YOU Q1 2024 Earnings

Call Details

• Call Title: Clear Secure Q1 2024 Earnings Call
• Date: May 8, 2024 at 12:00 PM UTC
• Management Team:
  • Caryn Seidman Becker (Co-founder, Chairman, and Chief Executive Officer)
  • Ken Cornick (Co-founder, President, and Chief Financial Officer)

Call Summary

Financial Performance

• Revenues increased 35% year-over-year in Q1 2024.
• Adjusted EBITDA grew 285% year-over-year and adjusted EBITDA margin was 23% in the quarter.
• Ken noted implied incremental margins of 65% and stated achievement of 78% incremental EBIT margins on a clean basis.
• Cost of revenue included a $1.8 million COVID-related benefit, and the company incurred approximately $4 million of expenses related to next-gen upgrades and cash severance in Q1.
• Overall OpEx declined by over 2,200 basis points as a percentage of revenues sequentially.
• Q1 marked the fourth consecutive quarter of positive GAAP operating profit and GAAP earnings per share.
• Cash flow from operations was $80.3M and free cash flow was $77.6M, which was up 51% year-over-year.
• After deducting normalized stock-based compensation, free cash flow grew 85% year-over-year in Q1.

Guidance

• Q2 2024 revenue guidance is $182.5M to $184.5M, and total bookings guidance is $192M to $198M.
• The company stated those Q2 figures represent 22% and 11% growth, respectively, versus the comparable prior period.
• The company expects modest sequential growth in PreCheck revenue in Q2 as the nationwide rollout is in early stages.
• The PreCheck rollout is described as roughly one month behind the company's internal expectations and remains subject to TSA approval.
• The company reiterated an expectation of year-over-year margin expansion and free cash flow growth of at least 30% versus 2023.
• Management expects stronger back-half contribution from PreCheck and Clear Verified versus the first half, and signaled selective pricing actions planned for August.