YOU - Earnings call transcript Q2 2021

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Operator

Good morning. Welcome to the Clear Second Quarter 2021 Earnings Conference Call.

We have with us here Ms. Caryn Seidman-Becker, Co-Founder, Chairman and Chief Executive Officer; Ken Cornick, Co-Founder, President and Chief Financial Officer. Please be advised today's conference is being recorded. to relating that expectations. to like contain discussion also statements forward-looking future would remind today's you will I events and

can these could to that recent find company's You results actual SEC cause filings. differ in projections the from our most materially factors

most included found the Chief in it With I'll comparable addition, today's Reconciliations we've in over discussion. measures Clear. Caryn? of turn Seidman-Becker, Officer and non-GAAP X-K. Executive some In GAAP Co-Founder, to measures financial financial our to directly be Chairman Caryn can that,

Caryn Seidman-Becker

Thank today frictionless quarter products. chance BXB business you. show our on morning along call review to firsts public Good joining morning, letter with of everyone. Thank engaging was growth. record our entertainment enrollments a including subscription-based earnings reaccelerating This for Clear as business our is sports record road business mobile our our growth for website. seeing both ClearPlus are them. side. in you talked platform This on as for Travel and I company. we us shareholder we our platform and a earnings the released our hope and a Clear's on dual you've subscription experiences there that significant travel is number members traction The seen app a about with Pass enterprise BXC first with had a Health of strong the and engines all

of to strength million, quarter. are strength our record That a third bookings are in our We Clear. and $XX $XX for into seeing is pleased with million third the represents quarter guidance we which quarter second reflected the quarter

space the with experiences. the two become solution flexible in obsession with uses. as and were Post approximately, by the safe has a product We to most and quickly testament our testing Pass recognized Health recently over useful a Our Washington million leading vaccination frictionless

well travel vaccination enterprises can their safe as highlight to link partnerships State from our a Clear venues. are the to validation partnership travelers new as want Pass seeing number where of with the both Health around We are a passengers from I Hawaii -- safe we of integrated uptake. to XXX,XXX program all Clear seeing and use Roughly partners. airlines brand, eligible Clear strong solution requirements. the bringing solution a is quarantine to are our trusted to vertically monthly avoid

vaccination growing businesses leveraging Clear. secure identity is Clear bringing member announced built trusting New millions. and our and all-in-one local City is Francisco validate and are San Our frictionless San the experiences York and for acceptance base Francisco City residents. on others why they on status network It Friday, joins State in to of to solutions platform New York

closely While one its flows can't the predict delta we on and virus, travel monitoring impact trends. and of the the ebbs are potential variant

not airline the our any also out date some aware are of impact but in bookings, of are days that of I addressable have would our total on to We in seen point around very our commentary early the travel market. penetration we business.

are that and With than past it more efficient to ever focused over in Q&A. let's to Additionally and are what and few Clear while businesses solutions, remaining we institutions and dependent open months on way on touchless seen over more turn is looking frictionless the for safe a experience. Clear travelers have more are that,

Operator

Instructions] [Operator you. Thank you. Thank

question. Brian Essex Goldman Our with first Please from is question your Sachs. the proceed of line

Charlotte Bedick

Brian. questions. for Hi. on Thanks taking Charlotte for is Bedick This the

consideration guys think to or like are Health how was of for IT do a So, and Do Epic, vaccine the that? Athena, vendors app to you healthcare market in also the offer maybe better unfold? I the envision you wondering, you positioned apps federated

Caryn Seidman-Becker

status today, secular turnkey a for Look, hi. we global And solution. trend healthcare to go trusted is information and looking beyond does and access having control and of secure but is their vaccine far partners a are believe you, Thank that people and that. that partners it

seeing are Pass, and on proven of focused we Health coming businesses back what are that so lot better. is partner which is that And new has interest seeing ready a scalable

local for So in solution one building doing private in a industry way. nationwide and interoperable crucial, state is governments and all an and it

just status, card, So, are about and have this isn't vaccine office, but employee, your building you, your going into are your access you an status. you vaccine you your

is power platform of the creating this all-in-one about the again, identity solutions. So and secure

and different the focus that of solutions creating lot drive is experience. a scalable there's apps there, all-in-one experience the trusted partner our think I customer out and

Charlotte Bedick

help better Pass much guess this could accounted I a follow-up, us Great. Health for understand basically how as you And quarter?

Ken Cornick

breaking So, revenue. that are lines business on gaining we line business. of significant as specific out we traction of But within not are noted,

Caryn Seidman-Becker

also you seven today out would announced saw crossed yesterday. just point as I that members we that what million we number

the And both from accelerated so obviously growth as the side being the member travel driven platform well side. is as

Charlotte Bedick

Great. I’ll much. queue. the Thank you so reenter

Operator

of Michael your Wells with Fargo with line Securities. the proceed Please from questions. is question Turrin next Our

Michael Turrin

Thanks. on earnings first report Hey. Congrats Good here. morning. the

mentioned XX% to more you you of that add yesterday. commentary experience late? enrollment Are you are trend? growth finding quarter maybe on more sensitivity around You travel the just seven like how it given around million enrollment just Can higher growth just looks conversion improved expect rates reached you'd

Ken Cornick

have including saw give We as of But you we all guidance Yes, seeing gave to on strength into release. metrics fairly and an are throughout specific members. not the going top QX in general, we the QX seen line are widespread and conversion. acceleration in so guidance the in

Caryn Seidman-Becker

add so side, that to both travel -- be with conversion, been really the on but It secure a There's business, it than more -- never platform What partners really been call note, that that add does is it experiences, is are right? that And to to more said looking wanting more important and you side time platform. drive want back, members Just the use for the hi, predictable, identity the experience There's places in on intent. to is retention, in and bring of that. more members our ever growth never is a and Clear and more touchless to morning. we harder to it. people have the glad And seeing are flywheel. for you on frictionless a to win this and on predictable It travel important.

Michael Turrin

Ken maybe the just then, is degree visibility into you terms to And QX have just What's I the you. Thank help in of set here think you model? touch color first And guidance any can with can you Helpful. given guidance useful just investors? around the on add macro point philosophy, you a overall your of from additional provide just assume are anything perspective? just the providing, level there is

Ken Cornick

Sure. Yes.

a we the general, we're we based have on as convert it's we well quite so in a year for good retention, And trends trials a free today. number into So you as know, of estimate our backlog, seeing best continuation as visibility renewals prior backlog have visible of paid. that have that today. from It's what's into

visibility that we of expected this the are paying people So that already to customers into the joined do quarter. convert have have

membership quite So on I partnership I growth would which visibility. have that, a tail of say, American it we nice X, out to have fairly launched the and well. as continues strong launched point would July good Express also

well. so to as continue we And that expect

Michael Turrin

great. Thank you. That's

Operator

the with your of is Group. Dana question proceed line next from Advisory Telsey Telsey Our question. Please with

Dana Telsey

rebound. bit results rebound. airports American rebound? for different Express, Any – terrific there? the in all what about service seeing a little you you travel leisure to what nice its areas. in about the business need? and Can you're seeing particularly has way you. been the on little partnerships congratulations talk regarding rebound a any are sign-ups Ken, and I've Health and Pass in and essential versus given the you the I meant of Thank And travel? What mentioned to talk business Can bit it morning just lately been other new on anything see potentially note, you Good

Caryn Seidman-Becker

care bringing I'll Dana, in over about and that experience to the start, it massively release who ambassadors, talked important deeply enrollments and frictionless great in our well the staffed being about seeing verification then Ken. From So are and and we really been with important that so, the what we I'll both airports people, – in has experience. really turn

members, NPF to Lane, capabilities, or Gate potential whether our members. other Home be driving Clear the travelers as with assets share or a the available app, the being it as Clear great to or well So for potential

does it really and And with our start the so brand. people

– seen of We this are bit a up seeing travelers you've summer. airports coming numbers, come million little they've back X.X to through late

traveler. a X.X traveler of driven traveler. from is million is in That think and rebound, although know XXXX. are term know they that We a the leisure is the off difference which just really hefty we between don't near by I a a leisure, think business a I peak

right touchless it's a that break seeing, really can't what are But now. from at seeing we frictionless think predictable. we but so leisure I for appreciation are looking And down you disproportionately deeper

gaining so and to And airports And has really volume and a better gotten the been month also Clear past we perspective. through the has that's in from offering and more that the change has travelers. have technology continued share the year become robust, every meaningful

offering, So we great there bigger are and Clear to the bringing team and a from Clear life. and out seeing a need the technology a perspective very for experience ambassador's what strong is rebound

Ken Cornick

or perspective, an just an from we diverse age geographic qualitative a definitely from customer a mean, than base And little hopping before. have new member from we base into I are color, Yeah. more perspective, a airline perspective,

So it traveler not is only. the business hard-core necessarily traditional

we definitely seeing base diverse a than membership did more today, We XXXX. are in

Caryn Seidman-Becker

just Dana, Health repeating the mind Would then, you you on asked Pass And that? Sorry. something piece.

Dana Telsey

for Pass seeing that evolving? Clear? terms you traction Sure. do the when you you How customer started you of Pass, what that are different Health for base expect On and Health developing expand? how see Any from in

Ken Cornick

venues, to We needing in are our restaurants. in order to order terms solution, in of to fairly demand work widespread to back seeing in get coming open order really safely, open in,

enterprises, businesses, And from diverse small to so fairly is venues. it to large to really

demand, are our so incoming for we And fairly strong solution. seeing

Caryn Seidman-Becker

And or great and the enrollment. what going acceleration and I have to control we using partners your important. the and may the digitize not do The card being you think safely more from Yankees would apart really of tonight Mets. might from or need add become Brooklyn I separate But partners having with is your for it in vaccine that, it Nets card to it's hence and so just the want you healthcare available Having a just started two expectation. at back the to your think, -- vaccine business, to relative to information. to I two-sided those is reopen whenever pieces, an help you access partnered be upload Because ability of able we partners, to

also is it enterprise individual APIs towards seeing to ability these really So our driving well both important. integrations And as seamless as you're partners. and create through

so And …

Ken Cornick

is We that do think variance a direct-to-consumer… the positive

Caryn Seidman-Becker

Right.

Ken Cornick

organic something, upload to your Clear we of cards is the expected early app on. vaccine … not that think I

Dana Telsey

Thank you.

Operator

Capital. Ananda The next question Loop your the is of Baruah from with question. Please proceed line with

Ananda Baruah

guys. Thanks questions. very morning out of for solid from couple Hi. taking Good I Yeah. the Congrats the guess a execution the me. gate. Yeah, on

Did the surprises Guys on negative you or I the And initiations a of see positive either ClearPlus The ClearPlus. of the And have Thanks. year? is might or any for follow-up? or for moved quarter then, you be key first action what signposts remainder through as some the otherwise?

Ken Cornick

markets had in think launching versus American drive from a geographically really was the nice ClearPlus were strong growth, of fairly broad-based, very and everything general We to and strong extremely so, XXXX. number continuing very, and actually I up diverse partnership, Express that representation. was

And markets are were that results many actually up down with versus XXXX that we achieved but XXXX. versus so some these still

are to other that geographies markets, potential extent the lagging here. so for the the still to And to start future catch-up acceleration there's from that

Caryn Seidman-Becker

or then, sort and regions. quite were I to two of there parts more were of would cities, are it two parts country XXXX. tale add that are the There I'd still of down that call that the than coastal strong

going backs. And I win little was think when so maybe also think although, a that you surprising on. I what's probably see shouldn't be

they come back. hope who left anybody miss it and airport. in would fact want you did, they in or online, But did you they to XXXX did it So in XXXX the that

And and the been strength so think talks brand I year who and of have Clear the left back. the really last experience people coming love that those to that

Ananda Baruah

there the with platform was is like would broad-based beyond helpful. nicely be really – that? doing And give uses nice the how you in That's really really kick-off guess in Health And on just question any just guys context the then biggest Thanks. you well. a I Are Sounds letter, called shareholder of And that helpful. platform Health occur could is sort I while. Pass? seeing guess Pass you also bookings,

Ken Cornick

Sure.

fairly the existing clearly XXXX. though many it are would platform of from frequently perspective in traveling our I than the say travel peak broad-based. utilization, less a is in they What On is members did

has ways to utilization So quarters perspective really although, every the it into positively is members. there's recovery, up quarter this been a and long for it past sequentially go existing trending from still a from several

We also the saw throughout CLEAR acceleration in an quarter. Plus

recurring. there's be all use many And the of Clear an didn't vaccine more and your range timing have end in on it cases quarter. handful towards if the that use quarter so to many are you've side, app, loading in platform use more therefore, came you on it the they card the the but use new the members than the into given of times then Clear just enrolled. at the may you're up quarter opportunity And cases then a And that of don't

So going do into And the Dubbi did then office like you one-time use. for was some might the concert Ubbi where that day. it a every events one-time that back we there's example,

you drive which new earlier. using Caryn our which strategy bring And it about events, which drive flywheel so cases and part on is enrolling members, of that And partners bring new then new obviously that's talked which on are use is that once.

Caryn Seidman-Becker

if to become is XX which on talked about part Clear the and you from I fact back and in going office times a day. a it it using get roadshow, habit go using habit. your to do is to are XX into daily were it which a times we your in people And to airports what what really of is that think daily year, goes average in wanting

launched past event driver going CLEAR Ubbi of and was back of obviously through the not obviously to power the coming one-time partnership year. happening partnerships Dubi Ubi a sporting Dubbi over wasn't that – lot But sure which If partnerships or a that we so you're Lane, a the I'm both started like Walmart. that

United So Hawaii then with and of Delta partnerships – the of power broad-based both travels and the State safe Hawaii. with

obviously So big opportunities. these enormous are partnerships with

have little lot drivers you well a big drivers. of as as So

Ananda Baruah

Thanks. really appreciate helpful I context. it. That's

Ken Cornick

Thank you.

Operator

with is next from Paul proceed question. [Operator Instructions]. question with Chung The JPMorgan. Please your

Paul Chung

taking and the Hi, thanks markets. public to for my question welcome

to travel. very in guide So nice up, in acceleration strong first pretty pace, subs particularly in XQ bookings and points

tough you to in pent-up So if and about hit today that comps think we pace about XXXX pace thinking I year nice then to guys I QX separately how the and linger? XQ. And the How should possibly quantify. pace some XXXX a follow-up. demand in are fiscal as sub we And have factoring get continues Delta from know in that's here add summer? tougher

Caryn Seidman-Becker

over products, turn Yes are it change. the bigger over to and which partners drivers big the more then I'll Ken, more Plus network, for CLEAR business and is next start year the

travel. of top on days that are in big these think the market, I early so addressable still still total to opportunity And penetrate

map XXXX look of.. XX so and in we terms of all And at rest the of -- as XXXX we those out

Ken Cornick

are Yes also any giving you thoughtful but particular we bookings we've comment last saw. made Southwest from Delta we which week. of the in seen and had for not right and QX, we we it guidance today that impact variant now seeing the are commentary are And

we anything thoughtful are but And at looking so today. not seeing are it, we and

Paul Chung

other side, discussions media on on Given of airport are Health end Thank here IPO to those the on XX airports pace accelerating? by with the nice hit the then And that. you. the Pass, for some year? Thanks coverage you. Got you are and still the

Ken Cornick

year our hit will pipeline practice do of sign contracts. versus numbers those not we announce the be we're we have We airports after next. and So on specific giving airports what to this a of, will guidance

Paul Chung

you. Thank

Operator

comes next Brian the Our with question. Goldman of question from line your of please proceed Essex Sachs.

Charlotte Bedick

of us the color Essex. Have is Again second around Hi. you it in TSA Brian during A you to question launch now launch this that and Can half XXXX delays, Charlotte any any expected on any roadshow for experienced in it's mentioned, give the Bedick the you know hiccups? was to pre-check. quick rollout? I going announced you QX. anticipated on that

Ken Cornick

No launch. it's we specific going process back know the because and track. half honestly we It to -- a date delays. is still said didn't It's on exact

hard We TSA program and with partnering as get we quickly launched are possible. working the are to as

Charlotte Bedick

you. Great. Thank

Operator

are you. no Caryn turn more Thank to I for back There the will closing questions remarks. on line. the call Seidman-Becker,

Caryn Seidman-Becker

to be we're Thank the you public excited and the joining thank welcome appreciated and for you us to today. here. We markets everybody

ever. with than frictionless and more for and an delivering as pleased second-quarter is the Clear are for about enormous We our is demand excited the future. today of safe important us. these And our experiences experiences talked results about touchless, opportunity vision we Today

thank So you all.

Operator

Thank This conclude today. us today's you for conference. will joining

You participation. may lines disconnect your thank time. We for your you this at

Clear Secure (YOU) 17 Aug 212021 Q2 Earnings call transcript