YOU Q2 2022 Earnings

Call Details

• Call Title: Clear Secure Q2 2022 Earnings Call
• Date: August 15, 2022 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)
  • Nick Petty (Chief Technology Officer)

Call Summary

Financial Performance

• Revenue in Q2 was up 86% year-over-year as reported on the call.
• Total bookings in Q2 increased 76% year-over-year and were described as strong across the network.
• The company generated $41M of free cash flow in Q2, bringing year-to-date free cash flow to $61M and last 12 months free cash flow to $114M.
• Cash and equivalents were $703M as of June 30, 2022.
• Adjusted EBITDA turned positive in Q2 and is positive on a year-to-date basis, while adjusted net income turned slightly positive in the quarter.
• Same-store bookings accounted for roughly 80% of the growth embedded in the approximately 30% bookings CAGR versus 2019.
• Operating expense growth in the quarter was less than 25% year-over-year, roughly one-third of the revenue growth rate, driving margin expansion.
• The company identified that GAAP revenue recognition lags cash bookings because of annual subscription amortization, which causes free cash flow to exceed GAAP profitability while growing.

Guidance

• Q3 GAAP revenue guidance is $111M to $113M as disclosed on the call.
• Q3 total bookings guidance is $128M to $132M and explicitly excludes any contribution from TSA PreCheck.
• The company expects to launch TSA PreCheck in Q4 and is preparing marketing and operations for that launch.
• The company expects to remit approximately $65M payable to American Express in Q3 related to the first year of the Platinum partnership.
• The company expects to generate positive free cash flow in the second half of 2022 even after the AmEx outflow.
• No long-term growth rate guidance was provided, though the company highlighted a ~30% CAGR in bookings versus 2019.