SCI · Service Corporation International

Service Corporation International delivered solid first quarter 2026 results characterized by resilient pricing power and operational discipline amid headwinds in funeral service volume. Revenue grew 2% year-over-year to $1,096.5 million, primarily driven by a 10% increase in comparable cemetery preneed sales production — which translated into 7% growth in comparable cemetery revenue and a 120 basis point expansion in cemetery gross profit. Funeral segment performance reflected a 6% decline in comparable service volumes, attributed by management to an unusually strong prior-year flu season and broader demographic trends; however, this was more than offset by a 3% increase in average funeral service revenue and only a ~1% increase in expenses. GAAP diluted EPS was $0.97, down slightly from $0.98 in Q1 2025, while adjusted EPS improved to $0.97 from $0.96 — supported by a lower diluted share count (139.9M vs. 145.3M), a favorable tax rate, and stronger cemetery profitability. Operating income declined modestly to $243.8 million from $251.7 million, reflecting lower funeral gross profit partially offset by cemetery margin gains. Cash flow generation strengthened meaningfully: net cash provided by operating activities rose 7% to $333.8 million, with adjusted operating cash flow up 6% to $334.5 million, driven by favorable working capital changes. Critically, the Company reaffirmed its full-year 2026 guidance, maintaining its adjusted EPS outlook of $4.05–$4.35 — implying midpoint growth of ~10% — consistent with its long-term 8%–12% growth framework. Management emphasized continued focus on executing its strategic pillars: growing revenue, leveraging scale, and allocating capital prudently, while acknowledging near-term volume volatility but affirming long-term stability in underlying demand drivers.