Where Food Comes From (NASDAQ:WFCF) reported slightly higher second-quarter revenue and improved operating income as growth in verification and certification services helped offset continued pressure in its flagship beef business.
Chief Executive Officer John Saunders said fewer cattle moving through the system and record-high beef prices continued to weigh on the company’s beef-related operations. However, he said the company’s expanding portfolio of food claims verification and certification services supported profitable growth during the quarter.
Second-Quarter Results
Gross profit increased 9% year over year to $2.7 million from $2.5 million, while gross margin improved to 40.6% from 37.5%. Saunders attributed the margin improvement to cost efficiencies across all three business segments.
- Operating income rose 21% to $665,000, compared with $549,000 a year earlier.
- Net income was $413,000, or $0.08 per share, compared with $562,000, or $0.11 per share, in the second quarter of 2025.
- The company said net income was affected by a $240,000 year-over-year negative swing related to the non-cash fair-market-value impact of digital assets.
- The prior-year quarter also included $50,000 in dividend income associated with the company’s former ownership interest in Progressive Beef, which was divested last year.
Saunders said operating income was the company’s most representative profitability measure for the quarter given those factors affecting net income.
For the first six months of 2026, total revenue increased 1% to $12 million from $11.8 million. Verification and certification revenue grew 3% to $9.8 million, while operating income increased to $963,000 from $691,000. First-half net income was $505,000, or $0.10 per share, compared with $593,000, or $0.11 per share, a year earlier.
The company generated $1.5 million in operating cash flow during the first half and ended the quarter with $3.4 million in cash and cash equivalents, up from $3.2 million at the end of 2025.
Certification Portfolio and RaiseWell Expansion
Saunders said the company now audits more than 50 standards across categories including animal proteins, wine grapes and upcycled foods. Its certification offerings cover claims such as animal welfare, sustainability practices, non-GMO, gluten-free and organic.
The company’s CARE Certified program focuses on animal care and environmental stewardship, while its newer RaiseWell Certified program verifies animal welfare and natural practices and provides traceability from farms through processing.
Whole Foods Market became the first retailer to adopt RaiseWell during the first quarter for its beef supply, Saunders said. More than 270,000 head of cattle have been enrolled by ranchers supplying beef to Whole Foods. Where Food Comes From is working to expand RaiseWell to chicken, turkey, pork, lamb and eggs.
Saunders said CARE and RaiseWell are part of the company’s service-bundling strategy, particularly alongside organic services. He said bundling is intended to create time and cost savings for customers while improving the company’s revenue and gross margins.
The company also recently partnered with the Potato Sustainability Alliance to provide on-farm audits that verify and benchmark environmental sustainability metrics. The audits cover areas including greenhouse-gas emissions, water management, food waste, soil health, biodiversity and pesticide use.
In May, the company helped USAgrichar become the first biochar producer in Colorado to receive U.S. Department of Agriculture certification for its product. Saunders said biochar can support soil health, water retention and nutrient efficiency while providing long-term carbon sequestration.
Food Safety, Traceability and Beef Exposure
During the question-and-answer session, President and Chief Strategy Officer Leann Saunders discussed the company’s positioning around animal disease, traceability and food safety. She said Where Food Comes From works closely with U.S. CattleTrace, a nonprofit focused on voluntary animal identification and traceability, and administers the organization’s activities.
She added that all of the company’s beef programs require electronic identification and that the company has conducted biosecurity audits and developed Secure Beef Supply Plans for locations over several years. Those services may become increasingly important when state animal health officials determine whether cattle can move, she said.
Leann Saunders also highlighted the company’s Safe Quality Food, or SQF, auditing program through its Validus Verification Services division. She said large organizations, including Walmart, are increasingly requiring supply chains to have SQF audits and food-safety protocols in place.
John Saunders said the company does not verify food safety for many leafy greens and lower-value vegetables because of the risks associated with that work. Still, he said food-safety events would likely maintain attention on food safety issues.
Responding to a question on reporting revenue by beef and non-beef categories, Saunders said beef accounts for roughly 50% of company revenue. Management said it would consider providing additional disclosure to help investors assess growth in business lines outside beef. Saunders said maintaining a broad offering across protein categories remains important for serving retailers such as Whole Foods and Walmart.
Buybacks and Renewed M&A Focus
Where Food Comes From repurchased approximately 65,000 shares in the second quarter, bringing year-to-date repurchases to nearly 89,500 shares. Since launching its repurchase program in 2019, the company has returned more than $17.2 million in value to stockholders, Saunders said.
The company is also renewing its focus on acquisitions following an approximately three-year pause since its last transaction. Saunders said the company has averaged about one acquisition annually over the past 14 years and views acquisitions as a way to add products, standards, customers, talent and revenue streams.
Management said it is in the early stages of reengaging in the acquisition process and does not expect investors to infer that any transaction is imminent. The company plans to file a shelf registration statement within the next year or so to provide greater financial flexibility for potential capital raising and opportunistic acquisition activity.
Separately, Jay Pfeiffer, vice president of investor relations, said the company could not identify the cause of two instances in May and July when its shares traded above $20. He said discussions with Nasdaq market surveillance personnel and investors did not identify a specific driver.
About Where Food Comes From (NASDAQ:WFCF)
Where Food Comes From, Inc (NASDAQ: WFCF) is a food traceability and certification company headquartered in Caldwell, Idaho. Established from a ranch-to-plate verification program launched in 2005, the company now offers a suite of services designed to authenticate product attributes, verify production claims and enhance supply-chain transparency for agricultural producers and food brands.
The company’s core offerings include third-party certification audits, program development, on-farm risk assessments and digital traceability solutions.
