Where Food Comes From, Inc. Q3 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Core Business Performance (Verification & Certification):
    • Q3 2023 verification and certification revenue grew 4% year-over-year to $5.4 million (from $5.2 million in Q3 2022).
    • Year-to-date (YTD) verification and certification revenue increased 8% to $13.9 million (from $12.9 million in 2022).
    • Growth in this segment offset weak tag sales due to reduced cattle herd sizes, driven by drought and cyclical trends.
    • Audit activity reached an all-time high; customer retention remains over 90%.
  • Total Revenue:
    • Q3 2023 total revenue declined 4% year-over-year to $7.0 million (from $7.3 million in Q3 2022).
    • YTD revenue fell 2% to $18.4 million (from $18.8 million in 2022), impacted by lower product (tag) sales and a one-time consulting contract recorded in Q1 2022.
  • Segment Highlights:
    • Product revenue in Q3 dropped to $1.2 million (down from $1.6 million in Q3 2022).
    • Consulting revenue in Q3 came in at $431,000 (down from $507,000 in Q3 2022).
    • YTD product revenue was $3.1 million (down 10% from $3.5 million in 2022).
    • YTD consulting revenue was $1.3 million (down from $2.4 million in 2022 due to last year’s one-time contract).

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Operator: Greetings, and welcome to the Where Food Comes From Third Quarter 2023 Earnings Call. [Operator Instructions] As a reminder this conference is being recorded. At this time I would like to turn the call over to Jay Pfeiffer of Investor Relations. Thank you. You may begin. Jay Pfeiffer: Good morning, and welcome to the Where Food Comes From 2023 third quarter earnings call. Joining me on the call today are CEO, John Saunders; President, Leann 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 current and future 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. Today we'll also discuss adjusted EBITDA, a non-GAAP financial measure provided as a complement to GAAP results. Please refer to today's earnings release for important disclosures regarding non-GAAP measures. I'll now turn the call over to John Saunders. John Saunders: Good morning, and thanks for joining the call today. As highlight

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