Clear Secure, Inc. (YOU) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Clear Secure, Inc. operates a secure identity network primarily through its consumer travel subscription service, CLEAR+, and its B2B identity verification solution, CLEAR1. The company operates as a single reporting segment with a controlling equity interest in Alclear Holdings, LLC.
Key Financial Metrics
| Metric (in thousands, except per share) | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenue | $253,003 | $211,368 |
| Operating Income | $62,001 | $37,404 |
| Net Income (GAAP) | $56,384 | $38,583 |
| Net Income Attributable to Clear Secure | $38,795 | $25,405 |
| Diluted EPS (Class A) | $0.38 | $0.26 |
| Operating Cash Flow | $190,356 | $98,347 |
| Free Cash Flow | $185,483 | $91,263 |
| Cash & Cash Equivalents | $170,675 | $87,563 |
| Marketable Securities | $629,401 | $614,439 |
| Total Debt | $0 | $0 |
Non-GAAP Metrics: Adjusted EBITDA was $80.59 million (32% margin) compared to $52.18 million (25% margin) in the prior year period.
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 20% year-over-year, driven by a 13% increase in Active CLEAR+ Members and price increases.
- Profitability Expansion: Operating income surged 66% to $62.0 million. Net income attributable to Clear Secure increased 53%.
- Expense Trends:
- Cost of Revenue Share Fee: Increased 25% due to higher per-member fees and fixed airport fees.
- Direct Salaries: Decreased 5% due to lower average employee count.
- General & Administrative: Increased 16%, primarily due to higher performance-based equity compensation and credit card fees.
- Cash Flow: Operating cash flow nearly doubled to $190.4 million, supported by higher net income and favorable working capital changes (specifically increases in deferred revenue and partnership liabilities).
Guidance, Outlook, and Risks
- Capital Allocation: The company declared a quarterly dividend of $0.15 per share and a special dividend of $0.20 per share for Q1 2026. A subsequent quarterly dividend of $0.15 was declared on May 6, 2026. The company repurchased 39,901 shares of Class A stock for $1.2 million; $250.3 million remains available under the repurchase program.
- Liquidity: The company maintains a $100 million revolving credit facility with $67.7 million remaining borrowing capacity. No debt is currently outstanding.
- Key Risks:
- Dependence on airport partners and TSA policies (e.g., randomization of re-verification).
- Ability to retain members and convert trial users.
- Significant future payments under the Tax Receivable Agreement (TRA) as non-controlling interest holders exchange units.
- Unusual Items: Other income increased significantly due to the revaluation of the TRA liability at a lower income tax rate.
Investor Verification Checklist
- Member Metrics: Verify the 13% growth in Active CLEAR+ Members (8.17 million) and the 31% growth in Total CLEAR Members (40.99 million) to confirm the revenue driver.
- TRA Liability: Review the $252.5 million Tax Receivable Agreement liability and the impact of future unit exchanges on cash flow.
- Deferred Revenue: Confirm the $554.9 million deferred revenue balance, which represents a significant portion of future recognized revenue.
- Non-Controlling Interest: Monitor the reduction in non-controlling interest ownership (from 26.18% to 24.63%) and its effect on net income attributable to the company.
- Dividend Sustainability: Assess the ability to fund recurring dividends and special distributions given the TRA payment obligations.