Clear Secure Inc

3. Business Combinations

2023 Acquisition

On September 5, 2023, CLEAR acquired certain assets of Sora ID, Inc., a one-click know your customer (“KYC”) solution which provides technology that is KYC compliant, and is transferable across financial institutions – creating a unique, reusable verification product.

The fair value of the purchase consideration was $5,250 including deferred consideration of $1,500, of which $1,246 was paid during the year ended December 31, 2024 with a remaining $254 payable 30 months after closing. The acquisition was accounted for as a business combination. Of the total purchase consideration, $3,950 was recorded as goodwill and $1,300 as acquired intangible assets on the consolidated balance sheets. The intangible assets acquired relate to customer relationships and developed technology with useful lives of 3 and 5 years, respectively. The Company valued the intangible assets using the multi-period excess earnings method and the relief from royalty method, both under the income approach. The goodwill recognized was deductible for tax purposes.

The Company’s allocation of purchase price was based upon valuations performed to determine the fair value of the net assets as of the acquisition date and is therefore subject to adjustments for up to one year after the closing date of the acquisition to reflect final valuations. This was finalized in the third quarter of 2024.

The Company also entered into an agreement to provide $4,000 of retention bonuses and $9,000 of post-combination remuneration in cash payments and RSUs upon satisfaction of certain post-closing financial metrics and continuing service requirements.

The retention bonuses consisted of (i) cash payments which were made monthly for the six months following the closing date, and (ii) RSUs that vest in various tranches on June 30, 2024 and December 31, 2024, 2025 and 2026. As of December 31, 2024, $650 of the retention bonuses remain unvested. Post-combination remuneration consists oftwo equal tranches of RSUs that will vest upon the achievement of specified operating metrics during the twelve month periods ended December 31, 2024 and December 31, 2025, respectively. As of December 31, 2024, $3,000 of the post-combination remuneration remained unvested. The Company has recorded $208 in compensation expense related to the post-combination remuneration for the year ended December 31, 2024. The remaining compensation expenses will be recognized within general and administrative expenses.

4. Revenue

The Company derives substantially all of its revenue from subscriptions to its consumer aviation service, CLEAR Plus. For the years ended December 31, 2024, 2023 and 2022, no individual airport accounted for more than 10% of membership revenue.

Revenue by Geography

For the years ended December 31, 2024, 2023 and 2022, substantially all of the Company’s revenue was generated in the United States.

Contract liabilities and assets

The Company’s deferred revenue balance primarily relates to amounts received from Members for subscriptions paid in advance of the services being provided that will be earned within the next twelve months. The following table presents changes in the deferred revenue balance as follows:

The Company has obligations for refunds and other similar items of $3,743 and $3,727 as of December 31, 2024 and 2023, respectively, recorded within accrued liabilities.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized $371,576, $281,786 and $188,009, respectively, of revenue which was included in the opening deferred revenue balances.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets as of December 31, 2024 and 2023 consist of the following:

The Coronavirus Aid, Relief, and Economic Security Act is intended to provide economic relief resulting from the COVID-19 pandemic which includes, but is not limited to, employment related costs. As of March 31, 2024, the Company no longer expects to receive the remainder of the balance in the next twelve months. As such, the Company reclassified this balance to Other assets. Refer to Note 11 for the reclassed balance.

6. Fair Value Measurements

The Company values its available-for-sale securities and certain liabilities based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In order to increase consistency and comparability in fair value measurements, a fair value hierarchy that prioritizes observable and unobservable inputs is used to measure fair value into three broad levels, which are described below:

Level 1 – Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in inactive markets or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data.

Level 3 – Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs to the extent possible. In addition, the Company considers counterparty credit risk in its assessment of fair value.

The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

The following is a description of the valuation methodologies used for certain assets and liabilities measured at fair value, which are not considered Level 1 items.

Corporate bonds – Valued at the closing price reported on the active market on which the individual securities, all of which have counterparts with high credit ratings, are traded.

Commercial paper – Value is based on yields currently available on comparable securities of issuers with similar credit ratings.

Money market funds – Valued at the net asset value (“NAV”) of units of a collective fund. The NAV is used as a practical expedient to estimate fair value. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The contractual maturities of investments classified as marketable securities are as follows as of December 31, 2024 and 2023:

The following table represents the amortized cost, gross unrealized gains and losses, and fair market value of the Company’s marketable securities by significant investment category in addition to their fair value level at December 31, 2024 and 2023:

(a)Money market funds that were measured at NAV per share (or its equivalent) have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the line items presented in the consolidated balance sheets.

Of the total marketable securities held at fair value as of December 31, 2024, $9,804 was in a continuous unrealized loss for 12 months or longer. The Company hadno continuous unrealized loss position from marketable securities as of December 31, 2024 or December 31, 2023 that was as a result of a credit deterioration. For the periods presented the Company does not intend to or will be required to sell these securities before recovery of their amortized cost bases.

7. Property and Equipment, net

Property and equipment as of December 31, 2024 and 2023 consist of the following:

Depreciation and amortization expense related to property and equipment for the years ended December 31, 2024, 2023 and 2022 was approximately $21,749, $18,215 and $15,524 respectively.

During the years ended December 31, 2024, 2023 and 2022, $6,227, $8,517, and $13,000 was capitalized in connection with internally developed software inclusive of $748, $1,424, andnone of equity-based compensation, respectively. Amortization expense on internally developed software was $13,122, $8,307 and $7,676 for the years ended December 31, 2024, 2023 and 2022 respectively.

Purchases of property and equipment with unpaid costs in accounts payable and accrued liabilities as of December 31, 2024 were $4,792 and $1, respectively and $648 and $173 as of December 31, 2023, respectively.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized impairment charges of $723, $3,469, and $2,047 on property and equipment. During the year ended December 31, 2024, these charges related to early termination of a lease and subsequent impairment to primarily leasehold improvements and other fixed assets. See Note 8 for more information. During the year ended December 31, 2023, these charges related to capitalized software and hardware for which the Company discontinued product development.

8. Leases

Below is a reconciliation of the amounts reported on the consolidated balance sheets with respect to the Company’s operating leases:

In October 2022, the Company modified a lease agreement and simultaneously entered into a sublease agreement whereby the Company will continue to be a lessee under the original operating lease but will act as a sublessor. Additionally, during the year ended December 31, 2023, the Company entered into another sublease agreement whereby the Company continues to be a lessee under the original operating lease but will act as a sublessor.

Additionally, during years ended December 31, 2024, 2023 and 2022, the Company recorded none, $1,506, and $1,021, respectively, of impairment to its right of use assets within general and administrative in the consolidated statements of operations. For the years ended December 31, 2024, 2023 and 2022, the Company recorded $1,776, $1,557 and $130, respectively, of sublease income within other income (expense), net within the consolidated statements of operations. See Note 7 for further impact on the Company’s consolidated financial statements as a result of aforementioned transactions.

As of December 31, 2024, the weighted-average incremental borrowing rate was 7.63%. Additionally, the weighted-average remaining lease term as of December 31, 2024 was 12.33 years.

Total operating lease expense recognized on the consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 was $15,805, $16,021, and $6,306, respectively. Cash paid for amounts included in the measurement of operating lease liabilities for the years ended December 31, 2024 and 2023 was $14,953 and $12,322, respectively.

9. Intangible Assets, net

See below for Intangible assets, net as of December 31, 2024 and 2023:

Amortization expense of intangible assets was $4,731, $3,434 and $3,268 for the years ended December 31, 2024, 2023 and 2022 respectively. The Company didnot recognize any impairment charges on intangible assets, net or goodwill for the periods presented.

10. Restricted Cash

As of December 31, 2024 and 2023, the Company maintained bank deposits of $3,456 and $4,501, respectively, which were primarily pledged as collateral for long-term letters of credit issued in favor of airports, in connection with the Company’s obligations under revenue share agreements. In April 2023, the Company issued a standby letter of credit under the Credit Agreement (as defined in Note 21) to replace the previously issued cash secured letter of credit of $6,099 in relation to the corporate headquarters lease agreement and reduced the restricted cash balance related to this lease agreement tonone.

11. Other Assets

Other assets as of December 31, 2024 and 2023 consist of the following:

During the three months ended March 31, 2024, the Company made an incremental strategic investment in equity securities of a privately held company, which the Company previously invested in during three months ended March 31, 2023. As the investment does not have a readily determinable fair value, the Company elected the measurement alternative to record the investment at initial cost less impairments, if any, adjusted for observable changes in fair value for identical or similar investments of the same issuer. Adjustments resulting from these fluctuations are recorded within other income (expense) on the Company’s consolidated statements of operations.

During the year ended December 31, 2024, there were no adjustments recorded by the Company in relation to its strategic investment.

12. Accrued Liabilities and Other Long Term Liabilities

Accrued liabilities consist of the following as of December 31, 2024 and 2023:

The Company’s accrued partnership liabilities primarily relates to estimated amounts related to a portion of merchant credit card benefits that it expects to fund.

Other long term liabilities consist of the following as of December 31, 2024 and 2023:

13. Warrants

Historically, Alclear issued warrants for their holders to purchase shares of Class B redeemable capital units. These warrants were generally subject to performance-based vesting criteria. The Company recognizes the expense for those warrants expected to vest on a straight-line basis over the requisite service period of the warrants, which generally ranges from three months tosix years. For warrants that vest upon issuance, the entire cost is expensed immediately.

In January 2022, United Airlines exercised 1,207,932 vested warrants with an intrinsic value of $32,457. In May 2022, the Company extended the term for existing United Airlines warrants that would continue to be exercisable for Class A Common Stock. The Company concluded that the extension was a modification and accounted for these instruments as equity awards under ASC 718. As the performance of the remaining vesting conditions was not probable immediately before and after the date of modification, no amount was recorded related to the modification. Due to the short duration to maturity and the nominal exercise price, the fair value of these warrants approximated the Class A Common Stock share price on the modification date.

In September 2022, United Airlines also exercised 534,655 vested warrants with an intrinsic value of $12,757. These exercises resulted in the Company issuing shares of its Class A Common Stock and were completed in a cashless transaction.

Additionally, in October 2022,2,138,620 warrants granted to United Airlines became probable of vesting and were exercised with an intrinsic value of $51,241 for Class A Common Stock in a cashless exercise. The 534,655 final remaining United Airlines warrants became probable of vesting in the fourth quarter of 2022 and were subsequently vested and exercised in January 2023. As a result, the Company recorded $76,834 of expense within general and administrative expense in the consolidated statements of operations for the twelve months ended December 31, 2022. In January 2023, the Company recognized $1,038 of the remaining expense related to the 534,655 fully vested United Airlines warrants. These warrants were exercised for Class A Common Stock in a cashless exercise with an intrinsic value of $16,136. The warrant agreement with United Airlines expired in the first quarter of 2023.

In July 2022, the Company cancelled 515,974 outstanding warrants that could have been exercisable for Class A Common Stock. These warrants were not considered as probable to vest as of the cancellation date.

In August 2022, the Company issued 108,611 replacement warrants exercisable for Class A Common Stock to certain warrant holders whose warrants expired in June 2022. Due to the short duration to maturity and the nominal exercise price, the fair value of these warrants approximated the Class A Common Stock share price on the grant date. The Company did not recognize expense related to these warrants as the performance of the awards was not considered probable. These warrants expired on December 31, 2022.

In November 2022, certain warrant holders exercised 194,109 warrants exercisable for Alclear Units for an exercise price of $0.01. As a result, the Company net issued 194,043 shares of Class C Common Stock and the same number of Alclear Units.

In January 2023, the Company recognized $1,038 of the remaining expense related to the 534,655 fully vested United Airlines warrants. These warrants were exercised for Class A Common Stock in a cashless exercise with an intrinsic value of $16,136. The existing warrant agreement with United Airlines expired in the first quarter of 2023. In September 2024, the Company’s remaining warrant agreement, which granted warrants that were exercisable for non-voting common units of Alclear (“Alclear Units”), expired.

Based on the probability of vesting, the Company recorded none, $623, and $77,033 or the years ended December 31, 2024, 2023 and 2022 respectively within general and administrative expense in the consolidated statements of operations.

14. Stockholders’ Equity

Common Stock

The Company has and will issue shares of its common stock as a result of transactions in relation to exchanges and vesting of restricted stock units (“RSUs”).

Treasury Stock

Historically, the Company's treasury stock consisted of forfeited Restricted Stock Awards (“RSAs”) that were legally issued shares held by the Company, and recorded at par value, as well as any shares repurchased under the Company’s share repurchase program that are not retired by the Company’s board of directors (the “Board”). As of December 31, 2023, there were no RSAs outstanding and the Company no longer issues RSAs. The Company’s treasury stock can be utilized to settle equity-based compensation awards issued by the Company and is excluded from the calculation of the non-controlling interest ownership percentage.

Share Repurchases

During the year ended December 31, 2024, the Company repurchased and retired 13,795,655 shares of its Class A Common Stock for $272,920 at an average price of $19.78. As of December 31, 2024, $52,747 remains available under the repurchase authorization. The Company has elected to account for the repurchase price paid in excess of par value in additional paid in capital within the consolidated financial statements.

Special and Quarterly Dividends

On August 2, 2023, the Company announced that its Board adopted a dividend policy (the "Dividend Policy") of paying a quarterly cash dividend to holders of Class A Common Stock and Class B Common Stock. The amount of such quarterly dividends is subject to approval of the actual amount by the Board at the time of such dividend declaration. It is expected that the dividends will be funded by proportionate cash distributions by Alclear to all of its members as of the applicable record date, including holders of non-controlling interests in Alclear and the Company. The declaration of cash dividends in the future is subject to final determination each quarter by the Board based on a number of factors, including the Company’s results of operations, cash flows, financial position and capital requirements, as well as general business conditions, legal, tax and regulatory restrictions and other factors the Board deems relevant at the time it determines to declare such dividends.

On February 15, 2024, the Company announced that its Board declared a quarterly dividend of $0.09 per share, payable on March 5, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on February 26, 2024. The Company funded the dividend from proportionate cash distributions by Alclear to all of its members as of February 26, 2024, including holders of non-controlling interests in Alclear and the Company.

On March 21, 2024, the Company announced the declaration of a special cash dividend in the amount of $0.32 per share payable on April 8, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on April 1, 2024. The Company funded the payment of the special cash dividend with cash held by the Company following its receipt of a pro rata cash distribution made by Alclear to all of its members, including the Company, together with cash held by the Company following its receipt of tax distributions made by Alclear.

On May 7, 2024, the Company announced that its Board declared a quarterly dividend of $0.10 per share, payable on June 18, 2024 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on June 10, 2024. The Company funded the dividend from proportionate cash distributions by Alclear to all of its members as of June 10, 2024, including holders of non-controlling interests in Alclear and the Company.

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 Company funded the dividend from proportionate cash distributions by Alclear to all of its members as of September 10, 2024, including holders of non-controlling interests in Alclear and the Company.

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 Company funded the dividend from proportionate cash distributions by Alclear to all of its members as of December 10, 2024, including holders of non-controlling interests in Alclear and the Company.

To the extent the quarterly or special dividends exceed the Company's current and accumulated earnings and profits, a portion of such dividends may be deemed a return of capital gain to the holders of our Class A Common Stock or Class B Common Stock, as applicable.

Non-Controlling Interest

The non-controlling interest balance represents the economic interest in Alclear held by the founders and members of Alclear. The following table summarizes the ownership of common units in Alclear as of December 31, 2024:

The non-controlling interest holders have the right to exchange Alclear Units, together with a corresponding number of shares of Class C Common Stock for Class A Common Stock or Class D Common Stock for Class B Common Stock. As such, exchanges by non-controlling interest holders will result in a change in ownership and reduce the amount recorded as non-controlling interest and increase Class A Common Stock or B Common Stock and additional paid-in-capital for the Company. Upon the issuance of shares Class A Common Stock or B Common Stock, Alclear issues a proportionate number of Alclear Units in conjunction with the terms of the Reorganization.

During the year ended December 31, 2024, certain non-controlling interest holders exchanged their Alclear Units and corresponding shares of Class C Common Stock or Class D Common Stock for shares of the Company's Class A Common Stock or Class B Common Stock, as applicable. As a result, the Company issued 18,077,294 shares of Class A Common Stock, including those issued in connection with the conversion of Class B Common Stock.

The non-controlling interest ownership percentage changed from 38.51% as of December 31, 2023 to 29.20% as of December 31, 2024. The primary driver of this decrease was attributable to the issuance of shares of Class A Common Stock, due to the exercise of exchanges described above.

15. Incentive Plans

2021 Omnibus Incentive Plan

The Clear Secure, Inc 2021 Omnibus Incentive Plan (“2021 Omnibus Incentive Plan”) became effective on June 29, 2021 to provide grants of equity-based awards to the employees, consultants, and directors of the Company and its affiliates.

The 2021 Omnibus Incentive Plan authorized the issuance of up to 20,000,000 shares of Class A Common Stock as of the date of the Reorganization. The 2021 Omnibus Incentive Plan authorized the issuance of shares pursuant to the grant, settlement or exercise of RSUs, RSAs, stock options and other share-based awards. Beginning with the first business day of each calendar year beginning in 2022 through 2031, the number of shares available will increase in an amount up to 5% of the total number of common shares outstanding (assuming exchange and/or conversion of all classes of common shares into Class A Common Stock) as of the last day of the immediately preceding year or a lesser amount approved by our Board or its compensation committee, so long as the total share reserve available for future awards at the time is not more than 12% of common shares outstanding (assuming exchange and/or conversion of all classes of common shares into Class A Common Stock). As a result of this provision, in March 2022, the Company filed a Registration Statement on Form S-8 registering the issuance of an additional 5,693,082 shares of Class A Common Stock that are reserved for issuance in respect of awards that may be granted under the 2021 Omnibus Incentive Plan. For fiscal year 2024, the

Compensation Committee approved no increase in the 2021 Omnibus Incentive Plan, which such increase would have been effective on the first business day of 2024.

Effective July 1, 2022, the Company amended the vesting schedule of existing time-based restricted stock units that cliff-vest after athree-year period to vest ratably over the same three-year period. This amendment did not impact the Company's consolidated statements of operations for the year ended December 31, 2022. The Company withheld taxes in connection with the net settlement of vested RSUs during the years ended years ended December 31, 2024, 2023 and 2022.

Restricted Stock Units

The RSUs are subject to both service-based and, in some cases, business performance-based vesting conditions. RSUs will vest on a specified date, provided the applicable service (generally three years) and, if applicable, business performance condition, have been satisfied. The RSUs with performance conditions issued are also subject to long-term revenue and cash-basis earnings performance hurdles. The Company determines the fair value of each RSU based on the grant date and records the expense over the vesting period or requisite service period and, if applicable, the performance conditions are probable of being met.

The following is a summary of activity related to the RSUs associated with compensation arrangements during years ended December 31, 2024:

The following is a vesting schedule of the expected vesting period related to the unvested RSUs as of December 31, 2024:

Below is the compensation expense recognized related to the RSUs:

As of December 31, 2024, estimated unrecognized compensation expense for RSUs that are probable of vesting was $53,794 with such expense expected to be recognized over a weighted-average period of approximately 2.11 years.

Founder PSUs

During June 2021, the Company established a long-term incentive compensation plan for the Co-Founders, which consists of performance restricted stock-unit awards (the “Founder PSUs”), that will be settled in shares of Class A Common Stock pursuant to the 2021 Omnibus Incentive Plan, subject to the satisfaction of both service and market based vesting conditions.

The grant date fair value for the Founder PSUs was determined by a Monte Carlo simulation and discounted by the risk-free rate on the grant date and an expected volatility of 45%. The Founder PSUs are estimated to vest over afive year period, based on the achievement of specified price hurdles of the Company’s Class A Common Stock. The specified price hurdles of the Company’s Class A Common Stock will be measured on the volume-weighted average price per share for the trailing days during any 180 day period that ends within the applicable measurement period. In June 2021, the Company granted 4,208,617 Founder PSUs at a weighted average grant date fair value of $16.54. The Company records the compensation expense related to these awards within general and administrative in the consolidated statements of operations.

As of December 31, 2024, estimated unrecognized expense for Founder PSUs was $2,016 with such expense expected to be recognized over a weighted-average period of approximately 0.29 years.

Below is a summary of total compensation expense recorded in relation to the Company’s incentive plans, excluding additional expense related to repurchases:

16. Net Income (Loss) per Common Share

Shares of the Company’s Class C and Class D Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class C Common Stock and Class D Common Stock under the two-class method has not been presented. Each share of Class C Common Stock (together with a corresponding Alclear Unit) is exchangeable forone share of Class A Common Stock and each share of Class D Common Stock (together with a corresponding Alclear Unit) is exchangeable forone share of Class B Common Stock.

Shares classified as treasury stock within the consolidated balance sheets are excluded from the calculation of basic net income (loss) per share. Additionally, the Company assumes the exercise for certain vested warrants exercisable for little to no consideration in its basic calculation to the extent applicable.

Below is the calculation of basic and diluted net income (loss) per common share:

After evaluating the potential dilutive effect under the treasury method for the year ended December 31, 2024, the outstanding Alclear Units for the assumed exchange of non-controlling interests were determined to be dilutive and thus were included in the computation of diluted earnings per share.

The following tables present potentially dilutive securities excluded from the computations of diluted earnings per share of Class A Common Stock and Class B Common Stock for the years ended December 31, 2024, 2023 and 2022:

For the year ended December 31, 2024, the Company has excluded 4,416,055 potentially dilutive shares from the tables above as they had performance conditions that were not achieved as of the end of the periods above.

17. Income Taxes

The Company is the sole managing member of Alclear, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, Alclear is generally not subject to U.S. federal and most state and local income taxes. Any taxable income or loss generated by Alclear is passed through to and included in the taxable income or loss of its members, including the Company, on a pro rata basis. The Company is subject to federal income taxes in the U.S. and its territories, in addition to state and local income taxes with respect to our allocable share of any taxable income or loss of Alclear, as well as any stand-alone income or loss generated by the Company. The Company is also subject to income taxes in Israel, Argentina, and Mexico. The Company paid $7,490 in estimated income taxes for the years ended December 31, 2024.

The components of income tax expense (benefit) are as follows:

The Company’s effectivetax rate was (238.2%),1.4% and 1.7% for December 31, 2024, 2023 and 2022, respectively. A reconciliation of the U.S. statutory income tax rate to the Company’s effective tax rate is as follows:

The components of the deferred tax assets and liabilities are as follows:

Deferred income taxes are recorded as follows in the accompanying balance sheets:

During 2024, the Company released a valuation allowance after concluding that it is more likely than not that certain deferred tax assets will be realized. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Company has concluded that it is more likely than not that a portion of deferred tax assets will be realized in the future and the valuation allowance has been adjusted to reflect our conclusion. During 2024, the Company assessed the applicable sources of taxable income including forecasted future U.S. taxable income to conclude that it is more likely than not that these deferred tax assets, excluding the indefinite lived portion of deferred tax assets related to the investment in the partnership of Alclear Holdings, LLC which would only be deductible on the sale or disposition of the partnership, will be fully realized prior to their expiration. During the year ended December 31, 2024, the Company released $175,548 of the $230,026 of valuation allowance.

The table below summarizes the significant movement year over year in the Company’s valuation allowance:

As of December 31, 2024, the Company had federal income tax net operating loss (“NOL”) carryforwards of$7,265,$276 of which, if unused, will expire in 2027. The Company had foreign income tax NOL carryforwards of $166, which, if unused, expire in years 2024 through 2032. The Company had state income tax NOL carryforwards of $16,528,

$12,717 of which, if unused, will expire in years 2039 through 2044.

Future changes in the ownership of the Company may limit the future utilization of the NOL and tax credit carryforwards, as defined by the federal, foreign, state, and local tax codes (the “Code”). Accordingly, utilization of the NOL carryforwards and credits will be subject to the annual limitation provided by the Code and similar state provisions and may result in the expiration of the NOLs and credits before utilization.

The Company accrues liabilities for uncertain tax positions that are not more likely than not to be sustained upon examination. Interest and penalties related to uncertain tax positions are recorded in accrued liabilities in the accompanying consolidated balance sheets. The following is a tabular reconciliation of the total amounts of unrecognized tax benefit:

The Company is subject to income taxes in the U.S. and its territories, Israel, Argentina, and Mexico. The statute of limitations for adjustments to our historic tax obligations will vary from jurisdiction to jurisdiction. The tax years for U.S. federal and state income tax purposes open for examination are for the years ending December 31, 2019 and forward. The tax years for foreign jurisdictions open for examination are for the years ending December 31, 2018 and forward.

The Company is asserting permanent reinvestment of all accumulated undistributed earnings of its foreign subsidiaries as of December 31, 2024. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts.

Recent U.S. Tax Legislation

On August 16, 2022, President Biden signed into law the Inflation Reduction Act. The Inflation Reduction Act creates a 15% corporate alternative minimum tax on profit of corporations whose average annual adjusted financial statement income for any consecutive three-tax-year period preceding the tax year exceeds $1 billion and is effective for tax years beginning after December 31, 2022. The Company does not currently expect this provision to have a material impact on the consolidated financial statements. Additionally, the Inflation Reduction Act creates an excise tax of 1% on the fair market value of net stock repurchases made after December 31, 2022. During the year ended December 31, 2024, the Company repurchased 13,795,655 shares of its Class A Common Stock. However, there was no excise tax as of December 31, 2024 because the stock issuances were in excess ofrepurchases.

The Company entered into the TRA, which generally provides for payment by the Company to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Clear Secure, Inc. actually realizes or is deemed to realize as a result of (i) any increase in tax basis in Alclear’s assets resulting from (a) exchanges by Alclear Members (or their transferees or other assignees) of Alclear Units (along with the corresponding shares of our Class C Common Stock or Class D Common Stock, as applicable) for shares of the Company’s Class A Common Stock or Class B Common Stock, as applicable, and purchases of Alclear Units and corresponding shares of Class C Common Stock or Class D Common Stock, as the case may be, from the Alclear Members (or their transferees or other assignees) or (b) payments under the TRA, and (ii) tax benefits related to imputed interest arising as a result of payments made under the TRA. The Company will retain the benefit of the remaining 15% of these net cash savings.

The TRA liability is calculated by determining the tax basis subject to TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. Subsequent changes to the measurement of the TRA liability are recognized in the statements of operations as a component of other income (expense), net.

The Company expects to obtain an increase in the share of the tax basis of its share of the assets of Alclear when Alclear Units are redeemed or exchanged by Alclear Members and other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Company would otherwise pay in the future to various tax authorities. The increase in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

During the year ended December 31, 2024, the Company issued 17,847,294 shares of Class A Common Stock to certain non-controlling interest holders who exchanged their Alclear Units. These exchanges resulted in a tax basis increase subject to the provisions of the TRA. The recognition of the Company’s liability under the tax receivable agreement mirrors the recognition related to its deferred tax assets. As of December 31, 2024, the Company has recognized the deferred tax asset of $231,680 for the step-up in tax basis, as the asset is more-likely-than-not to be realized. As a result, the Company has determined the TRA liability is probable and therefore has recorded a tax receivable agreement liability of $196,801.

Tax Distributions

The members of Alclear, including Clear Secure, Inc., incur U.S. federal, state and local income taxes on their share of any taxable income of Alclear. The Operating Agreement provides for pro rata cash distributions (“tax distributions”) to the holders of the Alclear Units in an amount generally calculated to provide each member of Alclear with sufficient cash to cover its tax liability in respect of the taxable income of Alclear allocable to them. In general, these tax distributions are computed based on Alclear’s estimated taxable income, multiplied by an assumed tax rate as set forth in the Operating Agreement.

For the years ended December 31, 2024, 2023 and 2022, Alclear paid tax distributions of $24,979, $13,929, and $171, respectively, to holders of Alclear Units other than the Company. For the year ended December 31, 2024, 2023 and 2022, Alclear recorded a liability of $11,737, $20,690, and $775 related to tax distributions to holders of Alclear Units other than Clear Secure, Inc.

18. Commitments and Contingencies

Litigation

From time to time, the Company is involved in various legal proceedings arising in the ordinary course of business. The Company records a liability when it believes that it is probable that a loss will be incurred and the amount of loss or range of loss can be reasonably estimated. Based on the currently available information, the Company does not believe that there are claims or legal proceedings that would have a material adverse effect on the business, or the consolidated financial statements of the Company.

Commitments other than leases

The Company is subject to minimum spend commitments of $13,622 over the next three years under certain service arrangements.

In conjunction with the Company’s revenue share agreements with the airports, certain agreements contain minimum annual contracted fees. These future minimum payments are as follows as of December 31, 2024:

The Company also has commitments for future marketing expenditures to sports stadiums of $3,495 through 2026. For the year ended December 31, 2024, 2023 and 2022, marketing expenses related to sports stadiums were approximately $5,119, $5,508 and $4,898, respectively.

Refer to Note 8 for the Company’s lease commitments.

19. Related-Party Transactions

As of December 31, 2024, and December 31, 2023, the Company had total payables to certain related parties of $3,540 and $3,508. Additionally, for the years ended December 31, 2024, 2023 and 2022 the Company recorded $13,088, $12,524 and $7,739, respectively, within Cost of revenue share fee within the consolidated statements of operations. These amounts are subject to a Cost of revenue share fee arrangement with an airline.

In July 2024, a related party exchanged 4,000,000 of their Alclear Units and corresponding shares of Class

C Common Stock for shares of the Company’s Class A Common Stock, and the Company repurchased and retired

the shares of Class A Common Stock.

Refer to Note 13 for further information regarding transactions between certain related parties with regards to warrants and Note 17 regarding the TRA liability.

20. Employee Benefit Plan

The Company has a 401(k) retirement savings and investment plan (the “401(k) Plan”). Participants make contributions to the 401(k) Plan in varying amounts, up to the maximum limits allowable under the Code. For the years ended December 31, 2024, 2023 and 2022 the Company recorded $2,047, $2,045 and $1,383, respectively within the consolidated statements of operations.

21. Debt

In March 2020, the Company entered into a credit agreement for athree-year $50,000 revolving credit facility, with a group of lenders. In April 2021, the Company entered into Amendment No. 1 to the Credit Agreement that increased the commitments under the revolving credit facility to $100,000, which extended the maturity date to March 31, 2024. The revolving credit facility includes a letter of credit sub-facility. In June 2023, the Company entered into Amendment No. 2 to the Credit Agreement to transition from London Interbank Offered Rate to the Secured Overnight Financing Rate ("SOFR") as our benchmark interest rate and to extend the maturity date to June 28, 2026. In November 2024, the Company entered into Amendment No. 3 to the Credit Agreement to increase the letter of credit sublimit from $35,000 to $50,000. The line of credit hasnot been drawn against as of December 31, 2024. Prepaid loan fees related to this facility are capitalized and amortized over the remaining term of the credit agreement. The balance expected to be amortized within twelve months from the balance sheet date is presented within Prepaid and other current assets on the consolidated balance sheets, while the long term portion is presented within Other assets in the consolidated balance sheets.

The Company incurred $396 of debt issuance costs in connection to Amendment No. 2 to the Credit Agreement. As of December 31, 2024 and 2023, the balance of these loan fees were $198 and $419, respectively.

The Credit Agreement contains customary terms and conditions, including limitations on consolidations, mergers, indebtedness, and certain payments, as well as a financial covenant relating to leverage. Borrowings under the Credit Agreement generally will bear a floating interest rate per year and will also include interest based on the greater of the prime rate, SOFR, or New York Federal Reserve Bank (NYFRB) rate, plus an applicable margin for specific interest periods.

As of December 31, 2024, the Company had a remaining borrowing capacity of $66,408, net of standby letters of credit, and hadno outstanding debt obligations.

In addition, the Credit Agreement contains certain other covenants (none of which relate to financial condition), events of default and other customary provisions. As of December 31, 2024, the Company was in compliance with all of the financial and non-financial covenants of the Credit Agreement.

22. Segment Information

The Company is organized and operates as a single operating and reportable segment, which aligns with the way the Chief Operating Decision Makers (“CODM”), who are the Chief Executive Officer and Chief Financial Officer, evaluate financial performance and results and allocate resources based on the consolidated results of the Company as a whole. The Company's operations are primarily focused on growing and maintaining its secure identity network across multiple offerings in both aviation and non-aviation channels. See Note 1 for further information on the Company’s operations and services from which it derives its revenues.

Operating income and assets are managed at the consolidated level, and there are no separate components that are regularly reviewed for performance or allocation of resources. Consolidated operating income as reported in the financial statements is used by the CODM to monitor budget versus actual results, review performance and allocate resources. The Company’s consolidated financial statements within this Annual Report on Form 10-K reflect the Company’s operations for its single operating and reportable segment.

Total revenues and long-lived assets outside of the United States are immaterial for each of the three years in the period ending December 31, 2024.

23. Subsequent Events

Quarterly and Special Dividend

On February 21, 2025, the Company announced that its Board declared a quarterly dividend of $0.125 per share and a special cash dividend of $0.27 per share, payable on March 18, 2025 to holders of record of Class A Common Stock and Class B Common Stock as of the close of business on March 10, 2025 (the “Record Date”). The Company will fund the quarterly 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. The Company will fund the payment of the special cash dividend with cash held by the Company following its receipt of a pro rata cash distribution made by Alclear to all of its members as of the Record Date, including the Company, together with cash held by the Company following its receipt of tax distributions made by Alclear.

Share Repurchases

During the first quarter of 2025, the Company used $20,109 to repurchase and retire 871,316 shares of Class A Common Stock at an average price of $23.08.

On February 21, 2025, the Company announced that its Board authorized a $200,000 increase to its existing Class A Common Stock share repurchase program, resulting in an aggregate remaining authorization of approximately $232,635. 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.