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spk01: Good morning and welcome to Clear's Fiscal Second Quarter 2024 Conference Call. We have with us today Karen Seidman-Becker, co-founder, chairman and chief executive officer and Ken Kornick, co-founder, president and chief financial officer. As a reminder before we begin, today's discussion contains forward-looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risk and uncertainties. Factors that could cause actual results to differ materially from these statements are included in the documents the company has filed and furnished with the SEC including today's shareholder letter. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call. During this call, the company will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's shareholder letter and the most recently filed annual report on Form 10Q. These items can be found on the investor relations section of Clear's website. With that, I'll turn the call over to Karen.
spk02: Good morning and thank you for joining our second quarter 2024 earnings call. It's been three years since our IPO and Clear remains focused on growing members, bookings and free cash flow. In the second quarter, we added a record 2.3 million members, reflecting growth across both ClearTravel and ClearVerified. In ClearTravel, we continue to build products that help our members win the day of travel, from home to gate and back again. The Lane of the Future rollout is well underway, improving the Clear Plus member experience with new technology enhancements that make verifications up to 30% faster, reducing friction for our members and our ambassadors. This quarter, we will begin rolling out the next phase of our Lane of the Future, our face-first technology. Members will verify with their face a seamless experience that will keep them moving. Travel is hard and getting harder. In addition to improvements in the airport, we are furthering the home to gate journey with the introduction of ClearPerks, exclusive benefits curated for Clear Plus members, from expedited passports to bag delivery and my favorite, Clear Scout, which is our lost item rescue service. Who hasn't lost something in the airport? To be able to have a Clear Ambassador go find it for you? Priceless. ClearPerks are designed to increase the predictable -to-end seamless travel experience and deliver additional value to our members. By 2030, 1 million more passengers are expected to crowd America's terminals every day, putting even more strain on a system that is already over capacity. Aging infrastructure and technology compound these challenges, especially at screening checkpoints. Since 2010, Clear has partnered with airports driving innovation to improve the passenger experience while sharing over $325 million of revenue with our local airport partners. Next month, Clear plans to announce a formal airport innovation campaign to accelerate our work around public-private partnerships and help bring the latest technology and infrastructure to American airports. As we said, we are seeing accelerated member growth this year, and our goal is to grow towards 50 million members in 2025. ClearVerified is fueled by this member flywheel. As we add more members, our platform becomes even more attractive to existing and new partners. With our increased scale, the percentage of members who are instant on, already enrolled, and can verify with one click goes way up. This frictionless experience, along with our trusted brand, create product magic for our partners. In a recent nationwide brand study of current, former, and non-Clear members, roughly 80% of respondents agree or strongly agree that they trust and feel more secure with companies or brands that partner with Clear. A similar percentage also said they would find it preferable to sign into online accounts using Clear. Identity has never been more important, and Clear is the market leader. I will now turn it over to Ken.
spk05: Thanks, Karen. Second quarter results demonstrate our continued focus on profitable growth. Revenues increased 25% and adjusted EBITDA grew 137%. We achieved incremental operating income and EBITDA margins of 80% and 74% respectively. Margin drivers that we have been discussing, including the ramp of recently launched airports, high incremental margins for TSA pre-check and verified, as well as continued cost discipline continue to play out. B&L strength is translating into significant cash generation. Cash flow from operations was 114.6 million, and free cash flow was 110.1 million, up 65% year over year. After deducting normalized dot comp, free cash flow grew 90%. Active Clear Plus members grew by 297,000 in the quarter, up from 78,000 in Q1, as the next-gen upgrade process is largely behind us and the in-airport sales channel improves sequentially. We continue to see member growth opportunities, particularly in our lower penetration markets, whereas a percent of MSA population, we are in the low single digits versus high single digits in our more penetrated markets. The experience economy and booming travel market have helped expand Clear's addressable market. A broader demographic of travelers are now appreciating the value of being a Clear member in our frictionless -to-gate journey. As of August 1, standard and airline pricing increased by $10, only the second time we've increased standard pricing in 14 years. Standard is now $1.99 with airline tiers at $159 and $189. Family pricing increased $20 to $1.19 per year. We remain focused on driving our move through absolute pricing and reducing historical discounting. Last quarter, we introduced Clear Plus gross dollar retention as a new KPI to reflect this focus. We introduced Clear Perks, which add significant value to our membership. Rush My Passport and Bagship have already gotten significant traction. As Karen mentioned, Clear Scout delivers a truly priceless service. If a member forgets anything in the airport, they can call us and we will dispatch one of our ambassadors to try and find it. So far, we've recovered everything from a laptop to a passport to an iPhone to a garment bag full of clothing in a United Lounge. Our airport innovation campaign that we plan to formally announce next month is an opportunity to partner with airports to drive overall customer experience in an ROI positive way. Our North Star is to identify projects that help our airport partners achieve their goals while also enhancing Clear member experience, which can lead to growth in members and increased retention. TSA Pre-Check enrollment provided by Clear is off to a strong start, and it's live in 46 airports up from three at the end of Q1. We're planning several thousand pre-enrollments daily, and this pipeline will convert to completed enrollments and realized revenues as travelers visit our expanding base of locations. We plan to expand locations inside and outside the airport to grow the market and drive share. We expect Pre-Check to contribute incremental gross profit dollars in the near term while driving revenue and gross profit growth into next year. We repurchased 3.6 million shares in Q2 and an additional 4 million shares from Delta in July, continuing our opportunistic approach to capital allocation. Our partnership with Delta remains a true win-win. They invested in Clear in 2016 and continue to own 4.3 million shares. We look forward to continued innovation together to enhance the passenger experience. On a -to-date basis, we've retired 8% of our beginning shares outstanding, and since initiating our repurchase program in 2022, we've bought back all 15 million shares issued in our IPO and then some. In Q3, we expect revenue of $193 to $195 million, and total bookings of $220 to $222 million, representing 21% and 15% growth respectively. In Q3, we will make our annual repayment to our credit card partner approximately $181 million. As a result, we will have negative free cash flow in Q3 consistent with last year. That said, we are raising our fiscal year free cash flow growth guidance to at least 40% -over-year or $280 million. With that, let's go to Q&A.
spk01: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. The first question comes from Joshua Riley with Needham. Please proceed with your question.
spk06: Thanks for taking my questions and nice execution here in the quarter. We saw a nice acceleration here in net member ads in Q2. Can you just review your philosophy on pricing and managing that around retention? I believe now you just mentioned that you did implement another modest price increase here.
spk05: I will start with pricing and then I will talk a little bit about net ads. Thanks for the questions. When we think about pricing, we look at it a few different ways. This is only the second time we have raised prices on the standard membership in 14 years. Obviously, we have taken some incremental pricing on family. From a standard perspective, this is $10 to $199. We were at $179 all the way back to 2010. In that time, we have gone from two airports to 58, from two lanes to over 160 lanes. We have added new ways to use clear such as Clear Mobile and Home to Gate. In a world where travel is hard, it is getting harder, people are really valuing experiences to the experience economy, particularly within travel. I would say over the past few years, a broader demographic of travelers are now appreciating what Clear has to offer. Certainly, we look at cost per use. That is an important factor. Also, what is the value per use of Clear? We think the value proposition is far outpaced at cost per use. Our experience continues to improve, as Karen mentioned. We are creating value beyond the checkpoint. Clear perks, we are really excited about. We are confident that our members are getting more value than the price they are paying. That is how we look at pricing. From a NetAd perspective, you did not ask this specific question. We did see an acceleration. Last quarter, we told you that the next-gen process was highly disruptive. We were talking about the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We are looking at the cost per use of Clear Mobile. We were talking about the next-gen, but coming out of June, we did see some nice growth there.
spk06: Got it, that's helpful. Then as we're getting passed this next-gen I.D. upgrade process, I know you don't get guidance on net member ads, but can you just help us understand what are the factors that we should be considering in terms of net member ads in the second half of 2024 in terms of the family price increases impacting churn? and opening new airports and maybe just any other factors we should be considering on the trajectory of net member ads for the second half of the year. Thank you.
spk05: Sure. Sure. We, you know, look, we think we have a lot of opportunity to grow members, particularly in our under penetrated markets. I talked about the expansion of TAM and how we're appealing to a wider audience. So we really do believe that. And, you know, I think as we have come out of next gen, we've refocused our field. We've we've launched TSA pre check. You know, that's something that's going on inside. It's many of the same ambassadors. So as that continues, you know, certainly the field operations have have gotten, you know, stabilized and have improved sequentially and will continue to. And, you know, we are optimistic for the for the back half. And last quarter, we said that our growth rate in the back half would be higher than what was implied in the Q2 guidance. And that still remains true.
spk02: And if I can just add to that, there's a lot of points around net ads. There's retention, there's wind backs, and then there's gross ads. And I think on all of those channels, we have a lot of opportunities for people who left clear over the past few years. They're coming back to a much larger clear a clear with better technology clear with more value with perks and other partners. So there should be opportunities to bring people back to clear and there's a larger population, obviously, as we've grown from a retention perspective to your point. The clear member experience is getting better. And again, we're offering more value and more on the way. So we expect that that number should also be getting better. And then there's gross ads. And so I think we have opportunities across the board. And then in addition to that, with pricing, when you look at gross dollar retention, that's also meaningful.
spk06: Great. Thanks, guys.
spk01: Thank you. The next question is from Dana Telsey with Telsey advisory group. Please go ahead.
spk03: Hi, Karen and Ken. Congratulations on the very nice results. Couple things. If you think about the future, it sounds like the airport innovation campaign, which is launching next month, could certainly be a driver of new member acquisition. Can you tell us a little bit about what it entails? A little more details on any of the partnerships with that and how you're gauging at? And then I have a follow up.
spk02: Yeah. Hi, Dana. Thank you. So we're really excited about the innovation campaign because at some level we've been doing it behind closed doors, airport by airport for over a decade because it's not only the technology in the clear lane that drives the customer experience, but it's the holistic experience from the time you walk in the door. So that could be things like wayfinding or how lanes are organized or structured. And so bringing the latest technology and infrastructure to American airports can really make a difference for the customer experience holistically for that airport. And in addition to that, for clear members and travelers. And so when you look at the opportunity to drive retention or gross adds through better customer experience to help our airport partners, when we talk about $325 million of revenue that we've shared with our partners, that's 100% margin to them. Right. And that is so massively important as they invest in infrastructure. You think you also see the power of public private partnerships. So you hear the government talking about infrastructure investments in airports. But sometimes there's things with faster turnaround that airports want that aren't funded that we can help with. So our North Star is to transform that passenger experience from home to gate, right? Not just where you're flying from the airport, but you're flying through it. And we think that this innovation campaign will really help travelers make it a journey to enjoy. I know that's like a bold statement with traveling, but you shouldn't endure the experience through the airport. You should enjoy it. And so we think it helps our airport partners. We think it helps travelers. We think it helps the clear member experience. And so again, I think on that metric, that's gross adds, that's retention, that's attached rates. And so we'll be working with our partners to identify eligible projects. And then we'll be coming back to you guys with more details on that as they come through over time. But taking it public as opposed to going one off behind closed doors is an opportunity to make a bigger impact faster. And I think with a nationwide network with, you know, over 25 million members on the clear platform in aggregate with multiple products like clear mobile like clear plus like pre check like perks. We really have an and a very strong balance sheet and travel booming. And you see the challenges in airports every single quarter, we could point out tons. And I think you guys read them in the newspaper and at every cocktail party. It's people's favorite conversations. So I think there's a lot we can.
spk00: Come out,
spk02: we'll be sharing them with you guys.
spk03: Got it. And then anything about the other venues to which you're expanding into and any updates beyond airports and then can mentioned some of the some member membership opportunities and other MSA's. What's the game plan to attack those and what's the opportunity and potential.
spk02: So, Dana, when you say other venues, you mean on the clear verified identity platform side. Yes,
spk03: exactly. Yep.
spk02: So one that I think you would be particularly excited about is Home Depot. I think as we all know, and you specifically frauds a huge problem in retail, right? They call it shrink, but it's really just that and fraud. So Home Depot is focused on enhancing their customer experience while reducing the shrink. We've partnered with them in their rental tool business to reduce fraud. And we've rolled it out across all their stores that they have rental tools in that's over 1000. And they've seen great success in both the customer experience and in reducing fraud. And this concept that we talked about a few years ago that we continue to hammer on the concept of a connected identity platform, powering trusted experiences, making them safer physically and digitally and easier. Right. For over 25% to 30% of their customer base, it was instant on. They're already on the platform. They have repeat customers day after day, week after week for those folks to just be able to one click and verify and move on is such a win win. And it's also bringing new people on the platform that could use it at Home Depot at LinkedIn at well start at public.com and more. So I think Home Depot has just been a great partnership and a huge win win. And it starts to really make you think about the art of the possible on you. You roll back what you're you know, you start to peel the onion on what a challenge is and a lot of it comes back to identity who you are and something about you. Are you a frequent shopper? You know, you look at Costco because of their membership based business. Their shrinks a lot lower. So it really does talk to the power of identity.
spk05: And then, Dean, on your on your addressable market question, look, we really look at, you know, MSA penetration by market and we talked about this in the past. We have a range of airports that have been open since 2010 to 2012 where we have higher penetration. And if we apply those penetration rates to the lower penetrated markets, you know, that implies significant growth in Clear Plus member base. And so it's really a matter of focus. It can be incremental staffing and enrollments within those airports or targeted marketing. So there's a range of opportunities to reach those travelers.
spk03: Thank
spk01: you. Thank you. The next question is from Ben Miller with Goldman Sachs. Please go ahead.
spk09: Thanks for taking the questions. I guess first, just any updated learnings from the TSA Pre-Check rollout would be helpful and how we should think about that as a contributor to the second half in 2025. And then, Karen, I think you mentioned a goal of 50 million members. When should investors expect Clear Verified to start being a meaningful driver of revenue going forward? And what are some of the more exciting Clear Verified offerings that you're excited about as a contributor going forward? Thanks.
spk02: Just to clarify, I said as we grow towards 50 million. So it is a target, but as we grow towards it, just to be specific, there's a lot of, well, let me start with Pre-Check and then I'll get to Clear Verified. Pre-Check, it's been an incredibly exciting quarter as we went from three airport locations to 46. But you shouldn't just think of it as an airport location in San Francisco in an LAX. I think we have four or five locations. So when you start to think of the capacity opened from 4 a.m. to 10 or 11 p.m. and if it takes, you know, on average, this is a higher number, but let's just say 8 to 10 minutes for a total enrollment and a lot less for a pre-enrollment, you think about the capacity that we have. And so there's a few learnings. I think one is really the power of pre-enrollment, quite frankly, and the power of digital marketing around that. When someone pre-enrolls, it takes half as much time and they come with their passport, right? And so a passport is a much easier one-step enrollment than a birth certificate and other things. So we want to encourage as frictionless an enrollment as possible. It's a better customer experience and it takes less time and someone comes more prepared with the right documents. So the power of pre-enrollment is something that we've learned a lot about and creates a lot of opportunities. And the more locations we have, the more places you have to finish your enrollment. I think the other thing that we've learned is, and I think it justifies, we once put out a number that said we think the TAM is 90 million. People want to enroll in PreCheck. The price point is $1.30 a month. And I think people are not educated enough on the pricing. They think it's $75 or whatever. The different providers have different pricing over a year. It's over five years. You break it down. It's $1.30 a month. Of course you should enroll. Everybody should enroll, but it's about ease of enrollment, right? And so I think we feel very excited about the TAM that we put out there and our ability to penetrate that TAM over the next few years as we continue to make enrollment easier, drive capacity, drive education around pricing. It's a really exciting opportunity. And in terms of clear verified, there's a few from a sector perspective. We continue to be very bullish on the healthcare sector. The opportunity for safer and easier frictionless and trusted experiences in healthcare for both the patient and the provider are massive. And no different than, you know, Home Depot is not something you would have thought of, you know, a few years ago when you think of a connected identity platform and then you start to understand the opportunities to change the business, improve the retention revenues and margins. The same can be applied to healthcare. There's a lot of steps. It's analog, making it interoperable. And then some of the regulatory things that are going on in healthcare create a sense of urgency for insurance companies, for hospitals, and for a lot of different companies who are driving the connected back end for interoperability. So we continue to be very excited on healthcare. You see early results on public.com. You see the conversations that we're having around KYC. You see the fraud happening on the payment side specifically as you look at peer to peer and you know that we can have a big impact there. We continue to be excited about financial services. And again, financial services is broad. That could be gaming or that could be banking or that could be a trading platform like public.com. So I think financial services is something we continue to be excited about and post the acquisition of Sora, I guess almost a year ago, the product is really good from a front end and a back end perspective for our partners on the consumer side, both online and in person. I think you just have to look at Home Depot and LinkedIn to know that there are enormous opportunities to drive safer and easier experiences. You see things like age verification rules coming out or online safety rules coming out of Congress and you know trust online matters. And so you know you see in so many different places you are being asked to verify who you are and something about you over and over. That just happened to me this weekend on X so would love to work with them. And so there are so many opportunities on the consumer side and then on the travel side, trust and safety and building that connected platform. You see that we're doing mobile check in in some hotels, but trust and safety in the shared economy is massively important. And also as you have, you know, there's programs that are one key one, whatever it's really saying the same person across your multiple brands. So travel consumer, both physical and digital health care and financial services. And when you look at the scaling and the acceleration of the gross ads on our platform is to know that all these different nodes, if you will, the more people we have on the platform, the more friction free and experience their customers have with a trusted brand, which when the consumer sees that it's clear, they get really excited to engage. So in that world of a trusted brand that I talked about from our brand studies, that's massively important. So the friction free experience, we're always innovating around it, adding different capabilities and and safety online has never been more important. So we continue to be really excited about the acceleration of the gross ads. Hopefully that answered your question.
spk01: Thank you. The next question is from Corey Carpenter with JP Morgan, please go ahead.
spk08: Thanks. Good morning. Ken, could you expand on the drivers of the booking acceleration and three Q. And are these trends that you expect to continue into four Q. And then second question on TSA precheck. As we think about the initial cohort of customers signing up, any rough breakdown you can provide between existing clear customers adding TSA versus customers entirely new to clear and what the update for those customers has been for the bundled option. Thank you.
spk05: I'll start with the drivers. Look, it goes back to what we said last quarter. We were impacted by next gen. That was disruptive to specifically the airport channel. So if we look at the back half, there's a number of drivers that are tailwinds. Number one, obviously pricing is a tailwind. So starting August 1st, pricing impact, which drives both retention and new. We have an improvement in the airport channel, which we've already seen some in Q2, but that will continue. We have incremental precheck contribution. And we said last quarter, we think they're verified bookings would be up in the back half versus the first half. So I would say like numerous drivers of the bookings acceleration versus the Q2 numbers. In terms of the precheck, I think, look, I think I don't have the specific breakdown, but we're having success both marketing to existing clear plus members to add on precheck, you know, and completely new people coming to you to precheck that are not in clear plus. So it's really spread across both sides. Certainly, our clear plus members are easier to talk to. We know who they are. We can email them. The non clear plus members were having to reach, whether in the airport with signage or with digital marketing.
spk03: Hello
spk05: operator. The next question.
spk01: Thank you. The next question is from Mark Kelly with Stiefel. Please go ahead.
spk04: Great. Thank you. Good morning, everyone. I kind of want to build on Corey's question there a bit on the TSA precheck product. I guess over the long run. Do you see that being more of a factor on, you know, your revenue and margin profile overall or I guess what's more important like TSA and isolation or TSA as a an acquisition channel, you know, for clear plus. That's my first one. And the second one is, you know, your footprint within your airports is already, you know, quite large. You know, some airports, you don't have access to every terminal. I guess. A. Do you think you need access to every terminal and B. How do you go about attacking those terminals where you don't have access today? Thank you.
spk05: So I'll start with the TSA. Look, we're really excited about TSA as a standalone business and a standalone revenue line item. As you know, we recognize the revenues on a net basis. So they're less impactful to revenue or bookings, bookings and revenue for TSA precheck are one in the same. Right. But they are much more impactful to gross profit dollars. So, you know, what I would say is in the near term, you know, call it 2024. It's going to be incremental gross profit dollars as we look to 2025. It's going to be meaningful to both revenues, revenue bookings and the gross profit dollar growth. And I would say the same thing for clear verified. Right. We have a this cost structure already in place, which we talked about. And as we enroll more people and get towards that 50 million, the repeat usage drives margin as well. So I would say there are upsell opportunities and there are opportunities to grow clear plus as a channel. But on a standalone basis, we are very, very excited about it.
spk02: I think there's another point there, which is tearing. So you should think about it like some people might just want precheck. Right. You might want an entry level. They might want precheck plus certain perks that we might add for that. They might want the bundle. Right. So as we continue to innovate, we think there's opportunities to meet different travelers where they are, because certainly everyone wants a more frictionless and predictable travel experience in terms of the terminals. We know every airline wants to bring precheck to their customers in a really accessible way. It's just been too hard. And so we know that all airlines and all airports want to bring it to their customers. And I think seeing is believing to know that no appointment is necessary to see the customers signing up at the crack of dawn and excited about it. We know that every airline and every airport want to bring it to their customers. So we expect to be in those terminals because they want to serve their travelers. But also it's about meeting travelers where they are. So if you enrolled online and you can go to Staples to finish or you can go to another retail location to finish on a Saturday morning because you're not going to the airport for a few weeks. Or you could do it in a hotel lobby, conveniently located in Midtown Manhattan during lunch. So there's or you could do it on your college campus or you could do it at a corporate office. We just did a corporate enrollment and that was met with great success is something that, of course, companies would want to make it easy for their travelers to enroll in precheck in the lobby. And so there's all sorts of ways to bring a customer centric mentality and accessibility to this. So we're really excited to lead that initiative.
spk05: In terms of footprint, you know, look, I think there are incremental opportunities in existing airports to expand our footprint. We think about it as a TAM expansion opportunity. Does that terminal expand our TAM or not? Some terminals, some checkpoints feed multiple terminals and it doesn't expand TAM. And also, you know, we talked a couple quarters ago about Louisville, which is our clear mobile product. And that's going that model allows us to go into smaller airports or pop ups or seasonal airports along with, you know, with a clear plus benefit. So clear plus members can use those lanes. It's also a pay per use model. So incremental revenue and we can offer precheck in those smaller airports where otherwise it might have been uneconomic to do so. And
spk02: when you look at some of our smaller airports today, early days, they're enrolling an impressive number of people in precheck. It's really important to bring this nationwide to all travelers in an easy and accessible way. And so, you know, it's just been great to see the positive response that we have from from all the markets.
spk04: That's helpful. Thanks very much. Thank
spk01: you. The next question is from Michael Purin with Wells Fargo. Please go ahead.
spk07: Hey, thanks for taking the questions. David Ongar. David Ongar on from Michael Turin today. Ken, you've been increasing the share buyback amount and you've taken on more ownership off the Delta sale yesterday. Can you can you talk through from a high level how you think about buyback today given you have increased confidence in the free cash flow growth that you laid out in the shareholder letter? And that could be viewed as a positive given that we're involved to market. Thank you.
spk05: Look, we, you know, we talk about capital allocation that we're going to be opportunistic. And certainly we've been more aggressive on share purchase this year than we have in past years. And that's a function of where our view of free cash flow is and where it's going. And obviously we want to drive free cash flow per share ultimately. And, you know, right now with our guidance of at least 280 million of free cash flow this year, we have about 139 and change shares outstanding. So that's two bucks of free cash flow per share. We're going to remain opportunistic and, you know, ultimately do what's best for shareholders.
spk07: Thank you. And then just one follow up on retention. I don't know if we've touched upon this in the past, but is there a soft target for the dollar retention you have? And is there a way for us to think about the bridge between the dollar to the member retention and dollar retention and that trend over time? Thank you.
spk05: There's no soft target specifically. I mean, we'd like it to be, you know, well over 100 percent. More
spk02: is better. More is better.
spk05: And so the bridge really is, you know, what's the year over year incremental benefit from pricing? The two metrics that, you know, that we have today, which is the dollar and the net member, we talked about the net member and how it, you know, doesn't necessarily represent the year over year change because it's a lagging indicator. And it is true that our member retention right now is very stable on a year over year basis. It's down, you know, less than 100 basis points on a year over year basis. You know, if you remove the impact of wind backs and sort of look at an apples to apples cohort. So certainly as the pricing rolls through from August 1st, that's going to benefit our net dollar retention. Remember, that's a 12 month trailing basis. So it's cumulative. But on the other hand, we anniversary the airline pricing in February. So there's always pushes and pulls.
spk02: If I can just add to that, we operate in friction filled worlds, whether it be an airport or a hospital or verifying online for certain use cases. And so bringing frictionless experiences, bringing product magic, that drives everything. And that is what we are focused on, whether it be lane of the future, whether it be hospital check in or hotel check in or changing a retailer's experience so that less is behind glass and it's safer. And so that is what we're focused on. And we've invested for that. And we expect that to drive not only customer experience, ads, retention and partners, but also have it flow through to the bottom line.
spk01: Thank you both. Thank you. Ladies and gentlemen, we have reached the end of the question and answer session. And I would now like to turn back to call back to Karen Seidman Becker for closing remarks.
spk02: Thanks for joining our second quarter 2024 earnings call. I am proud of our team, extremely proud of our team and how they are executing across our focus areas as we continue to improve the member experience, scale TSA pre-check and scale the Thank you.
spk01: Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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