Clear Secure's Q1 2025: Navigating Contradictions in Real ID Impact, Retention Metrics, and Tech Investments
Earnings DecryptMonday, May 19, 2025 12:16 pm ET
2min read
Real ID implementation impact, gross dollar retention stability, focus on member experience and value, impact of Real ID on business, and focus on automation and technology investments are the key contradictions discussed in Clear Secure's latest 2025Q1 earnings call.
CLEAR's Membership and Revenue Growth:
- CLEAR reported a total of 31.2 million members by the end of Q1 2025, marking a 42.3% year-over-year increase.
- The company generated $207 million in total bookings and $91 million in free cash flow, representing 14.8% and 17.6% growth, respectively.
- This growth was driven by expanding its travel footprint, scaling the TSA PreCheck enrollment program, and the traction with CLEAR1.
Impact of Price Increases on Retention:
- CLEAR's gross dollar retention was 87.1%, down 140 basis points sequentially, due to the impact of past large price increases in 2023 and 2024.
- The company has experienced meaningful price opportunities across its member base, enhancing its value proposition.
TSA PreCheck Enrollment Expansion:
- CLEAR operates approximately 15% of total PreCheck enrollment locations, gaining outsized market share and volume.
- The company is actively expanding its footprint, with 165 total locations now live, including airports, city centers, and transit hubs.
- This expansion aims to increase enrollment and upsell TSA PreCheck new enrollments into CLEAR+ as a bundled product.
Operating and Financial Efficiency:
- CLEAR reported $37 million in operating income, representing a 17.7% operating margin, and $52 million in adjusted EBITDA, representing a 24.7% adjusted EBITDA margin.
- The company's direct salaries and benefits represented 24% of revenue, reflecting operating leverage and improved retention through a new compensation structure.
CLEAR's Membership and Revenue Growth:
- CLEAR reported a total of 31.2 million members by the end of Q1 2025, marking a 42.3% year-over-year increase.
- The company generated $207 million in total bookings and $91 million in free cash flow, representing 14.8% and 17.6% growth, respectively.
- This growth was driven by expanding its travel footprint, scaling the TSA PreCheck enrollment program, and the traction with CLEAR1.
Impact of Price Increases on Retention:
- CLEAR's gross dollar retention was 87.1%, down 140 basis points sequentially, due to the impact of past large price increases in 2023 and 2024.
- The company has experienced meaningful price opportunities across its member base, enhancing its value proposition.
TSA PreCheck Enrollment Expansion:
- CLEAR operates approximately 15% of total PreCheck enrollment locations, gaining outsized market share and volume.
- The company is actively expanding its footprint, with 165 total locations now live, including airports, city centers, and transit hubs.
- This expansion aims to increase enrollment and upsell TSA PreCheck new enrollments into CLEAR+ as a bundled product.
Operating and Financial Efficiency:
- CLEAR reported $37 million in operating income, representing a 17.7% operating margin, and $52 million in adjusted EBITDA, representing a 24.7% adjusted EBITDA margin.
- The company's direct salaries and benefits represented 24% of revenue, reflecting operating leverage and improved retention through a new compensation structure.
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