Earnings call transcript Q3 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to CLEAR Quarter 3 2022 Earnings Conference Call.

We have with us here, Ms. Caryn Seidman-Becker, Co-Founder, Chairman and Chief Executive Officer; and Ken Cornick, Co-Founder, President and Chief Financial Officer. Please be advised that today's conference is being recorded.

I would also like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations.

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

our most we've Reconciliation in measures today's addition, included non-GAAP found measures In some can be to comparable directly in the X-K. GAAP financial financial discussion.

Seidman-Becker CLEAR. that, Caryn? With Caryn turn Chief and call the Chairman I'll Executive to over Co-Founder, Officer of

Caryn Seidman-Becker

call. to and Hello. welcome our third XXXX Thank earnings you, quarter

travelers more quarter to was beloved important strong. navigate than extraordinarily CLEAR look were an as third to Our season. frictionless ever CLEAR's travel experiences challenging

expansion represents Our in robust Same-store by results CAGR levels pre-COVID a enrollment contributed enterprise this platform product our which trends. verification airport to from powered XXXX enrollments partners with to XX%. experienced and of CLEAR were our quarter. up Plus CLEAR year-over-year, suite XX%

over CLEAR addition, visited quarter, power locations, In members Plus of CLEAR network. in of half who demonstrates the verified which the the further multiple the

we seen serve market recent all In to per for total are travel predictable travelers want time and people addressable more and for one one week. creating per have At we year time travel friction-free products years, experiences. CLEAR, who an to expanded

Plus Rico In including we XX we our Netherlands. CLEAR Juan, the in Canada, Puerto launches as recent addition operate San XX to to welcome today, network lanes, our airports, now reserve Germany and

restaurants. can reservation airport for as a do where make is free to for they travelers Reserve security just they

have capacity secular to rental global to in travel shift shifted there lines demand for market, trends, right. up the extrapolating patterns increased been thoughtful we travel, work hybrid always the blurred, the seen leisure experience the data shift been to business indicating shared economy recent about have demand and between has the While several has points and a for structural believe by we that between created where and

believe travel it stated of we and share vision to was morning's important XXXX, and which our start with this the platform be the interoperable. In with built preeminent consumers CLEAR's being platform CLEAR experience, slide identity pitch part identity the thought experience. is anywhere. identity and of and from their earnings a obsessed enroll obsessed to affirm in power to grow We have allows it once our release, into as In this important original customer an the view, platform customer to

deliver ability by connect to This friction-free customers, you, make for future is you that a the experiences enrollment moment. over things in here-and-now you their users. adoption million Powered is with driving allows our dreamt members to and expectation. to the CLEAR to The XX our now friction-free easy partners new all XXXX we

the travel, including believe We yet economic will the we remain environment, demand thoughtful sustain. continue of for to experiences,

safer, efficient and and for the of enable We on in focused also our is easier bookings We growing network experiences, free remain foundational, believe travel and and deployment physically It's these cash growing and digitally. beyond more both economically members, identity that flow. early days technologies.

can model we adjust as changing to As conditions demonstrated have a has historically, market and necessary. business CLEAR nimble rapidly

to amazing the team done reality. thank continue CLEAR who to the I CLEAR to has work want to bring incredible vision

With over that, turn Ken. I'll call to the

Ken Cornick

everyone. Good Caryn. Thanks, morning,

road. to Business guidance the Day CLEAR travel and quarter proposition our as performance to and continues accelerated work Our hit returned folks network financial as value third exceeded Labor expand. post actually the

to we've strong our trends travel return deeply depressed levels leisure been the strength the travel business complement experiencing, business. to providing added expect We of from

the experience XXXX XX.X%. XX% member a the growth in CAGR Of and of Overall, XX%, strength XX% quarter third represents of net quarter retention from XX% approximately this Reflecting levels. CLEAR in same-store pre-COVID bookings was growth. network, the

remain above retention We low Plus, CPA XXs. margins impressive continues expectations high the and long-term and across including CLEAR of our incremental to economics of by are encouraged cohorts. the upper unit Retention

Free The trailing Platinum a cash $XX million XX-month bringing cash free complete was includes flow $X.X million. to for Express flow our $XX contract. American the positive annual million, quarter cycle for

well the American flow Express free approximately cash cash trailing free payment as contract. year to include million flow as $XX XX-month for Platinum X quarter's This the

We one-thid in expect free than expense, the EBITDA adjusted OpEx, doubled continued roughly growth grew bookings in leverage. flow year-over-year, in our of culture as our growth warrant growth Adjusted operating positive spend In quarter efficient yield more QX, and net on and income a and sequentially, year-to-date effective the revenue cash XX% excluding our and rate. significant third of basis. is United

exercise in were Airlines A These in Class invested as warrants. our outstanding reflected been shares. million XXXX In filings and October, warrants, have representing warrants X.X United in issued SEC

to United innovation focused and with experiences customers. to friction-free new bringing travel continues partnership Our be on their

settled special and $X.XX an million $XXX used equivalents price cash as September XX in $X repurchase and at average Total million RSUs. announced $XX.XX, we approximately Today, cash net share of was invested a as well cash reflects for dividend. as of

allocation IPO noted we our and the long-term believers cash As end, prospectus economic we are maximize flow returns. letter, to capital free fervent growth, in in

special In tool return another share to to dividend addition our to capital opportunistic shareholders. repurchase cash program, the is

We opportunities will growth, organic growth pursue continue shareholders. investing and opportunistically in capital return to inorganic

underpinned good revenue environment, business, recurring economic model. we into In our subscription this have by visibility uncertain our

total launch build GAAP million. of $XXX expects to $XXX million, throughout Our PreCheck, $XXX program expected an TSA to $XXX revenues and of expect to With we of million QX from fourth bookings this XXXX. quarter revenues million guidance soft

now go Q&A. to We'll

Caryn Seidman-Becker

Q&A? Operator,

Operator

question first Group. Please with Our from Tesley Telsey proceed Dana question. Instructions] [Operator your with comes

Dana Telsey

It's with mentioned, business quarter. Two that think, you last Congratulations travel had the along leisure Nice things. Caryn, to on I very nice Palooza, see travel. the Travel results. recovering

planned? update but quarter's? do envision what is slight do we out? building should a seasonality And you ticked retention that rolling be is How there the just seeing down there? rate that excellent, is On launch, How TSA that see you're of the revenues it from on you and the Express PreCheck how mindful last bit American lastly, there? Any for

Caryn Seidman-Becker

a into There's launch. let on general. then I'll a bit give start and little in seasonality static. let talk PreCheck with little Dana, the the to Ken some retention, I'll also me insights

So hopefully, you can you me hear hear me okay? okay, Dana, can

Dana Telsey

hear you great. I

Caryn Seidman-Becker

I'll to right showing trends And sort of it then from but up you saw over a general, general being that is seasonality upside And not separate in just now. the do bit. travel retention, Ken. turn turned little think, I historical observation, are down a Historical

Friday coming to right, to office it you through Monday, see, Thursday then earlier. through So just the and very that's traveling different whether used than be starts people Thanksgiving Tuesday

didn't saw -- this just school and travel, after would up. cross pretty in are And seasonal are historically, patterns, drop off happen Day a kids big go people and general, we so back That historical you as Labor I geared year. not say seeing getting just to

So interesting following on history what's reflection is not the to because be a out, watch, it shakes any new going right year seasonality will to trends of appear as now. that

comment do want the you Ken, retention to on

Ken Cornick

From have to slower, of are and perspective, tension ago, the a to expectations how we retention. It's would upper talking quarters we thought. there's above retention as I not that would of about a into seasonality couple And our our than back started happening said, think we retention net migrate expect quite frankly, long-term we XXs. levels really current

back more been been but the that. function than of -- we in about. a what has talking the to of impact So retention expected, a there's not stronger we've It's seasonal to

Caryn Seidman-Becker

travel to today, and offer to of space tools terms more as the Gate, value per in I bringing think CLEAR been behalf to consumers. easier can so a it's year make I like travel at we get Home to we'll experience with details. to on per And week whether there's safer one about bringing much with safe stand-alone, one that that we other customer-centric Reserve, together we've time doing and and time we think travelers. PreCheck Plus, be the PreCheck closer Plus, started on American always be PreCheck, talk But of launch, CLEAR to with say you focused And the PreCheck

are bring incredibly product we this to to excited market. So

customer read enroll. on enrollment whether obsessed customer would in it's Again, communication a experience, to value-based our can online, post-COVID certainly, pricing. be of that or I you just centricity being with And culture and harder environment, the focus

want our to live ambassadors. be So We with to want we our brand accessible.

really we're and product we'll bringing so to be details closer to market, more get we excited to bringing as And be this launch.

Ken Cornick

And your update. just Amex last question was an

quarter, cycled five in we've quarters. down the you saw As

And so We completed the we've reimbursed year. contract accrual. first for the

still It's to And the so it's on think, our X, with additive pleased going we're strong. year TAM. been, We're very we partnership.

Operator

with Chung Paul from Please comes question with JPMorgan. your question. proceed next Our

Paul Chung

some penetration opportunities And seeing So launches, the can year, then we what What you're of just of airports your seeing And targeting? end count rates kind momentum? are the lanes where of airport you at as pipeline for kind XX add airports and next to are and think about we kind within base, today. year? key installed expect on highest nice are more you're which to of

Caryn Seidman-Becker

today, airport XX, to San to did excited Juan, be So bring really we clear that announce Puerto we're Rico. number

week. You see announcements will other this

As announce launch. until you we don't know, we

U.S., from before we'll to see look bring I to said hovering American year through the the I CLEAR that meaningful opportunity And end think XX I at you and so are that travelers Plus think in the predictability. CLEAR this XX. And having focus, is it's you around our lanes airports really when the to XX experience top a

it see You NPS. the in

is. travel hard how see You

to safe all a they So the to frankly, those think and them. to bring as year I think that are expect of next we I up, new we in airports, speaking it it that lot talking network, and and this talking, we well. airports, And are of their had are travelers growth to it's year want right? quite in we've Travelers say want

Paul Chung

you benefits, think airport then guess, growth assume of there? salaries investments term? of I And percentage driving should there improvement with the about And that and of most then just leverage on sign-ups the year? overall And how kind some where the kind about costs base, are of and direct think term follow kind about as longer do near as of new sales. seeing next How sales steady the cost a we up and come we a the as into pace to we of And seeing in percentage of down OpEx pace? what's think

Ken Cornick

Sure.

would of about to to from with new a that cost that to function the that's we we depressed did. have a year, this the we of bring from And back a growth level. throughout the talked normal how -- here, salaries, going starting something those is came which airport, So be level And was launches.

So we talked and that additional airports, new open disclosure we today. certainly in about staffing, there'll when be the

I revenue going our continue growth a of about we not year, I'm versus have give leverage on and is to think expansion. general, one-third shake of this our to on operating expense And year-to-date focus basis, and on a a out economic quarter efficiency this rate demonstrated we will In but next margins really growth specific was ours. strong that focus guidance quarter. strong margin where huge

Caryn Seidman-Becker

to add ahead just leverageable. one is also OpEx been that, operating that piece, at would of So highly all back-end of a place airport I right? the expense growth, but in the is investment lot an the put has

Operator

question with next Our Unger comes Wells Please your with proceed Fargo. David question. from

Unidentified Analyst

some trying mix? family meaningful Can would enrollments, that's is seeing get to of from in just just the percentage then Great. I'm And love bookings How to in channel towards yes, on and we trending XQ. mobile person, you're which sense most the just there. versus enrollments a the enrollment of double-click speed? on success details the friends contributing to

Ken Cornick

Sure.

are enrollments So a say we all Plus a out. year-over-year CLEAR basis and don't both perspective, platform in XXXX. on really, well CAGR of break cumulative basis what And encompasses a But as growing enrollments. our it will as from Plus channels CLEAR I just versus on the general, metric

and pleased with her all highlight, is a in same-store we're CAGR basis a as particular channels. on the in-airport comments, very Caryn The strong overall. that's So very a and mentioned channel of earlier

Caryn Seidman-Becker

to Delta, the that, on platform look a bringing CLEAR many can I that stand-alone to just we our than partnerships, basis. partnerships, add you more brand If people be at United, to Express, if used so it's American so whether

So a those passes but bringing are people on then only our members channel, not participating in things family partnership that and of or nature. powerful guest is

channel partnership So The with the attach strength. strength. rate continues with continues

there. use game the you into beer CLEAR to Raiders, buy get If Allegiance to with

-- you Avis, different If brought now you're to new you the use now at platform, way, it's CLEAR likelihood it's in higher join. a to and

turn to is just It would these flywheel I of early So say continues days. channels. that across all really

Unidentified Analyst

about CLEAR think that already excellent. opportunity airports curious, speaking path the existing Avis, next almost your That's car shareholder over members. months, and of results you XX were about users grow earlier that. the indicated And in how XX% rental to letter, of the a just mentioned thinking I'm that to across state expansion

Caryn Seidman-Becker

Yes.

should the be be are it's as car, on travel And ride house ways. very rental and parking, you on plane, leave I in rental both you're there you broader stand-alone there a if experience time it And or of piece, so you an added whether side, that be the customer think other then whether it on then the important travel are experiences. experience ribbon, you that think focused your creates you when traveling companies the to car arrive, basis and part car of about when the whether the it part it share when getting friction. get go from many different on different

other expand partnership from there's of obsessed to in and enroll So journey to drive really there multiple the to back really about their right? going the with the in in a to country, That point that the take the I that being think use interoperability, or to we delight do customer customers network that. a want use cases connected which can not we experience, experience. made is perspective about friction opportunity usually to around the in we home, app we're so their the airport, but that the And really places. to out an And across is parts more lot that that ability once and only excited

just airport dropping or your should off, security, getting to be or you it renting or car your through bags able it be you. dropping always whether be So

buy you and shouldn't beer, and And multiple preferred customer Avis to to sometimes a times. frequent sometimes you're have United a an sometimes you're over but reenroll flyer you're XX

experience for allows to this allows environment And their do. the Avis create our us us what so that's to It platform within customers.

Operator

Capital. question Ananda next Baruah is [Operator with from proceed Our your Instructions] Loop with Please question.

Ananda Baruah

could. think your then if I increase I Is there airport to inside have any way capacity a few, the about what year-over-year?

Ken Cornick

we In terms lines terms capacity many of just have in of or many equipment? of how sort how of pieces

Ananda Baruah

thinking, more almost lines. lanes it, get would to those capacity Yes. and I'm like, something guess, opportunity, more of like at lanes like begin kind but I opportunity, Ken, along

Ken Cornick

If checkpoint. you way. equipment could about in a capacity you We can you of capacity add additional additional think number could increase different within add and ways, particular add our that a lanes, lanes

quantity we within months. the I -- we capacity have over the for airports absolutely but So last don't increased know even a existing you, if year, XX

Ananda Baruah

get you trying is an about word the services, just just company's of the those as sorts map And anecdotal sense, I in been getting capacity guess, sense growth of At out impact company myself the the least at much on, in the all airport, context, really guys the genesis up things. put have you create of coming the to question of sort capacity from is those and of putting that back being drivers. trying a think I'm to mental of how about folks to

Ken Cornick

earlier annual pre-COVID that's bookings XX% XX% actually roughly a XXXX from and same-store. perspective, actually growth rate bookings is my we a compound XX% in comment, showed And growth. From levels,

XXXX, So like QX overall opened the XX CAGR. were store in XX% piece right, that XX% of is airports that our same of

hopefully, that a So you gives sense.

Ananda Baruah

provide, that's of anecdotally, just think And other it cumulative you platform the quick of those that of off-line me. it for to kind sort other Yes, And out about airport is any I'll another follow-up or questions, of platform uses in-airport how some metric -- that's platform? with aspects so take in way much your of versus I'll you. are

Ken Cornick

very in utilization. across that the board out, Yes, terms we're seeing so growth break but strong of obviously we don't

Operator

now time. the management. I turn over would back to no like to further are questions floor this There at

Caryn Seidman-Becker

Thank us you for joining today.

Ken Cornick

you. Thank

Operator

teleconference. This concludes today's

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

Clear Secure (YOU) 14 Nov 222022 Q3 Earnings call transcript