Where Food Comes From, Inc. — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue increased 4% to $7.3 million in Q3 2026 from $7.0 million in Q3 2025; nine-month revenue rose 2% to $19.3 million from $18.9 million.
• Verification and certification revenue grew 6% to $5.9 million in Q3 (from $5.6 million) and 4% to $15.7 million for the nine-month period (from $15.1 million).
• Product sales remained flat at $1.2 million in Q3 and $2.9 million for the nine-month period.
• Professional services revenue declined to $218,000 in Q3 (from $257,000) and $731,000 for nine months (from $912,000).
• Gross margin improved to 42.1% in Q3 (from 38.3%) and 40.5% for nine months (from 38.9%).
• Operating income increased 68% to $1.0 million in Q3 (from $0.6 million) and 52% to $1.9 million for nine months (from $1.3 million).
• Net income was $0.8 million ($0.17 diluted EPS) in Q3 compared to $1.1 million ($0.22 diluted EPS) in Q3 2025; nine-month net income was $1.3 million ($0.27 diluted EPS) versus $1.7 million ($0.34 diluted EPS).
• Q3 2025 net income included a $0.9 million gain on the sale of the Progressive Beef interest; nine-month 2025 net income included the same $0.9 million gain.
• Cash generated from operations was $2.8 million for the nine-month period, up from $2.3 million in the prior year.
• Cash and cash equivalents were $4.4 million at September 30, 2026, compared to $3.2 million at December 31, 2025.
• Deferred revenue was $1.618 million at September 30, 2026, compared to $1.545 million at December 31, 2025.
• SG&A expenses were flat at $2.1 million in Q3 and decreased 3% to $5.9 million for nine months (from $6.1 million).

Business Segments and Product Lines:

• Verification and certification services benefited from resurgent demand for beef-related services and growing momentum in other service offerings.
• Newly developed service offerings, including CARE and RaiseWell® Certified, are growing rapidly.
• The company added hundreds of new customers for Organic, non-GMO, Gluten Free, and Upcycled certifications.
• The company leverages service bundling to reduce costs and audit fatigue for customers.
• Smaller cattle herd sizes impacted product sales and certain verification services, though value-add services continue to capture $100-per-head premiums for cattle producers.

Management Commentary and Tone:

• Chairman and CEO John Saunders described results as "strong," highlighting 6% growth in the core verification business and continued strength in profit metrics.
• Management attributed margin and operating income growth to ongoing cost-down initiatives and accelerating revenue.
• Saunders emphasized the importance of the diverse and growing services portfolio in the face of headwinds from smaller cattle herd sizes.
• Management noted that consumer interest in sustainability, humane handling, and transparency is at record highs, positioning the company to lead the industry.

Other Key Points:

• The company returned $268,000 in value to stockholders in Q3 through the buyback of 21,170 shares.
• Total stock buybacks for the nine-month period reached 110,651 shares.
• Over the past seven years, the company has returned $17.5 million to stockholders through buybacks and a special dividend.
• A conference call was held on November 12, 2026, at 10:00 a.m. Mountain Time, with a replay available through November 26, 2026.
• The company estimates its solutions support more than 17,500 farmers, ranchers, vineyards, wineries, processors, retailers, distributors, trade associations, consumer brands, and restaurants.
• Forward-looking statements in the release are subject to risks including competition, governmental regulation, and market conditions for beef and other commodities.