Now there’s problems looking for solutions. And you see that across every industry. And so really talking about being the trusted identity layer of the Internet is a here and now opportunity. LinkedIn continues to scale and that badge is gaining recognition and will continue to be of more value to users and to partners. In healthcare, you will see us, unlocking our first in-person check-in product in Atlanta in a few weeks actually, yeah, in a week or so. And so, you’re seeing it for Verified account recovery for patients and for healthcare professionals. You’re seeing it for check-in. You’re seeing it for identity fraud in retail, which is a significant problem. And we are seeing fraud rates drop precipitously. So, our partners are seeing the impact.
Our customers love using it. Right now, you’re seeing about the same ratios with our partners, which is about 30% of the customers who are verifying our current CLEAR members and then 70% are new to the platform. Obviously, as we continue to scale our member base, we expect that to swap and that’s really powerful because it’s a one click verification or a one click KYC. So, we are seeing significant traction in health care, in financial services, in the consumer space where trust and safety are crucial, you know, specifically online, but also in physical. And you’re seeing that we talked about the member CLEAR Verified platform.
Ken Cornick: Yeah. And in terms of cost and margins, look, we’re very focused on driving margins. A number of the things that we talked about last year that we would — that we said would lead to margin expansion, those are all playing out. So, I don’t have specific commentary on cost by quarter, but I will say we remain highly disciplined from a cost perspective. And as we look to the back half, we see increased contribution from PreCheck, second half versus first half. We think Verified should be up in the back half versus the first half. And as we’ve come through the NextGen upgrades, we see improved growth from a CLEAR plus perspective. We’re also planning on taking some selective price. So, all of those things in the back half should lead to stronger growth rates in the back half versus the Q2 implied growth rate, as well as strong underpinnings for margin expansion.
Operator: Your next question comes from Mark Kelley with Stifel. Your line is open.
Mark Kelley: Thanks very much. Good morning. Two quick ones. You know, as TSA PreCheck scales, and then, you know, you just mentioned LinkedIn and healthcare, a lot of growth opportunities for the business. As we look out over time, is there a right way to think about the bookings mix and revenue mix as all these newer products layer in? I don’t care what time horizon you choose, if you can answer that question. That’s my first one. And the second one, am just curious does the TSA have to approve the nonairport partners you choose or is that completely up to you and you can kind of go wherever you think it makes sense for your product? Thank you.
Caryn Seidman-Becker: I’ll answer your second question first. TSA does need to approve it. I think we’re pragmatic people and so I think we’re all aligned to bring it to great places where travelers frequent that are conveniently located and good trusted partners but they do need to approve it. So that’s number one. In terms of the mix, early days, here’s how we look at the business, CLEAR Travel and CLEAR Verified and then broadly speaking gross profit dollars. So, I think when you look at CLEAR Travel, there’s three things that we’re doing. Obviously, we’re improving the member experience. We’re continuing to grow the networks. We launched Honolulu — sorry, Maui, wrong part of Hawaii, last week. So, you will continue to see more airports, you will continue to see more lanes in our current airports and you will continue to see more products both around that experience to drive the home to gate experience and then you will see pricing on top of that.
So when we talk about PreCheck and we talk about the TAM, the $90 million, we think it’s $150 million or $200 million opportunity on both the renewal and the new ads. And so how that layer in over time, we look all of it at CLEAR Travel and gross profit dollars. And then on the CLEAR Verified side, we’re scaling members today. It’s a smaller piece on the revenue side. But obviously, we’re going after three large TAMs in healthcare financial services and consumers abroad, physical and digital. And so, I think it’s too soon to tell, but I think we think of that as a billion-dollar opportunity. So, we’ve always said, we hope that they’re even, and we hope that means that they’re both growing aggressively, but obviously CLEAR Verified would be having a significantly higher growth rate on the top line.
Ken Cornick: And just to reiterate Caryn’s gross profit dollar point, you know, I think PreCheck, we mentioned this in the call earlier, PreCheck and Verified while less meaningful on a top line perspective today, they are starting to contribute gross profit dollars and we really are focused on growth in gross profit dollars over a relatively fixed cost structure, which would obviously drive EBITDA margins materially.
Operator: Your next question comes from Michael Turrin with Wells Fargo. Your line is open.
Michael Turrin: Hey, good morning. Thanks for taking the question. It’s David Unger for Michael Turrin. Ken, the 2Q bookings guide suggests 12% year-on-year growth. Can you please step through the seasonality factors that play there? And I know you’ve commented that TSA is not much contribution, but anything you can mention there would be great. Thanks.
Ken Cornick: Sure. So just taking a step back, look, we’ve been growing bookings at a sustained 30% CAGR versus the 2019 pre COVID levels, really for several years now. The Q2 guidance is around a 28% CAGR. Q1 was a 29% CAGR. So, getting the NextGen upgrade rate to 90% has been the priority and it impacted sales. Our field team, they’re back to balancing enrollments and verification with more products in our products and our pods, such as PreCheck and the bundle opportunity, we have more opportunities than ever there to drive revenue. I would also highlight Q2 2023 was particularly strong. Bookings accelerated, to a 43% growth rate last year, and we exceeded our guidance by around 10%. So, the growth comparison was quite strong for Q2.
