YOU 10-K & 10-Q changes, risk factors and insider trading

•failure to add new and retain existing Members, including Active CLEAR Plus+ Members, or increase the utilization of our platform, and the failure to add new or retain existing partners;

•risks associated with our organizational structure, including those related to our Tax Receivable Agreement,Agreement (as defined below), and tax related payments we may be required to make;

•provisions in our charter documents and certain rules imposed by regulatory authorities may delay or prevent our acquisition by a third partythird-party;

If we fail to add new and retain existing Members, including Active CLEAR+ PlusMembers, Members,oror increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected.

Our business and financial results depend significantly on adding new and retaining existing Members, increasing the number of CLEAR Plus+ Members, including by converting non-paying Members to paying Members, and the utilization of our platform by our Members. There can be no assurances that we will be successful at accomplishing any of the foregoing. Member growth, retention and utilization of our platform is in part dependent on our ability to introduce new services to our Members, expand our airport footprint, promote and increase awareness of our offerings and satisfy or exceed the expectations of our Members with our platform and offerings. We have derived substantially all of our historical revenue from CLEAR Plus,+, our consumer aviation subscription service. To grow and diversify our revenue, we will need to increase the number of Active CLEAR Plus+ Members and the utilization of our platform, and continue to offer services that are considered valuable to our CLEAR Plus+ Members. Failure to do so could adversely affect our business, results of operations and financial condition.

If CLEAR Plus+ Members do not perceive our aviation subscription service to be of value, including if we adjust pricing in a manner that is not favorably received by CLEAR Plus+ Members, we may not be able to attract and retain CLEAR Plus+ Members, and accordingly, our revenue, including revenue per paying CLEAR Plus+ Member, and results of operations may be adversely affected. We have in the past, and may in the future, expand CLEAR Plus+ membership to include benefits in addition to use at our partner airports, such as free access to CLEAR Mobile and CLEAR Perks. If our efforts to develop and offer more benefits are not valued by our current and future CLEAR Plus+ Members, our ability to attract and retain CLEAR Plus+ Members, or increase pricing, may be negatively impacted. We have and may, from time to time, adjust our CLEAR Plus+ membership pricing, our family plans, or our pricing model itself. For example, we have increased CLEAR Plus+ membership rates, as well as the price of a family member, in 2022,the 2023last andfour 2024,years, and may continue to adjust pricing in the future. These and other adjustments may not be well-received by CLEAR Plus+ Members, and could negatively impact our ability to attract and retain CLEAR Plus+ Members, revenues per paying CLEAR Plus+ Member, revenue and our results of operations.

Our ability to attract and retain Members, as well as to increase the number of Active CLEAR Plus+ Members and the utilization of our platform by our Members, could be materially adversely affected by a number of factors discussed elsewhere in these “Risk Factors,” including:

The growth of our business, including our membership base, geographic footprint and financial results, also depends on adding new and retaining existing partners, as well as increasing the revenue generated from partners. Our partners help increase our opportunities to attract new Members and, in some cases, help subsidize memberships. However, we may be unsuccessful at adding new partners, retaining existing partners or monetizing our partner relationships, and our success is subject to a number of the risks that we face in expanding our membership base. See “— If we fail to add new and retain existing Members, including Active CLEAR Plus+ Members, or increase the utilization of our platform, our business, results of operations and financial condition would be materially and adversely affected” above.

If our partners stop trusting our platform, or if our partners or our Members have an unsatisfactory experience with our platform, we are unable to offer new and relevant offerings and features or we are unable to increase the adoption of our platform, we could be unsuccessful at continuing to grow our partner network or increase the revenue generated from existing partners, which could hamper our prospects. This could in turn have an adverse impact on our ability to grow our membership base. If certain partners that subsidize memberships do not renew their agreements with usus, we could lose a portion of the affected Members, which could impact our revenue and retention rates. Any of the foregoing could materially and adversely affect our business, results of operations and financial condition.

We believe that our brand is important to attracting and retaining Members and partners. Our business is dependent on our ability to build, maintain and expand trust in our brand and our platform from a variety of different stakeholders.stakeholders, Building and maintaining our brandwhich depends on our ability to provide consistent, accurate, high-quality services to our Members and partners, as well as protect the information that we gather,gather (which may include personal information.information). It also requires us to understand the evolving expectations of our stakeholders, and to adjust our offerings to meet them. An inability to accurately understand or meet the expectations ofof, or forecast changes in our stakeholders, or any failure to meet the expectations ofin, our stakeholders, could have a material adverse effect on our brand, and therefore on our business, results of operations and financial condition. Failure to meet these continuously evolving stakeholder expectations could diminish the trust in our brand and platform. While it is our mission to continue to build and expand the trust in our brand and our platform from all stakeholders, any actual or perceived failure to do so could result in a decreased number of Members, decreased use of our platform by our Members, slower growth in our platform and business than we expect, a discontinuation of our partnerships and relationships, and a negative impact on our ability to continue in, or expand into, other sectors or industries, any of which could have a material and adverse effect on our business, prospects, results of operations and financial condition.

Our market is intensely competitive with respect to every aspect of our business, and we expect competition to increase in the future. We anticipate that both our existing and future services and our expansion into new verticals will face competition from a variety of other companies and organizations. Other companies may strive or choose to perform services related to confirming an individual’s identity as a standalone task or related to a specific transaction, which would increase the competition we currently face. For example, large, well-established technology platforms, such as Alphabet/Google, Amazon, Apple, Microsoft or Meta or well-known companies in the credit card industry may have developed, may currently be developing, or in the future could acquire, develop or expand, a platform that competes directly with some or all of our solutions. Other potential competitors include providers of decentralized identity verification platforms or verification services, including know your customer services. Additionally, biometric hardware companies and platform companies that also offer hardware may develop applications that directly or indirectly compete with our platform. We face competition from two other private entities that are authorized to compete with us in enrolling Members on TSA’sTransportation Security Administration’s (“TSA”)’s behalf for TSA PreCheck®.

We also face competition from solutions that were developed or could be developed in-house by our existing and future partners, and by governmental agencies, which could result in lost revenues and otherwise have a material adverse effect on our business, results of operations and financial condition. See “Increased adoption of new technological solutions and services, including third-party identity verification and credential authentication solutions, at locations where we operate or may operate in the future could impact our business” below.

Acquisitions of our competitors by companies that have more resources than us could have a negative impact on our competitive position. Some of our competitors may enter into alliances with each other or other companies or governmental agencies, or may establish or strengthen cooperative relationships with system integrators, third-party consulting firms or other parties. Any such consolidation, acquisitions, alliances or cooperative relationships could lead to pricing pressure and loss of market share and could result in one or more competitors with greater financial, technical, marketing, service and other resources, all of which could harm our competitive position. Furthermore, organizations may be more willing to incrementally add solutions to their existing infrastructure from our competitors than to replace their existing infrastructure with our solutions. These competitive pressures in our market or our failure to compete effectively may result in fewer Members and partners and reduced revenue and gross margins. Any failure to meet and address these factors could adversely affect our business, results of operations and financial condition.

Private industry and governmental agencies continue to increase their efforts related to developing and launching identity verification and credential authentication solutions, and we expect this trend to continue. For example, certain airlines, technology providers and the Transportation Security Administration (“TSA”) are developing technological solutions, in some cases including the use of identity verification technology or biometrics, that have been implemented, like TSA PreCheck® Touchless ID, and may gain widespread acceptanceacceptance, in locations where we operate, such as airports, or where we may operate in the future.

In addition, the federal government has conducted a number of proof of concept demonstrations to evaluate identity verification technologies and other credential authentication technologies at airport checkpoints, intends to expand use of its own biometric credential authentication technologies (“CAT”), at additional airport checkpoints, and is continuing to explore digital identities at checkpoints generally. The TSA has publicly stated its intent to require all travelers to be processed through CAT machines in the future, either through travelers presenting physical IDs or through the transmission of digital ID credentials. Additionally, state governments are issuing driver’s licenses in digital formats, and airlines have launched their own identity and credential authentication initiatives, in some cases with other identity verification partners. In many cases these initiatives also include the use of biometrics, either via centralized or decentralized platforms, and any of these platforms or standards may become universally accepted and preferred by the industry, the TSA, airlines, and our other partners. Widespread adoption of competing identity verification solutions or credential authentication solutions or standards (including TSA’s own solutions) at airport checkpoints or other locations where we operate could adversely impact our ability to operate in the same manner as we operate today.

We might not implement successful strategies to increase the adoption of our platform or expand into new verticals, which would limit our growth.

Our future profitability depends, in part, on our ability to successfully implementincrease our strategies to increasethe adoption of our platform, expand into new verticals and develop new offerings. We cannot assure you that the market for our platform and our existing and proposed offerings will remain viable. The market for identity verification solutions is still developing. The evolution of this market may result in the development of different technologies and industry standards that are not compatible with our current solutions, products, technologies or platform. Several organizations set standards for biometric identification and standards continue to develop related to storage of biometric information or identity information. Although we believe that our technologies comply with existing standards, these standards may change and any standards adopted could prove disadvantageous to or incompatible with our business model and current or future solutions, products, services and platform.

Our growth has been accelerated by our expansion from the aviation industry into different verticals, including travel and hospitality, KYC,workforce, digital marketplaces, live events and healthcare. Our business strategies include expanding our platform and Member base within these verticals and identifying and expanding into new verticals. There can be no assurances that we will be able to expand our business within existing verticals or successfully identify and expand into new verticals, or that any new verticals will provide us with successful opportunities and relationships.

We may be required to incur significantly higher expenditures than we currently anticipate to achieve the foregoing results.results, Such expenditureswhich could have a greater negative impact on our results of operations if our revenues do not increase sufficiently. Our investments may not be successful and there can be no assurances that our growth strategies and plans will be achieved.

We provide our platform to our partners through commercial agreements and strategic alliances. These arrangements can be complex and require substantial personnel and other resource commitments, which may limit the number of partners we can serve. If we are unable to quickly scale our business, or if we do not effectively manage our infrastructure and personnel capacity as we grow, we may not be able to achieve our growth plans. Furthermore, there could be a negative impact on existing alliances and business relationships. Under certain of our commercial agreements, the total amount of compensation we receive is partially dependent on the level of use at the relevant location, because we receive payment for each individual who uses our platform at that site. Usage levels are due to a number of factors including many that are beyond our control, and if usage is lower than anticipated, the compensation we receive may be lower than expected. As our commercial agreements terminate, we may be unable to renew or replace these agreements on comparable terms, or at all. We may in the future be required to enter into amendments or new agreements on less favorable terms, which could adversely affect our business, results of operations and financial condition.

Even if third-party claims against us lack merit, the expense and effort related to defending ourselves against these claims could be costly and time consuming.Assertionsconsuming. Assertions by a third party,third-party, whether or not meritorious, could subject us to costly and time-consuming litigation, expensive remediation and licenses, divert management attention and financial resources, harm our relationship with customers, reduce demand for our platform and result in our brand, business, results of operations and financial condition being adversely affected.

In addition, while we seek to develop new offerings and expand into new markets and industries, we may have limited or no experience in these areas, and our Members may not adopt our offerings. We may incur significant expense in our attempts to innovate and create new offerings, and thesewhich attempts may ultimately not be successful. New offerings, which can present new and difficult technology challenges, may subject us to claims if Members or partners experience service disruptions or failures or other quality issues. In addition, profitability, if any, in our newer activities may not meet our expectations, and we may not be successful enough to recoup our investments. Failure to realize the benefits of amounts we invest in new technologies, products or services could result in the value of those investments being written down or written off.

Maintaining adequate research and development resources, such as the appropriate personnel and development technology, to meet Member, partner and market demands is essential. If we elect not to or are unable to develop solutions internally, we may choose to, or be required to,to expand into a certain market or strategy via an acquisition for which we could potentially pay too much or fail to successfully integrate into our operations. Our failure to maintain adequate research and development resources or to compete effectively with the research and development programs of our competitors would give an advantage to such competitors and our business, results of operations and financial condition could be adversely affected. Moreover, there is no assurance that our research and development or acquisition efforts will successfully anticipateprovide marketthe needsbenefits andwe result in significant new marketable solutions or enhancements to our solutions, design improvements, cost savings, revenues or other expected benefits.expect. If we are unable to generate an adequate return on such investments, we may not be able to compete effectively and our business and results of operations may be materially and adversely affected.

We have derived substantially all of our historical revenue from Members who enroll in CLEAR Plus,+, which includes our RT Program service at U.S. airports. Accordingly, our performance is dependent on the strength of the travel industry and our revenue is susceptible to declines in or disruptions to leisure and business travel that may be caused by factors entirely out of our control, such as COVID-19.global pandemics. Additionally, platform usage beyond airports is driven by the operations of our partners, such as their ability to host events, provide hotel rooms, rent cars, and workplaces and medical centers being open for workers.workers and patients. Other events or factors beyond our control can disrupt, and have in the past disrupted, travel and operations within the United States and globally or otherwise result in declines in travel demand and the demand to attend events. These events include prolonged extreme weather, natural disasters or man-made disasters, travel-related health concerns (including pandemics and epidemics, such as COVID-19, Monkeypox, Ebola, Zika, Middle East Respiratory Syndrome, bird fluepidemics or other outbreak of contagious diseases), restrictions related to travel, stay-at-home orders, wars and military actions, terrorist attacks, sources of political uncertainty or political events, protests, foreign policy changes, regional hostilities, general economic conditions (such as a recession or inflation), changes in regulations, labor unrest or travel-related accidents. Because these events or concerns, and the full impact of their effects, are largely unpredictable, they can dramatically and suddenly affect travel behavior and other activities by consumers, and therefore demand for our airport and platform services, which could materially adversely affect our business, results of operations and financial condition. Additionally, as the Real ID Act will require passengers having compliant identification to travel by air in the United States by May 7, 2025, such regulation, if not extended, may decrease the number of travelers with compliant identification and, therefore, negatively impact the demand for our airport services, which could materially adversely affect our business, results of operations and financial condition.

Our financial performance is also subject to global economic conditions and their impact on levels of discretionary consumer spending. Consumer preferences tend to shift to lower-cost alternatives during recessionary periods and other periods in which disposable income is adversely affected, which could lead to a decline in enrollments or renewals of CLEAR Plus,+, less interaction with our platform products related to discretionary activities such as travel (such as rental cars and hotel rooms), and thus result in decreasing platform usage and lower revenue. Downturns in worldwide or regional economic conditions, such as the downturn resulting from the COVID-19 pandemic,pandemics, inflation, and the potential for a recession, have in the past led to a general decrease in travel and travel spending, as well as discretionary spending generally, and similar downturns in the future may materially adversely impact demand for our platform and services. Such a shift in consumer behavior would materially adversely affect our business, results of operations and financial condition.

We expect that our existing cash and cash equivalents will be sufficient to meet our anticipated cash needs for the foreseeable future. However, we intend to continue to make investments to support our business growth and may require additional capital to fund our business and to respond to competitive challenges, such as the need to promote our platform, develop new platform features and offerings, enhance our existing platform, or make strategic acquisitions. Accordingly, we may need to engage in equity or debt financings to secure additional funds. There can be no assurance that such additional funding will be available on terms attractive to us, or at all. Our inability to obtain additional funding when needed could have an adverse effect on our business, financial condition and operating results. If additional funds are raised through the issuance of equity or convertible debt securities, holders of our Class A Common Stock could suffer significant dilution, and any new shares we issue could have rights, preferences and privileges superior to those of our Class A Common Stock. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions, and could impose additional restrictions on our ability to make distributions or pay dividends to our stockholders, or make it less likely that our Board will declare such distributions or dividends.

We have in the past and may in the future seek to acquire or invest in businesses, products or technologies that we believe could complement or expand our current platform, enhance our technical capabilities or otherwise offer growth opportunities. For example, in September 2023, we acquired SORA ID, Inc., a networked identity company focused on the financial services industry that enabled us to add KYC services to our platform offerings.

We may be unable to find or achieve definitive agreements with such acquisition or investment targets, despite efforts by our management, which could be significant. Any transactions that we are able to identify and complete may involve risks, including the commitment of significant capital,capital and/or potentially dilutive equity issuances, and may divert management’s attention and resources from our existing business to develop and successfully integrate the acquired or combined business. We may be unable to successfully integrate such business or assets into our operations, and such business may fail to meet our expectations or achieve the intended results. This risk is enhanced considering we have limited experience in acquiring other businesses. We have in the past acquired, and may in the future acquire, businesses that we have difficulty integrating or where we fail to achieve the anticipated benefits of the acquisition.

Our business depends on retaining and attracting high-quality personnel, including certain key personnel, and continued attrition,or future attritionattrition, or unsuccessful succession planning could adversely affect our business.

To attract and retain key personnel, we use equity incentives, among other measures. These measures may not be sufficient to attract and retain the personnel we require to operate our business effectively. As we continue to mature, the equity incentives we currently use to attract, retain and motivate employees may not be as effective as in the past. Our ability to attract, retain and motivate employees may be adversely affected by declines in our stock price. If we issue significant equity to attract employees or to retain our existing employees, we would incur substantial additional equity-based compensation expense and the ownership of our existing stockholders would be further diluted.

In addition, as we grow, we continue to implement modifications and upgrades to our systems, and these activities subject us to inherent costs and risks associated with replacing and upgrading these systems. Further, our system implementations may not result in improvements at a level that outweighsoutweigh the costs of implementation, or at all. If we fail to successfully implement modifications and upgrades or expand the functionality of our platform, we could experience increased costs associated with diminished productivity and operating inefficiencies related to the efficient delivery of our products and services.

In particular, a significant and growing portion of our Members access our platform through the CLEAR mobile application (the “app”) and through our secure identity platform, CLEAR1. There is no guarantee that popular mobile devices and browsers will continue to support such platform, app or service, or that our Members will use our platform or app rather than competing products.service. We are dependent on the interoperability of our app with popular mobile operating systems that we do not control, such as Android and iOS, and CLEAR1 with popular internet browsers. Any changes in such systems that degrade the functionality of our digital offerings or give preferential treatment to competitors could adversely affect our platform’s usage. In the event that it is difficult for our Members to access and use our platform, our competitors develop products and services that are perceived to operate more effectively, or if our Members choose not to access or use our platform or use mobile products that do not offer access to our platform, our Member growth and Member engagement could be adversely impacted.

Our Members pay for our products and services using a variety of different payment methods, including credit and debit cards, and online wallets. We rely on third partythird-party systems to process payments. Acceptance and processing of these payment methods are subject to certain rules and regulations and require payment of interchange and other fees. To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors, or changes to rules or regulations concerning payment processing, our revenue, operating expenses and results of operation could be adversely impacted. We leverage our third-party payment processors to bill Members on our behalf. If these third parties become unwilling or unable to continue processing payments on our behalf, we would have to find alternative methods of collecting payments, which could adversely impact Member acquisition and retention. In addition, from time to time, we encounter fraudulent use of payment methods, which could impact our results of operation and if not adequately controlled and managed could create negative consumer perceptions of our service.

Our primary locations may be vulnerable to the adverse effects of climate change. Extreme weather conditions may disrupt our business and may cause us to experience additional costs to maintain or resume operations and higher attrition. In addition, current and emerging legal and regulatory requirements with respect to climate change and other aspects of environmental, social, governance and other sustainability (e.g., disclosure requirements) may result in increased compliance requirements on our business, which may increase our operating costs and cause disruptions in our operations.

We are dependent on CLEAR Plus+ memberships for a significant portion of our revenue, and a significant reduction in CLEAR Plus+ memberships would reduce our future revenue and harm our anticipated operating results. Given our dependence on CLEAR Plus+ for a significant portion of our revenues, a decrease in demand for goods or services that produce significant greenhouse gas emissions or are related to carbon-based energy sources, such as air travel, could have a material negative impact on our revenues.

We have, and in the future we may continue to, expand our operations internationally. For example, in December 2021, we acquired Whyline, Inc., our virtual queuing technology used for CLEAR Mobile, which had partnerships across international markets. In addition, in 2023 our LinkedIn partnership was extended to Members in Mexico and Canada. Further, in 2024, CLEAR Mobile was expanded to Members in Costa Rica. Operating outside of the United States requires significant management attention to oversee operations over a broad geographic area with varying cultural norms and customs.attention. As we continue to expand globally, we may incur significant additional operating expenses and may not be successful in our international expansion for a variety of reasons, including:

•complying with varying laws and regulatory standards, including with respect to consumer protection, tax and local regulatory restrictions;

•currency exchange restrictionsrestrictions, limitations on the repatriation and investment of funds or costs and exchange rate fluctuations;

•operating in jurisdictions that do not protect intellectual property rights to the same extent as the United States; and

•potential oppositions in foreign patent and trademark offices; andoffices.

Additionally, we accept payment from ourfor CLEAR Plus Members+ through credit card transactions, certain online payment service providers and mobile payment platforms. The ability to access credit card information on a real-time basis without having to proactively reach out to the Members each time we process an auto-renewal payment is critical to our success and a seamless experience for our users. However, if we or a third partythird-party experiences a data security breach involving credit card information, affected cardholders will often cancel their credit cards. In the case of a breach experienced by a third party,third-party, the more sizable the third party’sthird-party’s customer base and the greater the number of credit card accounts impacted, the more likely it is that our users would be impacted by such a breach. To the extent our CLEAR Plus+ Members are affected by such a breach experienced by us or a third party,third-party, affected Members would need to be contacted to obtain new credit card information and process any pending transactions. It is likely that we would not be able to reach all affected Members, and even if we could, some Members’ new credit card information may not be obtained and some pending transactions may not be processed, which could materially adversely affect our business, financial condition and results of operations.

We rely on third-party technology and information systemssystems, like Amazon Web Services (“AWS”), to help complete critical business functions. If that technology is subject to a security breach or fails to adequately serve our needs, and we cannot find alternatives, it may negatively impact our business, financial condition and results of operations.

We rely on third-party technology and vendors and other service providers for certain of our critical business functions, including credit card readers, scanners, third-party software, cameras and other technology to complete Member enrollments and verifications, as well as prevent fraud, network infrastructure for hosting our website and mobile application, software libraries, development environments and tools, services to allow Members to populate their accounts with personal information, and cloud storage platforms. Our business is dependent on the integrity, security and efficient operation of these systems and technologies, and we do not necessarily control the operation or data security of the third-party providers we utilize. Our efforts to use commercially reasonable diligence in the selection and retention of such third-party providers may be insufficient or inadequate to prevent or remediate such risks. Our systems and operations or those of our third-party providers and partners could be exposed to damage, interruption, security breach and other risks from, among other things, computer viruses and other malicious software, denial-of-service attacks and other cyberattacks, acts of terrorism, human error, coding errors or vulnerabilities, fraud, sabotage, natural disasters, telecommunications failures, financial insolvency, bankruptcy and similar events, and may be subject to financial, legal or regulatory issues, each of which may impose additional costs or requirements on us, expose us to potential liability or require us to expend significant resources on data security and in responding to any such actual or perceived breach, or prevent these third parties from providing services to us or our Members on our behalf. The failure of these systems to perform as designed, the vulnerability of these systems to security breaches and fraud or the inability to enhance our information technology capabilities, and our inability to find suitable alternatives in a timely and efficient manner and on acceptable terms, or at all, could disrupt our operations and subject us to losses or costs to remediate any of these deficiencies. Additionally, software errors or vulnerabilities in third-party technologies we use could result in significant disruptions to our information technology systems, leading to downtime, data loss, or compromised data integrity. There have been high-profile incidents of third-party service providers causing widespread disruptions to their customers’ operations, such as the Windows outage caused by a flawed CrowdStrike software update that occurred in July 2024.2024 and the AWS outage in October 2025. We cannot guarantee the infrastructure of our third-party service providers has not been, or will not be, compromised or that errors by our third-party service providers will not cause similar disruptions or outages to our operations. In addition, we cannot be assured that third parties will comply with their agreements with us and applicable laws and regulations or that third parties will not increase their prices or give preferential treatment to our competitors. Any contractual protections we may have from our third-party service providers, contractors or consultants may not be sufficient to adequately protect us from any such liabilities and losses, and we may be unable to enforce any such contractual protections. Additionally, the occurrence or perception of any of the above events could result in Members ceasing to use our platform, reputational damage, legal or regulatory proceedings or other adverse consequences, which could materially adversely affect our business, results of operations and financial condition.

We are not aware that our current products infringe the intellectual property rights of any third parties. We also are not aware of any third partythird-party intellectual property rights that may hamper our ability to provide future products and services. However, we recognize that the development of our services or products may require that we acquire intellectual property licenses from third parties so as to avoid infringement of those parties’ intellectual property rights. These licenses may not be available at all or may only be available on terms that are not commercially reasonable.

If third parties make infringement claims against us whether or not they are upheld, such claims could consume substantial time and financial resources, divert the attention of management and disrupt product sales and shipments. If any third partythird-party prevails in an action against us for infringement of its proprietary rights, we could be required to pay damages and either enter into costly licensing arrangements or redesign our products so as to exclude any infringing use. As a result, we would incur substantial costs, experience delays in product development, sales and shipments, and our revenues may decline substantially. Additionally, we may not be able to achieve the minimum necessary growth for our continued success.

We relaunched in 2010 at two U.S. airports as the only private company authorized by the DHS to automate the process for confirming traveler identity and validating travel documents for enrolled CLEAR Plus+ Members, and we continue to provide airport services to our Members through the RT Program. As we have grown, our interactions with the federal government have expanded as well.expanded. For example, in January 2020, we were selected by the TSA as an awardee in the TSA Biometric PreCheck® Expansion Services and Vetting Program to handle subscription renewal processing and new enrollments for the TSA PreCheck® program and have entered into an up to 10-year agreement to provide such services to the traveling public. In February 2024 we launched TSA PreCheck® Enrollment Provided by CLEAR to the public, and are currently providing in-person enrollment at airport and retail locations, as well as online renewal services. These operations remain subject to ongoing approval by the TSA, and there can be no assurances that we will continue to be able to meet all of TSA’s requirements. Additionally, we have entered into numerous Cooperative Research and Development Agreements with the DHS, and the DHS has certified the biometric enrollment and verification system weas use in certain locations asa Qualified Anti-Terrorism Technology under the SAFETY Act.

We operate through the RT Program according to guidelines set forth by the federal government, which have historically been implemented through our airport and/or airline partners. As we have grown, our regulatory frameworks have evolved as well.evolved. For example we are subject to various audits, reviews and evaluations overseen by the TSA, aan sub-agencyagency of the DHS, which include: annual operational audits at each airport where we operate our RT Program requiring us to demonstrate compliance with airport checkpoint security protocols; a TSA-CLEAR Quality Assurance program which includes monthly reviews of RT Program activities including a monthly report delivered to TSA, audits of certain of our information systems against a stringent FISMA High Rating designation for information security and an additional “Registered Traveler Security Overlay” framework; ongoing periodic reviews of our operational procedures and technology, such as the biometric matching technology and credential authentication systems that help power our system; ongoing special emphasis inspections of our compliance with operational and procedural obligations for RT Program providers; an evaluation by the Science and Technology Directorate of the DHS of our biometric enrollment and verification system for renewal of our SAFETY Act certification as a Qualified Anti-Terrorism Technology; and ongoing reporting requirements related to enrollments and verifications. In addition, TSA has provided us with technical and regulatory requirements, including technical integration specifications between TSA systems and CLEAR systems to enable transmittal of digital identity information to facilitate processing of each RT participant by TSA CAT; varying rates in the percentage of RT participants whose identities are randomly reverified at airport checkpoints, potentially up to all RT participants; enhanced enrollment standards for existing and new RT participants in line with new industry standards; and formalized audit requirements. We have no control over requirements proposed or implemented by federal agencies on us or our airport and airline partners regarding our business. New or changing requirements implemented by federal agencies, such as those set forth above, could have an adverse impact on our business and results of operations.

There is considerable patent and other intellectual property development activity in the biometrics, identity and technology industries generally, and litigation, based on allegations of infringement or other violations of intellectual property, is frequent. Furthermore, it is common for individuals and groups to purchase patents and other intellectual property assets for the purpose of making claims of infringement to extract settlements from companies like ours. We cannot guarantee that our internally developed or acquired technologies or third partythird-party tools that we use do not or will not infringe the intellectual property rights of others. From time to time, our competitors or other third parties, including non-practicing entities, may claim that we are infringing upon or misappropriating their intellectual property rights, and we may be found to be infringing upon such rights. In addition, in the event that we recruit employees from other technology companies, including certain potential competitors, and these employees are used in the development of portions of products which are similar to the development in which they were involved at their former employers, we may become subject to claims that such employees have improperly used or disclosed trade secrets or other proprietary information. Any claim, litigation or allegation could cause us to incur significant expenses and, if successfully asserted against us,successful, could require that we pay substantial damages, ongoing royalty payments or licensing fees, prevent us from offering our platform or services or using certain technologies, require us to develop alternative technology or obtain additional licenses, force us to implement expensive workarounds, or be subject to other unfavorable terms.

We expect that the occurrence of infringement claims and allegations is likely to grow as the market for biometric solutions and identity products and services grows.grows, Accordingly,increasing our exposure to damages resulting from infringementsuch claims could increase.claims. Even alleged infringement claims that lack merit may be distracting and expensive to defend and could contribute to reduced public confidence in our platform, and even if meritorious but ultimately unsuccessful, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and require us to incur significant expenditures. Further, during the course of any litigation, we may make announcements regarding the results of hearings and motions, and other interim developments. If securities analysts and investors regard these announcements as negative, the market price of our Class A Common Stock may decline. Any of the foregoing could prevent us from competing effectively and could have an adverse effect on our business, results of operations and financial condition.

Clear Secure, Inc. (the “Company” or “CLEAR”) is a secure identity company making experiences safer and easier - both digitally and physically. We make everyday experiences frictionless by connecting your identity to all the things that make you, YOU - transforming the way you live, work, and travel. CLEAR has been delivering secure, frictionless experiences in airports for over 15 years, achieving exceptional user delight and trust with CLEAR Plus,+, our consumer aviationtravel subscription service. CLEAR Plus+ enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide. AsAdditionally, weour continueCLEAR toTravel innovateportfolio on the travel experience, we are proud to offerincludes TSA PreCheck® Enrollment Provided by CLEAR, premium services such as CLEAR –Concierge, offeringother consumerstravel increasedbenefits choicesuch inas howexpedited andpassport whereservices, to sign up for this popular trusted traveler program. Ourour free flagship CLEAR app offerswhich severalhelps consumertravelers products,plan including:their trip Home to Gate, a feature to help travelers plan and timeother theirmobile-first tripidentity tosolutions such as CLEAR ID. Our CLEAR Travel portfolio extends CLEAR’s value proposition beyond the airport; CLEAR Mobile, which delivers predictable airport security for travelers by accessing a dedicated lane atand airportsupports security,our simply by showing a QR code, that is freestrategy to CLEARexpand Plususe Memberscases, increase engagement and availableaddress tonew allcustomer travelerssegments bysuch purchasingas ainternational day pass; Ambassador Assist, our curb-to-gate service where our Ambassadors guide Members through the airport; and CLEAR Perks, our suite of benefits to help CLEAR Plus Members win every step of their travel journey.travelers. CLEAR1 (formerly CLEAR Verified),is our business to business (“B2B”) offering,multi-layered identity verification solution. We combine biometric, document and device signals with verified data sources to ensure users are who they claim to be. Our B2B partners can select which verification layers to deploy, based on their specific security requirements, risk tolerance and user experience goals. We partner with a breadth of organizations, with a particular focus on Healthcare, Workforce and Governmental organizations where high fidelity identity security is ourparamount to their operational success. Our scaled Member base and comprehensive secure identity platform thatunderpin maximizesour CLEAR Travel and CLEAR1 businesses, maximizing security and minimizesminimizing friction for partnersconsumers and consumers. CLEAR1 enables our partnersenterprise to leverage our digital identity technology and embedded Member base to facilitate secure and frictionless experiences digitally and physically via our software development kits and application programming interfaces.partners.

Ability to retainGrow Total CLEAR Plus Members

Our ability to execute on our growth strategy is focused, in part, on our ability to retain our existing CLEAR Plus+ Members. Frequency and recency of usage are the leading indicators of retention, and we must continue to provide frictionless and predictable experiences that our Members will use in their daily lives. We are subject to various factors which may be out of our control and may impact our Member experience, such as checkpoint staffing generally, checkpoint queue configurations and Registered Traveler policies adopted by TSA. For example, the TSA employs varied randomization as part of their normal security processes. If the TSA materially increases randomized reverification rates for CLEAR Plus+ Members at the checkpoint or makes other adjustments to checkpoint processes, it may negatively impact the Lane experience and therefore may impact our ability to retain CLEAR Plus+ Members.

The value of the CLEAR platform to our Members increases as we add more use cases and partnerships, which in turn drives more frequent usage and strong retention. We cannot be sure that we will be successful in retaining our Members due to any number of factors such as our inability to successfully implement a new product, adoption of our technology, harm to our brand or other factors. If our efforts to develop and offer more benefits are not valued by our current and future CLEAR Plus+ Members, our ability to attract and retain CLEAR Plus+ Members, or increase pricing, may be negatively impacted.

Our business model is powered by network effects and has historically been characterized by efficient Member acquisition and high Member retention rates. While we believe our unit economics will remain attractive, this is dependent on our ability to add new Members efficiently and maintain our historically strong retention rates. As we grow our market penetration, the cost to acquire new Members could increase and the experience we deliver to Members could degrade, causing lower retention rates. For our definitions of “Lifetime Value” and “Customer Acquisition Cost” and information about how we calculate these metrics, see the section titled “Business—Our Member Acquisition and Retention Strategy” in our Annual Report on Form 10-K.

Revenues and operating income (loss) related to thesethis acquisitions for the years ended December 31, 20242025 and 20232024 were insignificant to the consolidated financial statements for all periods presented. See Note 3 within the consolidated financial statements included in this document for more information on acquisitions.

To evaluate performance of the business, we utilize a variety of other non-GAAP financial reporting and performance measures. These key measures include Total Bookings, Total CumulativeCLEAR Enrollments,Members , Total Cumulative Platform Uses, AnnualActive CLEAR+ Plus Net Member Retention,Members, Annual CLEAR Plus+ Gross Dollar Retention, Active CLEAR Plus Members, and Annual CLEAR Plus+ Member Usage.

Total Bookings represent our total revenue plus the change in deferred revenue during the period. Total Bookings in any particular period reflect sales to new and renewing CLEAR Plus+ subscribers plus any accrued billings to partners. Management views Total Bookings as an important measure of the current health and growth of the business and views it as a leading indicator.

Total Bookings increased by $122.2$143.2 million, or 17%, for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase was primarily driven by growth in Active CLEAR Plus+ Members combined with price increases.

Total CumulativeCLEAR EnrollmentsMembers

We define Total CLEAR Members (formerly Total Cumulative Enrollments) as the cumulative number of enrollmentsmembers that have registered for the CLEAR platform since inception as of the end of the period. AnThis Enrollmentincludes is defined as any MemberMembers who hashave registeredenrolled forthrough CLEAR+, trials, single-use product purchases, other non-paid uses of the CLEAR platform, and associated family accounts. Total CLEAR Members exclude members who are solely marketing opt-ins and purged accounts, and are adjusted to remove identified duplicate non-paid accounts. We renamed this metric to Total CLEAR Members and refined the definition to better reflect the breadth of Members who engage with the CLEAR platform sinceas inceptionour and has a profile (including limited time free trials regardless of conversion to paid membership) net of duplicate and/or purged accounts. This includes CLEAR Plus Members whoofferings have completed enrollment with CLEAR and have ever activated a payment method, plus associated family accounts.expanded. Management views this metric as an important tool to analyze the efficacy of our growth and marketing initiatives as new Members are potentially a current and leading indicator of revenues.

Total CumulativeCLEAR EnrollmentsMembers were 37,998 as of December 31, 2025 and 28,906 as of December 31, 2024 and 20,194 as of December 31, 2023,2024, which represented a 43%31% increase. The year-over-year increase was driven by CLEAR1 and CLEAR Plus+ Member enrollments.

We define Total Cumulative Platform Uses as the number of individual engagements across CLEAR use cases, including CLEAR+, Plus,CLEAR Mobile, our flagship appapp, and CLEAR1, since inception as of the end of the period. Management viewshas historically viewed this metric as an importanta tool to analyze the level of engagement of our Member base which can be a leading indicator of future growth, retention and revenue.

Total Cumulative Platform Uses was 295,907 as of December 31, 2025 and 234,821 as of December 31, 2024 and 180,807 as of December 31, 2023,2024, which represented a 30%26% increase, driven by Active CLEAR Plus+ Member verifications combined with increased contributions from CLEAR1 uses.

Active CLEAR Plus+ Members

We define Active CLEAR Plus+ Members as the number of members with an active CLEAR Plus+ subscription as of the end of the period. This includes CLEAR Plus+ members who have an activated payment method, plus associated family accounts and is inclusive of members who are in a limited time free trial or in a billing grace period after a billing failure during which time we attempt to collect payment; we exclude duplicate and/or purged accounts.period. Management views this as an important tool to measure the growth of its CLEAR Plus+ product.

Active CLEAR Plus+ Members was 7,3157,616 as of December 31, 20242025 and 6,7207,187 as of December 31, 2023,2024, which represented a 9%6% increase, driven by new ActiveMembers CLEARadded Plusthrough airports and digital channels including Members added through airport, partner and organic channels in existing and new airports.partnerships.

Annual CLEAR Plus+ Gross Dollar Retention

We define Annual CLEAR Plus+ Gross Dollar Retention as the net bookings collected from a Fixed Cohort of Members during the Current Period as a percentage of the net bookings collected from the same Fixed Cohort during the Prior Period. The Current Period is the 12-month period ending on the reporting date, the Prior Period is the 12-month period ending on the reporting date one year earlier. The Fixed Cohort is defined as all Active CLEAR Plus+ Members as of the last day of the Prior Period who have activated a payment method for our in-airport CLEAR Plus+ service, including their registered family plan Members. Bookings received from a third partythird-party as part of a partnership agreement are excluded from both periods. Active CLEAR Plus+ Members, including those on a free or discounted plan, or who receive a full statement credit, only impact Annual CLEAR Plus+ Gross Dollar Retention to the extent that they are paying anything out-of-pocket on behalf of themselves or a registered family plan Member. Management viewshas historically viewed this metric to be reflective of our business objective of optimizing revenue.

Annual CLEAR+ PlusGross Net MemberDollar Retention was 81.4%86.4% as of December 31, 20242025 and 86.3%88.5% as of December 31, 2023,2024. aThe year-over-year decrease of 490 basis points. The decreasechange was driven primarily driven by a reductionlower increase in thepricing winbackas rate andcompared to athe lesserprior extent from various price increases.period.

Annual CLEAR Plus+ Member Usage

We define Annual CLEAR Plus+ Member Usage as the total number of unique CLEAR Plus+ airport verifications in the 365 days prior to the end of the period divided by Active CLEAR Plus+ Members as of the end of the period who have been enrolled for at least 365 days. The numerator includes only verifications of the population in the denominator. Management viewshas historically viewed this as an importanta tool to analyze the level of engagement of our Active CLEAR Plus+ Member base.

Annual Usage was 7.0x as of December 31, 2025 and 7.1x as of December 31, 2024 and 8.1x as of as of December 31, 2023, which represented a 12% decrease.2024. The decrease was driven by both lower utilization for newer Members and decreaseda decrease in utilization for existing Members.

In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA, Adjusted EBITDA Margin, and Free Cash Flow, Adjusted Net Income and Adjusted Net Income per Common Share, Basic and DilutedFlow as non-GAAP financial measures that management believes provide useful information to investors. These measures are not financial measures calculated in accordance with GAAP and should not be considered as a substitute for net income, net income margin, net cash provided by (used in) operating activities or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Our Non-GAAP financial measures are expressed in thousands.

We define Adjusted EBITDA as net income adjusted for income taxes, interest income,(income), net, depreciation and amortization, impairment and losses on asset disposals, equity-based compensation expense, mark to market of warrant liabilities, net other (income) (expense) excluding sublease rental income, acquisition-related costs and changes in fair value of contingent consideration. We define Adjusted EBITDA isMargin anas Adjusted EBITDA expressed as percentage of revenue. Adjusted EBITDA and Adjusted EBITDA Margin are important financial measuremeasures used by management and our board of directors (“Board”) to evaluate business performance. We believe Adjusted EBITDA assistsand Adjusted EBITDA Margin assist investors in evaluating the performance of the Company’s core operations by excluding certain items that impact the comparability of results from period to period.

We define Free Cash Flow as net cash (used in) provided by operating activities adjusted for purchases of property and equipment.property. We believe Free Cash Flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. Withtrends.With regards to our CLEAR Plus+ subscription service, we generally collect cash from our Members upfront for annual subscriptions. As a result, when the business is growing Free Cash Flow can be a real time indicator of the current trajectory of the business.

Reconciliation of Net income (Loss)Income to Adjusted EBITDA and Net Income Margin to Adjusted EBITDA Margin:

The Company derives substantially all of its revenue from subscriptions to its consumer aviation service, CLEAR Plus.+. The Company offers certain limited-time free trials, family pricing, and other beneficial pricing through several channels, including airline and credit card partnerships. Membership subscription revenue is presented net of taxes, refunds, and credit card chargebacks. Membership subscription revenue is also reduced by the Company’s funded portion of credit card benefits issued to certain Members through a partnership with a credit card company at the end of the contract period.company. The Company’s funded portion varies based on total number of Members for the contract year.

The Company operates as a concessionaire in airports and shares a portion of the gross receipts generated both from the Company’s Members and from TSA PreCheck® Enrollment Provided by CLEAR with the host airportsairports, retail locations, and/or airlines (“Revenue Share”). The Revenue Share fee from CLEAR+ Members is generally prepaid to the host airport in the period collected from the Member. The Revenue Share fee is generally capitalized and subsequently amortized to operating expense over each Member’s subscription period. Such prepayments are recorded in “Prepaid revenue share fee” in the Company’s consolidated balance sheets. Cost of revenue share fee also includes a fixed fee component which is expensed in the period incurred and certain overhead related expenses paid to the airports in relation to our Revenue Share arrangements.

Cost of direct salaries and benefits includes employee-related expenses and allocated overhead associated with our field Ambassadors andAmbassadors, field managers directly assisting Members andMembers, their corresponding travel related costs.costs, and costs incurred in Member support. Employee-related costs recorded in direct salaries and benefits consist of salaries, taxes, benefits and equity-based compensation and expenses under arrangements related to the use of certain space at airports.

Other income (expense) income,, net

Other income (expense), net consists of certain non-recurring non-operating items including income recognized in relation to a minimum annual guarantee paid to us by a marketing partner anditems, the establishment of the tax receivable agreement liability for exchanges of Alclear units which occurred when the related deferred tax assets required a valuation allowance.allowance, and subsequent revaluations of the tax receivable agreement liability.

Provision (benefit) for income taxes

Summary and discussion of the years ended December 31, 2024,2025, 20232024 and 20222023 (in millions)1:

We are focused on growing Total CLEAR Members and the number of Members that engage with our platform. Our operating results and growth opportunities depend, in part, on our ability to attract new Members, including paying Members (CLEAR+ Members) as well as new platform Members. We rely on multiple channels to attract new CLEAR+ Members, including in-airport (our largest channel) which in turn is dependent on the ongoing ability of our Ambassadors to successfully engage with the traveling public. We also rely on numerous digital channels such as our website, mobile app and paid search. We also entered into strategic distribution partnerships with partners such as Delta Air Lines, United Airlines, Alaska Airlines, Hawaiian Airlines and American Express that promote our services to their customers on a discounted or subsidized basis which helps us to efficiently scale membership in CLEAR+. Through our partnership with American Express, eligible card members receive statement credits for all or a portion of their CLEAR Plus+ membership. We initially entered into our partnership with American Express in 2019. In February 2026, we executed a multi-year renewal of the partnership with American Express. In many cases, we offer limited time trials to new Members who may convert to paying Members upon the completion of their trial. Our future success is dependent on those channels continuing to drive new Members and our ability to convert trial Members into paying Members.

Total Bookings increased by $84.5$73.0 million, or 41%,33%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The increase was primarily driven by growth in Active CLEAR+ Members as well as price increases.

Total CLEAR Members were 40,98643,501 as of MarchJune 31,30, 2026 and 31,21533,472 as of MarchJune 31,30, 2025, which represented a 31%30% increase. The year-over-year increase was driven by CLEAR1 and CLEAR+ Member enrollments.

Active CLEAR+ Members werewas 8,1678,329 as of MarchJune 31,30, 2026 and 7,2297,227 as of MarchJune 31,30, 2025, which represented a 13%15% increase, driven by new Members added through new and existing airports as well as partner and organic channels.

The Company generates additional revenue from TSA PreCheck® Enrollment Provided by CLEAR. The Company offers both online and in person enrollments and renewals across multiple locations, and plans to continue to launch additional locations on a rolling basis, subject to TSA approval. The Company recognizes the revenue from these services net of fees remitted to TSA and the Federal Bureau of Investigation within the Company’s condensed consolidated statements of operations. The Company recognizes these revenues on a per transaction basis upon completion of each enrollment or renewal.

Comparison of the three and six months ended MarchJune 31,30, 2026 and 2025 (in millions)1:

1Note1 Note certain numbers in thisthese tabletables and accompanying discussion do not foot due to rounding differences

Information about our operating results for the three and six months ended MarchJune 31,30, 2026 compared to the three and six months ended MarchJune 31,30, 2025 is set forth below:

Revenue increased by $41.6$58.3 million, or 20%,27%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025.The2025. The change was primarily due to a 13%15% increase in the number of Active CLEAR+ Members as of MarchJune 31,30, 2026 compared to MarchJune 31,30, 2025 and increases to the price of a CLEAR+ membership compared to the price as of MarchJune 31,30, 2025. Approximately 26% and 27%27%, respectively, of paying CLEAR+ membersMembers were on a family plan as of MarchJune 31,30, 2026 and 2025, respectively.

Cost of revenue share fee increased by $7.3$8.1 million, or 25%,26%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was driven primarily by an increase of $1.0 million, or ana 11%9% increase, in fixed airport fees and $6.3$7.1 million, or a 31%34% increase, in per Member fees.

Cost of direct salaries and benefits expenses decreasedincreased by $2.4$0.3 million, or 5%,1%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was primarilydriven dueby tohigher aoverhead decreasecosts inoffset by lower employee compensation costs of $4.1 million caused by lower average employee count, partially offset by a $2.0 million increase for overhead costs.

Research and development expenses increaseddecreased by $0.5 million, or 2%,3%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was primarily due to a $1.1 million increase in technology costs, partially offset by a $0.4 million decrease in professional fees and a $0.3$1.4 million decrease in employee compensation costs and a $0.2 million decrease in professional fees, partially offset by a $1.2 million increase in technology costs.

Sales and marketing expenses increased by $2.6$2.7 million, or 19%,18%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was driven primarily by $1.9$1.7 million of higher marketing expense and $0.9 million of higher commission expense primarily related to our B2B offering, CLEAR1, and $1.2 million of higher marketing expense.

General and administrative expenses increased by $8.9$7.4 million, or 16%,13%, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was primarily driven by a $5.6$3.1 million increase in employee compensation costs primarily related to performance-based equity compensation costs, and a $3.2$2.4 million increase in credit card fees due to higher bookings.Total Bookings, and a $1.5 million increase in professional fees.

OtherGeneral income,and netadministrative expenses increased $1.5by million$16.3 million, or 14%, for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025. The change was driven primarily driven by thean revaluation$8.7 ofmillion theincrease TRAin liabilityemployee atcompensation costs primarily related to equity compensation costs, a lower$5.6 incomemillion taxincrease ratein forcredit thecard threefees monthsdue endedto Marchhigher 31,Total 2026.Bookings, and a $1.7 million increase in professional fees.

Income tax expense increased by $8.9$12.6 millionmillion, for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. The change was primarily due to higher pre-tax earnings, and a higher effective tax rate driven by an increase in Clear Secure, Inc.’s ownership percentage.

Our operations have been financed primarily through cash flowsflow from operating activities. As of MarchJune 31,30, 2026, we had cash and cash equivalents of $170.7$128.2 million and marketable securities of $629.4$831.0 million.

On May 13, 2022, the Company's Board authorized a share repurchase program pursuant to which the Company may purchase up to $100 million of its Class A Common Stock, with subsequent increases to the repurchase program authorized by the Board in November 2023, March 2024, August 2024, February 2025, and February 2026. Under the repurchase program, the Company may purchase shares of its Class A Common Stock on a discretionary basis from time to time through open market repurchases, privately negotiated transactions, or other means, including through Rule 10b5-1 trading plans. The timing and actual number of shares repurchased will be determined by management depending on a variety of factors, including stock price, trading volume, market conditions, and other general business considerations. The repurchase program has no expiration date and may be modified, suspended, or terminated at any time. During the threesix months ended MarchJune 31,30, 2026, the Company repurchased 39,901 shares for $1.3$1.2 million. The repurchased shares were retired. As of MarchJune 31,30, 2026, $250.3 million remainsremained available under the repurchase authorization.

Below is a summary of the Company’s quarterly and special dividends declared and paid to holders of record of Class A Common Stock and Class B Common Stock during the threesix months ended MarchJune 31,30, 2026 and 2025:

On March 31, 2020, we entered into a credit agreement (as amended, restated or otherwise modified, the “Credit Agreement”) for a three-year $50 million revolving credit facility with a maturity date of March 31, 2023 (which has since been amended to extend the maturity date to June 28, 2026). Borrowings under the Credit Agreement generally bear interest between 1.5% and 2.5% per year and also include interest based on the greater of the prime rate, London Interbank Offered Rate (“LIBOR”) or New York Federal Reserve Bank (“NYFRB”) rate, plus an applicable margin for specific interest periods. In April 2021, the Company increased the size of the revolving credit facility to $100 million, which matures three years from the date of the increase. The revolving credit facility includes a letter of credit sub-facility, in the amount of $50 million. In June 2023, the Company entered into a second amendment to the Credit Agreement to transition from LIBOR to the Secured Overnight Financing Rate ("SOFR") as our benchmark interest rate and to extend the maturity date to June 28, 2026.rate. In November 2024, the Company entered into Amendment No. 3 to the Credit Agreement to increase the letter of credit sublimit from $35 million to $50 million. In June 2026, the Company entered into Amendment No. 4 to (i) reduce the lender commitments under the Credit Agreement from $100 million to $50 million and (ii) to extend the maturity date to June 23, 2031.

As of MarchJune 31,30, 2026, the Company had a remaining borrowing capacity of $67.7$17.7 million, net of standby letters of credit, and had no outstanding debt obligations. As of MarchJune 31,30, 2026, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement. Refer to Note 18 within the condensed consolidated financial statements for further details.

The following summarizes our cash flows for the threesix months ended MarchJune 31,30, 2026 and 2025 (in millions):

For the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $190.4$391.5 million compared to net cash provided by operating activities of $98.3$221.3 million for the threesix months ended MarchJune 31,30, 2025, an increase of $92.0$170.2 million primarily due to higher net income, year-over-year favorable changes in working capital of $101.0 million driven by higher partnership liabilities and deferred revenue, and an increase in non-cash adjustments to net income of $11.7 million, and year-over-year favorable changes in working capital of $62.5$16.9 million driven primarily by higher partnership liabilities offset and higher deferred revenues.income tax expense.

For the threesix months ended MarchJune 31,30, 2026 net cash used in investing activities was $21.4$235.5 million compared to net cash provided by investing activities of $93.3$16.6 million for the threesix months ended MarchJune 31,30, 2025, a decrease of $114.7$252.1 million. The change was primarily due to an increase in the net purchases of marketable securities of $116.9$245.0 million andmillion, an increase in capital expenditures of $2.2$4.9 million, partially offset by a decrease in proceeds from a divestiture of $2.7 million.

For the threesix months ended MarchJune 31,30, 2026, net cash used in financing activities was $83.9$113.5 million compared to net cash used in financing activities of $171.3$216.3 million for the threesix months ended MarchJune 31,30, 2025, a decrease of $87.4$102.8 million. The change was primarily due to a decrease in the amounts used to repurchase Class A Common Stock of $100.5$125.1 million and lowera decrease in payments of dividends and distributions of $11.4$7.3 millionmillion, partially offset partially by higheran increase in payments of taxes on net settled stock-based awards of $15.4 million and higher TRA payments of $10.6 million and $13.9 million, respectively.million.

We have non-cancelable operating lease arrangements for office space. As of MarchJune 31,30, 2026, we had future minimum payments of $170.9$167.4 million, with $14.0$15.0 million due within twelve months.

We have and continue to enter into agreements with airports for access to floor and office space. As of MarchJune 31,30, 2026, we had future minimum payments of $64.0$86 million.

We have commitments for future marketing expenditures to sports stadiums of $5.4$5.1 million as of MarchJune 31,30, 2026.

The preparation of the condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported periods. The Securities and Exchange Commission (“SEC”) has defined a company’s critical accounting policies as the ones that are most important to the portrayal of a company’s financial condition and results of operations, and which require a company to make its most difficult and subjective judgments. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates. The Company’sCompany's critical accounting policies and estimates are described under the heading “Management’sManagement's Discussion and Analysis of Financial Condition and resultsResults of Operations” in our Annual Report on Form 10-K. ReferAdditionally, please refer to Note 2 within the condensed consolidated financial statements for further information.information on our critical accounting policies and estimates.