Where Food Comes From, Inc.

What they do

The company generates revenue by verifying and certifying that food products meet certain standards, such as non-GMO, organic, gluten-free, and animal welfare criteria. It also sells products and provides professional services. Its largest segment is verification and certification service revenue, which accounted for $5.389 million of the $6.611 million total revenue in Q2 2026.

Revenue drivers

• Verification and certification services — Core business; generated $5.389 million in Q2 2026 (81.5% of total revenue), up from $5.332 million in Q2 2025. Includes programs like RaiseWell Certified, which has more than 270,000 head of cattle enrolled.
• Product sales — Generated $937,000 in Q2 2026 (14.2% of revenue), down from $964,000 in Q2 2025. Tied to sales of verification-related products, such as labels or tags.
• Professional services — Generated $285,000 in Q2 2026 (4.3% of revenue), up slightly from $266,000 in Q2 2025. Consulting or audit-related services.

Recent performance

For Q2 2026, total revenue was $6.611 million, up 1% from $6.562 million in Q2 2025. Gross profit rose 9% to $2.683 million, with gross margin improving to 40.6% from 37.5%. Operating income increased 21% to $665,000, but net income fell to $413,000 ($0.08 diluted EPS) from $562,000 ($0.11) due to a $240,000 non-cash negative swing in fair value of digital assets and the prior-year quarter including $50,000 in dividend income from a divested investment. For the six months ended June 30, 2026, revenue was $11.976 million, up slightly from $11.835 million, with operating income up to $963,000 from $691,000.

Strategy

Management is focused on growing its non-beef verification programs (non-GMO, Gluten Free, Organic, Upcycled) and the recently introduced RaiseWell Certified standard, adopted by Whole Foods Market. The company is also pursuing cost efficiencies across all three revenue segments to improve gross margins. It continues to aggressively buy back shares, returning $809,000 in Q2 2026 (65,012 shares) and over $17 million since 2019 through buybacks and a special dividend. The company also divested its ownership interest in Progressive Beef in 2025.

Risks

• Beef industry downturn — Pressure on the beef business due to record high beef prices and smaller herd sizes, partially offset by premium verified beef demand.
• Digital asset volatility — Non-cash fair value changes in digital assets caused a $240,000 negative swing in Q2 2026, directly impacting net income.
• Internal control material weakness — In FY2025, management identified a material weakness in internal control over financial reporting related to improper application of ASC 842 (Leases), which was remediated by April 2026.
• Concentration in verification services — Over 80% of revenue comes from verification and certification services, making the company sensitive to changes in food industry standards or customer demand.

Outlook

Management expects continued modest revenue growth despite economic and industry headwinds, with growth driven by RaiseWell Certified and non-beef verification programs. They anticipate improved gross margins from cost efficiencies. The company has no debt, with $3.4 million cash at June 30, 2026, and expects to continue returning capital to shareholders through buybacks.