Good morning, and welcome to the Clear second quarter 2022 earnings conference call. We have with us today Ms. Caryn Seidman-Becker, Co-founder, Chairman, and Chief Executive Officer, Ken Cornick, Co-founder, President, and Chief Financial Officer. Please be advised that today's conference is being recorded. I would also like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections in our most recent SEC filings. In addition, we've included some non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's 8-K. With that, I'll turn the call over to Caryn Seidman-Becker, Co-founder, Chairman, and Chief Executive Officer. Caryn. Hello, and welcome to our second quarter 2022 earnings call. We were certainly expecting a very busy summer travel season, which we at Clear had termed Travelpalooza. Needless to say, the global secular demand for travel, combined with the significant industry challenges, have exceeded our already high expectations. This travel environment has highlighted the imperative for future-facing innovation and collaboration among all stakeholders to ensure travelers have the frictionless experience they rightfully deserve and enjoy in so many other settings. We are laser-focused and deeply committed to accelerating our network expansion, partnerships, and innovation around new products to help travelers navigate an increasingly difficult global travel environment. We at Clear spend each day envisioning and creating safer and easier travel experiences. When we say transforming the journey from home to gate, we mean it. From stepping out of your front door to reaching your final destination, it is just too hard today. Clear is on the side of the traveler and obsessed with making the journey better. Our results continue to be fueled by our strong network and our evidence of the power of the network effect we spoke about in our shareholder letter. As we have continued to add new nodes, the value proposition increases exponentially. In the second quarter, we experienced strong bookings growth of over 75%. Some of our earliest markets, opened over a decade ago, are among the fastest-growing in our network. We were able to fuel our growth in a highly capital-efficient manner, reflecting not only the network effect, but the obsession with customer experience, yielding both strong word of mouth and a high NPS. New products and innovation will further our network expansion and the continued increase in our total addressable market. We have just launched our new Powered by CLEAR verification SDK, available for mobile web experiences or native mobile applications. This low-code integration creates a single app solution for our partners, enabling frictionless experiences for their customers in both digital and physical environments. We are excited to welcome new partners to our network, creating new nodes for our over 13 million existing Clear members and ensuring rapid adoption for our partners. Since our IPO, I am pleased with the continued obsession and improvement of our member experience, the growth of our network, new product introductions, and our solid financial performance and free cash flow generation. What has propelled us at Clear and will continue to fuel our innovation, growth, and culture is the strong leadership team we have built. Just this month, we are excited to welcome Nick Petti as our new Chief Technology Officer. Nick joins us most recently from JP Morgan, where he was the CTO of payments for consumer and community banking. Before that, Nick was part of strong engineering cultures at Uber, Capital One, PayPal, and Amazon. Before I turn it over to Ken, a quick comment on the economic climate. These are still early days at Clear, and while there is plenty of discussion in the market about a recession, our business has not experienced any evidence of a travel or economic slowdown. We have an appropriately aggressive plan in front of us as identity, holistically speaking, and frictionless experiences have never been more important, and we are well-positioned to lead. We are also well-equipped to manage through various economic environments, as evidenced by Clear's financial performance during the pandemic, when travel declined by almost 100%. Our bookings declined by about 10%, while our margins and free cash flow expanded. I'm excited about the opportunities in front of us, our strong free cash flow, and balance sheet, which positions us incredibly well in this environment. With that, I will turn the call over to Ken. Thanks, Caryn. Good morning, everyone. Our financial performance in Q2 was better than we expected, with revenue up 86% and bookings up 76%, driven by growth in Clear Plus, as well as new platform deals and renewals. As Caryn alluded to, this level of growth is not just about the return to travel post-COVID. It's a reflection of Clear's significant growth opportunities. Our bookings CAGR versus pre-COVID 2019 levels is approximately 30%, with same-store bookings accounting for roughly 80% of this growth. As we discussed on the last two earnings calls, our focus remains on growing members, bookings, and free cash flow. We generated $41 million of free cash flow this quarter, bringing year-to-date free cash flow to $61 million and last twelve months free cash flow to $114 million. We expect to remit the approximately $65 million payable to American Express in the third quarter related to the very successful first year of our Platinum partnership. Even with this outflow, we expect to generate positive free cash flow in the second half of 2022. Excluding the working capital benefit from American Express over the last twelve months, we generated approximately $50 million of free cash flow, which is up over 4x the prior year LTM amount of $11.6 million. Next quarter, once we anniversary the payable to American Express, we'll be speaking more about LTM free cash flow. We're also focused on operating leverage. Since inception, we have been methodical about expense growth, and we embody a scrappy at scale culture. As previewed in our Q4 2021 earnings letter, year-over-year operating expense growth will continue to moderate as we progress through 2022. In the quarter, total OpEx grew less than 25%, roughly a third of our revenue growth rate, driving significant margin expansion. Adjusted EBITDA turned positive in Q2 and is now positive on a year-to-date basis. In addition, adjusted net income turned slightly positive in the quarter. We reported 94.3% net member retention in the quarter, which was higher than our expectations and remains above our long-term expectations of the upper 80s. In our quarterly letter, we included some additional detail on underlying drivers of our net retention metrics. Specifically, as utilization has grown with our network, retention levels for newer cohorts of members continue to improve. We see that in our retention curves, which have shifted up into the right. This should provide a healthy tailwind to retention over time, which we now expect to settle above pre-COVID levels. Our cash and equivalents balance as of June 30th was $703 million. As mentioned, we expect to generate additional free cash flow in the back half. Our Q3 guidance expects GAAP revenue of $111 million-$113 million and total bookings of $128 million-$132 million, excluding any contribution from TSA PreCheck. We're making good progress on our launch timeline, and we do expect a Q4 launch. We'll now go to Q&A. Thank you. At this time, we'll be conducting a Q&A session. If you'd like to ask a question, please press star one on your telephone keypad. 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 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. Our first question comes from the line of Dana Telsey with Telsey Advisory Group. Please proceed with your question. Good morning, everyone, and congratulations on the nice results. I liked your word, Caryn, of the Travelpalooza. Can you expand upon how you're thinking about the Travelpalooza going forward, potentially into the third and fourth quarter, and what you're seeing on the cohorts of membership retention? Because it certainly seems like the year one retention is going very nicely. Any other qualitative thoughts on the other year's membership and their retention? Just lastly, on American Express and on TSA PreCheck, any updates there? Thank you. Hi, Dana. I'll take the Travelpalooza concept, and then I'll turn it over to Ken on retention and PreCheck timing and Amex. You know, as I said in my words at the beginning, we continue to see very strong travel trends and expect them to continue for CLEAR because these are still early days. We are opening new airports, right? Which drives new enrollment and drives retention and utilization. We're launching new products, and I think it's really important, never has a frictionless experience been more valuable to travelers. All you have to do is turn on any TV station or, you know, online streaming to see how challenged the travel experience is and how people expect the predictable experience they have in other settings to happen in airports or in travel in general. That's what we're really focused on. Whether it be Home to Gate, whether it be our announced partnership with Uber, whether it be our Reserve products, whether it be what, you know, some new products that we're testing in the market that have been written about, we're on the side of the traveler and really obsessed with their experience from the time they leave their house to the time they board their plane, and I think that's deeply valuable. We continue to see great strength in CLEAR and the opportunities in front of us. I'll start with PreCheck. PreCheck is, you know, we're progressing on the launch timeline very, very nicely. We still expect a Q4 launch, and we're gearing up marketing and ops to support that. On the Amex piece, I don't know if you had a specific question, but as we sort of alluded to in the commentary, we're very pleased with year-one performance of the Amex partnership. We'll be remitting the $65 million, as we called out in the free cash flow area of our letter. We think there's a lot of opportunity on this Amex partnership for continued growth, not only on the Platinum side, but you know, potentially adding other card portfolios within that family. Retention. Look, we wanted to give some additional detail in some of the drivers behind, you know, the KPI that we report, the net member retention number. We are, you know, very pleased with how the cohorts are progressing. Typically, you see a degradation over time in the quality of the joins. We see the opposite, and we're really focused on, you know, the LTV and the LTV to CAC. The younger cohorts are actually performing better than our older cohorts, and that's really attributable, we think, to the network effect and the utilization. Thank you. Thank you. Our next question comes from the line of Paul Chung with JP Morgan. Please proceed with your question. Hi, thanks for taking my question. Just on bookings, booking strength, could you kind of expand on, you know, any pricing uplifts there? I know you did some price increases. Where are you seeing, you know, new enrollment momentum? Any comments on particular regions? Then are there any kind of card programs or airline partnerships we should be thinking about over the next six to 12 months? I have one follow-up. Sure. In terms of the booking strength, it really is fairly broad-based. Certainly the pricing that we took in Q2 went through successfully and is a contributor to the growth. If you recall, we raised prices for new members only, not existing. We grandfathered existing members in. You know, it is a small contributor to the bookings growth and but not all of it. It's fairly broad-based. From a geography perspective, I would echo that comment. It's really broad-based as well. The only thing I would add to that, Paul, is that you are starting to see strength on the coast. That's something we had commented on earlier in the year was coastal weakness, if you will, between international travel and business travel, and you are starting to see strength there. I think that's important to think about as travel comes back, both on the leisure side, but then as well as the business and international side, which have obviously been very slow to rebound. Gotcha. My follow-up, you know, free cash flow has been excellent. It's already exceeding all of, you know, 2021, and it's mostly on bookings growth. Anything else you wanna point out there? You mentioned the $65 million going out in 3Q. As we look beyond 3Q, how do we think about kind of the normalized pace of free cash flow? Does that cash outflow kind of occur every year in 3Q, or is it kind of more spread out in smaller magnitude as well? Just any comments there as we think about modeling next year. Yeah. With respect to the cash outflow, that'll be every year in Q3, you know, for Platinum. In terms of the free cash flow profile of the company, you know, a couple things to point out. Number one is, as we've sort of repeated every quarter, there is a discrepancy between GAAP and bookings. So cash and GAAP, and GAAP lags behind bookings, as we grow the business. That is, you know, a main contributor to the free cash flow generation relative to the GAAP financial metrics. I would also point out, you know, we are hyper-focused on capital efficiency as a very capital-efficient business. You know, we expect that to continue. It's just a feature of the business. I think it's also a feature of our culture and who we are. When you look at the, you know, the IPO letter that we wrote, we talked about it. It's how we've grown up. It's how we've built the business that we believe you can have growth and free cash flow. When Ken talked about a scrappy at scale culture, that's embedded throughout now our over 3,000 team members around the world. It's a great business, and I think we have very strong leaders who are focused on economic efficiency as well as investing appropriately in the business. Now 13 years into this, that's what we've done from the beginning. Great. Thank you. Thank you. Thank you. Our next question comes from line of Michael Turrin with Wells Fargo Securities. Please proceed with your question. Where we were modeling, it looks like it calls for continued 30% growth as a baseline. You mentioned the rebound in summer travel you're seeing. Anything you can add just around how to think about or how we should think about normalized growth for the business and some of the drivers there, as we maybe reach a point where some of the bigger spikes, ebbs and flows we've seen over the prior periods start to settle a bit here? We missed the first part of your question, but I think we got the gist of it, which is the normalized growth rate over time. You know, we're not guiding to long-term growth rates, but we did point out, you know, we wanted to highlight the CAGR of the business since 2019, just to show you this is not just about the travel rebound. This is a strong, you know, secular grower. We're not gonna, you know, give you guidance specifically on the long-term growth rate. We did wanna point out the CAGR since 2019, as many companies are doing in this environment. Sure. No, I mean, I think the CAGR is helpful just for us in trying to model just some of the settling impacts that could play through. Maybe just one more, Ken, if you could just remind investors the relation between free cash flow and EBITDA. Clearly, we saw the bigger spike to 40% margin on free cash flow this quarter. Anything for us to be mindful of just between, in the relation between those two metrics and thinking through the trajectory there? Sure. As a reminder, with the subscription business, since we're an annual biller, we have GAAP revenue which lags behind our cash receipts. If a member pays us $189 today, that's a booking of $189. The GAAP implication of that is it gets amortized or deferred over the 12-month period of the subscription. That's why you see, you know, free cash flow exceed the GAAP metrics. Adjusted EBITDA, while not a GAAP metric in and of itself, is based off of GAAP revenue. Most—basically all of our costs, cash and GAAP are the same. We recognize all the costs up front, cash and GAAP, while the revenues are deferred. That's why the Adjusted EBITDA, again, is based off of GAAP revenue and our free cash flow is in excess. In terms of CapEx, we're a fairly capital-efficient business. Over time, as GAAP catches up to bookings, those would converge. Since we're growing today, there is that lag and therefore free cash flow is higher than the GAAP metrics. Thank you. Thank you. Our next question comes from the line of Brian Essex with Goldman Sachs. Please proceed with your question. Hi, good morning, and thank you for taking the question. Maybe, you know, for Ken or Caryn, can we get a sense of given the enrollment growth that we've seen on the platform, I mean, across the company, can you give us a sense what conversion rates might be of the non-airline business and how that's driving kind of the kind of robust growth we're seeing in the enrollment volume? You know, if you go to a conference or something and you're downloading the app and you're getting that, you know, participants' information, how are those conversion rates, and how do you see the trajectory of, you know, paying enrollments going forward based on that trajectory? Yeah. You're referring to the upgrade rate from the platform to CLEAR Plus, and that is an exciting area for us. I think we mentioned last call, we haven't done a lot to specifically market to those folks, but we're getting, you know, very strong organic upgrade rates there. We think there's a lot of opportunity there. It is a contributor to the growth, but not a major contributor yet. Got it. That's very helpful. Maybe just from a TAM perspective, as we think about the potential of this platform, you know, the aggregate business together, how should we think about international opportunities both on platform and CLEAR Plus? Is that something that's potentially on the horizon or is that, you know, kind of a ways away? It is not a ways away. I would say it's today and on the horizon, in that when we bought Whyline, it was a business that had revenues in Latin America. Not only are we expanding the Reserve product to other international markets, but that is also bringing platform opportunities to those markets as well. It is today and on the near horizon, not in the distant future. Areas that we're specifically focused on are really the Americas, so going from Canada, down, you know, through South America as well as some places in Europe. Western Europe. Western Europe. That's super helpful. Is that primarily for platform business, or is that kind of on the airline side as well? You should think about that as the platform business, but Reserve is, you know, aviation-focused. It is sooner on the platform and the Reserve side than it is on the CLEAR Pro side. Got it. Super helpful. Thank you very much. Yeah. Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star one on your telephone keypad. Our next question comes from the line of Ananda Baruah with Loop Capital Markets. Please proceed with your question. Yeah. Thanks, guys. Good morning, and thanks for taking the questions. Congrats on the consistent good results here. I guess, yeah, a few if I could. Just to start, Caryn, sort of top of your prepared remarks, you mentioned sort of ongoing network expansion and new products and features on the horizon. Is there anything there you can share with us or, you know, sort of not specific, maybe give us at least at a higher level some of the ways you're thinking about getting at some of this new stuff? I have a couple follow-ups. Sure. The new Powered by CLEAR SDK that we talked about, the low-code integration for partners to embed CLEAR's technology in their user flow. You should think about two parts of the business, right? The travel side of the business and the platform side. I would think of travel as owned and operated, what you see at CLEAR Plus lanes or Reserve. Then what you think about as the platform, which you'll see partner announcements over time, is a single app solution so that the CLEAR enrollment and verification experience can be embedded in partners' apps. That's really a very powerful product introduction on the platform side and a significant milestone for our company, so that this frictionless experience that people have come to expect, partners can bring to their customers. That is a huge unlock for us, number one. The other thing that you might have read about, right, is a CLEAR Concierge pilot going on in Orlando. That's us testing different services, connecting our digital assets like our app or our Reserve technology with our physical assets, in this case, our ambassadors in airports, to create services furthering the frictionless experience, where you could go on to the app and ask for an ambassador to come meet you and truly help you go curb to gate. Those are premium products. We have different assets that we can put together in different ways, whether it be for us or for our partners. You know, those are just two examples. Yeah, that's really interesting and helpful. For the pilot that's going on in Orlando, is that a live pilot? You actually in Orlando could do that and have an ambassador meet you? It is a live pilot that we are testing. Interesting. Okay, cool. That's helpful. Ken, 80%, you said there's 80% same-store sales growth embedded in the 30% booking CAGR. I think in the past you've talked about, in recent past, but you've talked about some of the things that you've done, you guys have done to do that, continue to upgrade the talent. I think you talked about moving some of the stronger general managers around the country to replicate performance. Is there anything incremental that you've been doing over the last 90 days or so that could continue to help catalyze this growth? Or you guys sort of, I don't wanna say, settled with what you're doing, but is it gonna be sort of more of the same? I'm wondering if there's anything that you're doing to continue to lend to the consistent same store sales growth? I mean, yeah, we're continuing to refine our hiring practices. We're continuing to refine our training. You know, we're continuing to refine the technology that our ambassadors have, you know, in their app, in their hands to track performance. Yeah, we're a continuous improvement sort of philosophy, and you know, continuing to hire additional you know, training resources and management resources as we grow the business. I think it's you know, more of the same, but continuing to refine and improve. Yeah, improving it across the board. Okay, super helpful. Last one for me. TSA PreCheck, thanks for the update. Are you guys thinking any differently about the contribution from TSA PreCheck than you were during the IPO process? Or should we generally think of it as being relatively similar? Yeah, I think very consistent with what we've communicated in the past. We think there's a very large opportunity to drive new enrollments for TSA PreCheck as well as renewals, and no change to our thought process. The only thing I would add to that is, you know, I think many people have enrolled through Global Entry historically, and I think that those appointments are even harder to come by these days, and so it might create even a bigger total addressable market for PreCheck enrollment. Cool. That's helpful. Awesome. Thanks, guys. Appreciate it. Thank you. Thank you. Ladies and gentlemen, that concludes our Q&A session. I'll turn the floor back to Caryn for any final comments. Thank everybody for joining us today. Thank you. Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you. Your participation.