SERVICE CORPORATION INTERNATIONAL ANNOUNCES FIRST QUARTER 2025 FINANCIAL RESULTS AND CONFIRMS 2025 GUIDANCE

Conference call on Thursday, May 1, 2025, at 8:00 a.m. Central Time. 

HOUSTON, April 30, 2025 /PRNewswire/ -- Service Corporation International (NYSE: SCI), the largest provider of deathcare products and services in North America, today reported results for the first quarter of 2025.

First Quarter Highlights:

• Revenue grew $28.8 million over the first quarter of 2024
• Gross profit increased $17.2 million, or 6%, over the same quarter of last year
• Comparable total funeral services performed grew 1.8% in the current quarter
• Comparable total funeral sales average grew 2.3% in the current quarter
• GAAP earnings per share was $0.98 compared to $0.89 in the first quarter of 2024 resulting in 10% growth over the prior year quarter
• Adjusted earnings per share was $0.96 compared to $0.89 in the first quarter of 2024 resulting in 8% growth over the prior year quarter
• GAAP operating cash flow grew to $311.1 million in the current year quarter compared to $220.1 million in the prior year quarter
• Adjusted operating cash flow grew to $316.0 million in the current year quarter compared to $220.1 million in the prior year quarter

Tom Ryan, the Company's Chairman and CEO, commented on the first quarter performance:

"We are proud to report adjusted earnings per share growth of 8% and strong adjusted operating cash flows in the first quarter of 2025. This was driven by strong performance in our funeral segment with year over year increases in the number of services performed and average revenue per funeral along with growth in general agency revenue. Additionally, effective cost management drove solid gross profit performance and margin expansion. In the cemetery segment, we are continuing to focus on production, which will benefit us in future periods, as undeveloped property sold is constructed. Lastly, our robust cash flow has allowed us to continue investment toward our extensive pipeline of acquisitions while also providing us the flexibility to be opportunistic with stock repurchases.

We remain committed to our long-term growth strategy to grow revenue, leverage our unparalleled scale, and invest our capital wisely to enhance shareholder value. We would not be able to achieve this without our 25,000 associates and their ongoing commitment to providing excellent service to our client families."

Details of our first quarter 2025 financial results and the unaudited consolidated financial statements can be found in the Appendix at the end of this press release. The table below summarizes our key financial results.

• Diluted earnings per share was $0.98 in the first quarter of 2025 compared to $0.89 in the first quarter of 2024. The current year quarter was favorably impacted by $5.0 million of net gains on divestitures and impairment charges. The prior year quarter was unfavorably impacted by $0.7 million of net losses on divestitures. Diluted earnings per share, excluding special items, was $0.96 in the first quarter of 2025 compared to $0.89 in the first quarter of 2024. Higher gross profit, lower interest expense and lower share count more than offset a higher tax rate resulting in 8% growth over the prior year quarter.
• Net cash provided by operating activities grew $91.0 million to $311.1 million in the first quarter of 2025 compared to $220.1 million in the first quarter of 2024. Net cash provided by operating activities, excluding special items, grew $95.9 million to $316.0 million in the first quarter of 2025 compared to $220.1 million in the first quarter of 2024. The growth in the quarter is attributable to higher operating income, lower cash interest as well as other working capital benefits, some of which are related to timing differences in the current quarter.

OUTLOOK FOR 2025

Our annual guidance ranges for 2025 detailed below have not changed and are consistent with our previously reported outlook for 2025. Our outlook for diluted earnings per share from continuing operations excluding special items, at the midpoint of our guidance range, is anticipated to be within our expected long-term growth framework of 8%-12%.

CONFERENCE CALL AND WEBCAST

We will host a conference call on Thursday, May 1, 2025, at 8:00 a.m. Central Time. A question and answer session will follow a brief presentation made by management. The conference call dial-in numbers are (888) 317-6003 (US) or (412) 317-6061 (International) with the passcode of 5800257. The conference call will also be broadcast live via the Internet and can be accessed through our website at www.sci-corp.com. A replay of the conference call will be available through May 8, 2025 and can be accessed at (877) 344-7529 (US) or (412) 317-0088 (International) with the passcode of 7260026. Additionally, a replay of the conference call will be available on our website for approximately three months.

ABOUT SERVICE CORPORATION INTERNATIONAL

Service Corporation International (NYSE: SCI), headquartered in Houston, Texas, is North America's leading provider of funeral, cemetery and cremation services, as well as final-arrangement planning in advance, serving more than 700,000 families each year. Our diversified portfolio of brands provides families and individuals a full range of choices to meet their needs, from simple cremations to full life celebrations and personalized remembrances. Our Dignity Memorial® brand is the name families turn to for professionalism, compassion, and attention to detail that is second to none. At March 31, 2025, we owned and operated 1,489 funeral service locations and 496 cemeteries (of which 309 are combination locations) in 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. For more information about Service Corporation International, please visit our website at www.sci-corp.com. For more information about Dignity Memorial®, please visit www.dignitymemorial.com.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS  

The statements in this press release that are not historical facts are forward-looking statements made in reliance on the "safe harbor" protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as "believe," "estimate," "project," "expect," "anticipate," "predict," or other similar words that convey the uncertainty of future events or outcomes. The absence of these words, however, does not mean that the statements are not forward-looking. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by us, or on our behalf. Important factors, which could cause actual results to differ materially from those in forward-looking statements include, among others, the following:

• Our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control.
• We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.
• Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.
• We may be adversely affected by the effects of inflation, significant reduction in consumer confidence and customer demand, and/or recession.
• Our results may be adversely affected by significant weather events, natural disasters, catastrophic events, or public health crises.
• Our credit agreements contain covenants that may prevent us from engaging in certain transactions.
• If we lost the ability to use surety bonding to support our preneed activities, we may be required to make material cash payments to fund certain trust funds.
• The financial condition of third-party life insurance companies that fund our preneed contracts may impact our future revenue.
• Unfavorable publicity could affect our reputation and business.
• Our failure to attract and retain qualified sales personnel and licensed funeral professionals could have an adverse effect on our business and financial condition.
• We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks; therefore, we could be exposed to unexpected costs that could negatively affect our financial performance.
• Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets.
• Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.
• Our Canadian business exposes us to operational, economic, and currency risks.
• Our level of indebtedness could adversely affect our cash flows, our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.
• A failure of a key information technology system or process could disrupt and adversely affect our business.
• The funeral and cemetery industry is competitive.
• If the number of deaths in our markets declines, our cash flows and revenue may decrease. Changes in the number of deaths are not predictable from market to market or over the short term.
• If we are not able to respond effectively to changing consumer preferences, our market share, revenue, and/or profitability could decrease.
• The continuing upward trend in life expectancy and the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.
• Our funeral and cemetery businesses are high fixed-cost businesses.
• Risks associated with our supply chain could materially adversely affect our financial performance.
• Disruptions in global trade, including as a result of tariffs, trade restrictions, retaliatory trade measures or the effect of such actions on trading relationships between the United States and other countries could increase costs to our business.
• Regulation and compliance could have a material adverse impact on our financial results.
• Unfavorable results of litigation could have a material adverse impact on our financial statements.
• Cemetery operational claims could have a material adverse impact on our financial results.
• The application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and financial results.
• Changes in taxation, or the interpretation of tax laws or regulations, as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.

For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2024 Annual Report on Form 10-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us whether as a result of new information, future events, or otherwise.

SERVICE CORPORATION INTERNATIONAL

APPENDIX: RESULTS FOR THE FIRST QUARTER OF 2025

Comparable Funeral Results

The table below details comparable funeral results of operations ("same store") for the three months ended March 31, 2025 and 2024. We consider comparable funeral operations to be those businesses owned for the entire period beginning January 1, 2024 and ending March 31, 2025.

• Total comparable funeral revenue increased by $23.3 million, or 3.9%, as a $17.9 million increase in core funeral revenue, an $8.3 million increase in core general agency and other revenue, and a $3.9 million increase in non-funeral home revenue was offset by a $6.8 million decrease in non-funeral home preneed sales revenue.
• Core funeral revenue increased by $17.9 million, or 3.6%, primarily due to a favorable 2.5% increase in core average revenue per service and a 1.0% increase in core funeral services performed. The core cremation rate increased 40 basis points to 57.0%.
• Non-funeral home revenue increased by $3.9 million primarily due to a favorable 10.2% increase in non-funeral home average revenue per service and a 5.7% increase in non-funeral home services performed.
• Non-funeral home preneed sales revenue decreased by $6.8 million, primarily due to an operational decision to defer the delivery of urns on preneed contracts to the time of need coupled with a $19.9 million, or 25.5% decline in non-funeral home preneed sales production. The declines in both revenue and production were impacted by expected administrative challenges in our transition from trust to insurance-funded contracts in certain states. Both of these impacts are short-term in nature as we will recognize now deferred urn revenue at the time of need. Partially offsetting these headwinds is an increase in general agency revenue as we shift more production to insurance-funded contracts.
• Core general agency and other revenue grew $8.3 million, primarily due to growth in general agency revenue from higher commission rates as a result of the change in our preneed insurance agreement.
• Comparable funeral gross profit increased $20.7 million to $152.4 million, and the gross profit percentage increased 240 basis points from 21.9% to 24.3%. This increase is primarily due to the increase in revenue mentioned above and our continued successful focus on managing our fixed cost structure.
• Comparable preneed funeral sales production decreased $32.1 million, or 10.2%, in the first quarter of 2025 compared to 2024. Core preneed sales production decreased by $12.1 million, or 5.1%, primarily due to the transition to our new preneed insurance provider in July 2024. Non-funeral home preneed sales production decreased $19.9 million, or 25.5%, primarily due to our transition from trust to insurance-funded contracts mentioned above.

Comparable Cemetery Results

The table below details comparable cemetery results of operations ("same store") for the three months ended March 31, 2025 and 2024. We consider comparable cemetery operations to be those businesses owned for the entire period beginning January 1, 2024 and ending March 31, 2025.

• Total comparable cemetery revenue decreased $7.8 million, or 1.8%, in the first quarter of 2025 compared to the first quarter of 2024. The decrease was primarily due to a $10.0 million decline in core revenue, partially offset by an increase in other revenue of $2.2 million.
• Core revenue was lower by $10.0 million primarily due to a decline of $11.9 million in recognized preneed property revenue due to lower preneed property sales production. The decline was partially offset by a $2.0 million increase in atneed revenue.
• Comparable cemetery gross profit decreased by $5.8 million to $136.8 million. The gross profit percentage decreased from 32.4% to 31.6% due to the decline in revenue mentioned above, partially offset by the impact of effective cost control measures.
• Comparable preneed cemetery sales production decreased $8.3 million, or 2.5%, primarily due to a decline in large sales, partially offset by a modest increase in core preneed cemetery sales production.

Other Financial Results  

• Corporate general and administrative expenses were $44.7 million in the first quarter of 2025, up $3.4 million compared to the first quarter of 2024, due to higher workers compensation costs as well as higher expenses related to the timing of incentive compensation accruals versus the prior year quarter.
• Interest expense decreased $2.9 million to $61.5 million in the first quarter of 2025 primarily due to lower rates quarter over quarter on our floating rate debt, partially offset by slightly higher average debt outstanding.
• The GAAP effective income tax rate for the first quarter of 2025 was 26.1%, up from 22.9% in the prior year quarter. Our adjusted effective tax rate was 25.9% in the first quarter of 2025 compared to 22.9% in the prior year quarter. The higher effective tax rate in the current period was primarily due to certain excess tax benefits recognized on the settlement of employee share-based awards in the prior year quarter that are no longer deductible.

Cash Flow and Capital Spending

Net cash provided by operating activities excluding special items grew $95.9 million to $316.0 million in the first quarter of 2025 compared to $220.1 million in the first quarter of 2024. The growth in the quarter is primarily due to improvement in working capital of $65.0 million, driven by $36.9 million of higher cemetery installment receipts and other preneed working capital benefits and $28.4 million associated with payroll timing. Additionally, the growth for the quarter was positively impacted by $19.5 million of higher operating income and $14.5 million of lower cash interest. The decrease in cash interest was primarily due to timing associated with the bond financing and coinciding reduction of our drawn bank credit facility completed this past September, as well as lower rates on floating rate debt.

Total capital expenditures decreased in the current quarter by $1.1 million, primarily due to the timing of capital improvements at existing field locations and lower spend on digital investments and corporate, partially offset by higher spend due to the timing of cemetery property development and higher growth capital expenditures.

Trust Fund Returns

Total trust fund returns include realized and unrealized gains and losses and dividends and are shown gross without netting of certain fees. A summary of our consolidated trust fund returns as of March 31, 2025 is set forth below:

Non-GAAP Financial Measures

Earnings excluding special items and diluted earnings per share excluding special items shown above are non-GAAP financial measures. We believe these non-GAAP financial measures provide a consistent basis for comparison between quarters and years, and better reflect the performance of our core operations, as they are not influenced by certain income or expense items not affecting operations. We also believe these measures help facilitate comparisons to our competitors' operating results.

Set forth below is a reconciliation of our reported net income attributable to common stockholders to earnings excluding special items and our GAAP diluted earnings per share to diluted earnings per share excluding special items. We do not intend for this information to be considered in isolation or as a substitute for other measures of performance prepared in accordance with GAAP.

SOURCE Service Corporation International