interests in Alclear and the Company. The Company will fund the payment of the special cash dividend with cash held by the Company following its receipt of tax distributions made by Alclear.
The Company will fund the quarterly dividend from proportionate cash distributions by Alclear to all of its members as of the Record Date, including holders of non-controlling interests in Alclear and the Company.
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.
Sales and marketing Years ended December 31, 2025 2024 $ Change % Change Sales and marketing $ 54.4 $ 48.8 $ 5.6 12 % Sales and marketing expenses increased by $5.6 million, or 12%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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.
As of December 31, 2025, we had future minimum payments of $65.8 million. See Note 18 within the consolidated financial statements. The Company has commitments for future marketing expenditures to sports stadiums of $6.0 million as of December 31, 2025.
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.
Years ended December 31, 2025 2024 $ Change % Change Total Bookings (in millions) $977.2 $834.0 $143.2 17% 46 Table of Contents Total Bookings increased by $143.2 million, or 17%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily driven by growth in Active CLEAR+ Members combined with price increases.
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.
The change was driven primarily by an increase of $7.5 million, or a 22% increase, in fixed airport fees and $12.2 million, or a 17% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by $0 and $2.3 million in the years ended December 31, 2025 and 2024, respectively.
The Company funded the payment of the special cash dividend with cash held by the Company following its receipt of a pro rata cash distribution made by Alclear to all of its members, including the Company, together with cash held by the Company following its receipt of tax distributions made by Alclear.
The Company will fund the payment of the 54 Table of Contents special cash dividend with cash held by the Company following its receipt of a pro rata cash distribution made by Alclear to all of its members as of the Record Date, including the Company, together with cash held by the Company following its receipt of tax distributions made by Alclear.
The numerator includes only verifications of the population in the denominator. Management views this as an important tool to analyze the level of engagement of our Active CLEAR Plus Member base.
The numerator includes only verifications of the population in the denominator. Management has historically viewed this as a tool to analyze the level of engagement of our Active CLEAR+ Member base.
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.
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.
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.
As of December 31, 2025 2024 Change % Change Total Cumulative Platform Uses (in thousands) 295,907 234,821 61,086 26% Total Cumulative Platform Uses was 295,907 as of December 31, 2025 and 234,821 as of December 31, 2024, which represented a 26% increase, driven by Active CLEAR+ Member verifications combined with increased contributions from CLEAR1 uses.
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.
General and administrative Years ended December 31, 2025 2024 $ Change % Change General and administrative $ 232.4 $ 217.5 $ 14.9 7 % General and administrative expenses increased by $14.9 million, or 7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The change was primarily due to the partial release of the valuation allowance and establishment of certain deferred tax assets. 56 Table of Contents Liquidity and Capital Resources Our operations are financed primarily through cash flows from operating activities. As of December 31, 2024, we had cash and cash equivalents of $66.9 million and marketable securities of $543 million.
The change was primarily due to the partial release of the valuation allowance and establishment of certain deferred tax assets during the year ended December 31, 2024. 53 Table of Contents Liquidity and Capital Resources Our operations are financed primarily through cash flows from operating activities.
Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Revenue for other arrangements entered by the Company is generally recognized over time as services are performed. Income Taxes Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards.
Cost of revenue share fee Years ended December 31, 2024 2023 $ Change % Change Cost of revenue share fee $ 108.1 $ 88.6 $ 19.5 22 % Cost of revenue share fee increased by $19.5 million, or 22%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cost of revenue share fee Years ended December 31, 2025 2024 $ Change % Change Cost of revenue share fee $ 127.8 $ 108.1 $ 19.7 18 % Cost of revenue share fee increased by $19.7 million, or 18%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Historically, our principal uses of cash and cash equivalents have included funding our operations, capital expenditures, repurchases of members’ equity and more recently, business combinations and investments that enhance our strategic positioning.
As of December 31, 2025, we had cash and cash equivalents of $85.7 million and marketable securities of $614 million. Historically, our principal uses of cash and cash equivalents have included funding our operations, capital expenditures, repurchases of members’ equity and more recently, business combinations and investments that enhance our strategic positioning.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
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.
Other income (expense), net Other income (expense), net consists of certain non-recurring non-operating items, 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, and subsequent revaluations of the tax receivable agreement liability.
Summary 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.
Summary and discussion of the years ended December 31, 2025, 2024 and 2023 (in millions) 1 : Years ended December 31, 2025 2024 2023 Revenue $ 900.8 $ 770.5 $ 613.6 Operating expenses: Cost of revenue share fee $ 127.8 $ 108.1 $ 88.6 Cost of direct salaries and benefits $ 192.6 $ 173.0 $ 142.8 Research and development $ 72.4 $ 73.4 $ 74.4 Sales and marketing $ 54.4 $ 48.8 $ 43.5 General and administrative $ 232.4 $ 217.5 $ 222.4 Depreciation and amortization $ 34.6 $ 26.5 $ 21.6 Operating income $ 186.5 $ 123.2 $ 20.1 Other income (expense) Interest income, net $ 24.4 $ 32.5 $ 29.0 Other (expense) income, net $ (4.8) $ (89.1) $ 1.5 Income before tax $ 206.1 $ 66.6 $ 50.6 Income tax benefit (expense) $ (37.9) $ 158.6 $ (0.7) Net income $ 168.1 $ 225.3 $ 49.9 1 Note certain numbers in this table and accompanying discussion do not foot due to rounding differences Revenue Years ended December 31, 2025 2024 $ Change % Change Revenue $ 900.8 $ 770.5 $ 130.3 17 % Revenue increased by $130.3 million, or 17%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Under Accounting Standards Codification (“ASC”) 606, Revenue Recognition, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
The Company’s funded portion varies based on total number of Members enrolled each contract year. 56 Table of Contents Under Accounting Standards Codification (“ASC”) 606, Revenue Recognition, the Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services.
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.
As of December 31, 2025, the Company had a remaining borrowing capacity of $67.8 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 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.
As of December 31, 2025 2024 Change % Change Total CLEAR Members (in thousands) 37,998 28,906 9,092 31% Total CLEAR Members were 37,998 as of December 31, 2025 and 28,906 as of December 31, 2024, which represented a 31% increase. The year-over-year increase was driven by CLEAR1 and CLEAR+ Member enrollments.
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.
Cash Flow The following summarizes our cash flows for the years ended December 31, 2025, 2024 and 2023 (in millions): Years Ended December 31, 2025 2024 2023 $ Change 2025 vs 2024 % Change 2025 vs 2024 Net cash provided by operating activities $ 372.5 $ 295.7 $ 225.0 $ 76.8 26 % Net cash provided by (used in) investing activities (97.1) 113.8 (15.5) (210.9) (185) % Net cash used in financing activities (257.3) (401.5) (216.0) 144.2 (36) % Net increase in cash, cash equivalents, and restricted cash 18.0 7.9 (6.5) 10.1 128 % Cash, cash equivalents, and restricted cash, beginning of year 70.3 62.4 68.9 7.9 13 % Net exchange differences on cash, cash equivalents, and restricted cash 0.1 — — — 0.1 218 % Cash, cash equivalents, and restricted cash, end of period $ 88.4 $ 70.3 $ 62.4 $ 18.1 26 % 55 Table of Contents Cash flows from operating activities For the year ended December 31, 2025, net cash provided by operating activities was $372.5 million compared to $295.7 million for the year ended December 31, 2024, an increase of $76.8 million.
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.
Cost of direct salaries and benefits Years ended December 31, 2025 2024 $ Change % Change Cost of direct salaries and benefits $ 192.6 $ 173.0 $ 19.6 11 % 51 Table of Contents Cost of direct salaries and benefits expenses increased by $19.6 million, or 11%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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.
Cash flows from investing activities For the year ended December 31, 2025, net cash used in investing activities was $97.1 million compared to net cash provided by investing activities of $113.8 million for the year ended December 31, 2024, a change of $210.9 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.
Cash flows from financing activities For the year ended December 31, 2025, net cash used in financing activities was $257.3 million compared to $401.5 million for the year ended December 31, 2024, a change of $144.2 million.
In many cases, we offer limited time free trials to new Members who may convert to paying Members upon the completion of their trial. Our future success is dependent on those channels continuing to drive new Members and our ability to convert free trial Members into paying Members.
In many cases, we offer limited time trials to new Members who may convert to paying Members upon the completion of their trial.
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 certain Members through a partnership with a credit card company.
The Company recognizes these revenues on a per transaction basis upon completion of each enrollment or renewal. The Company also generates revenue in relation to CLEAR1. While contract structure may vary by use case, these deals are typically multi-year agreements that drive revenue through transaction fees (charged per use or per user) in addition to an annual platform fee.
While contract structure may vary by use case, these deals are typically multi-year agreements that drive revenue through transaction fees (charged per use or per user) in 49 Table of Contents addition to an annual platform fee. In addition, they may also include one-time implementation fees, licensing fees or incremental transaction fees.
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.
Active CLEAR+ Members We define Active CLEAR+ Members as the number of members with an active CLEAR+ subscription as of the end of the period. This includes CLEAR+ members who have an activated payment method, plus associated family accounts and is inclusive of members who are in a trial or in a billing grace period.
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.
Non-GAAP Financial Measures In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow as non-GAAP financial measures that management believes provide useful information to investors.
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.
This change was primarily due the TRA liability of $90.8 million established during the year ended December 31, 2024. 52 Table of Contents Income tax expense Years ended December 31, 2025 2024 $ Change % Change Income tax (expense) benefit $ (37.9) $ 158.6 $ (196.5) (124) % Income tax expense increased by $196.5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
During the year ended December 31, 2024, the Company repurchased 13,795,655 shares for $272.9 million. The repurchased shares were retired. As of December 31, 2024 and February 21, 2025, $52.7 million and $232.6 million, remained available under the repurchase authorization.
During the year ended December 31, 2025, the Company repurchased 5,294,598 shares for $126.3 million. The repurchased shares were retired. As of December 31, 2025 and February 20, 2026, $126.5 million and $250.3 million, respectively, remained available under the repurchase authorization.
Other income (expense) Years ended December 31, 2024 2023 $ Change % Change Interest income, net $ 32.5 $ 29.0 $ 3.5 12 % Interest income, net increased by $3.5 million for the year ended December 31, 2024 compared to the year ended December 31, 2023. The change was primarily driven by higher interest rates.
Other income (expense) Years ended December 31, 2025 2024 $ Change % Change Interest income, net $ 24.4 $ 32.5 $ (8.1) (25) % Interest income, net decreased by $8.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
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.
The Company will retain the benefit of the remaining 15% of these net cash savings. 57 Table of Contents 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.
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”).
Operating Expenses Cost of revenue share fee The Company operates as a concessionaire in airports and shares a portion of the gross receipts generated both from the Company’s Members and from TSA PreCheck® Enrollment Provided by CLEAR with the host airports, retail locations, and/or airlines (“Revenue Share”).
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,.
Reconciliation of Net Income to Adjusted EBITDA and Net Income Margin to Adjusted EBITDA Margin: For the year ended December 31, (In thousands) 2025 2024 2023 Net income 168,147 $ 225,274 $ 49,888 Income tax expense (benefit) 37,923 (158,647) 724 Interest (income), net (24,383) (32,509) (29,013) Other expense, net 6,577 90,850 107 Depreciation and amortization 34,624 26,480 21,649 Impairment on assets 362 723 4,975 Equity-based compensation expense 38,932 35,339 37,293 Acquisition related costs — — 457 Adjusted EBITDA $ 262,182 $ 187,510 $ 86,080 Revenue $ 900,779 $ 770,488 $ 613,579 Net income Margin 19 % 29 % 8 % Adjusted EBITDA Margin 29 % 24 % 14 % Reconciliation of Net cash provided by operating activities to Free Cash Flow For the year ended December 31, (In thousands) 2025 2024 2023 Net cash provided by operating activities $ 372,452 $ 295,677 $ 225,033 Purchases of property and equipment (29,340) (12,009) $ (25,555) Free Cash Flow $ 343,112 $ 283,668 $ 199,478 Revenue The Company derives substantially all of its revenue from subscriptions to its consumer aviation service, CLEAR+.
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.
The change was primarily due to a $1.0 million decrease in employee compensation costs, inclusive of a $1.3 million decrease in severance related to the 2024 closure of our Israel office, a $0.7 million decrease in non-cash impairment of certain assets, offset by an increase in professional fees of $0.8 million during the year ended December 31, 2025.
Although we have historically grown the number of new Members over time and successfully converted some free trial Members to paying Members, our future success is dependent upon our ongoing ability to do so. 46 Table of Contents Ability to retain CLEAR Plus Members Our ability to execute on our growth strategy is focused, in part, on our ability to retain our existing CLEAR Plus Members.
Our future success is dependent on those channels continuing to drive new Members and our ability to convert trial Members into paying Members. 44 Table of Contents Ability to retain CLEAR+ Members Our ability to execute on our growth strategy is focused, in part, on our ability to retain our existing CLEAR+ Members.
We expect that future capital expenditure will generally relate to building enhancements to the functionality of our current platform, equipment, leasehold improvements and expanding our operational footprint, and general corporate infrastructure. 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.
Share Repurchases 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.
The change was primarily due to increased employee compensation costs of $28.6 million caused by wage increases and higher average employee count. 55 Table of Contents Research and development Years ended December 31, 2024 2023 $ Change % Change Research and development $ 73.4 $ 74.4 $ (1.0) (1) % Research and development expenses decreased by $1.0 million, or 1%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Research and development Years ended December 31, 2025 2024 $ Change % Change Research and development $ 72.4 $ 73.4 $ (0.9) (1) % Research and development expenses decreased by $0.9 million, or 1%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Total Bookings Total Bookings represent our total revenue plus the change in deferred revenue during the period.
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+ subscribers plus any accrued billings to partners.

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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 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.
Biggest changeInvestments in Marketable Securities We had marketable securities totaling $614.4 million as of December 31, 2025. 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.
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.
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 $2.8 million that would be recognized in accumulated other comprehensive loss within the consolidated balance sheets.
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
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, 2025. 58 Table of Contents
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.
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 $85.7 million as of December 31, 2025.
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.
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, 2025, we had no outstanding borrowings under the revolving credit facility.
Removed
Our investments are made for capital preservation purposes and we do not enter into investments for trading or speculative purposes.

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