Where Food Comes From (WFCF) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 4–4.4% year-over-year to $6.4 million, led by a 10% increase in verification and certification services, while product and professional services revenues declined.

• Net income for Q2 2024 was $489,000, down 8% from the prior year, with diluted EPS steady at $0.09.

• Six-month revenue grew 5–5.1% to $12.0 million, with verification services up 13% and product revenue down 19%; net income for six months was $667,000, up slightly year-over-year, and diluted EPS was $0.12.

• The company is expanding verification services and professional consulting, leveraging new initiatives like Upcycled Food Certification, despite cyclical industry headwinds and inflationary pressures.

• Share buybacks continued, with 33,347 shares repurchased in Q2 and 149,419 shares year-to-date, including private purchases.

Financial highlights

• Q2 gross profit increased to $2.7 million, with gross margin around 41.6–42.4%; six-month gross profit was $5 million and gross margin 42.6%.

• Q2 operating income declined to $0.6 million, with an operating margin of about 9.1%; six-month operating income was $0.8 million and margin 7.0%.

• Adjusted EBITDA for Q2 was $0.8–0.844 million, down year-over-year; six-month Adjusted EBITDA was flat at $1.3 million.

• Cash from operations for six months was $1.9 million, up from $1.3 million in the prior year; cash balance at mid-year was $2.6 million.

• Working capital at June 30, 2024 was $2.3 million.

Outlook and guidance

• Management remains optimistic about long-term growth, citing a diversified revenue model, emerging trends in upcycled food and biosecurity services, and potential acquisitions.

• Beef verification is expected to rebound as herd sizes normalize, supporting future revenue and profit acceleration.

• Seasonality and cattle industry cycles may impact quarterly results.

• Forward-looking statements caution that results depend on industry trends, regulation, and market conditions.