Where Food Comes From Q1 2026 Earnings Call - RaiseWell Program Drives Beef Recovery Amid Disease Headwinds
Summary
Where Food Comes From reported a modest 2% year-over-year revenue increase to $5.4 million in Q1 2026, driven by a 6% jump in verification and certification revenue. The company returned to profitability despite a shrinking cattle herd and persistent tariff pressures. The standout development is the launch of the RaiseWell program, which secured a major adoption from Whole Foods Market, validating the company's ability to capitalize on consumer demand for premium, responsibly sourced proteins.
Operational and strategic momentum is broadening beyond the beleaguered beef sector. Non-beef verifications for pork, dairy, and eggs, alongside certification gains in organic and non-GMO categories, provided a robust counterbalance to lower cattle tag volumes. Furthermore, the company is positioning its IMI Global traceability infrastructure as a critical asset for managing potential cross-border animal disease outbreaks, specifically the New World screwworm moving up from Mexico. Management reaffirmed its commitment to capital returns, executing a $293,000 share repurchase in the quarter.
Key Takeaways
- Total revenue grew nearly 2% year-over-year to $5.4 million, signaling a return to profitability despite broader macroeconomic headwinds.
- Verification and certification revenue surged 6% to $4.4 million, outpacing overall growth and highlighting strong demand for compliance services.
- Product sales saw a slight year-over-year increase to $713,000, driven by ranchers shifting toward premium, feature-rich tags despite lower overall herd volumes.
- The new RaiseWell program successfully launched, securing Whole Foods Market as its first major retail adopter for beef supply verification.
- RaiseWell addresses premium consumer demand for antibiotic-free, hormone-free, and responsibly raised proteins, expanding to pork, bison, lamb, poultry, eggs, and dairy.
- New customer wins are increasingly concentrated in beef-related services, providing a bright spot in an otherwise disrupted cattle industry.
- The cattle industry is facing unusual disruption from confluence of factors, but the company is leveraging these challenges to demonstrate unique operational capabilities.
- Management highlighted a strategic opportunity to deploy IMI Global's advanced animal traceability system to manage potential cross-border outbreaks of New World screwworm moving up from Mexico.
- Partnerships with U.S. CattleTrace enable rapid deployment of contact tracing systems to identify exposed livestock and locations during health crises.
- Non-beef business lines showed solid growth, with verifications for pork, dairy, and eggs extending their positive momentum into the first quarter.
- Certification activity expanded across organic, non-GMO, gluten-free, and upcycled categories, supported by bundling incentives that save customers time and money.
- The company continued its stock repurchase program, buying back 24,469 shares for $293,000 in Q1, adding to $15.5 million in total buybacks since inception.
Full Transcript
Conference Operator, Call Moderator: Please note this conference is being recorded. I will now turn the conference over to Jay Pfeiffer, Investor Relations. Thank you. You may begin.
Jay Pfeiffer, Investor Relations, Where Food Comes From: Good morning, and welcome to the Where Food Comes From 2026 first quarter earnings call. Joining me on the call today are CEO John 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 our 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, please go ahead.
John Saunders, Chief Executive Officer, Where Food Comes From: Hello, and thank you for joining the call today. This morning in our first quarter results news release, we were pleased to announce year-over-year growth and return to profitability. Verification and certification revenue increased 6% in the quarter to $4.4 million from $4.2 million, while product sales edged up slightly to $713,000 from $702,000. Total revenue increased nearly 2% year-over-year to $5.4 million. This growth, which we achieved despite persistent headwinds around tariffs and a smaller herd size, was driven by steady new customer wins based on increasing demand for a range of certifications we provide. For all the challenges on the beef side, I’m happy to report that many of our new customers are for beef-related services.
A highlight on the beef side has been the RaiseWell program that we launched in the first quarter of 2026. RaiseWell offers brands, high-end retailers, and food service operators a great way to attract consumers seeking premium protein products that have been verified back to the source of origin as having been responsibly raised, meaning they have not been given antibiotics or added hormones and have complied with rigorous animal care requirements throughout the life of the animal. The RaiseWell launch has gone very well thus far. We secured Whole Foods Market as a first major retailer to adopt the program for its beef supply, and we are generating meaningful revenue now. RaiseWell is also available for other proteins, including pork, bison, lamb, poultry, eggs, and dairy.
In terms of product sales, we are experiencing lower volumes in line with fewer head of cattle being put through the system and temporary tag subsidies offered to ranchers. Despite that, our product revenue was slightly higher year over year, reflecting increased demand for premium tags that offer more features that our ranchers are looking for. As we mentioned last quarter, the cattle industry is going through an unusual period of disruption due to the confluence of many factors. With this disruption comes many opportunities. One of those is a potential opportunity to demonstrate our unique capabilities in response to an animal disease outbreak. As you know, the Mexican cattle industry is experiencing an outbreak of what is known as New World screwworm. This outbreak has been steadily moving north and now involves several Mexican states bordering Texas.
Dannette Henning, Chief Financial Officer, Where Food Comes From: I think we’re having an issue with John’s line. John, can you hear me? Okay, just give me a moment. We’ll try to reconnect. Hold on one moment.
Jay Pfeiffer, Investor Relations, Where Food Comes From: Dannette, can you hear me?
Dannette Henning, Chief Financial Officer, Where Food Comes From: I just asked him. Should we take over?
Jay Pfeiffer, Investor Relations, Where Food Comes From: You hear me? She’s gonna try and reconnect with John. If not, I can pick it up or you can, whatever you want.
Dannette Henning, Chief Financial Officer, Where Food Comes From: Yeah.
Jay Pfeiffer, Investor Relations, Where Food Comes From: I’m happy to do it.
Dannette Henning, Chief Financial Officer, Where Food Comes From: Either way. I don’t mind reading.
Okay.
Looking at questions.
All right. Okay.
Yeah.
Jay Pfeiffer, Investor Relations, Where Food Comes From: I think maybe one of us should say something about John’s traveling internationally.
Dannette Henning, Chief Financial Officer, Where Food Comes From: Yeah.
Jay Pfeiffer, Investor Relations, Where Food Comes From: Excuse the interruption.
Say again?
Dannette Henning, Chief Financial Officer, Where Food Comes From: Hello, all. I’m gonna apologize. John Saunders is traveling internationally, and we believe we’ve lost connection with him. I’m Dannette Henning, the CFO. I’m gonna go ahead and take over where he kinda left off. Here we go.
Picking back up at where the Mexican cattle industry was experiencing an outbreak of what is known as New World screwworm. The outbreak has been steadily moving north and now involves a couple of Mexican states bordering Texas. The USDA is working hard to prevent a cross-border spread, but should a spread occur, we are ideally positioned to help manage the response. Our IMI Global unit maintains the most advanced animal traceability system. With our growing partnership with U.S. CattleTrace, the producer-led private industry database, we can quickly deploy a system that enables contact tracing and allow animal health officials to identify livestock and locations that may have been exposed to disease. In the meantime, we are seeing solid growth in a number of non-beef business lines. Verifications for pork, dairy, and egg operations all extended their growth momentum in the first quarter.
Certification activity for organic, non-GMO, gluten-free, and upcycled also showed gains. Again, we continue to leverage our extensive solutions portfolio to our advantage through bundling incentives that save our customers time and money. In closing, we remain optimistic about our ability to profitably grow our business over the long term and accordingly plan to continue our stock repurchase program. We bought back 24,469 shares of our common stock during the first quarter at a cost of $293,000. Total buybacks since plan inception, including private purchases, are 1,399,121 shares at a cost of approximately $15.5 million. With that, I’ll thank you again for joining the call today and open the call to questions. Operator?
Conference Operator, Call Moderator: I would like to turn the conference back over to John for some closing remarks.
Dannette Henning, Chief Financial Officer, Where Food Comes From: Hi, this is Dannette.
John Saunders, Chief Executive Officer, Where Food Comes From: Well, thank you all very much. Oh.
Dannette Henning, Chief Financial Officer, Where Food Comes From: Go, go ahead.
John Saunders, Chief Executive Officer, Where Food Comes From: Sorry, Dannette.
Dannette Henning, Chief Financial Officer, Where Food Comes From: I’m sorry.
John Saunders, Chief Executive Officer, Where Food Comes From: Oh, I’m sorry. Thank you, Dannette, very much for finishing for me. I apologize to all of you for the technical difficulty. Wanna say welcome to all the new shareholders, and we will make you very proud, and look forward to talking to you in 3 months. Take care, everyone.
Conference Operator, Call Moderator: Thank you. This will conclude today’s conference. You may disconnect at this time, and thank you for your participation.
