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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2024
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to
Commission file number 001-40568
CLEAR SECURE, INC.
(Exact name of registrant as specified in its charter)
Delaware86-2643981
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
85 10th Avenue, 9th Floor, New York, NY
 10011
(Address of Principal Executive Offices)(Zip Code)
(646) 723-1404
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A common stock, par value $0.00001 per shareYOUNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  x   No  o 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filero
Non-accelerated fileroSmaller reporting companyo
Emerging growth companyo
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).     Yes   o     No  x
The registrant had the following outstanding shares of common stock as of November 4, 2024:
Class A Common Stock par value $0.00001 per share (the “Class A Common Stock”)
94,015,104 
Class B Common Stock par value $0.00001 per share (the “Class B Common Stock”)
877,234 
Class C Common Stock par value $0.00001 per share (the “Class C Common Stock”)
19,615,578 
Class D Common Stock par value $0.00001 per share (the “Class D Common Stock”)
24,896,690 


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                  Signatures




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CLEAR SECURE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(dollars in thousands, except share and per share data)
September 30,
2024
December 31,
2023
Assets
Current assets:
Cash and cash equivalents$32,885 $57,900 
Marketable securities511,812 665,197 
Accounts receivable639 526 
Prepaid revenue share fee25,179 24,402 
Prepaid expenses and other current assets25,222 22,009 
Total current assets595,737 770,034 
Property and equipment, net57,760 62,611 
Right of use asset, net111,046 115,874 
Intangible assets, net16,875 20,825 
Goodwill62,757 62,757 
Restricted cash3,410 4,501 
Other assets10,992 8,407 
Total assets$858,577 $1,045,009 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$10,876 $11,781 
Accrued liabilities129,731 164,015 
Deferred revenue417,078 376,253 
Total current liabilities557,685 552,049 
Other long term liabilities119,854 123,736 
Total liabilities677,539 675,785 
Commitments and contingencies (Note 18)
Class A Common Stock, $0.00001 par value - 1,000,000,000 shares authorized; 93,679,673 and 91,786,941 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
1 1 
Class B Common Stock, $0.00001 par value - 100,000,000 shares authorized; 877,234 and 907,234 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
  
Class C Common Stock, $0.00001 par value - 200,000,000 shares authorized; 19,750,578 and 32,234,914 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
  
Class D Common Stock, $0.00001 par value - 100,000,000 shares authorized; 25,046,690 and 25,796,690 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
  
Accumulated other comprehensive income1,472 2,050 
Treasury stock at cost, 0 shares as of September 30, 2024 and December 31, 2023
  
Accumulated deficit(7,324)(73,714)
Additional paid-in capital134,821 304,992 
Total stockholders’ equity attributable to Clear Secure, Inc.128,970 233,329 
Non-controlling interest52,068 135,895 
Total stockholders’ equity181,038 369,224 
Total liabilities and stockholders’ equity$858,577 $1,045,009 


See notes to condensed consolidated financial statements

1

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CLEAR SECURE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(dollars in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Revenue$198,424 $160,387 $564,218 $442,614 
Operating expenses:
Cost of revenue share fee28,592 22,885 79,049 63,674 
Cost of direct salaries and benefits44,825 35,337 125,198 102,687 
Research and development17,424 11,790 54,939 56,044 
Sales and marketing11,607 9,735 34,236 30,032 
General and administrative53,919 56,101 162,180 170,323 
Depreciation and amortization6,970 5,260 19,503 15,416 
Operating income35,087 19,279 89,113 4,438 
Other income (expense):
Interest income, net7,252 7,677 25,424 21,463 
Other income, net436 661 1,291 1,569 
Income before tax42,775 27,617 115,828 27,470 
Income tax expense(4,751)(754)(7,125)(846)
Net income38,024 26,863 108,703 26,624 
Less: net income attributable to non-controlling interests14,559 11,517 42,313 12,491 
Net income attributable to Clear Secure, Inc.$23,465 $15,346 $66,390 $14,133 
Net income per share of Class A Common Stock and Class B Common Stock (Note 16)
Net income per common share basic, Class A$0.25 $0.17 $0.71 $0.16 
Net income per common share basic, Class B$0.25 $0.17 $0.71 $0.16 
Net income per common share diluted, Class A$0.25 $0.17 $0.71 $0.15 
Net income per common share diluted, Class B$0.25 $0.17 $0.71 $0.15 
Weighted-average shares of Class A Common Stock outstanding, basic92,702,778 89,189,192 92,174,755 89,436,795 
Weighted-average shares of Class B Common Stock outstanding, basic891,582 907,234 901,979 907,234 
Weighted-average shares of Class A Common Stock outstanding, diluted94,279,071 89,968,555 93,263,943 90,503,162 
Weighted-average shares of Class B Common Stock outstanding, diluted891,582 907,234 901,979 907,234 






See notes to condensed consolidated financial statements

2

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CLEAR SECURE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
(dollars in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2024202320242023
Net income$38,024 $26,863 $108,703 $26,624 
Other comprehensive income (loss)
     Currency translation14 8 14 16 
     Unrealized gain (loss) on fair value of marketable securities3,046 1,390 (1,164)1,738 
Total other comprehensive income (loss)3,060 1,398 (1,150)1,754 
Comprehensive income41,084 28,261 107,553 28,378 
Less: comprehensive income attributable to non-controlling interests15,586 12,082 41,741 13,210 
Comprehensive income attributable to Clear Secure, Inc.$25,498 $16,179 $65,812 $15,168 




















See notes to condensed consolidated financial statements

3

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CLEAR SECURE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(UNAUDITED)
(dollars in thousands, except share data)
4

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Class AClass BClass CClass DAdditional paid in capitalAccumulated other comprehensive income (loss)Treasury StockAccumulated deficitTotal stockholders’ equity attributable to Clear Secure, Inc.Non-controlling interestTotal stockholders’ equity
Number of sharesAmountNumber of sharesAmountNumber of sharesAmountNumber of sharesAmountNumber of sharesAmount
Balance, January 1, 202491,786,941 $1 907,234 $ 32,234,914 $ 25,796,690 $ $304,992 $2,050  $ $(73,714)$233,329 $135,895 $369,224 
Net income— — — — — — — — — — — — 18,806 18,806 13,282 32,088 
Other comprehensive loss— — — — — — — — — (1,835)— — — (1,835)(1,148)(2,983)
Equity-based compensation expense, net of forfeitures— — — — — — — — 6,684 — — — — 6,684 4,185 10,869 
Net share settlements of stock-based awards183,167 — — — — — — — (1,298)— — — — (1,298)(812)(2,110)
Distribution to members— — — — — — — — — — — — — — (10,564)(10,564)
Tax distribution to members— — — — — — — — — — — — — — (4,558)(4,558)
Exchange of shares1,625,803 — — — (1,625,803)— — — 3 — — — — 3 (3) 
Dividends— — — — — — — — (8,481)— — — — (8,481)— (8,481)
Special dividend— — — — — — — — (28,828)— — — — (28,828)(28,828)
Repurchase and retirement of Class A Common Stock(4,416,759)— — — — — — — (52,514)— — — — (52,514)(32,868)(85,382)
Balance, March 31, 202489,179,152 $1 907,234 $ 30,609,111 $ 25,796,690 $ $220,558 $215  $ $(54,908)$165,866 $103,409 $269,275 
Net income— — — — — — — — — — — — 24,119 24,119 14,472 38,591 
Other comprehensive loss— — — — — — — — — (776)— — — (776)(451)(1,227)
Equity-based compensation expense, net of forfeitures— — — — — — — — 6,624 — — — — 6,624 3,847 10,471 
Net share settlements of stock-based awards287,541 — — — — — — — (685)— — — — (685)(1,819)(2,504)
Distribution to members— — — — — — — — — — — — — — (5,018)(5,018)
Tax distribution to members— — — — — — — — — — — — — — (7,367)(7,367)
Exchange of shares6,316,858 — — — (6,316,858)— — — 19,763 — — — — 19,763 (19,763) 
Dividends— — — — — — — — (9,339)— — — — (9,339)— (9,339)
Repurchase and retirement of Class A Common Stock(3,566,853)— — — — — — (52,036)— — — — (52,036)(12,582)(64,618)
Balance, June 30, 202492,216,698 $1 907,234 $ 24,292,253 $ 25,796,690 $ $184,885 $(561) $ $(30,789)$153,536 $74,728 $228,264 
Net income— — — — — — — — — — — — 23,465 23,465 14,559 38,024 
Other comprehensive income— — — — — — — — — 2,033 — — — 2,033 1,027 3,060 
Equity-based compensation expense, net of forfeitures— — — — — — — — 4,218 — — — — 4,218 2,130 6,348 
Net share settlements of stock-based awards141,300 — — — — — — — (782)— — — — (782)(1,333)(2,115)
Distribution to members— — — — — — — — — — — — — — (4,532)(4,532)
Tax distribution to members— — — — — — — — — — — — — — (3,453)(3,453)
Exchange of shares5,321,675 — (30,000)— (4,541,675)— (750,000)— 23,489 — — — — 23,489 (23,489) 
Dividends— — — — — — — — (9,398)— — — — (9,398)— (9,398)
Repurchase and retirement of Class A Common Stock(4,000,000)— — — — — — (67,591)— — — — (67,591)(7,569)(75,160)
Balance, September 30, 202493,679,673 $1 877,234 $ 19,750,578 $ 25,046,690 $ $134,821 $1,472  $ $(7,324)$128,970 $52,068 $181,038 

See notes to condensed consolidated financial statements

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Class AClass BClass CClass DAdditional paid in capitalAccumulated other comprehensive lossTreasury StockAccumulated deficitTotal stockholders’ equity attributable to Clear Secure, Inc.Non-controlling InterestTotal stockholders’ equity
Number of sharesAmountNumber of sharesAmountNumber of sharesAmountNumber of sharesAmountNumber of sharesAmount
Balance, January 1, 202387,760,831 $1 907,234 $ 38,290,964 $ 25,796,690 $ $394,390 $(1,529)80,505 $ $(101,797)$291,065 $219,856 $510,921 
Net loss— — — — — — — — — — — — (5,224)(5,224)(3,049)(8,273)
Other comprehensive income— — — — — — — — — 938 — — — 938 658 1,596 
Equity-based compensation expense, net of forfeitures(3,079)— — — — — — — 10,151 — 3,079 — — 10,151 6,257 16,408 
Net share settlements of stock-based awards155,049 — — — — — — — (946)— (83,584)— — (946)(1,462)(2,408)
Warrant expense— — — — — — — — 366 — — — — 366 257 623 
Exercise of warrants534,655 — — — — — — — 1,615 — — — — 1,615 (1,615) 
Tax distribution to members— — — — — — — — — — — — — — (13,886)(13,886)
Exchange of shares 2,048,773 — — — (2,048,773)— — — 6,189 — — — — 6,189 (6,189) 
Repurchase and retirement of Class A Common Stock(281,838)— — — — — — — (7,380)— — — — (7,380)911 (6,469)
Balance, March 31, 202390,214,391 $1 907,234 $ 36,242,191 $ 25,796,690 $ $404,385 $(591) $ $(107,021)$296,774 $201,738 $498,512 
Net income— — — — — — — — — — — — 4,011 4,011 4,023 8,034 
Other comprehensive loss— — — — — — — — — (736)— — — (736)(504)(1,240)
Equity-based compensation expense, net of forfeitures— — — — — — — — 8,415 — — — — 8,415 6,244 14,659 
Net share settlements of stock-based awards144,341 — — — — — — — (655)— — — — (655)(740)(1,395)
Tax distribution to members— — — — — — — — — — — — (26)(26)(17)(43)
Exchange of shares150,000 — — — (150,000)— — — 165 — — — — 165 (165) 
Special dividend— — — — — — — — (18,089)— — — — (18,089)— (18,089)
Repurchase and retirement of Class A Common Stock(1,533,357)— — — — — — (22,928)— — — — (22,928)(15,700)(38,628)
Balance, June 30, 202388,975,375 $1 907,234 $ 36,092,191 $ 25,796,690 $ $371,293 $(1,327) $ $(103,036)$266,931 $194,879 $461,810 
Net income— — — — — — — — — — — — 15,346 15,346 11,517 26,863 
Other comprehensive income— — — — — — — — — 833 — — — 833 565 1,398 
Equity-based compensation expense, net of forfeitures— — — — — — — — 2,721 — — — — 2,721 1,845 4,566 
Net share settlements of stock-based awards73,374 — — — — — — — (218)— — — — (218)(673)(891)
Distribution to members— — — — — — — — — — — — — — (4,322)(4,322)
Tax distribution to members— — — — — — — — — — — — — — (13,718)(13,718)
Exchange of shares1,315,502 — — — (1,315,502)— — — 5,171 — — — — 5,171 (5,171) 
Dividends— — — — — — — — (6,304)— — — — (6,304)— (6,304)
Repurchase and retirement of Class A Common Stock(510,000)— — — — — — (8,576)— — — — (8,576)(2,451)(11,027)
Balance, September 30, 202389,854,251 $1 907,234 $ 34,776,689 $ 25,796,690 $ $364,087 $(494) $ $(87,690)$275,904 $182,471 $458,375 
See notes to condensed consolidated financial statements

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CLEAR SECURE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CASH FLOWS
(UNAUDITED)
(dollars in thousands)
Nine Months Ended September 30,
20242023
Cash flows provided by (used in) operating activities:
Net income$108,703 $26,624 
Adjustments to reconcile net income to net cash provided from operating activities:
Depreciation of property and equipment16,347 12,933 
Amortization of intangible assets3,156 2,483 
Noncash lease expense4,804 4,896 
Impairment of assets 3,707 
Equity-based compensation27,038 35,102 
Deferred income tax701 (549)
Amortization of revolver loan costs169 252 
Premium amortization and (discount accretion), net on marketable securities(6,330)(9,835)
Changes in operating assets and liabilities:
Accounts receivable(113)433 
Prepaid expenses and other assets(4,379)(4,098)
Prepaid revenue share fee(777)(2,954)
Accounts payable(475)5,899 
Accrued and other long term liabilities(26,304)(10,990)
Deferred revenue40,825 68,439 
Operating lease liabilities(4,300)(1,440)
Net cash provided by operating activities$159,065 $130,902 
Cash flows provided by (used in) investing activities:
Purchases of marketable securities(703,132)(634,751)
Sales of marketable securities861,683 639,090 
Business combinations (3,750)
Purchase of strategic investment(1,000)(6,000)
Purchases of property and equipment(9,259)(21,825)
Purchases of intangible assets(318)(129)
Net cash provided by (used in) investing activities$147,974 $(27,365)
Cash flows used in financing activities:
Repurchase of Class A Common Stock(225,160)(56,124)
Payment of dividend(27,218)(6,320)
Payment of special dividend(28,828)(18,129)
Distributions to members(20,114)(4,322)
Tax distribution to members(24,979)(13,929)
Debt issuance costs (396)
Payment of taxes on net settled stock-based awards (6,729)(4,694)
Other financing activities(154) 
Net cash used in financing activities$(333,182)$(103,914)
Net (decrease) increase in cash, cash equivalents, and restricted cash(26,143)(377)
Cash, cash equivalents, and restricted cash, beginning of period62,401 68,884 
Exchange rate effect on cash and cash equivalents, and restricted cash37 80 
Cash, cash equivalents, and restricted cash, end of period$36,295 $68,587 

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September 30,
2024
September 30,
2023
Cash and cash equivalents$32,885 $63,522 
Restricted cash3,410 5,065 
Total cash, cash equivalents, and restricted cash$36,295 $68,587 

See notes to condensed consolidated financial statements

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CLEAR SECURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(dollars in thousands, except for share and per share data, unless otherwise noted)

1. Description of Business and Recent Accounting Developments
Description and Organization

Clear Secure, Inc. (the “Company” and together with its consolidated subsidiaries, “CLEAR,” “we,” “us,” “our”) is a holding company and its principal asset is the controlling equity interest in Alclear Holdings, LLC (“Alclear”). In connection with the Company’s reorganization (the “Reorganization”) completed prior to the completion of its initial public offering (“IPO”), Alclear was formed as a Delaware limited liability company on January 21, 2010 and operates under the terms of the Second Amended and Restated Operating Agreement dated June 7, 2023 (the “Operating Agreement”). As the sole managing member of Alclear, the Company operates and controls all of the business and affairs of Alclear, and through Alclear and its subsidiaries, conducts the Company’s business.

The Company operates a secure identity platform under the brand name CLEAR primarily in the United States. CLEAR's current offerings include: CLEAR Plus, a consumer aviation subscription service, which enables access to predictable and fast experiences through dedicated entry lanes in airport security checkpoints within our nationwide network of 58 airports (as of the date of this filing); TSA PreCheck® Enrollment Provided by CLEAR at 52 airports and 10 Staples locations (as of the date of this filing), which offers consumers increased choice in how and where to sign up for this popular trusted traveler program; CLEAR Mobile at 3 airports (as of the date of this filing), 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; CLEAR Verified, our B2B offering, which 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; and our free flagship CLEAR app, which offers consumer products like Home-to-Gate and includes RESERVE Powered by CLEAR, our virtual queuing technology that enables customers to prebook a spot in airport security line so they don’t have to wait.
2. Basis of Presentation and Summary of Significant Accounting Policies

These condensed consolidated financial statements have been prepared in accordance with United States (“U.S.”) generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion of management, all adjustments consisting only of normal recurring adjustments necessary for a fair presentation have been reflected in these condensed consolidated financial statements. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024.

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts that are reported in the condensed consolidated financial statements and accompanying disclosures. Although these estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future, actual results may differ from those estimates.

These condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Form 10-K”).
The condensed consolidated financial statements are presented in US Dollars, which is the Company’s reporting currency.
Recently Adopted Accounting Pronouncements
The Company adopted all applicable standards effective as of December 31, 2023, within these condensed consolidated financial statements. There was no material impact as a result. There are no newly issued standards since December 31, 2023 that are applicable to the Company.

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CLEAR SECURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except for share and per share data, unless otherwise noted)

3. Business Combinations
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 payable in two tranches at 15 and 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 condensed 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 was 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 of $4,000 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 September 30, 2024, $813 of the retention bonuses remain unvested. For the post-combination remuneration, the amount of $9,000 consists of two 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 September 30, 2024, $3,000 of the post-combination remuneration remained unvested. The Company has recorded $296 in compensation expense related to the post-combination remuneration for the nine months ended September 30, 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 three and nine months ended September 30, 2024 and 2023, no individual airport accounted for more than 10% of membership revenue.
Revenue by Geography
For the three and nine months ended September 30, 2024 and 2023, 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 customers 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 for the nine months ended September 30, 2024.

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CLEAR SECURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except for share and per share data, unless otherwise noted)
2024
Balance as of January 1$376,253 
Deferral of revenue596,774 
Recognition of deferred revenue(555,949)
Balance as of September 30
$417,078 
The Company has obligations for refunds and other similar items of $3,772 as of September 30, 2024 recorded within accrued liabilities.

During the nine months ended September 30, 2024 and 2023, the Company recognized $350,175 and $257,669, 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 September 30, 2024 and December 31, 2023 consist of the following:
September 30,
2024
December 31,
2023
Prepaid software licenses$12,334 $10,306 
Coronavirus aid, relief, and economic security act retention credit 1,002 
Prepaid insurance costs2,891 1,946 
Other current assets9,997 8,755 
Total$25,222 $22,009 
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 recorded a reclass of 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.

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CLEAR SECURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except for share and per share data, unless otherwise noted)
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:
September 30,
2024
December 31,
2023
Due within 1 year$323,513 $439,155 
Due after 1 year through 2 years188,299 226,042 
Total marketable securities
$511,812 $665,197 
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 September 30, 2024 and December 31, 2023.
As of September 30, 2024
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueLevel
Commercial paper$12,534 $14 $ $12,548 
U.S. Treasuries182,070 314 (51)182,333 
Corporate bonds297,144 1,670 (77)298,737 
Money market funds measured at NAV (a)18,194 — — 18,194 N/A
Total marketable securities$509,942 $1,998 $(128)$511,812 
As of December 31, 2023
Amortized CostGross Unrealized GainsGross Unrealized LossesFair ValueLevel
Commercial paper$42,903 $16 $(24)$42,895 
U.S. Treasuries324,274 2,896 (257)326,913 
Corporate bonds294,540 969 (564)294,945 
Money market funds measured at NAV (a)444 — — 444 N/A
Total marketable securities$662,161 $3,881 $(845)$665,197 
(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 condensed consolidated balance sheets.

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CLEAR SECURE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except for share and per share data, unless otherwise noted)
Of the total marketable securities held at fair value as of September 30, 2024, $86,168 was in a continuous unrealized loss position for 12 months or longer. The Company had no continuous unrealized loss positions in relation to marketable securities as of September 30, 2024 or December 31, 2023 that were as a result of credit deterioration. For the periods presented the Company does not intend to nor will it be required to sell any securities before recovery of their amortized cost bases.

For certain other financial instruments, including accounts receivable, accounts payable, accrued liabilities, as well as other current liabilities, the carrying amounts approximate the fair value of such instruments due to the short maturity of these balances.
7. Property and Equipment, net
Property and equipment as of September 30, 2024 and December 31, 2023 consist of the following:
Depreciation Period in YearsSeptember 30,
2024
December 31,
2023
Internally developed software
3 - 5
$68,553 $62,306 
Acquired software36,441 6,539 
Equipment536,863 33,624 
Leasehold improvements
1 - 15
9,085 9,113 
Furniture and fixtures514,100 12,709 
Construction in progress9,200 8,672 
Total property and equipment, cost144,242 132,963 
Less: accumulated depreciation(86,482)(70,352)
Total property and equipment, net$57,760 $62,611 
Depreciation and amortization expense related to property and equipment for the three months ended September 30, 2024 and 2023 was $5,619 and $4,417, respectively, and $16,347 and $12,933 for the nine months ended September 30, 2024 and 2023, respectively.
During the three and nine months ended September 30, 2024, $1,659 and $5,241 were capitalized in connection with internally developed software inclusive of $205 and $650 of equity-based compensation, respectively. Amortization expense on internally developed software was $3,496 and $2,612 for the three months ended September 30, 2024 and 2023, respectively, and $9,912 and $6,764 for the nine months ended September 30, 2024 and 2023, respectively.
During the three months ended September 30, 2024 and 2023, the Company recognized impairment charges of