We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Shares of Where Food Comes From, Inc. (WFCF - Free Report) have dropped 3.9% since the company released its fiscal first-quarter 2026 results, lagging slightly behind the S&P 500 Index’s 3.2% decline over the same period. Over the past month, the stock has fallen 10.1%, a steeper drop than the S&P 500’s 1.2% decrease. This performance reflects broader market softness but also suggests investors reacted cautiously to the company’s mixed top-line results despite a notable bottom-line improvement.
Earnings & Revenue Performance of WFCF
Where Food Comes From’s third-quarter 2025 revenues slipped slightly to $7 million from $7.1 million a year earlier, as modest growth in verification and certification services could not fully offset declines in product and professional services revenues. Verification and certification revenues improved to $5.6 million from $5.5 million, while product sales eased to $1.2 million from $1.3 million. Professional services revenues also dipped to $257,000 from $292,000. Nevertheless, profitability improved markedly. Net income rose to $1.1 million from $0.5 million, and diluted EPS increased to 22 cents from 9 cents, helped significantly by a $946,000 gain on the sale of the company’s Progressive Beef interest.
Where Food Comes From Inc. Price, Consensus and EPS Surprise
Beyond revenues and earnings, several operational indicators highlight the company’s performance resilience. The gross profit came in at $2.7 million, slightly below the prior year’s $2.8 million, as higher compensation, insurance and hardware costs pressured margins. Selling, general and administrative expenses decreased marginally to $2.1 million from $2.2 million, thanks to lower marketing and trade-show spending, which offset higher compensation outlays.
For the first nine months of 2025, results show similar trends. Total revenues for the first nine months of 2025 were $18.9 million compared with $19.1 million a year ago, while net income increased to $1.7 million from $1.2 million. Cash generated from operations was $2.3 million, down from $2.8 million, but cash and equivalents more than doubled from year-end 2024 to $4.8 million, aided by the Progressive Beef sale. Stock buyback activity also remained strong, with 116,547 shares repurchased for the first nine months of 2025.
WFCF: Management Commentary
Management emphasized that demand across a broad range of verification and certification services largely offset persistent weakness in beef-related activity stemming from tariffs and cyclical herd shrinkage. CEO John Saunders highlighted year-over-year growth in pork, dairy and egg verification, as well as rising adoption of non-GMO, gluten-free, organic and Upcycled certifications. The company also noted continued customer retention above 90% and benefits from bundling multiple verification services for clients.
Executives described the business as increasingly insulated from cattle-cycle volatility, given its expanding and diversified standards portfolio. They also pointed out that gross margins have remained relatively stable despite wage inflation and other cost pressures, reflecting improved efficiencies and disciplined cost management.
Factors Influencing WFCF’s Headline Numbers
The slight revenue decline was driven mainly by headwinds in beef-related verification and lower hardware sales tied to smaller North American cattle herds. Management explained that drought conditions, trade dynamics and the U.S.-Mexico border closure related to the screwworm issue continue to limit herd rebuilding. Lower tag volumes resulted in a drop in hardware revenues, though this was partially offset by demand for higher-value tag products.
On the profitability front, the primary driver of bottom-line expansion was the $946,000 gain from the Progressive Beef divestiture. Additional contributions came from a $48,000 gain on digital assets, stable gross margins and lower SG&A spending. Operating income dipped slightly due to the modest revenue decline, but net income increased sharply because of these non-operating gains.
View
Management indicated that beef-related revenues may remain constrained in the near term, with meaningful herd recovery potentially a year away or more. Nevertheless, the company expects growth in non-beef certifications, including organic, dairy, poultry and Upcycled programs, to continue supporting revenue stability.
Executives also suggested that macro-level consumer trends favor transparency and traceability, positioning the company for ongoing long-term growth. The firm is investing in new offerings, including a labeling program that is gaining traction, and noted that several service innovations are nearing launch.
Other Developments at WFCF
The company completed the sale of its Progressive Beef ownership during the quarter, generating $1.8 million in cash and returning 12,585 shares of common stock to the company for cancellation. Management said the transaction frees capital for reinvestment and ongoing share repurchases. Total buybacks since program inception have surpassed 1.3 million shares, representing more than $14 million returned to shareholders.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
WFCF Stock Dips as Q3 Earnings Highlight Growth Beyond Core Beef
Shares of Where Food Comes From, Inc. (WFCF - Free Report) have dropped 3.9% since the company released its fiscal first-quarter 2026 results, lagging slightly behind the S&P 500 Index’s 3.2% decline over the same period. Over the past month, the stock has fallen 10.1%, a steeper drop than the S&P 500’s 1.2% decrease. This performance reflects broader market softness but also suggests investors reacted cautiously to the company’s mixed top-line results despite a notable bottom-line improvement.
Earnings & Revenue Performance of WFCF
Where Food Comes From’s third-quarter 2025 revenues slipped slightly to $7 million from $7.1 million a year earlier, as modest growth in verification and certification services could not fully offset declines in product and professional services revenues. Verification and certification revenues improved to $5.6 million from $5.5 million, while product sales eased to $1.2 million from $1.3 million. Professional services revenues also dipped to $257,000 from $292,000. Nevertheless, profitability improved markedly. Net income rose to $1.1 million from $0.5 million, and diluted EPS increased to 22 cents from 9 cents, helped significantly by a $946,000 gain on the sale of the company’s Progressive Beef interest.
Where Food Comes From Inc. Price, Consensus and EPS Surprise
Where Food Comes From Inc. price-consensus-eps-surprise-chart | Where Food Comes From Inc. Quote
Other Key Business Metrics of WFCF
Beyond revenues and earnings, several operational indicators highlight the company’s performance resilience. The gross profit came in at $2.7 million, slightly below the prior year’s $2.8 million, as higher compensation, insurance and hardware costs pressured margins. Selling, general and administrative expenses decreased marginally to $2.1 million from $2.2 million, thanks to lower marketing and trade-show spending, which offset higher compensation outlays.
For the first nine months of 2025, results show similar trends. Total revenues for the first nine months of 2025 were $18.9 million compared with $19.1 million a year ago, while net income increased to $1.7 million from $1.2 million. Cash generated from operations was $2.3 million, down from $2.8 million, but cash and equivalents more than doubled from year-end 2024 to $4.8 million, aided by the Progressive Beef sale. Stock buyback activity also remained strong, with 116,547 shares repurchased for the first nine months of 2025.
WFCF: Management Commentary
Management emphasized that demand across a broad range of verification and certification services largely offset persistent weakness in beef-related activity stemming from tariffs and cyclical herd shrinkage. CEO John Saunders highlighted year-over-year growth in pork, dairy and egg verification, as well as rising adoption of non-GMO, gluten-free, organic and Upcycled certifications. The company also noted continued customer retention above 90% and benefits from bundling multiple verification services for clients.
Executives described the business as increasingly insulated from cattle-cycle volatility, given its expanding and diversified standards portfolio. They also pointed out that gross margins have remained relatively stable despite wage inflation and other cost pressures, reflecting improved efficiencies and disciplined cost management.
Factors Influencing WFCF’s Headline Numbers
The slight revenue decline was driven mainly by headwinds in beef-related verification and lower hardware sales tied to smaller North American cattle herds. Management explained that drought conditions, trade dynamics and the U.S.-Mexico border closure related to the screwworm issue continue to limit herd rebuilding. Lower tag volumes resulted in a drop in hardware revenues, though this was partially offset by demand for higher-value tag products.
On the profitability front, the primary driver of bottom-line expansion was the $946,000 gain from the Progressive Beef divestiture. Additional contributions came from a $48,000 gain on digital assets, stable gross margins and lower SG&A spending. Operating income dipped slightly due to the modest revenue decline, but net income increased sharply because of these non-operating gains.
View
Management indicated that beef-related revenues may remain constrained in the near term, with meaningful herd recovery potentially a year away or more. Nevertheless, the company expects growth in non-beef certifications, including organic, dairy, poultry and Upcycled programs, to continue supporting revenue stability.
Executives also suggested that macro-level consumer trends favor transparency and traceability, positioning the company for ongoing long-term growth. The firm is investing in new offerings, including a labeling program that is gaining traction, and noted that several service innovations are nearing launch.
Other Developments at WFCF
The company completed the sale of its Progressive Beef ownership during the quarter, generating $1.8 million in cash and returning 12,585 shares of common stock to the company for cancellation. Management said the transaction frees capital for reinvestment and ongoing share repurchases. Total buybacks since program inception have surpassed 1.3 million shares, representing more than $14 million returned to shareholders.