Clear Secure, Inc. YOU

Key data

The business

Clear Secure sells speed through the airport. A CLEAR+ membership, about $199 a year, lets you verify with a fingerprint or eye scan at a kiosk and walk past the document-checker line at more than 50 US airports. That subscription is nearly all the revenue, billed a year up front, which is why cash lands long before it is earned: deferred revenue sits at $573M. Gross margin is 90%. Once the lanes and pods are built, each new member is almost pure profit. Two growth arms hang off the core. The company is now the largest private enroller for TSA PreCheck, and CLEAR Verified rents the same identity check to banks, hospitals and websites that need to confirm you are you. The moat is the enrolled biometric itself plus habit: a member who has breezed past one line rarely goes back to standing in it. Substantially all revenue is US, and no single airport is more than 10% of membership.

The numbers

Five quarters show a subscription business hitting its operating-leverage stride.

Revenue growth reaccelerated to 27% in Q2 2026 from 20% in Q1, and operating income rose 95% while revenue grew 27%, because the cost base hardly moved. Reported EPS of $0.49 versus consensus $0.40, a 23% margin, the fourth straight quarter above. Net income more than doubled year on year even as the tax rate climbed from 15% to 21%.

The annual view carries one trap. Reported net income fell from $170M in 2024 to $109M in 2025, which looks like earnings going backward. It is not. Operating income rose from $123M to $186M over the same stretch. The 2024 figure was inflated by a one-time tax benefit tied to Clear's up-C ownership structure, not by the business earning more. Judge this on operating income, which has swung from a $129M loss in 2022 to a $186M profit in 2025, and on cash.

The cash is the real tell. Trailing free cash flow is about $508M on $1.0B of revenue, a 51% margin, fattened by members prepaying a full year. That is an 11.4% free-cash-flow yield at today's price, unusual for a business still growing above 20%, and stock-based pay is a modest 4.3% of revenue, so the owner keeps most of it. The Street sees revenue at $1.11B this year and $1.27B next, EPS near $1.83 then $2.20. At $44.33 you pay 24 times this year's earnings and under nine times free cash flow. The market prices member growth as if the airport core is maturing, yet Q2's reacceleration and the deferred-revenue build say the renewal engine is still tightening. The print that settles it is net member adds against deferred-revenue growth over the next two quarters.

The software economics underneath are enviable.

Management

Clear is founder-run: Caryn Seidman Becker has led it since the restructuring that created today's company, and the dual-class structure keeps control with her. Capital comes back two ways, a $0.15 quarterly dividend just declared and payable September 24, and steady buybacks of Class A stock. What gives pause is the selling. Insiders sold $70.8M over the past year across 35 transactions and bought nothing. The CEO and her Alclear vehicle unloaded about $33M in July and August, about $26M of it on August 5, the day the quarter printed. Plan status is not disclosed in the filings, so I cannot separate pre-scheduled from discretionary, and that ambiguity is the point. The selling flagged at the start of September has not extended past that August 5 cluster, but a year of one-way insider flow deserves weight against a stock the founder is steadily monetizing.

How it fails or surprises you

Member growth stalls. CLEAR+ has already captured much of the frequent-flyer core, and the airport pool is finite. If net adds slow and renewal softens, the 27% growth rate compresses fast because so much revenue recurs. It shows first in deferred revenue, up 11% since December. Two quarters of flat deferred revenue would break the compounding case before the income statement admits it.

The earnings line misleads. Reported net income fell 36% in 2025 while the business grew, an artifact of the up-C tax structure and a 2024 one-time benefit. A reader anchoring on GAAP EPS sees decay where operating income shows 51% growth. If the effective tax rate keeps climbing toward a normal 25%, reported EPS growth lags operating growth, and the optical P/E stays richer than the cash multiple deserves.

CLEAR Verified re-rates it (right tail). Today's price pays for airport lanes. Reusable digital identity, renting the same face scan to banks, healthcare and login flows, is a far larger pool the market is not funding. If Verified revenue starts breaking out in the disclosures over the next year, growth reaccelerates past 25% and the sub-nine-times free-cash-flow multiple looks like a mistake. The print to watch is a Verified revenue line in the filings.

Closing thoughts

Bull and bear both agree the business gushes cash. They disagree on how much runway the airport core has left, and member growth plus deferred revenue over the next two or three quarters decide it. If both keep building, you bought a compounding subscription business at nine times free cash flow. If both flatten for two quarters, the pool is tapped. If one grows and one stalls, pricing is doing the work while the member base matures, and the verdict gets pushed out another quarter. After a 36% drawdown from last year's high, you are buying a 90%-gross-margin, net-cash, 50%-free-cash-flow-margin business at 24 times forward earnings and an 11% cash yield, not a demanding price if growth holds even in the high teens. My judgment, labeled as such: the left tail, member saturation plus a year of insider selling, is real but partly priced by the drawdown, while the right tail from Verified is unfunded and asymmetric. On balance the fatter tail now points up, though the insider flow keeps me from calling it cleanly.

The bet is still that travelers keep paying $199 to skip the line and keep renewing, and that the face scan travels beyond the airport. What breaks it is saturation: member growth stalls and deferred revenue stops building. Watch net member adds against deferred revenue, now $573M and up 11% since December. Two quarters of both going flat, and the compounding story is over no matter how cheap the cash flow looks.