Clear Secure, a cybersecurity company, is revolutionizing identity verification with its primary service focused on identity checks. Renowned for its 147 priority lanes exclusively for Clear Plus members at 56 airports across the United States, Clear Secure enables its members to swiftly navigate security checkpoints using biometric identity verification capabilities.
Membership Benefits and Growth
For $189 per year, customers gain access to these priority lanes by uploading their driver’s licenses or passports to the Clear mobile app or airport kiosk. Currently boasting 6.7 million paying users, Clear Secure experienced a 31% growth in its user base in 2023. Additionally, the company serves 13 million non-paying users who utilize the Clear app for flight information, such as gate numbers or estimated terminal walk times.
Expansion into Identity Verification
Clear Secure aims to expand its identity verification capabilities through new channels. With its Clear Verified business product, the company collaborates with enterprises in professional sports leagues, e-commerce, retail, finance, hospitality, and healthcare. A notable success story in this realm is its partnership with LinkedIn, where users can verify their identities for free through Clear Secure and display a verification indicator on the platform.
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Financial Performance and Outlook
Clear Secure’s revenue surged by 40% in 2023, with particular attention drawn to its rapidly growing free cash flow margin of 33%. Management anticipates this free cash flow, along with Clear Secure’s sales, to grow by over 30% in 2024. Despite its impressive performance, the company trades at a low valuation, only 9 times its free cash flow.
Financial Strength and Shareholder Returns
With over $700 million in cash and marketable securities, no debt, and nearly $200 million in free cash flow expected to be realized in 2023, Clear Secure’s management has increased its share repurchase authorization to $128 million to capitalize on the current low valuation. In addition to share buybacks, this cash reserve is expected to easily fund growing dividends, which yield approximately 1.3% at current prices. Dividend payments are projected to consume only 16% of the company’s annual free cash flow.
Explore the potential of investing in Clear Secure and capitalize on its innovative approach to identity verification and strong financial performance. With ProfitsForce’s comprehensive analysis and insights, investors can navigate the cybersecurity landscape with confidence and optimize their investment strategies for long-term success.
