Core Insights - Service Corporation International (SCI) reported third-quarter 2025 revenue of $1.06 billion, reflecting a 4.4% increase from the prior-year quarter, indicating an evolving revenue mix across its cemetery and funeral operations [1] Cemetery Operations - Cemetery revenue rose to $484.0 million from $448.0 million a year ago, primarily driven by higher recognized preneed cemetery revenue, which totaled $338.5 million compared to $307.0 million in the prior-year period [2] - On a comparable basis, cemetery revenue increased by 6.9%, while comparable core cemetery revenue grew by 6.7% [3] - Cemetery preneed sales production increased by approximately 10%, supporting higher revenue recognition as contracts matured [3] Funeral Operations - Total funeral revenue increased to $574.1 million from $566.0 million in the third quarter of 2024, although comparable funeral revenue declined by 0.3% [4] - Core funeral services experienced a decline of 3.5% on a comparable basis, impacting at-need revenue, which was partially offset by a 3.1% increase in comparable total average revenue per service due to higher pricing and mix [4] Non-Funeral Home Sales Channels - Comparable non-funeral home revenue increased by 12.6%, driven by a 13.4% rise in average revenue per service, despite a slight decrease in services performed [5] - Comparable non-funeral home preneed sales revenue declined, mainly due to the company's decision to defer delivery of certain merchandise until the time of need, affecting the timing of revenue recognition [5] Overall Performance - The revenue growth in the quarter highlights how SCI's top line is shaped by changes in mix, with higher recognized preneed cemetery revenue, rising average revenue per service, and growth in non-funeral home revenue supporting consolidated revenue growth, despite declines in funeral service volumes [6] - Shares of SCI have gained 3.9% in the past year, outperforming the industry's growth of 2.3% [6]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $102.1 million, essentially flat compared to the same quarter last year [5] - GAAP net income for the quarter was $11.7 million, up 85.7% from $6.3 million in the same quarter last year [8] - GAAP diluted EPS increased to $0.74 compared to $0.40, an 85% increase year-over-year [8] - Adjusted consolidated EBITDA for Q2 was $32.3 million, down 1% from the prior year [9] - Adjusted diluted EPS for Q2 was $0.74, a 17.5% increase compared to $0.63 in the prior year quarter [10] Business Line Data and Key Metrics Changes - Total funeral operating revenue grew 1.4% to $59.6 million, driven by a 0.5% increase in calls [6] - Cemetery operating revenue was $33.5 million, a slight decrease of 0.6% from the same period last year [7] - Financial revenue rose 18.8% to $8.2 million, primarily due to a 96.2% increase in preneed funeral commission income [7] Market Data and Key Metrics Changes - Year-to-date cemetery revenue is up 2.2%, below the year-over-year growth range of 10% to 20% [7] - The company anticipates a return to a normalized volume growth rate of 1% to 2% in 2026 [6] Company Strategy and Development Direction - The company is under contract to acquire new businesses, expected to close in Q3 2025, which will add significant revenue [11] - The focus is on high-quality acquisitions to add shareholder value, with a commitment to prudent capital management [12] - The company is rolling out a casket core line and enhancing service delivery through a "passion for service" program [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strategy and execution, noting a return to growth mode after disciplined capital management [11] - The company is monitoring broader economic trends and reaffirming its commitment to capital stewardship while pursuing strategic acquisitions [12] - Management expects a strong second half of the year, with updated guidance reflecting the impact of acquisitions and divestitures [22] Other Important Information - Cash from operating activities for the quarter totaled $8.1 million, an increase of $2.2 million from the same period last year [19] - The leverage ratio improved to 4.2 times compared to 4.6 times at the end of 2024 [20] - Overhead spending was reduced to 12.2% of revenue, down from 20% in the prior year quarter [20] Q&A Session Summary Question: Can you provide details on the M&A transactions? - Management confirmed that multiple transactions are involved, each with multiple businesses [24] Question: What is the pricing outlook for the acquisitions? - Pricing is in line with the company's valuation philosophy, generally in high single digits on multiples for premium businesses [25] Question: Can you break down the revenue guidance changes? - The increase in revenue guidance is attributed to acquisitions, divestitures, and organic business performance [52] Question: What are the expectations for cemetery growth in the back half of the year? - Management expects to return to over 10% growth, contingent on resolving inventory delays [55] Question: What is the outlook for future M&A activity? - The pipeline for acquisitions is strong, with ongoing conversations with owners of premium businesses [58]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $107.1 million, an increase of $3.6 million or 3.5% compared to the same quarter last year [8] - GAAP net income was $20.9 million, an increase of $13.9 million or 200.1% year-over-year [21] - Adjusted diluted EPS for the first quarter was $0.96 per share, an increase of $0.21 or 28% compared to the prior year quarter [12] Business Line Data and Key Metrics Changes - Total funeral operating revenue was $69.1 million, an increase of $3 million or 4.6% year-over-year, driven by a 1.8% increase in average revenue per contract and a 2.4% increase in admin volume [8][9] - Total cemetery revenue reached $27.9 million, an increase of $1.5 million or 5.8% [10] - Financial revenue was $7.4 million, an increase of $613,000 or 9.1%, primarily from preneed insurance funeral sales [11] Market Data and Key Metrics Changes - The company observed a shift in flu season affecting volume, with a positive variance of 7.7% compared to the first quarter of the previous year [9] - The preneed cemetery growth rate is expected to be between 10% to 20% for the year [10] Company Strategy and Development Direction - The company is focused on disciplined execution and strategic initiatives, including the implementation of the Trinity system and supply chain optimization [15][16] - The company aims to maintain its current guidance while monitoring economic conditions, with potential adjustments based on performance in the second quarter [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the strength of its financial strategy, despite broader economic uncertainties [13][14] - The company plans to reinvest proceeds from divestitures into higher quality EBITDA-producing businesses, with expectations for acquisitions in the second half of the year [41][43] Other Important Information - Adjusted consolidated EBITDA for the first quarter was $32.9 million, a decrease of $653,000 or 1.9% [11] - Overhead expenses decreased to $15.3 million from $19.4 million in the prior year, with adjusted overhead as a percentage of revenue at 14.3% [24][25] Q&A Session Summary Question: How was March and April performance? - Management indicated that momentum has continued strongly from January through April, primarily due to volume increases [28][29] Question: Does the strength year-over-year suggest the COVID hangover is behind? - Management noted it is challenging to forecast but believes this year will level up and potentially increase volume moving forward [30][32] Question: What is attributed to the decline in preneed and terming rates sold? - Management attributed the decline to delays in available inventory at premier cemeteries rather than discretionary spending [34][36] Question: What are the expected proceeds from property monetization in Q2? - Expected proceeds from property monetization in Q2 are around $6 million, which is factored into guidance [62][63] Question: How does the company plan to react in a recessionary environment? - Management expressed confidence in the resilience of the industry and plans to accelerate lead generation programs to maintain growth [55][57]

Financial Data and Key Metrics Changes - For the first quarter, total revenue was reported at $107.1 million, an increase of $3.6 million or 3.5% compared to the same quarter last year [9] - GAAP net income for the first quarter was $20.9 million, an increase of $13.9 million or 200.1% [22] - Adjusted diluted EPS for the first quarter was $0.96 per share, an increase of $0.21 or 28% compared to the prior year quarter [13] - Adjusted consolidated EBITDA was $32.9 million, a decrease of $653,000 or 1.9% [12] Business Line Data and Key Metrics Changes - Total funeral operating revenue was $69.1 million, an increase of $3 million or 4.6% year-over-year, driven by a 1.8% increase in average revenue per contract and a 2.4% increase in admin volume [9] - Total cemetery revenue reached $27.9 million, an increase of $1.5 million or 5.8% [11] - Financial revenue was $7.4 million, an increase of $613,000 or 9.1%, primarily from preneed insurance funeral sales [12] Market Data and Key Metrics Changes - The company observed a shift in flu season, impacting volume expectations, with a positive variance of 7.7% compared to the first quarter of the previous year [10] - The preneed cemetery growth rate is expected to be between 10% to 20% for the year [11] Company Strategy and Development Direction - The company is maintaining its current guidance while monitoring economic conditions, with plans to potentially raise guidance if momentum continues [14][15] - The Trinity system is in Phase one of implementation, focusing on back office systems, with Phase two expected to begin in the third quarter [16] - The company is excited about the rollout of its express funeral funding partnership, aimed at improving family financial flexibility and unlocking new sales potential [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's momentum and the strength of its financial strategy, despite broader economic uncertainties [14][19] - The company is focused on operational excellence and innovation to create lasting value for shareholders [20] Other Important Information - Cash provided by operating activities for the quarter was $13.8 million, down from $19.7 million in the prior year [23] - The company ended the quarter with a maintained leverage ratio of 4.2 times, down from 5 times [24] Q&A Session Summary Question: How was March and April performance? - Management indicated that momentum has continued strongly from January through April, primarily due to volume increases [30][31] Question: What is the outlook for preneed and terming rates sold? - Management noted that while there was a decline in preneed property rights sold, they expect a return to normal growth rates starting in the second quarter [34][35] Question: What are the expected proceeds from property monetization in Q2? - Management estimated around $6 million in proceeds from property sales in Q2, which is factored into guidance [56] Question: How does the company plan to react in a recessionary environment? - Management expressed confidence in the resilience of the industry, noting that demand remains stable even during economic downturns [51][52] Question: What cost-saving measures are currently in place? - Management highlighted ongoing supply chain initiatives and fleet management as key areas for cost savings [47][48]