Clear Secure (YOU) Q2 Revenue Jumps 17%

Clear Secure (YOU 6.17%), the identity verification and secure access technology provider best known for biometric screening at airports, reported Q2 FY2025 results on August 5, 2025. The most notable news was that GAAP revenue outpaced analyst expectations, reaching $219.5 million versus an estimate of $215.0 million, representing a 17.5% increase from the prior-year quarter. However, GAAP earnings per share came in at $0.26, missing the $0.29 expectation. The period saw robust free cash flow and improved operating margins, but net margin slipped, and trends in active member growth and engagement showed slowing momentum. Overall, it was a quarter marked by continued network and product expansion but some signals of deceleration in core user metrics and profitability.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Key Success Factors

Clear Secure operates a secure identity platform used for biometric verification. Its most widely recognized product is CLEAR+, a paid membership service that enables travelers to move quickly through airport security using biometric technology. The company runs these services in 59 U.S. airports and is expanding into other verticals, such as healthcare and enterprise identity verification.

The business is built around five main focus areas: expanding its partner and member network, maintaining robust security and privacy standards, advancing technology, complying with stringent regulations, and driving membership acquisition and retention. The company’s success relies on growing its enrollment base, introducing innovative new offerings, and deepening relationships with both consumers and business clients.

Quarterly Performance: Revenue, Members, and Engagement

GAAP revenue rose 17.5% year over year in Q2 FY2025 and beat the consensus estimate by $4.5 million. This outcome was powered both by increases in airport-related membership and accelerated growth in business-to-business services. Adjusted EBITDA, a measure of operating performance excluding certain expenses like depreciation and equity-based compensation, reached $60.1 million, up 26.6% from Q2 FY2024. boosting the operating margin to 19.4%.

Acquisition of new members continued, with active CLEAR+ members at 7.63 million, growing 7.5% year-over-year but down from 14.8% growth in Q2 FY2024. Cumulative enrollments reached 33.47 million, up 38.2% year over year. Total platform uses climbed 28.1% year-over-year, indicating a steady increase in users interacting with the service. Despite these gains, growth rates showed further deceleration compared to prior quarters, as year-over-year revenue growth was 17.5% in Q2 FY2025, down from 18.0% in Q1 FY2025, 20.7% in Q4 FY2024, 23.7% in Q3 FY2024, and 24.6% in Q2 FY2024.—pointing to a business reaching greater maturity in its core segments.

One of the most important watchpoints remains per-member engagement. The average annual uses per CLEAR+ member fell 5.3% to 7.0x compared to the year-earlier period, reflecting a lower frequency of use per subscriber. Gross dollar retention, a metric that indicates what proportion of recurring revenue Clear Secure retains from existing members, dipped 2.0 percentage points to 87.3%. This was attributed largely to price increases implemented for subscriptions, affecting certain cohorts, particularly among family plans. Sequential stabilization was noted, but overall engagement is still an area to watch.

The company expanded airport and product coverage, maintaining 59 CLEAR+ airports and reaching 231 TSA PreCheck enrollment locations. New initiatives included expansion of CLEAR+ for travelers from the U.K. Canada, Australia, and New Zealand, and the July 2025 launch of a premium Concierge service aimed at increasing value for high-engagement users. A broader ePassport product now supports international travelers and a digital CLEAR ID solution is expected to launch as a federally recognized ID, potentially increasing addressable market size.

Outside its core consumer offerings, the B2B segment (branded CLEAR1) signed a record number of deals, especially in industries like healthcare and digital agreement providers such as DocuSign. This demonstrates Clear Secure’s strategy to diversify its customer base, although it does not break out detailed B2B segment revenue. The company also reiterated its commitment to privacy.

On capital allocation, management repurchased 1.0 million shares at an average price of $23.96 per share and paid $18.1 million in dividends and distributions. Free cash flow (non-GAAP) reached $117.9 million, up 7.1% from Q2 FY2024, supporting continued returns to shareholders. The quarterly cash dividend was held steady at $0.125 per share, payable in September 2025. This is part of the company’s ongoing return of capital policy, with $42.7 million returned to shareholders via buybacks and dividends.

Looking Ahead: Guidance and Key Areas to Watch

For Q3 2025, management expects revenue between $223 million and $226 million, which implies year-over-year growth of 13.1% and the full-year FY2025 free cash flow (non-GAAP) goal of at least $310 million was reaffirmed. The company expects further improvement in operating margins but did not raise its previous outlook for overall growth or profitability.

Management remains focused on monetizing new product launches, deepening international traveler participation, and accelerating B2B signings. However, investors should monitor trends in member engagement, pricing sensitivity, and maturing growth in the core travel segment. Persistent declines in average usage per member (Annual CLEAR+ Member Usage declined from 7.4x in Q2 FY2024 to 7.0x in Q2 FY2025, a year-over-year decrease of 5.3%) and ongoing moderation in topline growth (Total Revenue YoY Growth slowed from 24.6% in Q2 FY2024 to 17.5% in Q2 FY2025) are top priorities for scrutiny in the coming periods. The quarterly dividend was held steady at $0.125 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.