Clear Secure Inc

Previous wording

CLEAR is an identity company making experiences safer and easier 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, friction-free experiences in airports for over 14 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide. As we continue to innovate on the travel experience, we are proud to offer TSA PreCheck® Enrollment Provided by CLEAR – offering consumers increased choice in how and where to sign up for this popular trusted traveler program. Our free flagship CLEAR app offers consumer products like Home-to-Gate, which includes RESERVE Powered by CLEAR, our virtual queuing technology that enables customers to prebook a spot in the airport security line so they don’t have to wait. CLEAR Verified, our B2B offering, enables our partners to leverage our digital identity technology and reusable member network to facilitate secure and frictionless experiences digitally and physically via our software development kits and application programming interfaces.

Current wording

CLEAR is an identity company making experiences safer and easier 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, friction-free experiences in airports for over 14 years, achieving exceptional user delight and trust with CLEAR Plus, our consumer aviation subscription service. CLEAR Plus enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints nationwide. As we continue to innovate on the travel experience, we are proud to offer TSA PreCheck® Enrollment Provided by CLEAR – offering consumers increased choice in how and where to sign up for this popular trusted traveler program. CLEAR Mobile, which delivers predictable airport security for travelers by accessing a dedicated lane at airport security, simply by showing a QR code, that is free to CLEAR Plus Members and available to all travelers by purchasing a day pass—valid for 24 hours. Our free flagship CLEAR app offers consumer products like Home-to-Gate, which includes RESERVE Powered by CLEAR, our virtual queuing technology that enables customers to prebook a spot in the airport security line so they don’t have to wait; CLEAR Verified, our B2B offering, enables our partners to leverage our digital identity technology and reusable member network to facilitate secure and frictionless experiences digitally and physically via our software development kits and application programming interfaces.

Previous wording

During the three and six months ended June 30, 2024, the Company recognized certain exchanges. As of June 30, 2024, the Company did not record a TRA liability as a result of these exchanges.

Current wording

During the three and nine months ended September 30, 2024, the Company recognized certain exchanges. As of September 30, 2024, the Company did not record a TRA liability as a result of these exchanges.

Previous wording

Total Bookings increased by $21.9 million, or 13%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily driven by new Member enrollments, pricing increases, and strong retention of existing Members.

Current wording

Total Bookings increased by $35.8 million, or 19%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The increase was primarily driven by new Member enrollments and pricing increases.

Previous wording

Total Bookings increased by $52.8 million, or 16%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily driven by new Member enrollments, pricing increases, and strong retention of existing Members.

Current wording

Total Bookings increased by $88.5 million, or 17%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily driven by new Member enrollments and pricing increases.

Previous wording

Total Cumulative Enrollments were 24,221 as of June 30, 2024 and 17,385 as of June 30, 2023, which represented a 39% increase. The year-over-year increase was driven by CLEAR Verified and CLEAR Plus enrollments.

Current wording

Total Cumulative Enrollments were 26,453 as of September 30, 2024 and 18,594 as of September 30, 2023, which represented a 42% increase. The year-over-year increase was driven by CLEAR Verified and CLEAR Plus enrollments.

Previous wording

Total Cumulative Platform Uses was 206,673 as of June 30, 2024 and 154,317 as of June 30, 2023, which represented a 34% increase, driven by CLEAR Plus verifications combined with increased contributions from CLEAR Verified uses.

Current wording

Total Cumulative Platform Uses was 220,413 as of September 30, 2024 and 167,417 as of September 30, 2023, which represented a 32% increase, driven by CLEAR Plus verifications combined with increased contributions from CLEAR Verified uses.

Previous wording

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; it excludes duplicate and/or purged accounts. Management views this as an important tool to measure the growth of its CLEAR Plus product.

Current wording

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. Management views this as an important tool to measure the growth of its CLEAR Plus product.

Previous wording

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. Active CLEAR Plus Members also include those in a grace period of up to 51 days after a billing failure during which time we attempt to collect updated payment information. Bookings received from a third party as part of a partnership agreement are excluded from both periods; all 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.

Current wording

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 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 views this metric to be reflective of our business objective of optimizing revenue and less dependent upon the underlying growth rate of the total membership base.

Previous wording

Annual CLEAR Plus Gross Dollar Retention was 89.3% as of June 30, 2024 and 87.7% as of June 30, 2023, a year-over-year increase of 160 basis points. The year-over-year change was driven by pricing benefits, primarily from paying CLEAR Plus members on a family plan, and strong Member retention.

Current wording

Annual CLEAR Plus Gross Dollar Retention was 89.0% as of September 30, 2024 and 88.0% as of September 30, 2023, a year-over-year increase of 100 basis points. The year-over-year change was driven by pricing increases offset in part by modest decreases in Member retention.

Previous wording

We define Annual CLEAR Plus Net Member Retention as one minus the CLEAR Plus net Member churn on a rolling 12 month basis. We define “CLEAR Plus net Member churn” as total cancellations net of winbacks in the trailing 12 month period divided by the average Active CLEAR Plus Members as of the beginning of each month within the same 12 month period. Winbacks are defined as reactivated Members who have been cancelled for at least 60 days. Active CLEAR Plus Members are defined as Members who have completed enrollment with CLEAR and have activated a payment method for our in-airport CLEAR Plus service, including their registered family plan Members. Active CLEAR Plus Members also include those in a grace period of up to 51 days after a billing failure during which time we attempt to collect updated payment information. Management views this metric as an important tool to analyze the level of engagement of our Member base, which can be a leading indicator of future growth and revenue, as well as an indicator of customer satisfaction and long term business economics.

Current wording

We define Annual CLEAR Plus Net Member Retention as one minus the CLEAR Plus net Member churn on a rolling 12 month basis. We define “CLEAR Plus net Member churn” as total cancellations net of winbacks in the trailing 12 month period divided by the average Active CLEAR Plus Members as of the beginning of each month within the same 12 month period. Winbacks are defined as reactivated Members who have been cancelled for at least 60 days. Management views this metric as an important tool to analyze the level of engagement of our Member base, which can be a leading indicator of future growth and revenue, as well as an indicator of customer satisfaction and long term business economics.

Previous wording

Annual CLEAR Plus Net Member Retention was 83.2% as of June 30, 2024 and 90.7% as of June 30, 2023, a year-over year decrease of 750 basis points. The decrease was primarily driven by a larger pool of Members up for renewal year-over-year, a normalization of winbacks, and NextGen Identity+ upgrades, which we prioritized over our typical focus on reactivating Members in the lane.

Current wording

Annual CLEAR Plus Net Member Retention was 81.5% as of September 30, 2024 and 88.5% as of September 30, 2023, a year-over year decrease of 700 basis points. The decrease was primarily driven by a larger pool of Members up for renewal year-over-year, a normalization of winbacks and the modest impact of various pricing increases.

Previous wording

Active CLEAR Plus Members was 7,095 as of June 30, 2024 and 6,183 as of June 30, 2023, which represented a 15% increase, driven by new Members added through new and existing airports as well as partner and organic channels.

Current wording

Active CLEAR Plus Members was 7,150 as of September 30, 2024 and 6,374 as of September 30, 2023, which represented a 12% increase, driven by new Members added through new and existing airports as well as partner and organic channels.

Previous wording

In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income and Adjusted Net Income per Common Share, Basic and Diluted 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 (loss), 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.

Current wording

In addition to our results as determined in accordance with GAAP, we disclose Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, Adjusted Net Income and Adjusted Net Income per Common Share, Basic and Diluted 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 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.

Previous wording

We define Adjusted EBITDA as net income (loss) adjusted for income taxes, interest (income) expense 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. Adjusted EBITDA is an important financial measure used by management and our board of directors (“Board”) to evaluate business performance. During the third quarter of fiscal year 2022, we revised our definition of Adjusted EBITDA (Loss) to exclude sublease rental income from our other income (expense) adjustment. During the fourth quarter of fiscal year 2022, we revised our definition of Adjusted EBITDA to include impairment on assets as a separate component. We did not revise prior years' Adjusted EBITDA because there was no impact of a similar nature in the prior period that affects comparability. Adjusted EBITDA margin is adjusted EBITDA, divided by total revenues.

Current wording

We define Adjusted EBITDA as net income adjusted for income taxes, interest (income) expense 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. Adjusted EBITDA is an important financial measure used by management and our board of directors (“Board”) to evaluate business performance. We believe Adjusted EBITDA assists 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. During the third quarter of fiscal year 2022, we revised our definition of Adjusted EBITDA to exclude sublease rental income from our other income (expense) adjustment. During the fourth quarter of fiscal year 2022, we revised our definition of Adjusted EBITDA to include impairment on assets as a separate component. We did not revise prior years' Adjusted EBITDA because there was no impact of a similar nature in the prior period that affects comparability. Adjusted EBITDA margin is adjusted EBITDA, divided by total revenues.

Previous wording

We define Adjusted Net Income as net income (loss) attributable to Clear Secure, Inc. adjusted for the net income (loss) attributable to non-controlling interests, equity-based compensation expense, amortization of acquired intangible assets, acquisition-related costs, changes in fair value of contingent consideration and the income tax effect of these adjustments. Adjusted Net Income is used in the calculation of Adjusted Net Income per Common Share as defined below.

Current wording

We define Adjusted Net Income as net income attributable to Clear Secure, Inc. adjusted for the net income attributable to non-controlling interests, equity-based compensation expense, amortization of acquired intangible assets, acquisition-related costs, changes in fair value of contingent consideration and the income tax effect of these adjustments, using an effective tax rate. We believe these adjustments assist investors in evaluating the performance of the Company’s core operations assuming the exchange of all vested and outstanding common units in Alclear. In addition, this measure, while not necessarily calculated in the same way as similarly titled measures used by other companies, facilitates comparisons with other companies that have different organizational and tax structures. Adjusted Net Income is used in the calculation of Adjusted Net Income per Common Share as defined below.

Previous wording

Adjusted Net Income and Adjusted Net Income per Common Share exclude, to the extent applicable, the tax effected impact of non-cash expenses and other items that are not directly related to our core operations. These items are excluded because they are connected to the Company’s long term growth plan and not intended to increase short term revenue in a specific period. Further, to the extent that other companies use similar methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP operating results.

Current wording

Adjusted Net Income and Adjusted Net Income per Common Share exclude, to the extent applicable, the tax effected impact of non-cash expenses and other items that are not directly related to our core operations. These items are excluded because they are connected to the Company’s long term growth plan and not intended to increase short term revenue in a specific period. We believe these adjustments assist investors in evaluating the performance of the Company’s core operations assuming the exchange of all vested and outstanding common units in Alclear. Further, to the extent that other companies use similar methods in calculating non-GAAP measures, the provision of supplemental non-GAAP information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP operating results.

Previous wording

We define Free Cash Flow as net cash provided by operating activities adjusted for purchases of property and equipment. 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.

Current wording

We define Free Cash Flow as net cash provided by operating activities adjusted for purchases of property and equipment. We believe Free Cash Flow provides useful information to management and investors about the Company’s liquidity and cash flow trends. 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.

Previous wording

Comparison of the three and six months ended June 30, 2024 and 2023 (in millions):

Current wording

Comparison of the three and nine months ended September 30, 2024 and 2023 (in millions):

Previous wording

Information about our operating results for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 is set forth below:

Current wording

Information about our operating results for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 is set forth below:

Previous wording

Revenue increased by $36.9 million, or 25%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was primarily due to an increase in the number of CLEAR Plus Members. Approximately 29% and 30%, respectively, of paying CLEAR Plus Members were on a family plan as of June 30, 2024 and 2023, respectively.

Current wording

Revenue increased by $38.0 million, or 24%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change was primarily due to an increase in the number of CLEAR Plus Members as well as the benefit of pricing increases. Approximately 28% and 30%, respectively, of paying CLEAR Plus Members were on a family plan as of September 30, 2024 and 2023, respectively.

Previous wording

Revenue increased by $83.6 million, or 30%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was primarily due to an increase in the number of CLEAR Plus Members. Approximately 29% and 30%, respectively, of paying CLEAR Plus Members were on a family plan as of June 30, 2024 and 2023, respectively.

Current wording

Revenue increased by $121.6 million, or 27%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was primarily due to an increase in the number of CLEAR Plus Members as well as the benefit of price increases. Approximately 28% and 30%, respectively, of paying CLEAR Plus Members were on a family plan as of September 30, 2024 and 2023, respectively.

Previous wording

Cost of revenue share fee increased by $4.9 million, or 23%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was driven primarily by an increase of $2.4 million, or a 41% increase, in fixed airport fees and $2.5 million, or a 16% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by $0.6 million and $0.3 million in the three months ended June 30, 2024 and 2023.

Current wording

Cost of revenue share fee increased by $5.7 million, or 25%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change was driven primarily by an increase of $2.3 million, or a 35% increase, in fixed airport fees and $3.4 million, or a 21% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by none and $1.1 million in the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Cost of revenue share fee increased by $9.7 million, or 24%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was driven primarily by an increase of $4.9 million, or a 43% increase, in fixed airport fees and $4.8 million, or a 16% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by $2.0 million and $0.9 million in the six months ended June 30, 2024 and 2023.

Current wording

Cost of revenue share fee increased by $15.4 million, or 24%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was driven primarily by an increase of $7.2 million, or a 40% increase, in fixed airport fees and $8.2 million, or a 18% increase, in per Member fees. COVID-related concessions reduced Cost of revenue share fee by $2.4 million and $2.0 million in the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

Cost of direct salaries and benefits expenses increased by $5.9 million, or 17%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was primarily due to increased employee compensation costs of $5.5 million caused by wage increases and higher average employee count.

Current wording

Cost of direct salaries and benefits expenses increased by $9.5 million, or 27%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change was primarily due to increased employee compensation costs of $8.8 million caused by wage increases, and higher average employee count.

Previous wording

Cost of direct salaries and benefits expenses increased by $13.0 million, or 19%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was primarily due to increased employee compensation costs of $10.3 million caused by wage increases and higher average employee count.

Current wording

Cost of direct salaries and benefits expenses increased by $22.5 million, or 22%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was primarily due to increased employee compensation costs of $21.2 million caused by wage increases and higher average employee count.

Previous wording

Research and development expenses decreased by $6.7 million, or 15%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was primarily due to a $5.5 million decrease in employee compensation costs, net of a $0.9 million increase in severance related to the closure of our Israel office. In addition, during the six months ended June 30, 2023, we incurred a $1.2 million non-cash impairment of certain assets that did not occur in the current period.

Current wording

Research and development expenses decreased by $1.1 million, or 2%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was primarily due to (1) a $1.2 million decrease in employee compensation costs, net of a $0.9 million increase in severance related to the closure of our Israel office; and (2) a $1.2 million non-cash impairment of certain assets and $7.7 million employee equity-based compensation forfeitures during the nine months ended September 30, 2023 that did not occur in the current period. These decreases were offset in part by a $1.4 million increase in technology costs.

Previous wording

Sales and marketing expenses increased by $0.2 million, or 2%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was primarily driven by a $2.1 million increase in higher discretionary marketing expense offset by a $2.0 million decrease in Ambassador commission expense.

Current wording

Sales and marketing expenses increased by $1.9 million, or 19%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change was primarily driven by a $3.4 million increase in higher discretionary marketing expense, partially offset by a $1.4 million decrease in employee compensation costs and a $0.4 million decrease in Ambassador commission expense.

Previous wording

Sales and marketing expenses increased by $2.3 million, or 11%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was driven primarily by $3.4 million of higher discretionary marketing expense and $1.2 million increased employee compensation costs, partially offset by a $2.2 million decrease in Ambassador commission expense.

Current wording

Sales and marketing expenses increased by $4.2 million, or 14%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was driven primarily by $6.9 million of higher discretionary marketing expense, partially offset by a $2.6 million decrease in Ambassador commission expense.

Previous wording

General and administrative expenses decreased by $0.8 million, or 1%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was driven primarily by a decrease of $3.0 million in employee compensation cost and $1.6 million in professional service fees. The decrease was partially offset by a $3.5 million increase in technology costs.

Current wording

General and administrative expenses decreased by $2.2 million, or 4%, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change is primarily driven by a decrease of $3.1 million in employee compensation costs and $3.0 million in professional service fees, partially offset by $1.9 million of higher credit card fees due to higher bookings and $1.8 million for technology costs.

Previous wording

General and administrative expenses decreased by $6.0 million, or 5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was driven primarily by a decrease of $8.5 million in employee compensation cost and $2.4 million in professional service fees. In addition, during the six months ended June 30, 2023, we incurred a $1.5 million lease impairment and $1.0 million write-off of certain assets that did not occur in the current period. The decrease was partially offset by a $6.0 million increase in technology costs and $3.6 million higher credit card fees due to higher bookings during the six months ended June 30, 2024.

Current wording

General and administrative expenses decreased by $8.1 million, or 5%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was driven primarily by a decrease of $11.8 million in employee compensation cost and $5.5 million in professional service fees. In addition, during the nine months ended September 30, 2023, we incurred a $1.5 million lease impairment and $1.0 million write-off of certain assets that did not occur in the current period. The decrease was partially offset by a $7.8 million increase in technology costs and $5.5 million of increased credit card fees due to higher bookings during the nine months ended September 30, 2024.

Previous wording

Interest income, net increased by $0.9 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was primarily driven by higher interest rates.

Current wording

Interest income, net increased by $4.0 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was primarily driven by higher interest rates.

Previous wording

Income tax expense increased by $0.2 million, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The change was primarily due to the U.S. federal and state current taxes not offset by tax attributes (e.g. net operating losses and general business tax credits).

Current wording

Income tax expense increased by $4.0 million, for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. The change was primarily due to the U.S. federal and state current taxes not offset by tax attributes (e.g. net operating losses and general business tax credits).

Previous wording

Income tax expense increased by $2.3 million, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The change was primarily due to the U.S. federal and state current taxes not offset by tax attributes (e.g. net operating losses and general business tax credits).

Current wording

Income tax expense increased by $6.3 million, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The change was primarily due to the U.S. federal and state current taxes not offset by tax attributes (e.g. net operating losses and general business tax credits).

Previous wording

Our operations have been financed primarily through equity financing and cash flow from operating activities. As of June 30, 2024, we had cash and cash equivalents of $39.1 million and marketable securities of $630.5 million.

Current wording

Our operations have been financed primarily through cash flows from operating activities. As of September 30, 2024, we had cash and cash equivalents of $32.9 million and marketable securities of $511.8 million.

Previous wording

Historically, our principal uses of cash and cash equivalents have included funding our operations, capital expenditures, repurchases of members’ equity and more recently, business combinations and investments that enhance our strategic positioning. We may also use our cash and cash equivalents to repurchase our Class A Common Stock, pay cash dividends and distribute to members for tax payments. We plan to finance our operations, future stock repurchases, cash dividends and capital expenditures largely through cash generated from the proceeds of our IPO and operations. We believe our existing cash and cash equivalents, marketable securities, cash provided by operations and the availability of additional funds under our Credit Agreement (as defined below) will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, including payment of dividends, potential stock repurchases, and known commitments and contingencies as discussed below. We expect that future capital expenditure will generally relate to building enhancements to the functionality of our current platform, equipment, leasehold improvements and furniture and fixtures related to office expansion and relocation, and general corporate infrastructure.

Current wording

Historically, our principal uses of cash and cash equivalents have included funding our operations, capital expenditures, repurchases of members’ equity and more recently, business combinations and investments that enhance our strategic positioning. We may also use our cash and cash equivalents to repurchase our Class A Common Stock, pay cash dividends and distribute to members for tax payments. We plan to finance our operations, future stock repurchases, cash dividends and capital expenditures largely through cash generated from operations. We believe our existing cash and cash equivalents, marketable securities, cash provided by operations and the availability of additional funds under our Credit Agreement (as defined below) will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months, including payment of dividends, potential stock repurchases, and known commitments and contingencies as discussed below. We expect that future capital expenditure will generally relate to building enhancements to the functionality of our current platform, equipment, leasehold improvements and furniture and fixtures related to office expansion and relocation, and general corporate infrastructure.

Previous wording

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. On November 8, 2023, March 21, 2024 and August 5, 2024, the Company announced that its Board authorized three $100 million increases to its existing Class A Common Stock share repurchase program, resulting in an aggregate remaining authorization on August 5, 2024 of approximately $100 million. 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 six months ended June 30, 2024, the Company repurchased 7,983,612 shares for $150.0 million. The repurchased shares were retired. As of June 30, 2024, $75.4 million remained available under the repurchase authorization.

Current wording

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. On November 8, 2023, March 21, 2024 and August 5, 2024, the Company announced that its Board authorized three $100 million increases to its existing Class A Common Stock share repurchase program, resulting in an aggregate remaining authorization on August 5, 2024 of approximately $100.5 million. 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 nine months ended September 30, 2024, the Company repurchased 11,983,612 shares for $225.2 million. The repurchased shares were retired. As of September 30, 2024, $100.5 million remained available under the repurchase authorization.

Previous wording

On August 2, 2024, the Company announced that its Board declared a quarterly dividend of $0.10 per share, payable on September 17, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on September 10, 2024 (the “Record Date”). The Company will fund the dividend from proportionate cash distributions by Alclear to all of its members as of the Record Date, including holders of non-controlling interests in Alclear and the Company.

Current wording

On October 31, 2024, the Company announced that its Board declared a quarterly dividend of $0.125 per share, payable on December 17, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on December 10, 2024 (the “Record Date”). The Company will fund the dividends from proportionate cash distributions by Alclear to all of its members as of the Record Date, including holders of non-controlling interests in Alclear and the Company.

Previous wording

As of June 30, 2024, the Company had a remaining borrowing capacity of $68.3 million, net of standby letters of credit, and had no outstanding debt obligations. As of June 30, 2024, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement. Refer to Note 20 within the condensed consolidated financial statements for further details.

Current wording

As of September 30, 2024, the Company had a remaining borrowing capacity of $67.8 million, net of standby letters of credit, and had no outstanding debt obligations. As of September 30, 2024, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement. Refer to Note 21 within the condensed consolidated financial statements for further details.

Previous wording

The following summarizes our cash flows for the six months ended June 30, 2024 and 2023 (in millions):

Current wording

The following summarizes our cash flows for the nine months ended September 30, 2024 and 2023 (in millions):

Previous wording

For the six months ended June 30, 2024, net cash provided by operating activities was $194.9 million compared to net cash provided by operating activities of $135.8 million for the six months ended June 30, 2023, an increase of $59.2 million primarily due to year-over-year increase of net income of $70.9 million offset by unfavorable changes in working capital of $3.3 million and a decrease in non-cash adjustments to net income of $8.5 million.

Current wording

For the nine months ended September 30, 2024, net cash provided by operating activities was $159.1 million compared to net cash provided by operating activities of $130.9 million for the nine months ended September 30, 2023, an increase of $28.2 million primarily due to year-over-year increase of net income of $82.1 million offset by a decrease in non-cash adjustments to net income of $3.1 million and unfavorable changes to working capital of $50.8 million, driven by the settlement of accrued partnership liabilities.