Earnings Labs

Where Food Comes From, Inc. (WFCF)

Q2 2025 Earnings Call· Sat, Aug 9, 2025

$12.30

-1.13%

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Transcript

Operator

Operator

Greetings, and welcome to the Where Food Comes From Second Quarter 2025 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I'd now like to turn the call over to your host, Mr. Jay Pfeiffer, Director of Investor Relations. Please go ahead.

Jay Pfeiffer

Analyst

Good morning, and welcome to the Where Food Comes From 2025 Second Quarter Earnings Call. Joining me on the call today are CEO, John Saunders, President Leann Saunders; and Chief Financial Officer, Dannette Henning. During this call, we'll make forward-looking statements based on current expectations, estimates and projections that are subject to risk. Statements about financial performance, growth strategy, customers, business opportunities, market acceptance of our products and services and potential acquisitions are forward-looking statements. Listeners should not place undue reliance on these statements as there are many factors that could cause actual results to differ materially from forward-looking statements. We encourage you to review our publicly filed documents as well as our news releases and website for more information. I'll now turn the call over to John Saunders.

John K. Saunders

Analyst

Hello, and thanks for joining the call today. This morning, we reported improved second quarter financial results. Our core verification and certification revenue increased nearly 2% despite continued pressure on beef verifications associated with smaller herd sizes. The increase in verification revenue was attributable to strong demand for other verification services, notably our CARE Certified and Upcycled programs, which continue to build momentum. This growth underscores the strength of a business model that's based on providing the broadest range of verification services in the industry, a strategy that enables us to compensate for downturns in other segments of our business. We now verified customer compliance to more than 50 individual standards and our unique ability to bundle these services results in cost savings and convenience for those customers in a differential competitive marketing advantage for our business. Hardware sales in the second quarter also increased year-over-year by 18% to $1 million from $800,000 in Q2 last year. Although we are selling fewer basic tags due to smaller herds and government tag subsidies, growing demand for higher-priced value-added tax is more than compensating. Some of these tagged options include combo sets that offer a blend of visual and electronic identification. These tags are also customizable in various ways to enable personalized ID systems and other advantages over standard tags. Ultra-high-frequency tags that operate up to 960 megahertz, offering improved accuracy, longer read range and faster read speeds, all of which combined to improve data management and compliance with USDA standards. Also, tissue sampling units or TSUs these are tags that are used to extract DNA samples for genetic analysis. The combination of higher verification in tag revenue led to a 3% increase in total revenue to $6.6 million from $6.4 million year-over-year. So again, due to our deep solutions portfolio, we're…

Operator

Operator

[Operator Instructions] Our first question comes from the line of [ Arak Kayam ], Private Investor.

Unidentified Analyst

Analyst

Well, I was just wondering what kind of initiatives or programs you have in place to not only attract top talent but retain as well?

John K. Saunders

Analyst

Dannette, do you want to take a shot at that or Leann.

Dannette D. Boyd Henning

Analyst

Yes, I can. This is Dannette. Thank You for the question, too. We work closely with our HR and HR reaches out to different college universities. We also advertise physicians and try to recruit various candidates, that direction. We also just have a well-recognized name and brand and a lot of recruits come directly to us because they really want to work at our company because of what we stand for. We have internal continuing education, and we definitely encourage -- we've got an open door policy where we encourage other people to communicate within themselves so that they can learn from one another. So Leann, do you have anything else to add?

Leann Saunders

Analyst

No, I thought that was good unless there's a follow-up question to that.

Unidentified Analyst

Analyst

No, that was all. Appreciate it.

Operator

Operator

[Operator Instructions] It seems there are no other questions at this time. I'll turn the floor back to Mr. Saunders for any final comments.

John K. Saunders

Analyst

Once again, thank you for your support, and we look forward to talking again in 3 months. Take care.

Operator

Operator

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