Clear Secure Inc.

Company Overview

Business Model: Clear Secure, Inc. ("CLEAR" or the "Company") operates a secure identity network, making experiences safer and easier both digitally and physically. Its core offering is CLEAR Plus, a consumer aviation subscription service providing access to dedicated entry lanes in airport security checkpoints. The Company also offers TSA PreCheck® Enrollment Provided by CLEAR, and a free flagship CLEAR app with features like Home to Gate, CLEAR Mobile, Ambassador Assist, and CLEAR Perks. CLEAR1, its business-to-business ("B2B") offering, is a secure identity platform that enables partners to leverage digital identity technology and an embedded Member base via software development kits and application programming interfaces. Revenue is primarily generated from CLEAR Plus annual subscriptions ($199 per year, with a family plan at an additional $119 per year per Member), per-transaction fees from TSA PreCheck® Enrollment, and transaction/platform/licensing fees from CLEAR1 partners. The business model is characterized by network effects, efficient Member acquisition, and strong retention rates. The Company does not sell Member data.

Market Position: CLEAR has over 15 years of experience in delivering secure, frictionless experiences, primarily in airports. As of December 31, 2024, its network includes 165 CLEAR Plus Lanes across 58 airports, 5 airports with Mobile Lanes, 52 airports and 24 retail locations with TSA PreCheck® Enrollment Provided by CLEAR, and 17 sports and entertainment venues. The Company has enabled approximately 235 million Total Cumulative Platform Uses across its network. CLEAR Plus is the largest user of its platform, followed by CLEAR1 partners. The Company maintains a workforce of approximately 4,198 Ambassadors and field managers. CLEAR's information security program is certified at a FISMA High Rating by the Department of Homeland Security ("DHS") and its biometric enrollment and verification system is certified as a Qualified Anti-Terrorism Technology under the SAFETY Act. The Company's airport coverage is approximately 73% of 2024 TSA checkpoint volume, with 5% of all TSA checkpoint volume going through a CLEAR lane in 2024.

Recent Strategic Developments: In February 2024, CLEAR launched TSA PreCheck® Enrollment Provided by CLEAR, expanding to 52 airports and 24 retail locations by year-end. The Company introduced its Lane of the Future, featuring new EnVe hardware for a face-first verification experience that is approximately 5x faster. CLEAR Perks, a new suite of benefits for CLEAR Plus Members, including Ambassador Assist and CLEAR Scout, was also launched. CLEAR Mobile expanded to 5 airport locations. In September 2023, the Company acquired Sora ID, Inc., adding Know Your Customer ("KYC") services to its platform offerings. The partnership with American Express was renewed in March 2024 for the first of two one-year renewal terms through June 2025. International expansion included extending the LinkedIn partnership to Mexico and Canada in 2023 and CLEAR Mobile to Costa Rica in 2024. CLEAR Plus membership rates and family plan pricing were increased in 2022, 2023, and 2024.

Geographic Footprint: Substantially all of Clear Secure, Inc.'s revenue is generated in the United States. Its primary operations are within the U.S. airport network, complemented by a growing presence in retail locations and sports and entertainment venues. The Company has a limited international presence, with its LinkedIn partnership extended to Mexico and Canada, and CLEAR Mobile expanded to Costa Rica. The Company's headquarters are located in New York, New York.

Financial Performance

Revenue Analysis

Profitability Metrics (2024):

• Gross Margin: 63.5%
• Operating Margin: 16.0%
• Net Margin: 29.2%

Investment in Growth (2024):

• R&D Expenditure: $73.4 million (9.5% of revenue)
• Capital Expenditures: $12.0 million
• Strategic Investments: $1.0 million (purchase of strategic investment). In 2023, the Company acquired Sora ID, Inc. for $5.25 million, adding KYC services.

Business Segment Analysis

Clear Secure, Inc. is organized and operates as a single operating and reportable segment. All financial performance and operational metrics are managed and evaluated on a consolidated basis.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In 2024, the Company repurchased and retired 13,795,655 shares of its Class A Common Stock for $272.9 million. As of December 31, 2024, $52.7 million remained available under the repurchase authorization, which was subsequently increased by $200 million in February 2025, resulting in an aggregate remaining authorization of approximately $232.6 million.
• Dividend Payments: The Company paid quarterly cash dividends of $0.09, $0.10, $0.10, and $0.125 per share in March, June, September, and December 2024, respectively. A special cash dividend of $0.32 per share was paid in April 2024. Total dividend payments for 2024 amounted to $68.2 million.
• Future Capital Return Commitments: The Board adopted a quarterly cash dividend policy in August 2023. In February 2025, the Board declared a quarterly dividend of $0.125 per share and a special cash dividend of $0.27 per share, payable in March 2025.

Balance Sheet Position (as of December 31, 2024):

• Cash and Equivalents: $66.9 million
• Total Debt: $0 (no outstanding debt obligations)
• Net Cash Position: $66.9 million
• Debt Maturity Profile: The revolving credit facility matures on June 28, 2026.

Cash Flow Generation (2024):

• Operating Cash Flow: $295.7 million
• Free Cash Flow: $283.7 million
• Cash Conversion Metrics: Free Cash Flow is viewed by management as a real-time indicator of the business's current trajectory, especially as cash from annual subscriptions is generally collected upfront.

Operational Excellence

Production & Service Model: CLEAR's secure identity platform is multi-layered, featuring both a front-end for enrollment, verification, and linking, and a robust, secure, and scalable back-end. The "enroll once, use everywhere" approach aims to reduce friction for Members and increase conversion for partners. Identity confirmation is opt-in, utilizing document authentication (e.g., driver’s license, passport), best-in-class biometric capture technology, liveness detection, anti-spoofing technologies, biometric matching, source corroboration, and other proprietary technologies. Members can enroll in-person at airport Pods or via their personal mobile device. The platform is versatile, customizable, and scalable across various verticals. The Company's approximately 4,198 Ambassadors and field managers are crucial for delivering frictionless experiences in airports. The new EnVe hardware, part of the "Lane of the Future," offers a face-first verification experience that is approximately 5x faster.

Supply Chain Architecture: Key Suppliers & Partners:

• Technology Providers: Relies on third-party vendors and service providers for critical business functions, including credit card readers, scanners, software, cameras, network infrastructure, software libraries, development environments, and cloud storage platforms.
• Payment Processors: Utilizes third-party systems for processing various payment methods.
• Governmental Partners: Collaborates with the Department of Homeland Security (DHS) and the Transportation Security Administration (TSA) for airport operations and programs like TSA PreCheck® Enrollment.
• Airline Partners: Engages in strategic distribution partnerships with airlines such as Delta Air Lines, United Airlines, Alaska Airlines, and Hawaiian Airlines to promote services.
• Financial Partners: Partners with American Express to offer statement credits for CLEAR Plus memberships.
• Marketing Partners: Has commitments for future marketing expenditures with sports stadiums.

Facility Network:

• Headquarters: 85 10th Avenue, 9th Floor, New York, New York, comprising approximately 120,000 square feet under a lease expiring in April 2038.
• Operational Locations: Operates in 58 airports with CLEAR Plus Lanes, 5 airports with Mobile Lanes, 52 airports and 24 retail locations for TSA PreCheck® Enrollment Provided by CLEAR, and 17 sports and entertainment venues. Small offices for team members are typically available at these locations.
• Research & Development: Supported by an approximately 220-person technology team focused on platform innovation.

Operational Metrics (as of December 31, 2024):

• Total Cumulative Platform Uses: 234,821 thousand (+30% year-over-year).
• Active CLEAR Plus Members: 7,315 thousand (+9% year-over-year).
• Annual CLEAR Plus Gross Dollar Retention: 88.5% (decreased 0.9% year-over-year).
• Annual CLEAR Plus Net Member Retention: 81.4% (decreased 4.9% year-over-year).
• Annual CLEAR Plus Member Usage: 7.1x (decreased 12% year-over-year).
• Lifetime Value to Customer Acquisition Cost ratio: Approximately 10 times for CLEAR Plus Members who joined during 2024.
• Airport Coverage: Approximately 73% of 2024 TSA checkpoint volume.
• CLEAR Lane Utilization: 5% of all TSA checkpoint volume went through a CLEAR lane in 2024.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: The largest CLEAR Plus Member acquisition channel is in-airport, accounting for 64% of Member acquisitions in 2024, where Ambassadors engage directly with prospective Members.
• Digital Platforms: Utilizes digital channels such as paid search and online platforms.
• Channel Partners: Engages in strategic distribution partnerships with airlines (Delta Air Lines, United Airlines, Alaska Airlines, Hawaiian Airlines) and credit card companies (American Express) to promote services on a discounted or subsidized basis.
• CLEAR1 (B2B): Partners integrate directly with the platform using SDKs and APIs to offer frictionless experiences to their customers.

Customer Portfolio: Enterprise Customers:

• Partnerships: Includes local airport authorities, airlines, and B2B partners across verticals such as healthcare, financial services, travel and hospitality, workforce, and other consumer services.
• Strategic Partnerships: Key alliances include those with Delta Air Lines, United Airlines, Alaska Airlines, Hawaiian Airlines, American Express, LinkedIn, and Uber.
• Customer Concentration: No individual airport accounted for more than 10% of membership revenue. Revenues from CLEAR1 partners have historically been immaterial to total revenue.

Geographic Revenue Distribution:

• United States: Substantially all of the Company’s revenue for the years ended December 31, 2024, 2023, and 2022 was generated in the United States.
• Growth Markets: The Company has expanded its LinkedIn partnership to Mexico and Canada and CLEAR Mobile to Costa Rica, indicating initiatives in emerging international markets.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The market in which CLEAR operates is highly competitive, fragmented, and characterized by high growth, evolving user preferences, and continuous introduction of new services. The identity verification solutions market is still developing, with ongoing efforts by private industry and governmental agencies to develop and launch new solutions, including identity verification and credential authentication technologies. This includes initiatives by airlines, technology providers, and the Transportation Security Administration ("TSA"), as well as state governments issuing digital driver’s licenses.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Offline Alternatives: Manual security checks and screening processes.
• Large Technology Platforms: Companies such as Alphabet/Google, Amazon, Apple, Microsoft, or Meta, which may develop or acquire competing identity platforms.
• Credit Card Industry: Well-known companies in the credit card industry that may develop or expand competing platforms.
• Identity Verification Providers: Providers of decentralized identity verification platforms or other verification services, including Know Your Customer ("KYC") solutions.
• Biometric Hardware Companies: Companies that also offer hardware and may develop competing applications.
• TSA PreCheck® Enrollment Providers: Two other private entities are authorized to compete with CLEAR in enrolling Members for TSA PreCheck®.
• In-house Solutions: Solutions developed by existing and future partners (e.g., airlines) and governmental agencies (e.g., TSA's own biometric Credential Authentication Technologies ("CAT") and digital identity initiatives).

Emerging Competitive Threats: New market entrants, disruptive technologies, and alternative solutions, particularly the widespread adoption of competing identity verification or credential authentication solutions at airports or other locations, could impact CLEAR's business.

Competitive Response Strategy: CLEAR's growth strategy focuses on simultaneously expanding its Member base, adding valuable partners, and enhancing platform functionality. This includes growing CLEAR Plus through airport network expansion, increased market penetration, and new aviation products like CLEAR Perks. The Company aims to scale its TSA PreCheck® enrollment program, leveraging it as a channel for new CLEAR Plus Members. CLEAR also seeks to expand partnerships and distribution channels with new airlines, credit card partners, digital marketplaces, and CLEAR1 partners across various verticals (healthcare, financial services, travel, hospitality, workforce). Opportunistic acquisitions and corporate development opportunities are also part of the strategy.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: The Company's business and financial results are highly dependent on its ability to attract and retain Members (especially CLEAR Plus) and partners, and to increase platform utilization. Failure to do so, or to meet evolving stakeholder expectations and maintain brand reputation, could materially adversely affect the business. The market is highly competitive, with threats from existing and emerging technology platforms, in-house solutions by partners and government agencies, and alternative identity verification methods. Public confidence in biometrics and identity platforms is crucial for continued growth. Declines or disruptions in the travel industry (e.g., pandemics, economic downturns, geopolitical events) or changes in consumer discretionary spending could significantly impact revenue. The Real ID Act, requiring compliant identification for air travel by May 7, 2025, could also negatively affect demand for airport services.

Operational & Execution Risks

Supply Chain Vulnerabilities: CLEAR relies on third-party technology and service providers for critical business functions, including payment processing, hardware (credit card readers, scanners, cameras), software, and cloud infrastructure. Security breaches, system failures, or inadequate performance by these third parties could disrupt operations, lead to data loss, damage Member trust, and incur significant costs. The Company's platform is complex, and any errors, bugs, or failures in its software or systems could result in operational disruptions, data breaches, and reputational harm. Rapid growth and expansion, particularly into new verticals or internationally, place additional demands on managerial, operational, and technological resources, which, if not effectively managed, could adversely affect the business. The effectiveness of marketing efforts, the interoperability of its mobile application with popular operating systems, and the ability to maintain its corporate culture as it grows are also key operational risks.

Financial & Regulatory Risks

Market & Financial Risks: Clear Secure, Inc. has historically incurred net losses and its ability to achieve or sustain profitability is not assured, especially with ongoing investments in growth. The Company may require additional capital, which may not be available on reasonable terms and could dilute stockholder value. Future acquisitions carry inherent risks of significant capital commitment, integration challenges, and potential failure to meet expectations. The preparation of financial statements involves critical accounting estimates and judgments that, if incorrect, could adversely affect reported results. The Company's focus on long-term Member experience may not align with short-term financial results, potentially impacting stock price. As a holding company, its ability to pay dividends and other expenses depends on distributions from Alclear Holdings, LLC, which may be restricted by law or debt covenants. The Tax Receivable Agreement ("TRA") obligates the Company to make substantial payments to Alclear Members for tax savings, which could be significant and impact liquidity. The Credit Agreement contains restrictive covenants that limit financial and operational flexibility. The stock repurchase program is discretionary and subject to market conditions and a 1% excise tax. The U.S. federal income tax treatment of distributions to stockholders is subject to unpredictable tax attributes.

Regulatory & Compliance Risks: The Company operates in a highly regulated environment, particularly aviation security, and must continuously meet evolving standards set by governmental stakeholders like the DHS and TSA. Failure to comply with these standards or changes in regulatory requirements could negatively impact operations and growth. The Company faces a risk of litigation from third parties for alleged intellectual property infringement, which can be costly and distracting. A significant risk category involves compliance with complex and rapidly evolving laws and regulations concerning privacy, biometrics, artificial intelligence, health information (HIPAA), and data protection (e.g., CCPA, GDPR). Any actual or perceived failure to comply could result in significant liability, fines, negative publicity, and erosion of trust. The Company is also subject to various consumer protection laws and regulations governing recurring subscription payments. Legal proceedings and regulatory investigations are part of the ordinary course of business, and adverse outcomes could harm the business. Insurance coverage may be inadequate for potential losses, and liability protections under the SAFETY Act may be limited or not renewed.

Geopolitical & External Risks

Geopolitical Exposure: Limited experience operating outside the United States exposes the Company to additional costs and risks associated with international expansion, including compliance with diverse privacy laws, cultural norms, identity confirmation challenges, information security threats, and currency fluctuations. Climate Change: Primary operational locations may be vulnerable to extreme weather conditions, leading to business disruptions and increased costs. Evolving environmental, social, and governance ("ESG") regulations may impose increased compliance requirements. Trade Relations: Not explicitly detailed, but international operations inherently carry risks related to trade policies and relations. Sanctions & Export Controls: Not explicitly detailed, but international operations inherently carry risks related to sanctions and export controls compliance.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas: CLEAR's R&D focuses on its multi-layered secure identity platform, encompassing front-end enrollment, verification, and linking, and a robust, scalable back-end. Key areas include best-in-class biometric capture technology, liveness detection, anti-spoofing technologies, biometric matching, and proprietary technologies. The Company has developed NextGen Identity+, which provides the highest fidelity identity at scale, and the new EnVe hardware for significantly faster face-first verification. Recent acquisitions, such as Whyline, Inc. (virtual queuing technology for CLEAR Mobile) and Sora ID, Inc. (KYC solution), demonstrate a focus on expanding core capabilities. Innovation Pipeline: The Company is actively developing new products and services and enhancing existing ones. Its innovation pipeline includes expanding CLEAR1 to power a wide range of use cases such as customer check-in, account creation/KYC, age verification, and workforce products (employee onboarding, continuous verification, critical access control, account recovery). CLEAR plans to continue investing in verticals like aviation and travel, healthcare, hospitality, consumer use cases, and financial services, with a robust pipeline of new CLEAR1 partners.

Intellectual Property Portfolio:

• Patent Strategy: As of December 31, 2024, CLEAR holds 107 issued United States patents (with 4 additional patent applications allowed) and 37 patent applications pending in the United States. Issued patents expire between 2032 and 2042. The Company also has a limited number of patents issued and applications filed in other countries.
• Trademark Strategy: The portfolio includes 7 U.S. registered trademarks and 3 pending trademark applications, covering the CLEAR name and other brand indicia. The domain name www.clearme.com is also registered.
• Trade Secrets: The Company relies on trade secrets, proprietary know-how, and contractual agreements (confidentiality, non-disclosure, assignment) to protect its technology and intellectual property.
• IP Litigation: The Company anticipates facing allegations of intellectual property infringement, which can be costly and time-consuming.

Technology Partnerships: CLEAR engages in strategic alliances and integrations, such as with Uber for its Home to Gate feature, and with various partners who integrate CLEAR1 solutions via SDKs and APIs.

Leadership & Governance

Executive Leadership Team

Leadership Continuity: The Company's success depends on retaining high-quality personnel, including key executives. Ms. Seidman Becker and other key senior management team members are at-will employees. The Company acknowledges that recently hired executives may introduce changes to strategic focus or operations.

Board Composition: The full Board provides oversight of the cybersecurity program, with the Audit Committee primarily overseeing risk, including data security and cybersecurity risks, and providing regular updates to the full Board. The CLEAR Security Advisory Board ("CSAB"), composed of three external members with expertise in aviation/transportation security, physical security operations, cybersecurity, privacy, and data security, provides guidance and advice to the Board and Chief Security Officer ("CSO"). The CSO provides periodic reports to the Board and Audit Committee on cyber risks and threats.

Human Capital Strategy

Workforce Composition: As of December 31, 2024, Clear Secure, Inc. had 4,022 full-time employees. Its largest workforces are located in New York, Los Angeles, and Atlanta. The Company seeks individuals with expertise in engineering, product development, and marketing, in addition to its hospitality and security-focused Ambassadors and field managers.

Talent Management: Acquisition & Retention: The Company's hiring strategy involves aggressive recruitment to support expansion. It uses equity incentives, among other measures, to attract and retain key personnel. Diversity & Development: The Company emphasizes a unique workplace culture and brand, with a focus on being a meritocracy. Its core values include "Our Great People," "Obsessed with Member Experience," "Embrace Change," "Own It," "Speak Up," "Bias for Action," and "Indefatigable."

Environmental & Social Impact

Environmental Commitments: Climate Strategy: Clear Secure, Inc.'s primary operational locations are vulnerable to the adverse effects of climate change, such as extreme weather conditions, which could disrupt business and incur additional costs. The Company acknowledges that current and emerging legal and regulatory requirements related to climate change and other environmental, social, and governance ("ESG") matters may increase compliance requirements and operating costs. Given its dependence on air travel (CLEAR Plus memberships), a decrease in demand for carbon-based energy sources or related services could negatively impact revenues. Supply Chain Sustainability: No material information was explicitly stated in the filing regarding supply chain sustainability initiatives or supplier engagement on ESG requirements.

Social Impact Initiatives:

• Community Investment: No material information was explicitly stated in the filing regarding community investment or philanthropic programs.
• Product Impact: No material information was explicitly stated in the filing regarding specific product impact initiatives related to accessibility, digital divide, or social benefit applications.

Business Cyclicality & Seasonality

Demand Patterns: Clear Secure, Inc.'s financial performance is highly dependent on the strength of the travel industry and is susceptible to declines or disruptions in leisure and business travel. Factors outside the Company's control, such as prolonged extreme weather, natural disasters, health concerns (e.g., pandemics), travel restrictions, wars, civil unrest, political instability, and general economic conditions (e.g., recession, inflation), can dramatically affect travel behavior and demand for its services. Consumer preferences may shift to lower-cost alternatives during recessionary periods, impacting enrollments and renewals. Platform usage beyond airports is also influenced by the operational status of partners (e.g., events, hotels, car rentals, workplaces). Changes in Transportation Security Administration ("TSA") policies, such as increased randomized reverification rates for CLEAR Plus Members, could negatively impact the Member experience and retention. The Real ID Act, requiring compliant identification for air travel by May 7, 2025, could also decrease demand for airport services.

Planning & Forecasting: No material information was explicitly stated in the filing regarding specific planning and forecasting approaches for cyclicality or seasonality.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations: Clear Secure, Inc. operates under stringent federal government standards related to aviation security, overseen by the Department of Homeland Security ("DHS") and the Transportation Security Administration ("TSA"). This includes compliance with checkpoint operations, enrollment and verification processes, and employee hiring and training. The Company operates through the Registered Traveler Program ("RT Program") and was selected by the TSA for the TSA Biometric PreCheck® Expansion Services and Vetting Program. Its information security program is certified at a FISMA High Rating, and its biometric system is certified as a Qualified Anti-Terrorism Technology under the SAFETY Act. International Compliance: As the Company expands internationally, it becomes subject to diverse regulatory regimes, including those governing data privacy and biometrics in countries like Mexico, Canada, and Costa Rica. Data Privacy & Biometrics: The Company is subject to a wide array of U.S. federal and state laws (e.g., California Consumer Privacy Act ("CCPA"), California Privacy Rights Act ("CPRA"), Illinois’s Biometric Information Privacy Act ("BIPA"), Texas’s Capture or Use of Biometric Information Act ("CUBI")) and international regulations (e.g., General Data Protection Regulation ("GDPR"), UK GDPR) concerning the collection, use, disclosure, storage, and transmission of personal and sensitive biometric information. Artificial Intelligence: Emerging laws and regulations governing the use of artificial intelligence ("AI") or automated decision-making technology, such as draft regulations under CCPA and the EU AI Act, may apply to CLEAR's technology. Health Information: As a "business associate" for healthcare partners, the Company is increasingly regulated under the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") regarding the privacy, security, and transmission of sensitive patient health information ("PHI"). Consumer Protection: The Company is subject to laws and regulations related to consumer protection, including those governing recurring subscription payments (e.g., California’s Auto Renewal Law, federal Restore Online Shopper’s Confidence Act, and proposed Federal Trade Commission Negative Option Rule).

Trade & Export Controls: No material information was explicitly stated in the filing regarding specific trade or export control restrictions beyond general international compliance.

Legal Proceedings: The Company is involved in legal proceedings arising in the ordinary course of business, including claims by members, intellectual property claims, contract and employment claims, and data privacy claims. It is also subject to regulatory and governmental investigations. Currently, there are no claims or proceedings believed to have a material adverse effect on the business, results of operations, financial condition, or cash flows.

Tax Strategy & Considerations

Tax Profile: Clear Secure, Inc.'s effective tax rate was (238.2%) for the year ended December 31, 2024, compared to 1.4% in 2023 and 1.7% in 2022. The Company is subject to U.S. federal, state, and local income taxes, as well as income taxes in Israel, Argentina, and Mexico. Alclear Holdings, LLC is treated as a flow-through entity for U.S. federal income tax purposes.

• Tax Reform Impact: The Inflation Reduction Act, enacted in August 2022, introduced a 15% corporate alternative minimum tax and a 1% excise tax on net stock repurchases. The Company does not expect the corporate alternative minimum tax to have a material impact. No excise tax was incurred in 2024 as stock issuances exceeded repurchases.
• Tax Receivable Agreement (TRA): The Company has a TRA with Alclear Members, obligating it to pay 85% of the cash savings from U.S. federal, state, and local income tax or franchise tax realized from increases in tax basis in Alclear's assets. As of December 31, 2024, the TRA liability was $196.8 million. The Company expects tax savings of approximately $544.3 million over 15 years from December 31, 2024, with estimated payments of $462.7 million to Alclear Members under certain assumptions.
• Net Operating Loss (NOL) Carryforwards: As of December 31, 2024, the Company had federal NOL carryforwards of $7.265 million (some expiring in 2027), foreign NOL carryforwards of $0.166 million (expiring 2024-2032), and state NOL carryforwards of $16.528 million (some expiring 2039-2044).
• Unrecognized Tax Benefits: The Company had $1.552 million in unrecognized tax benefits as of December 31, 2024.
• Permanent Reinvestment: The Company asserts permanent reinvestment of all accumulated undistributed earnings of its foreign subsidiaries.

Insurance & Risk Transfer

Risk Management Framework: Clear Secure, Inc. procures various insurance policies, including general business liability, workers’ compensation, employment practices liability, cyber liability and data breaches, and directors’ and officers’ liability insurance. The Company maintains cybersecurity insurance, though it acknowledges that costs related to cybersecurity threats may not be fully insured. Its certification as a Qualified Anti-Terrorism Technology under the SAFETY Act provides legal liability protections against certain claims following an act of terrorism, although this coverage may be limited or subject to renewal. Risk Transfer Mechanisms: No additional material information was explicitly stated in the filing regarding other specific risk transfer mechanisms beyond insurance and the SAFETY Act.