YOU Q3 2023 Earnings

Call Details

• Call Title: Clear Secure Q3 2023 Earnings Call
• Date: November 8, 2023 at 1:00 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 grew by 38% year-over-year in Q3 2023 as reported on the call.
• Bookings grew by 32% year-over-year in Q3 2023 as reported on the call.
• Incremental EBITDA margins were 40% in the quarter, reflecting operating leverage.
• Free cash flow was negative $9M in Q3 due to a $133M cash outflow settling an accrued liability to a credit card partner for contract year two.
• On a trailing 12-month basis, the company generated $180M of free cash flow, which was up 97% year-over-year as reported on the call.
• After adjusting for a $10M net working capital benefit, trailing 12-month free cash flow was reported up 150% year-over-year.
• After deducting normalized stock compensation, trailing 12-month free cash flow was reported at $123M, up 228% year-over-year.

Guidance

• The company expects Q4 2023 revenue of $165M to $167M.
• The company expects Q4 2023 bookings of $185M to $187M.
• Guidance includes a modest contribution from TSA PreCheck enrollment provided by Clear in Q4 2023.
• The company expects year-over-year free cash flow growth in Q4 2023.
• The NextGen Identity upgrade to accounts will occur over the next few months and Lane of the Future will be phased through 2024 according to the prepared remarks.
• Management stated that PreCheck revenue will be recognized on a net basis and described incremental margins for PreCheck as directionally high.