Clear Secure, Inc.

With that, I'll turn it over to Ken. Thanks, Karen. Good morning, everyone. Our financial performance in Q1 was better than we expected with revenue up 79% and bookings up 74%, driven by growth in ClearPlus as well as new deals on the platform side. As we discussed last quarter, our focus remains on growing members, bookings, and free cash flow. We generated roughly $20 million of free cash flow in the quarter and expect this to be our fifth consecutive year of free cash flow generation. Our business model is strong, and following several years of platform investments, as well as the normalization of airport staffing levels post-pandemic, we are seeing operating leverage. Adjusted EBITDA this quarter was roughly break-even. As we told you last quarter, we expect moderating year-over-year expense growth in 2022. Quick word on retention. We reported 95.3% net member retention in the quarter, which remains above our long-term expectations of the upper 80s. We are really pleased with how retention has trended coming out of the pandemic, and there are structural reasons for this strength, like network expansion, strong operational execution, customer centricity, and brand passion, as we discussed in our letter. In addition, some of the strength also relates to win-backs of the excess churn we saw during the pandemic. As a reminder, the net retention calculation is the sum of gross retention plus win-backs. So in other words, gross retention, which is in the low to mid-80s, is netting to the mid-90s with the benefit of windbacks. We do expect net retention to normalize above pre-pandemic levels in the upper 80s and among best-in-class consumer subscription metrics. Some of you may have seen news of our planned price increase. Later this week, we're raising the retail price of Clear Plus subscription for the first time in our history by $10 to $189 for new members. Existing members will be grandfathered at $179 in 2022. This quarter, we added some disclosure around stock-based compensation expense. As owner-operators, we're strong believers in driving economic returns, and we are mindful of the true cost to shareholders of share count growth. At Clear, we have constructed a thoughtful, long-term total rewards program that encourages an ownership mentality while we remain focused on limiting dilution over time. Along those lines, today we announced a $100 million share purchase program. As clear owners, we're focused on economic capital allocation to maximize long-term returns, including opportunistic share purchases. Our cash and equivalence balance at 331 was $663 million. Thus, we have ample liquidity to support repurchases as well as our growth initiatives, both organic and inorganic. Now for guidance. In Q2, we expect GAAP revenues of $99 to $101 million and total bookings of $110 to $114 million excluding any contribution from TSA PreCheck. We're making steady progress in our launch timeline, setting us up for go live in the next several months. We'll now go to Q&A.

Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question today, please press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants that are using speaker equipment, It may be necessary to pick up your handset before pressing the star keys. One moment, please, so we poll for questions. Once again, that's star one. Thank you. Thank you. Our first question is from the line of Paul Cho with J.P. Morgan. Please proceed with your question.

Hi. Thanks for taking my questions. Very nice performance here. Just curious on the you know, the Health Pass member and the conversion to Clear Plus. How effective has that upsell progressed? You know, what are some metrics you can share? And then separately, we're also seeing, you know, the Clear brand kind of pop up in various different verticals, you know, seeing it in hospitals and others. Where are you seeing more opportunities to kind of grow the brand, et cetera?