Clear is having a hard time winning with its face biometrics services at sports venues
Sports would seem to be an approachable industry for a biometric ID vendor to enter. Like airports, stadiums have milling crowds, increasing security concerns, high-profile marketing opportunities.
But arenas are where a lot of technologies flounder (Wi-Fi). Biometric ID vendor Clear Secure has learned this searching for new revenue from securing sporting events.
The Sports Business Journal this week has a trepidatious and reasoned article about Clear’s leadership’s efforts to diversify from their airport biometrics recognition kiosks, software licensing and services – namely Plus airport express lane subscriptions.
The publication reports on an initial attempt, in 2021, to get into sports and entertainment as the pandemic flipped tables in the aviation industry. Based on conversations with unnamed sources, the foray went badly, with unproductive internal competition.
Had Clear pulled off the effort, the battles would no doubt have been hailed at a new management strategy, but no. The Sports Business Journal erased that particular whiteboard and with it some valuable staff.
Clear has at least made a marketing impression in sports, meaning, it is becoming a known quantity. But only 11 sports teams, according to the publication, are using its Plus express lane service. In 2019, the number of non-airport facilities using it was 25.
(The company is in airports, with about 40 deployments. Clear now says it has collected 11.8 million people’s biometric identifiers, up from 5.6 million enrolled a year ago.)
And with some partnerships, it continues to experiment with arena services. Executives are working with Vanuetize and Los Angeles FC to verify the ages of people in Banc of America Stadium wanting to buy alcohol using their phones, for example.
But, as has been pointed out, Clear executives had wanted to use sports as a high visibility placement at the gates of stadiums. Executives seem to have overlooked that they were making attendees stop by a kiosk for identification, when none was needed, and then sent them along to be searched, a task that ID verification did not obviate.
Well, Clear could at least get some revenue, right? Probably not.
Clear’s technology is widely respected, but it apparently is not the right bundle of features and guarantees for the price for all airlines.
The market has its thoughts, however. Publicly held Clear’s share price is a hair up from its $18.79 low in March but has been trending the wrong way since its 52-week high of $65.70 last August.)
Yet, Clear is in reasonable condition by contemporary business standards.
Operating cash flow and revenue have been, when averaged, inclining from 2019 to 2021. The opposite of true of revenue over the past three years, none of which saw a positive number. (See Clear’s quarterly report here.)
First quarter revenue was $90.5 million, 80 percent over the same period a year ago. Cumulative bookings were $107.8 million, an increase of 73 percent over a year ago.
(Executives have told shareholders they expect second-quarter revenue to climb a bit, to between $99 million and $101 million, with total bookings topping out at $110 million and $114 million.)
Cumulative enrollments – the total paid-for subscriptions – rose 112 percent, to 11.8 million over the same period.
And net Plus membership retention reached 95.3 percent, a rate that has increased every year since the first quarter of 2021, when it was 77.2 percent.
It has its TSA PreCheck Application Program, according to analyst Daniel Jones, who posts at Seeking Alpha. Jones is heartened by the program as a revenue generator. Clear joined that program’s predecessor, Biometric PreCheck Expansion Services and Vetting, in 2020.
And the company has made other attempts at diversification. It has signed up 187 owners of theaters, hotels, theme parks, restaurants and offices to deploy mobile health pass readers, for example.
Growth is growth, of course, but is Clear prepared for even a moderate recession? Is it even enough to lure a buyout offer? The next three or four quarters may hold that answer.