Where Food Comes From, Inc. (WFCF) has introduced RaiseWell Certified, a new third-party verification standard designed to elevate expectations for animal care, responsible raising practices, and supply-chain transparency across North America’s protein markets. Positioned as a comprehensive certification program, RaiseWell Certified is intended to serve brands, premium retailers and foodservice operators seeking credible, verified claims that align with growing consumer interest in ethically raised and trac ...

Financial Data and Key Metrics Changes - The company reported an approximate 6% year-over-year decline in total revenue for Q1 2025, primarily due to a decrease in the Verification and Certification Services segment, which saw revenue drop by $252,000 compared to Q1 2024 [4] - Net income for the quarter was $31,000 or $0.01 per diluted share, down from $178,000 or $0.03 per diluted share in the same quarter last year, with more than half of the decline attributed to a $76,000 non-cash charge on digital assets [6] Business Line Data and Key Metrics Changes - The Verification and Certification Services segment, which represents roughly 50% of total revenue, was significantly impacted by fewer cattle moving through the system due to cyclical herd size reduction and severe drought conditions [4] - Despite the challenges, gross margins remained stable at 41.6%, attributed to disciplined cost management [6] - The Upcycled Certified program, the fastest-growing service offering, saw total certifications grow 70% year-over-year in 2024 and 10% growth in Q1 2025 [10] Market Data and Key Metrics Changes - The global food market for upcycling is currently valued at $46 billion and is expected to grow to nearly $75 billion by 2029, indicating a significant market opportunity [10] - The company is experiencing increased demand for biosecurity services due to disease outbreaks affecting poultry operations [6] Company Strategy and Development Direction - The company is focusing on expanding its Upcycled Certified program and fee-based retail labeling program for protein products, targeting mass market and high-end regional retailers [10][11] - The CARES certified program aims to meet growing consumer expectations for responsibly sourced products, enhancing visibility and brand recognition among retail consumers [12] Management's Comments on Operating Environment and Future Outlook - Management views the herd size reduction as a cyclical issue that is expected to reverse in the future, despite current challenges [5] - The company remains optimistic about customer retention rates, which are in the high 90% range, despite the disruptions in verification activities [5] Other Important Information - The company continues to buy back shares, having repurchased 376,000 shares at a cost of $383,000 during the first quarter [7] - The company has faced challenges in communicating its digital asset performance due to media policies, which have affected the visibility of its financial news [8][9] Q&A Session Summary Question: What are the impacts of the current cattle market on the business? - Management noted that the decline in cattle movement is due to cyclical herd size reduction and drought conditions, but they expect this to be temporary [4][5] Question: How is the company addressing the challenges in poultry verification? - The company is seeing increased demand for biosecurity services as a response to avian influenza outbreaks affecting poultry operations [6] Question: What is the growth outlook for the Upcycled Certified program? - The Upcycled Certified program is experiencing significant growth, with a 70% increase in certifications year-over-year and continued expansion expected [10]