Financial Data and Key Metrics Changes - The company converted over $7 million in one-time revenue to recurring SaaS, increasing recurring revenue from 62% to over 98% of total revenue [4] - Net margin grew from 8% to over 30% since 2020 [5] - GAAP net income for Q2 2026 was $1.7 million, up 9% from $1.6 million last year [9] - Total revenue for fiscal 2026 year-to-date increased 8% from $10.9 million to $11.8 million [11] - Earnings per share for the quarter was $0.09 basic and diluted, reflecting a 13% year-over-year growth [10] Business Line Data and Key Metrics Changes - The company is experiencing growth across all lines of business, with cross-selling initiatives contributing to momentum [12] - Traditional sales are growing, and the focus on customer care and execution remains paramount [12] Market Data and Key Metrics Changes - The traceability segment accounted for between 8% and 10% of total revenue [32] - The company is positioned to benefit from increasing consumer awareness regarding food safety, driven by trends like MAHA and organic food movements [38] Company Strategy and Development Direction - The company aims to maintain a focus on customer care, grow recurring revenue, and return capital to shareholders through dividends and stock buybacks [12] - Investments are being made in product development, including the filing of two patents for Touchless Traceability [7][24] - The company is preparing for an expected surge in demand for traceability solutions as FDA deadlines approach [49] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the challenges of data accuracy in traceability, with error rates from suppliers ranging from 50% to 70% [18] - The company believes that its AI-driven solutions for error detection and correction will provide a competitive advantage [22][35] - Management is cautious about the impact of food inflation on business but has not seen immediate effects [42] Other Important Information - The company has repurchased approximately 80,000 common shares for $1.1 million during Q2 2026 [13] - The board declared a quarterly dividend of $0.02 per share, marking the third 10% increase since the dividend was established [16] Q&A Session Summary Question: What is the current revenue contribution from traceability? - The revenue contribution from traceability is estimated to be between 8% and 10% [32] Question: Can AI improve the accuracy of traceability data? - AI can indeed improve accuracy by detecting and correcting errors in data, which is a significant advantage over traditional methods [34][35] Question: Is there any impact from MAHA on the business? - MAHA increases consumer awareness of food safety, which indirectly benefits the company [38] Question: Can the company provide updates on traceability by ingredients? - The company is capable of tracking products and ingredients, allowing for detailed specifications and compliance with FDA regulations [40] Question: Does food inflation impact the business? - Food inflation has an indirect impact, potentially leading to margin squeezes for supermarkets, which could affect the company's pricing [42] Question: How is investment spending reflected in the results? - Investment spending is more targeted, with less in marketing and more in development, leading to an overall reduction in aggregate spending [44][45] Question: What are the current thoughts on strategic M&A? - The company is focused on existing initiatives and does not see M&A as a priority at this time, although they remain open to opportunities [47][50]

Core Insights - ReposiTrak is expanding its Traceability Network by adding food manufacturing companies to enhance traceability data sharing in the food supply chain [1][2] - The urgency for food manufacturers to adopt traceability is driven more by customer demands than by FDA deadlines, with retailers and wholesalers requiring data sharing sooner [3] Group 1: Company Developments - ReposiTrak has announced the inclusion of various food manufacturers, including a contract manufacturer of private-label grocery items, a cheese and dairy solutions provider, a gourmet food producer, and a natural wellness brand [2][3] - The ReposiTrak Traceability Network allows for the efficient exchange of FDA-required Key Data Elements (KDEs) for each Critical Tracking Event (CTE) in the supply chain [1][9] Group 2: Industry Trends - Retailers, wholesalers, and restaurants are increasingly demanding traceability data, which can take months for manufacturers to onboard and share accurately [3] - The ReposiTrak platform requires no additional hardware and employs a 500+ point error detection process to ensure data accuracy before it reaches customers [3]