Q1 2025 Clear Secure Inc Earnings Call
Speaker Change: Good morning, and welcome to clear its fiscal first quarter 'twenty twenty-five conference call, we have with US today, Karen Seidman, Becker cofounder Chair and Chief Executive Officer, Michael Barkin precedent.
Jen Sioux: And Jen Sioux Chief Financial Officer.
Jen Sioux: As a reminder, before we begin today's discussion contains forward looking statements about the company's future business and financial performance. These are based on management's current expectations and are subject to risks and uncertainties.
Jen Sioux: Factors that could cause actual results to differ materially from these statements are included in the documents. The company has filed and furnished with the SEC, including today's shareholder letter.
Jen Sioux: The company disclaims any obligations to update any forward looking statements that may be discussed during this call.
Jen Sioux: During this call unless otherwise stated all comparisons will be against the comparable period of fiscal year 'twenty 'twenty. Four. Additionally, the company will discuss both GAAP and non-GAAP financial measures.
Jen Sioux: The reconciliation of GAAP to non-GAAP financial measures is provided in today's shareholder letter.
Jen Sioux: And the most recently filed quarterly report Form 10-Q. These.
Jen Sioux: These items can be found on the Investor Relations section of clears website.
Karen Seidman: With that I'll turn the call over to Karen.
Karen Seidman: For issuers.
Speaker Change: Good morning, and thank you for joining our first quarter 'twenty 25 earnings call I want to welcome our new President Michael Barkin, and our new CFO Jan Sue to their first clear earnings call I'm, absolutely thrilled to have them as partners and an integral part of clear leadership team.
Speaker Change: Building, the leading secure identity platform, making it safer and easier for people to move through the world in the first quarter, we saw momentum across our travel footprint continued scaling of our TSA pre check enrollment program and exciting traction with clear one we've introduced important new products to improve the member experience enrolment process.
Speaker Change: And our technology platform with the real idea deadline here and our E passport product fully rolled out clear is helping to ensure Americans across the country are real I D ready.
Speaker Change: Fears travel business saw continued strong growth in the first quarter, a reflection of our opportunity to continue to grow the top and bottom line through focus on the member experience network and product expansion fear is active in 59 clear plus airports and for domestic their mobile airport with 167 lanes, reaching 74% of <unk>.
Speaker Change: U S airline passengers.
Speaker Change: In the first quarter of 2025 U S Air travel demand continued upward TSA checkpoint volumes grew almost 1% normalizing for leap day, we're clear we care about the absolute volume of travelers at our airports and their demand for frictionless predictable experiences akin to their experiences elsewhere in the consumer economy.
Speaker Change: Recent survey conducted by the U S Travel Association highlighted the primary challenges faced by American Air travelers. The biggest pain point for 64% of respondents with long lines at airport security with over half of travelers waiting over 20 minutes in the security line Importantly, the survey suggested that biometrics are crucial to.
Speaker Change: Create a travel environment, where safety and security are assured without sacrificing efficiency or privacy something we've long believed this data reflects the need for a universal predictable and frictionless experience clear is building the solution with the lane of the future at the core of this transformation is what we call our E suite products and.
Speaker Change: E E passport and E gate designed to lead the future of secure seamless travel experience is N V.
Speaker Change: Our new enrollment verification pads have now been deployed across our network. Our N V pods are driving material benefits to the member experience through facial recognition and faster verification.
Speaker Change: And these are also enabling labor productivity enhancement proving the value of automation and high volume environment.
Speaker Change: We are proud that our N V. Just received the Red Dot design award given for Great innovation and design.
Speaker Change: E passport is a breakthrough and identity verification. It has unlocked true one step enrollment for the first time ever members can now fully enrolled at home digitizing their passport in less than two minutes by scanning their passport chip directly within the clear at no more stopping at the airport you enroll travelers can arrive at the airport.
Speaker Change: Straight to the Cleveland today. This is available to U S travelers and we will be bringing us to international travelers in the near future, which will expand our total addressable market. He gates represent the next leap forward software driven intelligent hardware built for faster and more secure experiences they're vertically integrated automated and built for.
Speaker Change: Scale pilots are underway at select airports and we believe they should be a cornerstone of next generation travel made.
Speaker Change: A major global events like the World Cup in 2026, and the Olympics in 2028 are on the Horizon, and we'll put U S airports in the global spotlight clear is ready to meet the moment offering end to end automated lanes at no cost to the government or taxpayers.
Speaker Change: We are proud to be delivering TSA pre check enrollment to more Americans than ever with 165 locations now lives, including airports city centers and transit hubs clear is creating more ways for people to enroll at the airport.
Speaker Change: We recently rolled out our passport look up feature which means as long as travelers have a passport they don't need to have it physically with them to enroll we believe this will be an important accelerant to TSA pre check enrollment.
Speaker Change: With the federal real idea enforcement date here. The stakes are high millions of Americans risk showing up at the airport unprepared clear is built to solve this members can now upload and digitize their passport directly in the clear up and be travel ready our NV rollout in E. Passport solutions are great examples of clear solving big problems with thoughtful member first.
Speaker Change: Technology.
Clear one is the one vertically integrated identity platform that helps enterprises prevent fraud reduce insider risk and build trust clear ones embedded base of over 31 million members today, and smart networks maximizes security and minimizes friction clear one continues to gain traction as we bring digital identity to life.
Speaker Change: Across new categories.
Our recent partnership with Doc you sign is a game changer customers count on dock, you signed for critical agreements and contracts and we believe there is no greater way to build trust and those documents then total identity integrity provided by clear our solution will allow users to verify their identity instantly and securely when signing high trust agreements streamlined.
Speaker Change: Processes in real estate finance and legal industries together, we are setting a new standard for secured digital first workflows and it sets. The foundation for expanded enterprise adoption of clear overall clear one continues to make great progress across the consumer health care and finance industries identity is becoming more foundational to trust and access across sectors.
Speaker Change: And clear is uniquely positioned to lead with that I will turn it over to John.
John: Thank you Karen and thanks to the entire clear team for such a warm welcome there's a tremendous amount of opportunity for the business. As we look ahead and I'm thrilled to be joining clear at such an exciting time, let me now turn to our first quarter financial result, we continued to execute against our broader strategy, which is to grow members bookings in free cash flow, we ended the quarter with <unk>.
John: 31.2 million total members on the clear network up 42, 3% year over year underscoring the continued growth and traction of clear one we delivered $207 million of total bookings and $91 million of free cash flow, representing 14, 8% and 17, 6% growth respectively.
John: Clear plus members grew to $7 4 million, representing nine 1% growth our continued innovation, including the leaner the future is elevating member experience and fueling member acquisition.
John: Q1, gross dollar retention was 87, 1% down 140 basis points sequentially, driven by Comping large step function price increases from 'twenty to 'twenty, three and 'twenty 'twenty four.
John: As an annual subscription biller any pricing action that we take effect gross dollar retention over a 24 month time period from the date, we implement the pricing change the pricing impact builds over the first 12 months and then tails off over the subsequent 12 months.
John: Since 2023 general airline pricing increased 59% from $119 to 189 and family pricing doubled from $60 to 119. These price increases had the greatest impact on gross dollar retention throughout 2024 and are now beginning to normalize we have demonstrated our ability to.
John: Consistently grow both active clear plus members and average price overtime, we continue to see meaningful price opportunities across our member base as we continue to enhance our value proposition.
John: Shifting gears, we are making strong progress on TSA pre check and while we currently operate approximately 15% of total pre check enrollment locations, we are gaining outsized market share and volume.
John: We are rapidly ramping our footprint with 165 total locations today across airports flagships and our retail partners. Furthermore, we are encouraged by our ability to upsell TSA pre check new enrollment into clear plus as a bundled product.
John: Moving on to profitability, we generated $37 million of operating income representing a 17, 7% operating margin and $52 million of adjusted EBITDA, representing a 24, 7% adjusted EBITDA margin.
John: Cost of direct salaries and benefits represented 24% of revenue up 150 basis points year over year. This increase reflects the first full quarter under our new ambassador compensation structure, which shifted to higher base salaries and lower commissions. This change was designed to improve retention across our ambassador team and is showing success.
John: Direct salaries and benefits in Q1 also included the impact of new TSA pre check flagship location. Excluding these impacts cost of direct salaries and benefits demonstrated year over year operating leverage. Additionally, we continue to drive efficiencies in G&A, which represented 25, 9% of revenue an improvement of 360 Bay.
John: <unk> points year over year, reflecting our disciplined corporate expense management in.
John: In Q1, we generated $91 million of free cash flow up 17, 6% year over year as a result of continued operating leverage and the capital efficiency of our business model.
John: We ended the quarter with $533 million of cash and marketable securities after returning $168 million of capital to shareholders, including approximately $102 million under our share repurchase program and approximately $67 million in dividends and distributions.
John: Turning to guidance for Q2 and in consideration of the external environment, we expect revenue of $214 million to $216 million and total bookings of $215 million to $220 million, representing 15, 1% and 10, 4% growth at the midpoint respectively for the.
John: Full year 2025, we are reaffirming our free cash flow guidance of at least $310 million and finally, we continue to expect full year 2025, GAAP tax rate to range between 17 and 20%.
Karen Seidman: With that I'm looking forward to working with many of you and we'll turn it back to Karen for some closing remarks.
Speaker Change: Thanks, Jacky for the past two years had been a challenging environment from an operating and regulatory perspective, which impacted member experience and member retention importantly, we are thrilled with our engagement with the current administration and their alignment with private sector partnership and innovation we are.
Speaker Change: Emerging from this period with an improving member experience, our growing network, new technology and continued pricing opportunities leading to growth in our member base bookings and free cash flow.
Speaker Change: Want to close by thanking all of our great clear ambassadors and team members across the country for their dedication in serving our members with excellence every day with that well open the call for Q&A.
Speaker Change: Thank you. The floor is now opened for questions. If you do have a question. Please press star one on your telephone keypad at this time, we ask that you ask one question and one follow up question to give everyone a chance to ask questions in queue.
Speaker Change: And our first question comes from Joshua Reilly from Needham Go ahead, Josh Your line is alive.
Joshua Reilly: Alright, well, thanks for taking my questions and welcome.
Speaker Change: In here, John and Michael.
Speaker Change: As we're thinking about the bookings guidance for Q2 can you just discuss the macro factors.
Speaker Change: Considering including any potential disruption from the real idea implementation and can you just speak more broadly what are you seeing in real time at the airports with regards to real I E and is that impacting bookings or your business at all.
Speaker Change: Thanks, Josh.
Speaker Change: In terms of the macro to date, both gross adds and conversion rates from trial to paid membership remain healthy we are not seeing softness in our business as a result of any broader macro sentiment.
Speaker Change: There is a lot of noise right now from both the economic backdrop and.
Speaker Change: And so like you look at new work for example in it in the news every day I think what's really important is that we're a subscription based business oriented you. How many travelers are coming through airports versus airfares and so just as an example are the <unk>.
Speaker Change: First quarter I think we talked about on the call growing 1% in April pretty much been flat.
Speaker Change: So I think you had yesterday started real I D. When they can be a pretty quiet days, though I think net net yesterday I'm really proud of how our team executed and it was pretty much business as usual, but certainly every airport is handling it differently and I think you have to be thoughtful of just how it.
Speaker Change: Could work its way through the system. There is a lot of gratitude that clear members and we've really been focused on clear remember it being real I D ready and that the clear lane is the calm in the chaos. So we didn't see it yesterday. It is day one we are partnering closely at both the federal and the local law.
Speaker Change: And I think that really is a great reflection of the strength with this administration and the public private partnership and so we're excited about that we're really pleased that we have E passport rolled out before that so I think that guidance is just a reflection of the noise in the world and being thoughtful of it with a new management team and making sure that we.
Speaker Change: We execute with strength going forward.
Speaker Change: And Josh I jotted that as.
Speaker Change: Karen shared we are we are not seeing any softness in the business today as a result of of macro but having said that the market is obviously volatile and and real idea is just one example of that it's an area, where we think we can drive a lot of positive impact, but but it also just create some degrees of.
Speaker Change: The ability in an unknown. So we felt it was appropriate to widen bookings by by one percentage point just to give ourselves a bit of room for a wider range of outcomes I I'd also add we all we did reiterate the free cash flow guidance. So I think that's a testament to the visibility we have in the business and the levers that we have as well going forward.
Speaker Change: Got it that's helpful. And then as we look at retention. The dollar retention you know, obviously ticked down sequentially, but wanted to get some color on what's happening more broadly with family member family members now that you've lapped the larger price increases for these customers relative to what youre seeing for individual members are you seeing the family churn normalize.
Speaker Change: Now that we've lapped those big price increases thanks, guys.
Speaker Change: Yeah, I would just say overall on member retention those trends remain consistent and you can see that in the net adds additions that we added this quarter. So 100000 net adds sequentially Q4 to Q1, which is an improvement relative to Q1 of prior year, where we added 78000.
Speaker Change: On quarter.
Ben Miller: Thank you and the next question comes from Ben Miller from Goldman Sachs spend your line is live.
Ben Miller: Great. Thanks for taking the questions.
Ben Miller: Given the uncertain macro backdrop I'm curious how the team might express flexibility around long term investments and capital returns in a downturn and as you think about the ranges of outcomes and the macro curious what's contemplated in the reiteration of the free cash flow guide.
Ben Miller: I'd like to take the macro band because I think it's really important when you think about both the investments that we've made and the automation that we're focused on driving and that is our biggest opportunity set which is not only does the nextgen identity create operating.
Ben Miller: Leverage and you've seen that through the improvement.
Ben Miller: Of of what you're seeing in the lane the envies create operating efficiencies and E gates create enormous operating efficiencies. In addition to that E passport or one step enrollment is a big opportunity for us as it both expands our enrollment capacity and our Tam and so 40.
Ben Miller: Percent of people today, who enroll come and complete at the airport those folks can go straight to the lane and so on that side of the business. We're really focused on automation to improve the member experience predictability and security and I think that's where you see the operating leverage there from a clear one perspective and a pre check person.
Ben Miller: <unk>, what we've been saying is that we've put the expenses forward over the past year or two and now we're leveraging that with revenue and you see that in the pre check growth I think we had 90 something locations last quarter and now we're talking about 165 today, so you're seeing that ramp and so and certainly there is a.
Ben Miller: Small labor component with that if it's our own flagship location versus one of our partner locations, where we don't have labor, but there's a really good ROI to that so I would just say, we're seeing the operating leverage and we're driving automation on on the more.
Ben Miller: Labor intensive side of our business.
Karen Seidman: That's right I would just add on on and on the investment side as Karen shared much of the fixed cost investment is behind us as we've talked about in the past and you can see the clear plus business continuing to drive overall operating leverages as Karan mentioned pre check most of those costs are embedded.
Karen Seidman: And that business is very much still scaling and we're rapidly growing.
Karen Seidman: Our market share in volumes and in and pre check them on your capital allocation capital return question I would say you know we ended the quarter with.
Karen Seidman: $500 million in cash we spelled it out just under 150 million, meaning in our share repurchase authorization. So I think you know coupled up with our free cash flow generation, we have a lot of flexibility to.
Karen Seidman: Access to a range of capital allocation alternatives in a well we'll continue to do that going forward.
Karen Seidman: And then I would just add one more thing to what Jon said, which is we've been focused on bringing AI to every work stream.
Karen Seidman: Of our business to drive productivity and outcomes and you're seeing that across the board here in clear and that's something that we'll continue to focus on.
Speaker Change: Great. Thanks for that and just as a follow up I'm curious, how you think about pricing as a lever from here and has the current uncertain economic environment changed maybe how you think about the price versus user growth algorithm in the business over the near to medium term. Thanks, so much.
Speaker Change: Yeah on pricing I think you know the company has been really strategic about pricing and I think there's definitely a continued opportunity to refine our strategy, particularly using a data driven approach I think it's important in a consumer subscription business like clear yeah.
Speaker Change: I think pricing is is a key lever to drive bookings and revenue and I think overall, we've been relatively conservative over time with our.
Speaker Change: With our top line price, which today is $199, which is only $20 more than the original price from 15 years ago.
Speaker Change: And so I think a lot of it is about maintaining the strong value proposition of our product.
Speaker Change: And I do think we have an opportunity over time to focus on lifetime value of our members and I think that one of the key pieces of that.
Speaker Change: Is to continue to look at the top line price the areas, where we've been able to acquire members with discounted prices and our opportunity to continue to close the gap, which I think the company has done a great job of over time, and we'll continue to focus on that.
Speaker Change: Thank you and our next question comes from Mark Kelley from Stifel Go ahead Mark.
Mark Kelley: Great. Thanks, very much good morning, everyone. Two quick ones if I could first just on the.
Mark Kelley: The passport product rolling out internationally I guess, when you look across the whole product portfolio are there other opportunities to maybe be more ingrained.
Speaker Change: And grow your business outside of the U S. That's the first one.
Speaker Change: And then the second question you know on the last call you expressed the desire to close that wholesale to retail price gap.
Speaker Change: And obviously, we saw your announcements that you renewed with Amex I'm again, just can you walk through the dynamics a bit there and just maybe help us think through the free cash flow component, particularly in Q3.
Speaker Change: You know what your credit card partners. Thank you.
Speaker Change: So I'll talk about E passport and then I'll turn it over to Michael to talk about.
Speaker Change: Credit card just in terms of E passport the opportunity to upload your passport and digitize. It is really powerful and today international travelers do not have a way to get through a U S Airport security and a differentiated expedited.
Speaker Change: Innovative and secure way and so when you look at the total addressable market there and just the four countries that will be starting with which is the U K, Canada, Australia, New Zealand, we think Theres about 2 million travelers there from a total addressable market and then after that we'll be expanding to other countries. So far.
Speaker Change: First things first which is we're going to continue to expand our network in the U S and we want to make that network available to international travelers I think that's a win win when we look at both strengthening security and delighting customers and then from there.
Speaker Change: You know I I'm not sure. If you mean will we expand our business operationally internationally as of now that is not our focus it's expanding the Tam in serving international members I will say unclear one we are expanding internationally.
Speaker Change: And serving our domestic partners with international businesses, which is something that we couldn't do with strength before so we're really focused on that opportunity set when you look at the doctor signs or the linked in's et cetera. They have global businesses. So following our customers around the world is our first objective and quite frankly.
Speaker Change: It's also from an economic perspective quite efficient for us. So it's a win win without Michael. Thanks, Sharon you know until the earlier question on pricing I think one of the things that we're very focused on is ensuring that right are our price remains both both affordable and one that.
Speaker Change: One that really is something that's abroad.
Speaker Change: The broad population of travelers can access, but also one that reflects the value proposition that our product and services offer and so certain.
Speaker Change: We look at that in terms of pricing overall, and we definitely look at that as it relates to all of our products some of which through various partners are at lower prices as it relates to our credit card partnership we deeply value the partnership that we've created with America.
Speaker Change: Express I think that the partnership underscores our customer and brand alignment, which is mutually beneficial and is definitely supported our growth and engagement among our respective member basis throughout the partnership.
Speaker Change: I think it's important to realize that these partnerships are so important because it's actually estimated that travel spend represents over 20% of total spending on premium credit cards, which really highlights the alignment and value of our shared interests in this for us that the credit card partnership serves as an important acquisition channel and it definitely does.
<unk> members with attractive demographics, and ultimately strong lifetime value, which is why it makes sense for us to engage in this with a lower effective net price and as our business has scaled in our network has grown and we've invested significantly as Karen walked through the value proposition of our product has improved and we expect that we'll continue to look for ways to ensure.
Speaker Change: But our most important partnerships, including on the credit card side.
Speaker Change: Reflect that shared value that we each bring and hopefully we can increase our member level LTV and growth in our bookings and free cash flow through partnerships like this.
Speaker Change: Alright. Thank you Michael Thank you very helpful.
Speaker Change: Thank you and our next question comes from Joe Feldman from Telsey Advisory go ahead Joe.
Speaker Change: Yeah. Thanks for taking the question on behalf of Dana Telsey.
Joe Feldman: So wanted to ask about the <unk> business.
Joe Feldman: And maybe if you could talk more about the progress you are seeing across like health care and financial and social I know you mentioned it briefly in the prepared remarks, but maybe you could dive in a little bit more about some of the trends you're seeing.
Joe Feldman: Absolutely I think theres two important trends that we're seeing one is in health care and the other isn't work force and workforce is both in health care and beyond So we will start with health care and I think there's you know several announcements over the past quarter on partnerships that we have with different health care providers.
Joe Feldman: So whether that'd be sure script and I a L. Two which is really important or hospital system and those hospital systems can be for both workforce or for patients and it's across various product and I think one of the things that's really important for health care is not single point solutions, but the power of the platform.
Joe Feldman: So one implementation and our integration with epic is really important as we go forward to be part of their toolbox to make integration simple for our health care partners again for both of them I would actually say not just for their workforce and their patients but also for their visitors. So we're seeing industry demand.
Joe Feldman: Account recovery, where C and that could be again for either workforce or for the patient that has a pretty painful customer experience. It's an expensive experience in a HIPAA compliant world of which we are and it also can create security vulnerabilities if not done well in addition to that account creation account checking.
Joe Feldman: And the ability to verify your insurance information of the patient is really important and so we continue to grow our product suite in health care and that is helping us not only signed new partners, but also serve our current partners in a bigger way and then from a workforce perspective, what you're seeing across critical infra.
Joe Feldman: The structure is really important the threat of North Korea is a threat of a foreign adversaries, having access to critical infrastructure and data is a huge problem. It's a compliance problem. It's a trust in a brand problem and so the cost there are much greater than you would.
Joe Feldman: Even think Ah at the beginning and so helping secure workforce.
Joe Feldman: Is really important both through our own direct part products and integration, but then again Doc you sign is workforce are off that our integration is workforce and so I think that's a really important segment for us across multiple sectors.
Speaker Change: That's great. Thank you and then maybe for Michael and Janet just curious you know now that you guys have been here a little while [laughter] sure why but just.
Speaker Change: Just curious you know kind of what you guys have seen so far and where you are spending more and more of your time These days.
Speaker Change: Maybe anything you've learned in the last few months, where you see some opportunities.
Speaker Change: Perfect. Thanks, Yeah.
Speaker Change: I've had the privilege of being on the board for five years and seeing the great work that Karen and the team did to build the business to where it is today and.
Speaker Change: So somewhat unique perspective, enjoining and yeah I think for me, it's it's the opportunity and this kind of moment for the company you know and I think a real potential for an inflection point as identity and security really moved to the forefront of both the physical and the digital world and.
Speaker Change: Yeah, I think in the in the travel business with everything that's that's happening the way that we can extend our products the value proposition in a world that is getting increasingly more difficult to navigate.
Speaker Change: <unk> offers us a lot of opportunity.
Speaker Change: And I think the product and technology investments that we've made in clear one really position us to be on the cutting edge of digital identity engine integration at a moment when trust and security I think has never been more important and so for me the opportunity to get to have a seat at the table for what I think is.
Speaker Change: Really exciting time in a really exciting ecosystem with us.
Speaker Change: With a great team and a lot of investment and a really a yeah, a really incredible member base and N team both on the ground in and are working towards the future of the company, who makes me really excited and I think you know my background as an investor in our former CFO and so certainly the financial profile of the business.
Speaker Change: Gives me a lot of comfort around how we can both invest and and ultimately grow free cash flow and deliver shareholder value here. So I'm really excited to be a part of it certainly learning a lot as we go every day and and I'm looking forward to what's ahead.
Speaker Change: And I would say I think I think the first month here then.
Speaker Change: Thesis validating for it for me personally I'm, Karen Ken and the team have obviously built a fantastic business, but I think also a culture of financial discipline and that really comes through I think in the operating leverage that you've seen in the business and expanding free cash flow generation and by the way that that margin.
Speaker Change: Expansion in free cash flow would come at a time.
Speaker Change: When when the business has navigated some pretty challenging operating environment and I think looking ahead I see a lot of opportunity I think on the plus side. We have a lot of growth ahead of us both on the member and pricing side of the growth equation and on top of that we feel like we're early early innings in and.
Speaker Change: Expanding the broader clear network and building, a really large and sticky BW doesn't it.
Speaker Change: I'd also say I think organizationally I'm I'm I'm optimistic about the team and I think we have a really healthy balance between a fresh thinking and and operators that had been at the company for for a long standing time to really continue scaling an immature the company effectively.
Speaker Change: I you know on the feedbacks I I guess, what I would say is I do think we have an opportunity to bring more clarity and in our communication to the market.
Speaker Change: And so that that is something that we are constantly reviewing and the the goal is really to provide simplification and consistency when when we speak to you all I'm in the market.
Speaker Change: That's great.
Speaker Change: Thank you and our next question comes from Michael <unk> from Wells Fargo. Your line is now live.
Speaker Change: Hey, great. Thanks I'm on.
Speaker Change: On booking seasonality the backdrop sounds stable could you maybe expand on what you're seeing year to date.
Speaker Change: Our bookings, thus far and how you're thinking through or planning for any potential variability in summer travel and if there are offsets you'd note. If your volumes do start to slow whether it's price or just some of the other new product areas, you're highlighting which of those you'd maybe focus us in on thank you.
Speaker Change: Yeah, I would say, what we're not seeing anything you know.
Speaker Change: It was surprising from a macro perspective is as we've articulated on this call perhaps on seasonality I just come back to what we.
Speaker Change: I have shared in the past and we do expect a different point, we've talked about it from a net adds perspective, but that translates to bookings. Obviously, we we expect kind of Q2 and Q4 to be our larger share of net adds in and that's relative to kind of lower a lower based on on Q1 and Q3.
Speaker Change: Okay.
Speaker Change: And then on the gross dollar retention metric that the commentary and then I think to comment on the materials sounds like you're expecting that to stabilize after some of the price impacts can you walk us through just what you're seeing that's driving the confidence there and whether this is sort of the right ZIP code for us to think about.
Speaker Change: <unk> been evaluating that metric as we rolled through the course of the year.
Speaker Change: Sure I would say what we described in our earlier remarks. It is really it's a technical factor that is affecting that metric and so whenever we have made pricing changes in the past those practices pricing actions have an impact on the metric for a 24 month period and because because we made large.
Speaker Change: <unk> price increases in step functions as opposed to kind of gradual price increases over time, there's there's a mathematical impact to gross dollar retention I would I would come back to say I think our overall objective and you've heard Curtis I'm.
Speaker Change: Sure. That's on on this call is the goal is to bring discounted members in line with our growing value proposition and I think we've done that successfully and we've consistently been able to grow our clear plus members and our average price over time, which has translated into bookings growth. So I think you know the price increases that we took were.
Speaker Change: Were the right thing to do and you see that in in our output of members bookings and ultimately free cash flow.
Speaker Change: And if I can just add to that our focus is on driving the member experience and making sure that we are creating value for our customers as we've talked about in the past few quarters. There are too many customers who are not raised the price does not match the value number one continue to drive the value and then price follows.
Speaker Change: Thank you.
Ken: At this time I would like to turn it back to Ken for any closing remarks.
Speaker Change: Thank you for joining our call I'm proud of how our team is executing and extremely excited for the opportunities in front of us. So thank you.
Speaker Change: Thank you. This does conclude today's conference. We thank you for your participation you may disconnect. Your lines at this time and have a wonderful day.