you-20240331

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2024


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 001-40568

CLEAR SECURE, INC.

(Exact name of registrant as specified in its charter)


Delaware									86-2643981
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)
85 10th Avenue, 9th Floor, New York, NY									10011
(Address of Principal Executive Offices)									(Zip Code)

(646) 723-1404

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A common stock, par value $0.00001 per share	YOU	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”

“smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o
		Emerging growth company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The registrant had the following outstanding shares of common stock as of May 3, 2024:


Class A Common Stock par value $0.00001 per share (the “Class A Common Stock”)			93,022,861
Class B Common Stock par value $0.00001 per share (the “Class B Common Stock”)			907,234
Class C Common Stock par value $0.00001 per share (the “Class C Common Stock”)			25,103,193
Class D Common Stock par value $0.00001 per share (the “Class D Common Stock”)			25,796,690

Table of Contents


		Page
	PART I - FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	1
	Condensed Consolidated Statements of Operations	2
	Condensed Consolidated Statements of Comprehensive In come (Loss)	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity	4
	Condensed Consolidated Statements of Changes in Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35
	PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

Table of Contents

CLEAR SECURE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(dollars in thousands, except share and per share data)


	March 31, 2024		December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	64,134	$	57,900
Marketable securities	634,327		665,197
Accounts receivable	621		526
Prepaid revenue share fee	23,963		24,402
Prepaid expenses and other current assets	20,590		22,009
Total current assets	743,635		770,034
Property and equipment, net	60,127		62,611
Right of use asset, net	114,270		115,874
Intangible assets, net	20,083		20,825
Goodwill	62,757		62,757
Restricted cash	3,590		4,501
Other assets	12,579		8,407
Total assets	$	1,017,041	$	1,045,009
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	7,066	$	11,781
Accrued liabilities	239,951		164,015
Deferred revenue	377,760		376,253
Total current liabilities	624,777		552,049
Other long term liabilities	122,989		123,736
Total liabilities	747,766		675,785
Commitments and contingencies (Note 17)
Class A Common Stock, $0.00001 par value - 1,000,000,000 shares authorized; 89,179,152 shares issued and outstanding as of March 31, 2024 and 91,786,941 shares issued outstanding as of December 31, 2023	1		1
Class B Common Stock, $0.00001 par value - 100,000,000 shares authorized; 907,234 shares issued and outstanding as of March 31, 2024 and December 31, 2023	—		—
Class C Common Stock, $0.00001 par value - 200,000,000 shares authorized; 30,609,111 shares issued and outstanding as of March 31, 2024 and 32,234,914 shares issued and outstanding as of December 31, 2023	—		—
Class D Common Stock, $0.00001 par value - 100,000,000 shares authorized; 25,796,690 shares issued and outstanding as of March 31, 2024 and December 31, 2023	—		—
Accumulated other comprehensive loss	215		2,050
Treasury stock at cost, 0 shares as of March 31, 2024 and December 31, 2023	—		—
Accumulated deficit	(54,908)		(73,714)
Additional paid-in capital	220,558		304,992
Total stockholders’ equity attributable to Clear Secure, Inc.	165,866		233,329
Non-controlling interest	103,409		135,895
Total stockholders’ equity	269,275		369,224
Total liabilities and stockholders’ equity	$	1,017,041	$	1,045,009

See notes to condensed consolidated financial statements

Table of Contents

CLEAR SECURE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

(dollars in thousands, except share and per share data)


	Three months ended March 31,
	2024		2023
Revenue	$	179,049	$	132,356

Operating expenses:
Cost of revenue share fee	24,364		$	19,570
Cost of direct salaries and benefits	40,288		$	33,146
Research and development	20,104		$	21,944
Sales and marketing	11,622		$	9,509
General and administrative	52,890		$	58,078
Depreciation and amortization	6,092		$	5,167
Operating income (loss)	23,689		(15,058)

Other income (expense):
Interest income, net	9,925		$	6,392
Other income, net	439		$	274
Income (loss) before tax	34,053		(8,392)
Income tax (expense) benefit	(1,965)		$	119
Net income (loss)	32,088		(8,273)
Less: net income (loss) attributable to non-controlling interests	13,282		(3,049)
Net income (loss) attributable to Clear Secure, Inc.	$	18,806	$	(5,224)

Net income (loss) per share of Class A Common Stock and Class B Common Stock (Note 15)
Net income (loss) per common share basic, Class A	$	0.20	$	(0.06)
Net income (loss) per common share basic, Class B	$	0.20	$	(0.06)
Net income (loss) per common share diluted, Class A	$	0.20	$	(0.06)
Net income (loss) per common share diluted, Class B	$	0.20	$	(0.06)
Weighted-average shares of Class A Common Stock outstanding, basic	91,831,639		89,614,791
Weighted-average shares of Class B Common Stock outstanding, basic	907,234		907,234
Weighted-average shares of Class A Common Stock outstanding, diluted	92,506,108		89,614,791
Weighted-average shares of Class B Common Stock outstanding, diluted	907,234		907,234

See notes to condensed consolidated financial statements

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CLEAR SECURE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(UNAUDITED)

(dollars in thousands)


	Three months ended March 31,
	2024		2023
Net income (loss)	$	32,088	$	(8,273)
Other comprehensive income (loss)
Currency translation	—		8
Unrealized (loss) gain on fair value of marketable securities	(2,983)		1,588
Total other comprehensive (loss) income	(2,983)		1,596
Comprehensive income (loss)	29,105		(6,677)
Less: comprehensive income (loss) attributable to non-controlling interests	12,134		(2,391)
Comprehensive income (loss) attributable to Clear Secure, Inc.	$	16,971	$	(4,286)

See notes to condensed consolidated financial statements

Table of Contents

CLEAR SECURE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(dollars in thousands, except share data)


	Class A			Class B			Class C			Class D			Additional paid in capital		Accumulated other comprehensive loss		Treasury Stock			Accumulated deficit		Total stockholders’ equity attributable to Clear Secure, Inc.		Non-controlling Interest		Total stockholders’ equity
	Number of shares	Amount		Number of Shares	Amount		Number of Shares	Amount		Number of Shares	Amount		Additional paid in capital		Accumulated other comprehensive loss		Number of Shares	Amount		Accumulated deficit				Non-controlling Interest		Total stockholders’ equity
Balance, January 1, 2024	91,786,941	$	1	907,234	$	—	32,234,914	$	—	25,796,690	$	—	$	304,992	$	2,050	—	$	—	$	(73,714)	$	233,329	$	135,895	369,224
Net income	—	—		—	—		—	—