Good morning and welcome to CLEAR's Fiscal Second Quarter 2024 Conference Call. We have with us today Caryn Seidman-Becker, Co-Founder, Chairman and Chief Executive Officer; and Ken Cornick, Co-Founder, President and Chief Financial Officer.

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.

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. The company disclaims any obligation to update any forward-looking statements that may be discussed during this call.

During this call the company will discuss both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in today's shareholder letter and the most recently filed annual report on Form 10-Q. These items can be found on the Investor Relations section of CLEAR's website.

With that, I'll turn the call over to Caryn..

Good morning, and thank you for joining our second quarter 2024 earnings call. It's been three years since our IPO and CLEAR remains focused on growing members, bookings and free cash flow. In the second quarter, we added a record 2.3 million members, reflecting growth across both CLEAR Travel and CLEAR Verified.

In CLEAR Travel, we continue to build products that help our members win the day of travel from Home to Gate and back again. The lane of the future rollout is well underway improving the CLEAR Plus member experience with new technology enhancements that make verifications up to 30% faster reducing friction for our members and our ambassadors.

This quarter we will begin rolling out the next phase of our lane of the future our FaceFirst technology. Members will verify with their face a seamless experience that will keep them moving. Travel is hard and getting harder.

In addition to improvements in the airport, we are furthering the Home to Gate journey with the introduction of CLEAR Perks, exclusive benefits curated for CLEAR Plus members from expedited passports to bag delivery and my favorite CLEAR Scout, which is our lost item rescue service, who hasn't lost something in the airport to be able to have a Clear ambassador go find it for you priceless.

CLEAR Perks are designed to increase the predictable end-to-end seamless travel experience and deliver additional value to our members. By 2030, one million more passengers are expected to crowd Americas terminals every day, putting even more strain on a system that is already overcapacity.

Aging infrastructure and technology compound these challenges, especially at screening checkpoints. Since 2010 CLEAR has partnered with airports driving innovation to improve the passenger experience while sharing over $325 million of revenue with our local airport partners.

Next month CLEAR plans to announce a formal airport innovation campaign to accelerate our work around public-private partnerships and help bring the latest technology and infrastructure to American airports. As we said we are seeing accelerated member growth this year and our goal is to grow towards 50 million members in 2025.

CLEAR Verified is fueled by this member flywheel. As we add more members our platform becomes even more attractive to existing and new partners. With our increased scale, the percentage of members who are instant on already enrolled and can verify with one click goes way up.

This frictionless experience along with our trusted brand, create product magic for our partners. In a recent nationwide brand study of current former and non-CLEAR members, roughly 80% of respondents agree or strongly agree that they trust and feel more secure with companies or brands that partner with CLEAR.

A similar percentage also said they would find it preferable to sign into online accounts using CLEAR. Identity has never been more important and CLEAR is the market leader. I will now turn it over to Ken..

Thanks Caryn. Second quarter results demonstrate our continued focus on profitable growth. Revenues increased 25% and adjusted EBITDA grew 137%. We achieved incremental operating income and EBITDA margins of 80% and 74% respectively.

Margin drivers that we have been discussing including the ramp of recently launched airports, high incremental margins for TSA PreChecks and Verified as well as continued cost discipline continue to play out. P&L strength is translating into significant cash generation.

Cash flow from operations was $114.6 million and free cash flow was $110.1 million, up 65% year-over-year. After deducting normalized stock-comp free cash flow grew 90%.

Active CLEAR Plus members grew by 297,000 in the quarter, up from 78,000 in Q1, as the NextGen upgrade process is largely behind us and the in-airport sales channel improved sequentially.

We continue to see member growth opportunities, particularly in our lower penetration markets, where as a percent of MSA population we are in the low single-digits versus high single-digits in our more penetrated markets. The experienced economy and booming travel market have helped expand CLEAR's addressable market.

A broader demographic of travelers are now appreciating the value of being a CLEAR member in our frictionless Home to Gate journey. As of August 1, standard and airline pricing increased by $10, only the second time we've increased standard pricing in 14 years. Standard is now $199, with airline peers at $159 and $189.

Family pricing increased $20 to $119 per year. We remain focused on driving ARPU through absolute pricing and reducing historical discounting. Last quarter we introduced CLEAR Plus gross dollar retention as a new KPI to reflect this focus. We introduced CLEAR Plus, which adds significant value to our membership.

RushMyPassport and bag ship have already gotten significant traction. As Karen mentioned, CLEAR Scout delivers a truly priceless service. If a member forgets anything in the airport they can call us and we will dispatch one of our ambassadors to try and find it.

So far we've covered everything from a laptop to a passport to an iPhone to a garment bag full of clothing in the United lounge. Our airport innovation campaign that we plan to formally announce next month is an opportunity to partner with airports to drive overall customer experience and an ROI-positive way.

Our North Star is to identify projects that help our airport partners achieve their goals while also enhancing CLEAR member experience, which can lead to growth in members and increased retention. TSA PreCheck enrollment provided by CLEAR is off to a strong start and it's live in 46 airports, up from three at the end of Q1.

With several thousand pre-enrollments daily and this pipeline will convert to completed enrollments and realize revenues as travelers visit our expanding base of locations. We plan to expand locations inside and outside the airport to grow the market and drive share.

We expect PreCheck to contribute incremental gross profit dollars in the near-term, while driving revenue and gross profit growth into next year. We repurchased 3.6 million shares in Q2 and an additional four million shares from Delta in July, continuing our opportunistic approach to capital allocation.

Our partnership with Delta remains a true win-win. They invested in CLEAR in 2016 and continue to own 4.3 million shares. We look forward to continued innovation together to enhance the passenger experience. On a year-to-date basis, we've retired 8% of our beginning shares outstanding.

And since initiating our repurchase program in 2022, we have bought back all 15 million shares issued in our IPO [indiscernible]. In Q3, we expect revenue of $193 million to $195 million and total bookings of $220 million to $222 million, representing 21% and 15% growth respectively.

In Q3, we will make our annual repayment to our credit card partner, approximately $181 million. As a result, we will have negative free cash flow in Q3 consistent with last year. That said, we are raising our fiscal year free cash flow growth guidance to at least 40% year-over-year or $280 million. With that let's go to Q&A..

Thank you. We will now be conducting a question-and-answer session [Operator Instructions] The first question comes from Joshua Reilly with Needham. Please proceed with your question..

All right. Thanks for taking my questions and nice executions, here in the quarter. So we saw a nice acceleration here in net member adds in Q2.

Can you just review your philosophy on pricing and managing that around retention, as I believe now you just mentioned, that you did implement another modest price increase here?.

Sure. I'll start with pricing and then I'll talk a little bit about, net adds. So thanks for the questions. So when we think about pricing, we look at it a few different ways. Look, this is only the second time keep in mind, it's only the second time, we've raised prices on the standard membership in 14 years.

So obviously, we've taken some incremental pricing on family. But from a standard perspective, this is $10 to $199. We were at $179 all the way back to 2010. In that time, we've gone from two airports to 58, from two lanes to over 160 lanes and we've added new ways to use CLEAR such as CLEAR Mobile and Home to Gate.

So in a world, where travel is hard, it's getting harder. People are really valuing experiences to the experience economy and particularly within travel. I would say over the past few years, a broader demographic of travelers are now appreciating what CLEAR has to offer.

And certainly, we look at cost per use, that's an important factor, but also what's the value per use of CLEAR. And we think the value proposition has far outpaced, the cost per use. And our experience continues to improve as Karen mentioned, we're creating value beyond the checkpoint. So CLEAR Perks, we're really excited about.

It's a great example where we think the value of the benefit exceeds the cost of membership, whether it's a discount on RushMyPassport or we recover your iPhone, the membership literally pays for itself. So we're confident that our members are getting more value than the price, they're paying. And so that's sort of how, we look at pricing.

And from a net add perspective, you didn't ask a specific question, but yes, we did see an acceleration.

Last quarter, we told you that the NextGen process was highly disruptive, both from a focus from our ambassador, our field operation and from a lane flow perspective, and that we were coming out of it, sort of peaked in February coming out of that things would improve.

We refocused on balanced approach to servicing existing members and adding new members. And that's exactly, what we've seen coming out of Q2. And so things have been improving literally since February. But certainly, June was impacted by NextGen, but coming out of June, we did see some nice growth there..

Got it. That's helpful.

And then as we're getting past this NextGen ID upgrade process, I know you don't give guidance on net member adds, but can you just help us understand what are the factors that we should be considering in terms of net member adds in the second half of 2024, in terms of the family price increases impacting churn, and opening new airports and maybe just any other factors, we should be considering on the trajectory of net member adds for the second half of the year? Thank you..

Sure. Sure. We – look, we think we have a lot of opportunity to grow members particularly in our underpenetrated markets. I talked about the expansion of TAM and how we're appealing to a wider audience. So we really do believe that. And I think, as we have come out of NextGen, we've refocused our field. We've launched TSA PreCheck.

That's something that's going on in the side. It's many of the same ambassadors. So as that continues, certainly the field operations have gotten stabilized and have improved sequentially and will continue to. And we are optimistic for the back half.

And last quarter, we said that our growth rate in the back half would be higher than what was implied in the Q2 guidance, and that still remains true..

And if I can just add to that, there's a lot of points around net adds. There's retention, there's win backs and then there's gross adds. And I think on all of those channels, we have a lot of opportunities.

For people who left CLEAR over the past few years, they're coming back to a much larger CLEAR, a CLEAR with better technology, a CLEAR with more value with perks and other partners. So there should be opportunities to bring people back to CLEAR. And there's a larger population obviously, as we've grown.

From a retention perspective, to your point, the CLEAR member experience is getting better. And again, we're offering more value and more on the way. So we expect that that number should also be getting better. And then, there's gross adds. And so I think we have opportunities across the board.

And then in addition to that with pricing, when you look at gross dollar retention that's also meaningful..

Great. Thanks guys..

Thanks Josh..

Thank you. The next question is from Dana Telsey with Telsey Advisory Group. Please go ahead..

Hi, Ken and Caryn, congratulations on the very nice results. A couple of things. As you think about the future, it sounds like the airport innovation campaign, which is launching next month could certainly be a driver of new member acquisition.

Can you tell us a little bit about what it entails? A little more details on any of the partnerships with that and how you're gauging that? And then I have a follow-up..

Yeah. Hi, Dana, thank you. So we're really excited about the innovation campaign, because at some level we've been doing it behind closed doors airport by airport for over a decade, because it's not only the technology and the CLEAR Lane that drives the customer experience.

But it's the holistic experience from the time you walk in the door, so that could be things like wayfinding, or how lanes are organized or structured.

And so bringing the latest technology and infrastructure to American airports can really make a difference for the customer experience holistically for that airport and in addition to that for Clear members and travelers.

And so when you look at the opportunity to drive retention or gross adds through better customer experience to help our airport partners. When we talk about $325 million of revenue that we've shared with our partners that's a 100% margin to them, right? And that is so massively important as they invest in infrastructure.

You think you also see the power of public private partnerships. So you hear the government talking about infrastructure investments in airports. But sometimes there's things with faster turnaround that airports want that aren't funded that we can help with.

So our North Star is to transform that passenger experience from home to gate right not just where you're flying from the airport, but where you're flying through it. And we think that this innovation campaign will really help travelers make it a journey to enjoy.

I know that's like a bold statement with traveling, but you shouldn't endure the experience through the airport. You should enjoy it. And so we think it helps our airport partners. We think it helps travelers. We think it helps a Clear member experience. And so again I think on that metric that's gross adds that's retention that's attach rates.

And so we'll be working with our partners to identify eligible projects and then we'll be coming back to you guys with more details on that as they come through over time. But taking it public as opposed to going one-off behind closed doors is an opportunity to make a bigger impact faster.

And I think with a nationwide network with over 25 million members on the Clear platform in aggregate with multiple products like CLEAR Mobile, like CLEAR Plus, like PreCheck, like Plus [ph]. We really have a very strong balance sheet and travel booming and you see the challenges in airports every single quarter we could point out tons.

And I think you guys read them in the newspaper and at every cocktail party, it's people's favorite conversations. So I think there's a lot we can do over the next 12, 24 and 36 months to impact the travel experience and build stronger relationships and public-private partnerships with our airport partners.

But as these projects come out, we'll be sharing them with you guys..

Got it.

And then anything about the other venues to, which you're expanding into and any updates beyond airports? And then Ken mentioned some membership opportunities in other MSAs, what's the game plan to attack those? And what's the opportunity and potential?.

So Dana when you say other venues, you mean on the CLEAR Verified identity platform side?.

Yes, exactly. Yes..

So one that I think you would be particularly excited about is Home Depot. I think as we all know and you specifically fraud is a huge problem in retail, they call it shrink, but it's really just theft and fraud. So Home Depot is focused on enhancing their customer experience, while reducing the shrink.

We've partnered with them in the rental tool business to reduce fraud and we've rolled it out across all their stores that they have rental tools and that's over a thousand. And they've seen great success in both the customer experience and in reducing fraud.

And this concept that we talked about a few years ago that we continue to hammer on, the concept of a connected identity platform powering trusted experiences making them safer physically and digitally, and easier right over 25% to 30% of their customer base, it was instant on. They're already on the platform.

They have repeat customers day after day, week after week for those folks to just be able to one click and verify and move on is such a win-win, and it's also bringing new people on the platform that could use it at Home Depot, at LinkedIn, at WellStar, at public.com and more.

So I think Home Depot has just been a great partnership and a huge win-win, and it starts to really make you think about the art of the possible on you roll back what -- or you start to peel the onion on what a challenge is and a lot of it comes back to identity, who you are and something about you? Are you a frequent shopper you look at Costco because of their membership-based business their shrink is a lot lower.

So it really does talk to the power of identity..

And then Dean on your addressable market question. Look we really look at MSA penetration by market and we've talked about this in the past, we have a range of airports that have been opened since 2010 to 2012 where we have a higher penetration.

And if we apply those penetration rates to the lower penetrated markets that implies significant growth in CLEAR Plus member base. And so it's really a matter of focus. It can be incremental staffing and enrollments within those airports or targeted marketing. So there's a range of opportunities to reach those travelers..

Thank you..

Thank you. The next question is from Ben Miller with Goldman Sachs. Please go ahead..

Thanks for taking the questions. I guess first, just any updated learnings from the TSA PreCheck rollout would be helpful, and how we should think about that as a contributor to the second half in 2025. And then Caryn, I think you mentioned a goal of 50 million members.

When should investors expect CLEAR Verify to start being a meaningful driver of revenue going forward? And what are some of the more exciting CLEAR Verified offerings that you're excited about as a contributor going forward? Thanks..

Just to clarify I said as we grow towards 50 million. So it is as a target, but as we grow towards it, just to be specific. There's a lot of -- well, let me start with PreCheck and then I'll get to CLEAR Verified. PreCheck has been an incredibly exciting quarter as we went from three airport locations to 46.

But you shouldn't just think of it as an airport location in San Francisco, in an L.A. X. I think we have four or five locations. So when you start to think of the capacity opened from 4:00 a.m. to 10 p.m. or 11 p.m.

and if it takes on average this is a higher number, but let's just say eight to 10 minutes for a total enrollment and a lot less for pre-enrollment. You think about the capacity that we have. And so, there's a few learnings. I think one is really the power of pre-enrollment, quite frankly and the power of digital marketing around that.

When someone pre-enrolled it takes half as much time and they come with their passport, right? And so a passport is a much easier one-step enrollment than birth certificate and other things.

So we want to encourage as frictionless and enrollment as possible, it's a better customer experience and it takes less time and someone comes more prepared with the right documents. So the power of pre-enrollment is something that we've learned a lot about and creates a lot of opportunities.

And the more locations we have, the more places you have to finish your enrollment. I think the other thing that we've learned is -- and I think it justifies we once put out a number that said we think the TAM is $90 million. People want to enroll in PreCheck. The price point is $1.30 a month. And I think people are not educated enough on the pricing.

They think it's $75 or whatever the different providers have different pricing over a year. It's over five years, you break it down, it's $1.30 a month. Of course, you should enroll. Everybody should enroll.

But it's about ease of enrollment, right? And so I think we feel very excited about the TAM that we put out there and our ability to penetrate that TAM over the next few years, as we continue to make enrollment easier, drive capacity, drive education around pricing. It's a really exciting opportunity.

And in terms of CLEAR Verified, there's a few -- from a sector perspective, we continue to be very bullish on the healthcare sector. The opportunity for safer and easier frictionless and trusted experiences in healthcare for both the patient and the provider are massive.

And no different than Home Depot is not something you would have thought of, a few years ago when you think of a connected identity platform and then you start to understand the opportunities to change the business, improve the retention revenues and margins. The same can be applied to healthcare.

There's a lot of steps, it's analog making it interoperable and then some of the regulatory things that are going on in healthcare, create a sense of urgency for insurance companies, for hospitals and for a lot of different companies who are driving the connected back end for interoperability. So we continue to be very excited on healthcare.

You see early results on public.com. You see the conversations that we're having around KYC. You see the fraud happening on the payment side, specifically as you look at peer-to-peer and you know that we can have a big impact there. We continue to be excited about financial services.

And again, financial services is broad that could be gaming or that could be banking or that could be a trading platform like public.com. So, I think financial services is something we continue to be excited about.

And post the acquisition of Sora, I guess almost a year ago, the product is really good from a front-end and a back-end perspective for our partners. On the consumer side, both online and in-person, I think you just have to look at Home Depot and LinkedIn to know that there are enormous opportunities to drive safer and easier experiences.

You see things like age verification rules coming out or online safety rules coming out of Congress and you know trust online matters. And so, you see in so many different places you were being asked to verify who you are and something about you over and over. That just happened to me this weekend on X. So would love to work with them.

And so, there are so many opportunities on the consumer side. And then on the travel side, trust and safety and building that connected platform, you see that we're doing mobile check-in in some hotels but trust and safety in the shared economy is massively important.

And also, as you have -- there's programs that are one key, one whatever, it's really saying the same person across your multiple brands. So travel consumer, both physical and digital healthcare and financial services.

And when you look at the scaling and the acceleration of the gross adds on our platform is to know that all these different nodes, if you will, the more people we have on the platform, the more friction free and experience their customers have with a trusted brand which when the consumer sees that it's CLEAR, they get really excited to engage.

So, in that world of a trusted brand that I talked about from our brand studies that's massively important, so the friction-free experience. We're always innovating around it adding different capabilities and safety online has never been more important. So we continue to be really excited about the acceleration of the gross adds.

Hopefully that answers your question..

Thank you. The next question is from Cory Carpenter with JPMorgan. Please go ahead..

Hey. Thanks. Good morning. Ken, could you expand on the drivers of the booking acceleration in 3Q? And are these trends that you expect to continue into 4Q? And then second question on TSA PreCheck.

As we think about the initial cohort of customers signing up, any rough breakdown you can provide between existing CLEAR customers adding TSA versus customers entirely new to CLEAR and what the update for those customers has been for the bundled option? Thank you..

Sure. I'll start with the drivers. Look, it goes back to what we said last quarter. We were impacted by NextGen. That was disruptive to specifically the airport channel. So if we look at the back half, there's a number of drivers that are tailwinds. Number one, obviously, pricing is a tailwind.

So starting August 1, we have pricing impact which drives both retention and new. We have an improvement in the airport channel, which we've already seen some in Q2 but that will continue. We have incremental PreCheck contribution. And we said last quarter we think verified bookings would be up in the back half versus the first half.

So I would say like numerous drivers of the bookings acceleration versus the Q2 numbers. In terms of the PreCheck, I think look, I think -- I don't have the specific breakdown but we're having success both marketing to existing CLEAR Plus members to add on PreCheck and completely new people coming to PreCheck that are not in CLEAR Plus.

So it's really spread across both sides. Certainly, our CLEAR Plus members are easier to talk to. We know who they are. We can e-mail them. The non-CLEAR Plus members were, having to reach whether in the airport with signage or with digital marketing..

Great. Thank you..

Hello?.

Operator? Next question..

Thank you. The next question is from Mark Kelley with Stifel. Please go ahead..

Great. Thank you. Good morning everyone. I kind of want to build on Cory's question there a bit on the TSA PreCheck product.

I guess over the long run, do you see that being more of a factor on your revenue and margin profile overall? Or I guess what's more important like TSA in isolation or TSA as an acquisition channel for CLEAR Plus? That's my first one. And the second one is, your footprint within our airports is already quite large.

But some airports you don't have access to every terminal. I guess, a, do you think you need access to every terminal? And b, how do you go about attacking those terminals, where you don't have access today? Thank you..

Sure. So I'll start with the TSA. Look, we're really excited about TSA as a standalone business and a standalone revenue line item. As you know we recognize the revenues on a net basis. So they're less impactful to revenue or bookings.

Bookings and revenue for TSA PreCheck are one and the same, right? But they are much more impactful to gross profit dollars. So what I would say is, in the near-term call it 2024, it's going to be incremental gross profit dollars. As we look to 2025, it's going to be meaningful to both revenue bookings and the gross profit dollar growth.

And I'd say the same thing for CLEAR Verified, right? We have this cost structure already in place which we talked about. And as we enroll more people and get towards that 50 million the repeat usage drives margin as well. So we're -- I would say there are upsell opportunities and there are opportunities to grow, CLEAR Plus, as a channel.

But on a standalone basis we are very, very excited about it..

I think there's another point there which is tiering. So you should think about it like some people might just want PreCheck, right? You might want an entry level. They might want PreCheck plus certain perks that we might add for that.

They might want the bundle, right? So as we continue to innovate, we think there's opportunities to meet different travelers where they are, because certainly everyone wants a more frictionless and predictable travel experience. In terms of the terminals we know every airline wants to bring PreCheck to their customers, in a really accessible way.

It's just been too hard. And so we know that all airlines and all airports want to bring it to their customers. And I think seeing is believing, to know that no appointment is necessary to see the customers signing up at the crack of dawn and excited about it. We know that every airline and every airport want to bring it to their customers.

So we expect to be in those terminals, because they want to serve their travelers. But also it's about meeting travelers where they are.

So if you enrolled online and you can go to Staples to finish or you can go to another retail location to finish on a Saturday morning, because you're not going to the airport for a few weeks or you could do it in a hotel lobby conveniently located in Midtown Manhattan during lunch.

So there's -- or you could do it on your college campus or you could do it at a corporate office. We just did a corporate enrollment and that was met with great success. It's something that of course companies would want to make it easy for their travelers to enroll in PreCheck in the lobby.

And so there's, all sorts of ways to bring a customer-centric mentality and accessibility to this. So we're really excited to lead that initiative..

Right. In terms of footprint look, I think there are incremental opportunities in existing airports to expand our footprint. We think about it as a TAM expansion opportunity. Does that terminal expand our TAM or not. Some terminals -- some checkpoints feed, multiple terminals, and it doesn't expand TAM.

And also we talked a couple of quarters ago about Louisville which is our CLEAR Mobile product and that's going that model allows us to go into smaller airports or pop-ups or seasonal airports, along with a CLEAR Plus benefit. So CLEAR Plus members can use those lanes. It's also a pay-per-use model, so incremental revenue.

And we can offer PreCheck in those smaller airports where otherwise it might have been uneconomic to do so..

And when you look at some of our smaller airports today early days they're enrolling an impressive number of people in PreCheck. It's really important to bring this nationwide to all travelers in an easy and accessible way. And so it's just been great to see the positive response that we have from all the markets..

That's helpful. Thanks very much..

Thank you..

Thank you. The next question is from Michael Turrin with Wells Fargo. Please go ahead..

Hey, thanks for taking my question. David Unger on for Michael Turrin today. Ken, you've been increasing the share buyback amount and you've taken on more ownership of the Delta sale yesterday.

Can you talk through from a high level how you think about buyback today, given you have increased confidence in the free cash flow growth that you laid out in the shareholder letter and that could be viewed as a positive given that we're in a volatile market? Thank you..

Yes. Look we talk about capital allocation that we're going to be opportunistic. And certainly we've been more aggressive on share repurchase this year than we have in past years. And that's a function of where our view of free cash flow is and where it's going. And obviously, we want to drive free cash flow per share ultimately.

And right now with our guidance of at least $280 million of free cash flow this year. We have about 139 million and change shares outstanding. So that's $2 of free cash flow per share. We're going to remain opportunistic and ultimately do what's best for shareholders..

Thank you. And then just one follow-up on retention. I don't know if we touched upon this in the past, but is there a soft target for the dollar retention you have? And is there a way for us to think about the bridge between the dollar -- the member retention and dollar retention and that trend over time? Thank you..

There's no soft target specifically. I mean we'd like it to be well over 100%..

More the better..

More the better. And so the bridge really is what's the year-over-year incremental benefit from pricing. The two metrics that we have today which is the dollar and the net member we talked about the net member and how it doesn't necessarily represent the year-over-year change because it's a lagging indicator.

And it is true that our member retention right now is very stable on a year-over-year basis. It's down less than 100 basis points on a year-over-year basis. You know, if you remove the impact of win backs and sort of look at an apples-to-apples cohort.

So certainly as the pricing rolls through from August 1 that's going to benefit our net dollar retention. Remember that's a 12-month trailing basis so it's cumulative. But on the other hand we anniversaried the airline pricing in February. So there's always pushes and pulls..

If I can just add to that we operate in friction-filled worlds whether it be an airport or a hospital or verifying online for certain use cases. And so bringing frictionless experiences, bringing product magic that drives everything.

And that is what we are focused on whether it be lane of the future, whether it be hospital check-in or hotel check-in or changing a retailer's experience so that less is behind glass and it's safer.

And so that is what we're focused on and we've invested for that and we expect that to drive not only customer experience ads retention and partners, but also have it flow through to the bottom-line..

Thank you both..

Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. And I would now like to turn the call back to Caryn Seidman-Becker for closing remarks..

Thanks for joining our second quarter 2024 earnings call. I am proud of our team -- extremely proud of our team and how they are executing across our focus areas as we continue to improve the member experience, scale TSA PreCheck and scale verified. Thank you..

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation..