Financial Data and Key Metrics Changes - The company generated adjusted earnings per share of $0.88, an increase of over 11% compared to $0.79 in the prior year period [5] - Total comparable funeral revenue increased by over $15 million, or about 3%, compared to the prior year quarter [5] - Funeral gross profit increased by about $15 million, with the gross profit percentage rising by 20 basis points [6][10] Business Line Data and Key Metrics Changes - Comparable core funeral revenues increased by $8 million, or about 2%, driven by a 3.3% growth in core average revenue per service [6] - Comparable cemetery revenue increased by $2 million, or almost 1%, with a core revenue increase of about $1 million [8][9] - Preneed funeral sales production decreased by $29 million, or about 9%, primarily due to the transition to a new preneed insurance provider [7] Market Data and Key Metrics Changes - The company anticipates comparable core preneed sales production growth in 2025, despite a decrease in the current quarter [7] - The transition to the new preneed insurance provider has impacted sales production, but the company expects growth in the future [7][8] Company Strategy and Development Direction - The company confirmed its normalized earnings per share guidance range of $3.7 to $4 for 2025, raising its cash flow outlook due to stronger working capital trends [10] - The company plans to invest $100 million in capital expenditures, focusing on existing locations, cemetery development, and new builds [17][18] - The acquisition pipeline remains optimistic, with an anticipated investment target of $75 million to $125 million for 2025 [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue and margin growth for both funeral and cemetery segments in the remainder of 2025 [10] - The company expects preneed cemetery and funeral sales production to grow at low to mid-single-digit percentages over the prior year's six-month period [11] - Management acknowledged the challenges posed by higher effective tax rates but remains optimistic about cash flow and operational performance [21] Other Important Information - The company returned $239 million of capital to shareholders in the second quarter through dividends and share repurchases [19] - The company ended the quarter with liquidity of about $1.4 billion, consisting of approximately $250 million in cash and $1.2 billion available on its long-term bank credit facility [23] Q&A Session Summary Question: What caused the dip in the recognition rate in the current quarter? - Management attributed the dip to normal volatility in cemetery production and expects the recognition rate to return to normal in the second half of the year [26][27] Question: What are the expectations for the cremation rate moving forward? - Management indicated that the pace of increase in the cremation rate may moderate, adjusting expectations to a range of 50 to 80 basis points [30][32] Question: How will the changes in cash taxes affect long-term cash flow? - Management expects a $30 million benefit from lower cash taxes this year, with ongoing benefits from capital improvements [34][39] Question: What are the expectations for funeral volumes in the back half of the year? - Management noted that the third quarter may present tougher comparisons for funeral volumes, while cemetery revenues are expected to be strong [42] Question: How is the company performing in preneed sales production? - Management expects low to mid-single-digit growth in preneed sales production for both funeral and cemetery segments in the second half of the year [58][60] Question: What is the outlook for capital deployment given the increase in cash flows? - Management indicated that capital will be deployed to the highest return opportunities, including M&A and new construction projects [66][70]

Adjusted EPS - For the three months ended June 30, 2025, net income attributable to common stockholders was $122.9 million, or $0.86 diluted EPS, compared to $118.2 million, or $0.81 diluted EPS in 2024[7] - Adjusted EPS for the three months ended June 30, 2025, was $0.88, compared to $0.79 in 2024[7] - For the six months ended June 30, 2025, net income attributable to common stockholders was $265.7 million, or $1.84 diluted EPS, compared to $249.5 million, or $1.69 diluted EPS in 2024[7] - Adjusted EPS for the six months ended June 30, 2025, was $1.84, compared to $1.68 in 2024[7] Adjusted Cash Flow from Operations & Free Cash Flow - Net cash provided by operating activities for the three months ended June 30, 2025, was $166.5 million, compared to $196.9 million in 2024[8] - Adjusted cash flow from operations for the three months ended June 30, 2025, was $168.3 million, compared to $219.9 million in 2024[8] - Free cash flow for the three months ended June 30, 2025, was $99.4 million, compared to $137.5 million in 2024[8] - Net cash provided by operating activities for the six months ended June 30, 2025, was $477.6 million, compared to $417.0 million in 2024[8] - Adjusted cash flow from operations for the six months ended June 30, 2025, was $484.2 million, compared to $440.0 million in 2024[8] - Free cash flow for the six months ended June 30, 2025, was $348.5 million, compared to $287.6 million in 2024[8]

Financial Performance - For the quarter ended June 2025, Service Corp. reported revenue of $1.07 billion, reflecting a 3% increase year-over-year [1] - Earnings per share (EPS) for the quarter was $0.88, up from $0.79 in the same quarter last year [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.05 billion by 1.48%, while the EPS surpassed the consensus estimate of $0.84 by 4.76% [1] Key Metrics - Total comparable funeral average revenue per service was $5,807, slightly above the two-analyst average estimate of $5,762.86 [4] - The number of funeral services performed was 87,014, exceeding the two-analyst average estimate of 86,839 [4] - Cemetery revenue reached $474.1 million, surpassing the estimated $471.26 million by three analysts, representing a 1.3% increase compared to the year-ago quarter [4] - Funeral revenue was $591.4 million, exceeding the estimated $578.6 million by three analysts, marking a 4.5% increase year-over-year [4] - Gross profit from cemetery services was $155.5 million, above the estimated $154.19 million, while gross profit from funeral services was $116 million, exceeding the estimate of $106.85 million [4] Stock Performance - Shares of Service Corp. have returned -7.4% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Viewpoint - Service Corp. (SCI) reported quarterly earnings of $0.88 per share, exceeding the Zacks Consensus Estimate of $0.84 per share, and showing an increase from $0.79 per share a year ago, representing an earnings surprise of +4.76% [1][2] Financial Performance - The company posted revenues of $1.07 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.48%, compared to $1.03 billion in the same quarter last year [2] - Over the last four quarters, Service Corp. has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance and Outlook - Service Corp. shares have declined approximately 4.7% since the beginning of the year, while the S&P 500 has gained 8.3% [3] - The company's current consensus EPS estimate for the upcoming quarter is $0.83 on revenues of $1.04 billion, and for the current fiscal year, it is $3.77 on revenues of $4.28 billion [7] Industry Context - The Funeral Services industry, to which Service Corp. belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Service Corp.'s stock performance [5][6]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The company reported strong Q2 2025 financial results, driven by increased revenue and adjusted EPS, with management highlighting segment-specific growth drivers [Second Quarter 2025 Highlights](index=1&type=section&id=Second%20Quarter%20Highlights) Service Corporation International reported strong Q2 2025 results with adjusted earnings per share of $0.88, an 11% increase year-over-year. Revenue grew by $31.4 million to $1.065 billion, and gross profit increased by 5%. Key operational achievements included a 3.1% growth in the comparable total funeral sales average and a 5.3% increase in cemetery preneed sales production Q2 2025 Key Financial Results (in millions, except per share data) | | 2025 Q2 | 2024 Q2 | 2025 YTD | 2024 YTD | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $1,065.4 | $1,034.0 | $2,139.6 | $2,079.4 | | **Operating income** | $224.5 | $220.8 | $476.1 | $453.0 | | **Net income** | $122.9 | $118.2 | $265.7 | $249.5 | | **Diluted EPS** | $0.86 | $0.81 | $1.84 | $1.69 | | **Adjusted Diluted EPS** | $0.88 | $0.79 | $1.84 | $1.68 | | **Net cash from operations** | $166.5 | $196.9 | $477.6 | $417.0 | - Key performance metrics for Q2 2025 showed positive growth - Revenue grew by **$31.4 million** compared to Q2 2024[7](index=7&type=chunk) - Gross profit increased by **$13.5 million**, or **5%**[7](index=7&type=chunk) - GAAP earnings per share grew **6%** to **$0.86**, while adjusted EPS grew **11%** to **$0.88**[7](index=7&type=chunk) - Cemetery preneed sales production increased by **5.3%**[7](index=7&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) The CEO attributed the impressive 11% growth in adjusted EPS to higher funeral revenue and effective fixed cost management, which led to a 14.8% increase in comparable funeral gross profit. In the cemetery segment, a focus on sales production resulted in a 5.3% increase in preneed sales, with the majority of this benefit expected in future periods as properties are developed - Funeral segment performance was driven by a higher average revenue per funeral and increased core general agency revenue, benefiting from a change in the preferred preneed insurance provider[3](index=3&type=chunk) - The cemetery segment's **5.3%** increase in preneed sales production will primarily benefit future periods as the undeveloped property sold is constructed and the revenue is recognized[4](index=4&type=chunk) - The company reaffirmed its long-term growth strategy of growing revenue, leveraging scale, and making wise capital investments to enhance shareholder value[5](index=5&type=chunk) [2025 Financial Outlook](index=2&type=section&id=CONFIRMED%202025%20EARNINGS%20PER%20SHARE%20GUIDANCE%20AND%20RAISED%202025%20CASH%20FLOW%20GUIDANCE) The company reaffirmed its 2025 adjusted EPS guidance while raising its cash flow outlook due to anticipated lower cash taxes and working capital benefits [Confirmed EPS and Raised Cash Flow Guidance](index=2&type=section&id=Confirmed%20EPS%20and%20Raised%20Cash%20Flow%20Guidance) The company confirmed its full-year 2025 adjusted EPS guidance range of $3.70 to $4.00. The guidance for net cash provided by operating activities (excluding special items) was raised to a new range of $880 million to $940 million, up from the previous $830 million to $890 million. This increase is attributed to lower anticipated cash taxes and stronger working capital benefits Revised 2025 Outlook (in millions, except per share amounts) | Metric | Original 2025 Outlook | Revised 2025 Outlook | | :--- | :--- | :--- | | **Adjusted Diluted EPS** | $3.70 - $4.00 | $3.70 - $4.00 | | **Adjusted Operating Cash Flow** | $830 - $890 | $880 - $940 | | **Expected Cash Taxes** | $175 | $145 | | **Total Maintenance Capital Expenditures** | $315 | $315 | - The cash flow outlook was increased due to lower expected cash taxes (midpoint reduced by **$30 million**) and stronger working capital benefits[9](index=9&type=chunk) [Segment Performance](index=8&type=section&id=Consolidated%20Segment%20Results) Both funeral and cemetery segments demonstrated varied performance, with the funeral segment showing strong profit growth and the cemetery segment increasing preneed sales production [Funeral Segment](index=8&type=section&id=Funeral%20Segment) The funeral segment demonstrated strong performance with a 2.7% increase in comparable revenue, driven by a 3.3% rise in core average revenue per service and a 14.0% growth in core general agency revenue. This resulted in a significant 14.8% increase in comparable gross profit and a 210 basis point margin expansion to 19.9% [Consolidated Funeral Results](index=8&type=section&id=Consolidated%20funeral) For the second quarter of 2025, consolidated funeral revenue increased to $591.4 million from $565.8 million in the prior year. Gross profit rose to $116.0 million, with the gross profit margin expanding to 19.6% from 17.7% Consolidated Funeral Results (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $591.4 | $565.8 | $1,230.9 | $1,170.5 | | **Gross Profit** | $116.0 | $100.4 | $270.0 | $232.3 | | **Gross Profit %** | 19.6% | 17.7% | 21.9% | 19.8% | [Comparable Funeral Results](index=9&type=section&id=Comparable%20Funeral%20Results) Comparable funeral revenue grew 2.7% to $576.8 million, driven by a 3.3% increase in average revenue per service and higher general agency revenue. Despite a 1.5% decrease in core funeral services performed, gross profit surged 14.8% to $114.6 million due to revenue growth and effective cost management. Preneed sales production declined 8.8%, impacted by the transition to a new insurance provider Q2 Comparable Funeral Performance vs. Prior Year | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $576.8M | $561.6M | +2.7% | | **Gross Profit** | $114.6M | $99.8M | +14.8% | | **Gross Profit %** | 19.9% | 17.8% | +210 bps | | **Total Services Performed** | 84,622 | 85,353 | -0.9% | | **Total Avg. Revenue / Service** | $5,809 | $5,634 | +3.1% | | **Total Preneed Sales** | $299.3M | $328.1M | -8.8% | - Core general agency revenue grew by **$7.2 million** (**14.0%**), primarily due to higher commission rates resulting from the change in the company's preferred preneed insurance provider[31](index=31&type=chunk) - Comparable preneed funeral sales production decreased by **$28.8 million** (**8.8%**), which is attributed to the transition to a new preneed insurance provider that began in July 2024[31](index=31&type=chunk) [Cemetery Segment](index=8&type=section&id=Cemetery%20Segment) The cemetery segment experienced modest comparable revenue growth of 0.4% to $470.0 million. While preneed sales production was strong, increasing 5.3%, the timing of revenue recognition on new property construction led to a slight decrease in recognized preneed revenue. Comparable gross profit decreased by 2.7% to $153.3 million, with margins contracting to 32.6% due to higher selling compensation on increased sales production [Consolidated Cemetery Results](index=8&type=section&id=Consolidated%20cemetery) For Q2 2025, consolidated cemetery revenue was $474.1 million, a slight increase from $468.2 million in Q2 2024. Gross profit decreased slightly to $155.5 million from $157.5 million, with the gross profit margin declining to 32.8% Consolidated Cemetery Results (in millions) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $474.1 | $468.2 | $908.8 | $908.9 | | **Gross Profit** | $155.5 | $157.5 | $292.9 | $299.8 | | **Gross Profit %** | 32.8% | 33.6% | 32.2% | 33.0% | [Comparable Cemetery Results](index=10&type=section&id=Comparable%20Cemetery%20Results) Comparable cemetery revenue saw a marginal increase of 0.4% to $470.0 million. A 5.3% increase in preneed sales production, driven by large and core sales, is expected to benefit future periods. However, gross profit declined by 2.7% to $153.3 million, and the margin contracted by 110 basis points, primarily due to higher selling compensation associated with the increased sales production Q2 Comparable Cemetery Performance vs. Prior Year | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $470.0M | $468.2M | +0.4% | | **Gross Profit** | $153.3M | $157.6M | -2.7% | | **Gross Profit %** | 32.6% | 33.7% | -110 bps | | **Preneed Sales Production** | $366.5M | $348.0M | +5.3% | - Preneed sales production increased by **$18.5 million** (**5.3%**), which will benefit future periods as the current undeveloped property sold is constructed and recognized[34](index=34&type=chunk) - The decrease in comparable cemetery gross profit was a result of modest revenue growth being offset by higher selling compensation on higher sales production[34](index=34&type=chunk) [Other Financial Results](index=11&type=section&id=Other%20Financial%20Results) This section details corporate expenses, cash flow dynamics, capital expenditure trends, and the strong performance of the company's trust funds [Corporate Expenses and Income Taxes](index=11&type=section&id=Corporate%20Expenses%20and%20Income%20Taxes) Corporate general and administrative expenses increased by $10.5 million to $49.5 million, largely due to a $6.4 million legal settlement. Interest expense remained stable at $64.1 million. The adjusted effective tax rate decreased to 25.4% from 25.8% in the prior year quarter, primarily due to non-taxable gains on certain life insurance policies - Corporate G&A expenses rose by **$10.5 million** in Q2 2025, with **$6.4 million** attributed to legal settlements and the remainder to higher auto/general liability claims and timing of incentive compensation accruals[34](index=34&type=chunk) - The adjusted effective tax rate for Q2 2025 was **25.4%**, down from **25.8%** in Q2 2024, mainly due to non-taxable gains on the cash surrender value of certain life insurance policies[34](index=34&type=chunk) [Cash Flow and Capital Spending](index=11&type=section&id=Cash%20Flow%20and%20Capital%20Spending) Net cash from operating activities was $166.5 million, a decrease from the prior year, primarily due to an $84.3 million increase in cash taxes paid. Excluding special items and cash taxes, operating cash flow increased by $32.7 million. Total capital expenditures decreased by $8.6 million to $83.0 million, mainly due to lower spending on digital investments and corporate projects - Net cash provided by operating activities was **$166.5 million** in Q2 2025, down from **$196.9 million** in Q2 2024. This was significantly affected by an expected **$84.3 million** increase in cash taxes paid[7](index=7&type=chunk)[33](index=33&type=chunk) - Excluding special items and the increase in cash taxes, net cash provided by operating activities increased by **$32.7 million**, or over **14%**[7](index=7&type=chunk)[33](index=33&type=chunk) Capital Expenditures (in millions) | Category | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Maintenance & Cemetery Development** | $68.9 | $82.4 | $135.7 | $152.4 | | **Growth Capital Expenditures** | $14.1 | $9.2 | $25.5 | $18.6 | | **Total Capital Expenditures** | $83.0 | $91.6 | $161.2 | $171.0 | [Trust Fund Performance](index=12&type=section&id=Trust%20Fund%20Returns) The company's trust funds generated strong returns in the second quarter of 2025. The combined trust funds saw a return of 8.4% for the three months and 7.8% for the six months ended June 30, 2025 Consolidated Trust Fund Returns (Gross) | Fund Type | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | **Preneed funeral** | 8.4% | 7.6% | | **Preneed cemetery** | 8.6% | 8.1% | | **Cemetery perpetual care** | 8.0% | 7.6% | | **Combined trust funds** | 8.4% | 7.8% | [Financial Statements and Non-GAAP Reconciliation](index=5&type=section&id=APPENDIX%3A%20RESULTS%20FOR%20THE%20SECOND%20QUARTER%20OF%202025) This appendix provides detailed consolidated financial statements including operations, balance sheet, cash flows, and non-GAAP reconciliations for Q2 2025 [Consolidated Statement of Operations](index=5&type=section&id=Consolidated%20Statement%20of%20Operations%20%28Unaudited%29) The company reported Q2 2025 revenue of $1.065 billion and net income of $122.9 million, resulting in diluted EPS of $0.86. This compares to revenue of $1.034 billion, net income of $118.2 million, and diluted EPS of $0.81 in Q2 2024 Q2 2025 Consolidated Statement of Operations (in thousands) | | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Revenue** | $1,065,444 | $1,034,016 | | **Gross profit** | $271,438 | $257,915 | | **Operating income** | $224,459 | $220,841 | | **Net income attributable to common stockholders** | $122,865 | $118,166 | | **Diluted earnings per share** | $0.86 | $0.81 | [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20Balance%20Sheet%20%28Unaudited%29) As of June 30, 2025, the company had total assets of $18.0 billion, up from $17.4 billion at year-end 2024. Total liabilities increased to $16.4 billion, while total equity decreased to $1.56 billion Consolidated Balance Sheet Highlights (in thousands) | | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $434,141 | $377,330 | | **Total assets** | $17,980,205 | $17,379,438 | | **Total current liabilities** | $713,193 | $723,839 | | **Long-term debt** | $4,976,111 | $4,751,448 | | **Total liabilities** | $16,419,852 | $15,700,769 | | **Total equity** | $1,560,353 | $1,678,669 | [Consolidated Statement of Cash Flows](index=7&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20%28Unaudited%29) For the six months ended June 30, 2025, net cash provided by operating activities was $477.6 million. Net cash used in investing activities was $191.2 million, and net cash used in financing activities was $243.0 million, resulting in a net increase in cash of $49.1 million Six Months Ended June 30 Cash Flow Summary (in thousands) | | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $477,580 | $417,000 | | **Net cash used in investing activities** | ($191,235) | ($235,825) | | **Net cash used in financing activities** | ($243,025) | ($215,163) | | **Net increase (decrease) in cash** | $49,120 | ($36,653) | [Non-GAAP Reconciliation](index=12&type=section&id=Non-GAAP%20Financial%20Measures) The company reconciled its GAAP net income to non-GAAP "Earnings excluding special items." For Q2 2025, GAAP net income of $122.9 million was adjusted for items like gains on divestitures ($4.1M), legal settlements ($6.4M), and restructuring charges ($1.6M) to arrive at non-GAAP earnings of $125.5 million. This translated to an adjusted diluted EPS of $0.88 compared to the GAAP EPS of $0.86 Q2 Reconciliation of GAAP to Non-GAAP Earnings (in millions, except EPS) | | Net Income | Diluted EPS | | :--- | :--- | :--- | | **As reported (GAAP)** | $122.9 | $0.86 | | Gains on divestitures, net | ($4.1) | ($0.03) | | Legal settlement | $6.4 | $0.04 | | Restructuring charge | $1.6 | $0.01 | | Tax effects & other | ($1.3) | ($0.00) | | **Excluding special items (Non-GAAP)** | $125.5 | $0.88 |

Core Insights - Service Corporation International (SCI) reported a strong second quarter performance with adjusted earnings per share of $0.88, reflecting an 11% increase year-over-year [2][8] - The company experienced a 14.8% growth in comparable funeral gross profit, driven by higher funeral revenue and effective cost management [2][26] - Cemetery segment sales production increased by 5.3%, contributing to modest revenue growth, with future benefits expected from undeveloped property sales [3][26] Financial Performance - Total revenue for the second quarter of 2025 was $1,065.4 million, up from $1,034.0 million in the same quarter of 2024, marking a $31.4 million increase [5][8] - Operating income rose to $224.5 million compared to $220.8 million in the prior year [5] - Net income attributable to common stockholders was $122.9 million, an increase from $118.2 million in the second quarter of 2024 [5][8] Earnings and Cash Flow - Diluted earnings per share increased to $0.86 from $0.81 year-over-year, while adjusted diluted earnings per share rose to $0.88 from $0.79 [5][9] - Net cash provided by operating activities was $166.5 million, down from $196.9 million in the prior year, primarily due to an increase in cash taxes paid [8][9] - Excluding special items, net cash provided by operating activities increased by over 14% [8][9] Guidance and Outlook - The company confirmed its 2025 earnings per share guidance range of $3.70 to $4.00 and raised its cash flow outlook to $880 million to $940 million [6][7] - The anticipated long-term growth framework for diluted earnings per share from continuing operations is expected to be within 8%-12% [6][7] Segment Performance - Comparable funeral revenue increased by $15.2 million, or 2.7%, driven by a $7.9 million increase in core funeral revenue [21][26] - Comparable cemetery revenue showed a slight increase, with total recognized preneed revenue at $323.0 million, down from $325.1 million [25][26] - The core cremation rate improved to 57.1%, reflecting a 20 basis point increase [26]

Group 1 - Service Corporation International (SCI) will release its financial results for Q2 2025 on July 30, 2025 [1] - A conference call to discuss the earnings will take place on July 31, 2025, at 8:00 a.m. Central Time [1] - The conference call can be accessed via dial-in numbers or through a live webcast on SCI's website [1] Group 2 - SCI is North America's leading provider of funeral, cemetery, and cremation services, serving over 600,000 families annually [2] - As of June 30, 2025, SCI operates 1,485 funeral service locations and 498 cemeteries across 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico [2] - The Dignity Memorial® brand is recognized for its professionalism and compassion in providing a range of services from simple cremations to personalized remembrances [2]

Service Corporation International (NYSE: SCI ) is certainly a thesis that surprised me but in a positive way. It wasn't the compounder I was expecting, but its business model is very solid, it has sustainable margins, some growth triggers, strong cash generation, andEquity Research Analyst with a broad career in the financial market, covered both Brazilian and global stocks. As a value investor, my analysis is primarily fundamental, focusing on identifying undervalued stocks with growth potential. Feel free ...

Group 1 - Emotional attachments to companies can negatively impact investment decisions [1] - Crude Value Insights focuses on cash flow and companies that generate it, highlighting value and growth prospects in the oil and natural gas sector [1] - The service offers a 50+ stock model account and in-depth cash flow analyses of exploration and production (E&P) firms [2] Group 2 - Subscribers have access to live chat discussions about the oil and gas sector [2] - A two-week free trial is available for new subscribers [3]

Summary of Service Corporation International (SCI) FY Conference Call Company Overview - **Company**: Service Corporation International (SCI) - **Industry**: Funeral services and cemetery offerings - **Position**: Largest owner of funeral homes and cemeteries in North America, with approximately 1,500 funeral homes and 500 cemeteries [6][7] Core Business Model and Strategy - **Market Share**: Funeral business has a market share of about 15%, while the cemetery segment has a market share of approximately 28-30% [7] - **Growth Strategy**: Focus on preneed contracts to capture market share and build a trust fund portfolio [2] - **Earnings Growth**: Historical EPS growth of 8% to 12%, with 5% to 6% from organic growth and 2% to 3% from inorganic growth [9][10] Demographic Trends - **Target Demographic**: Aging baby boomer population, with average ages for funeral services at 82-84 years and cemetery services at around 65 years [8] - **Consumer Behavior**: Shift towards lighter celebrations of life rather than formal services, leading to a transformation in service offerings [8] Financial Performance - **Funeral Volume Trends**: Experienced a spike during the pandemic with an additional 130,000 funerals performed, followed by stabilization and a slight decline in volumes [15][16] - **Revenue per Service**: Steady growth in funeral revenue per service in the low single digits, driven by inflationary price increases and enhanced service offerings [17][20] Preneed Sales - **Preneed Merchandise and Services**: Approximately $2.6 billion in annual sales, with $1.2 billion from funeral services and $1.4 billion from cemetery services [22] - **Backlog**: $16 billion backlog, split between trust funds and life insurance policies, with improved economics due to a recent partnership with Global Atlantic [23][24] Cemetery Segment Insights - **Sales Composition**: Preneed cemetery sales consist of large sales (over $80,000) making up 10-15% of total sales, with core sales being more consistent [27][28] - **Consumer Trends**: Increased interest from baby boomers purchasing adjacent cemetery properties after burying loved ones [29] - **Margin Expansion**: Cemetery segment margins have expanded from 12-13% to 30-35% due to tiered pricing strategies and high-end sales [33][55] Future Outlook - **Growth Projections**: Anticipated return to mid-single-digit growth in preneed cemetery sales as baby boomers continue to influence the market [36] - **EPS Guidance**: Expected EPS growth in the lower end of the 8% to 12% range for 2025, influenced by tax rate changes and stabilization in funeral volumes [58][59] Capital Allocation - **Free Cash Flow**: Projected free cash flow of approximately $550 million, with plans for M&A, construction, dividends, and share repurchases [61][62] Key Takeaways - **Market Position**: SCI is well-positioned to capitalize on demographic trends and has a robust strategy for growth through preneed sales and service innovation [2][8] - **Financial Stability**: Strong cash flow and margin expansion indicate a healthy financial outlook, despite recent fluctuations in funeral volumes [61][55] - **Consumer Relevance**: Continuous adaptation to consumer preferences is crucial for maintaining market share and driving future growth [49][50]