Service Corporation International FY25 revenue $4.31B (+3%); op income $974M (+5%); NI $543M (+5%); EPS GAAP $3.80 (+8%); adj EPS $3.85 (+9%). FCF $554M. Adj operating cash flow $966M; Q4 $213M. Q4 adj EPS $1.14 (+8% YoY). Q4 segment performance — Funeral: comparable revenues +$3M (<1%); core funeral revenue +$6M (>1%); core average revenue per service +3.2% despite +30bp commission rate; core funeral services performed -1.9%. FY comparable funeral volume -<1%. Non-funeral home revenue +$3M (>11% avg revenue per service). Preneed sales revenue +$2M (>11%). Core general agency -$8M (~13% decline). Cemetery: Q4 comparable revenue +$5M (~1%); other revenue +$8M (endowment care trust fund income); preneed merchandise + service sales production +$15M; comparable preneed cemetery sales production +$8M (~2%). FY preneed cemetery sales production +4%. Capex Q4 $174M / FY $508M. Acquisitions FY $101M. Total debt $5.14B (+4%); buyback $461M (+82%); dividend $184M (+5%). FY26 normalized EPS $4.05-$4.35 (midpoint $4.20, +5-13% growth). Funeral volume flat to slightly down + inflationary pricing. Cemetery preneed sales low-to-mid-single digits; revenue +2-5%; gross margin expansion 30-60bp. Risks: funeral volume cyclicality, cremation rate trends, competitive landscape (Carriage Services, Park Lawn, Matthews International, Stonemor / Everstory), preneed execution, endowment trust returns.

Service Corporation 2025-26: Adj EPS $3.85 (+9%), FY26 EPS $4.05-$4.35

FY25 revenue $4.31B (+3%); op income $974M (+5%); NI $543M (+5%); EPS GAAP $3.80 (+8%); adj EPS $3.85 (+9%). FCF $554M (~flat). Adj operating cash flow $966M; Q4 $213M. Q4 adj EPS $1.14 (+8% YoY). Q4 segment performance — Funeral: comparable revenues +$3M (<1%); core funeral revenue +$6M (>1%); core average revenue per service +3.2% despite +30bp core commission rate; core funeral services performed -1.9%. FY comparable funeral volume -<1%. Non-funeral home revenue +$3M (>11% growth in average revenue per service). Preneed sales revenue +$2M (>11%). Core general agency + other revenue -$8M (~13% decline due to lower general agency commission rate + product mix). Cemetery: Q4 comparable cemetery revenue +$5M (~1%); other revenue +$8M (endowment care trust fund income); preneed merchandise + service sales production +$15M; comparable preneed cemetery sales production +$8M (~2%). FY preneed cemetery sales production +4%. Capex Q4 $174M / FY $508M. Acquisitions FY $101M (within guidance range). Total debt $5.14B (+4%); buyback $461M (+82% YoY); dividend $184M (+5%). FY26 normalized EPS guide $4.05-$4.35 (midpoint $4.20, 5-13% growth). Funeral volume flat to slightly down with average revenue per case growing at inflationary rates. Cemetery preneed sales production growth low to mid-single digits; cemetery revenue growth 2-5%; gross margin expansion 30-60bp.

Key takeaways

Multi-decade demographic + preneed sales pipeline thesis intact — preneed cemetery production +4% FY25. Service Corporation International is the largest US death care services operator (funeral homes + cemeteries), structurally positioned as a multi-decade demographic compounder. The preneed sales pipeline (cemetery + funeral preneed contracts) creates multi-year backlog of future revenue. FY25 preneed cemetery sales production grew ~4% with Q4 production +$15M absolute. Preneed cemetery sales production essentially "books" future cemetery revenue years (sometimes decades) in advance — multi-year compounding visibility.
Cemetery preneed sales production +4% FY; +2% Q4 — multi-year backlog accretion. Cemetery preneed sales production reflects forward-locked revenue: customers purchase cemetery property + merchandise + services in advance for future need. The +4% FY25 production growth + +2% Q4 production growth + $8M endowment care trust fund income reflects (a) demographic tailwinds, (b) effective preneed sales force, (c) trust fund investment performance. Multi-year preneed sales = future revenue locked in.
Funeral average revenue per service +3.2% Q4 — pricing power offsetting modest volume softness. Q4 core funeral average revenue per service grew +3.2% despite a +30bp core commission rate. Combined with -1.9% core services performed, the dynamic is +3.2% pricing offset by -2% volume = ~+1% revenue growth. The +3.2% pricing reflects (a) inflation pass-through, (b) higher-mix service options, (c) location pricing power. FY25 average revenue per service growth above inflation supports margin trajectory.
FY25 adj EPS $3.85 (+9%); FY26 normalized EPS $4.05-$4.35 (midpoint +9% growth) — sustained mid-to-high single digit compounding. From FY25 adj EPS $3.85 → FY26 midpoint $4.20 = +9% growth. The 5-13% range reflects (a) flat-to-slightly-down funeral volume + inflationary pricing, (b) cemetery preneed sales production growth + revenue growth, (c) cemetery gross margin expansion 30-60bp, (d) capital allocation (buyback). Multi-year EPS compounding setup.
$461M FY25 buyback (+82% YoY); $184M dividend (+5%) — multi-year capital return acceleration. FY25 buyback grew to $461M (+82% vs $254M FY24). Combined with dividend $184M (+5%), total capital return $645M. Free cash flow generation supports multi-year capital return + acquisitions ($101M FY25 within guidance). The buyback acceleration reflects management's confidence in normalized FCF generation + intrinsic value relative to share price.

Business

Service Corporation International is the largest US funeral + cemetery services operator, with two reporting segments + preneed sales platform:

Funeral Segment (~55% of revenue): Funeral homes + cremation services + bereavement merchandise. Q4 FY25 comparable revenue +<1%; core funeral revenue +>1%; core average revenue per service +3.2%. Multi-region with concentrations in Texas, Florida, California, Northeast.
Cemetery Segment (~45% of revenue): Cemetery property (lots, mausoleums, monuments) + cemetery merchandise + services. Q4 comparable revenue +~1%; preneed production +$15M; FY preneed sales production +4%. Multi-decade asset base with ongoing entitlement to future revenue.
Preneed Sales Platform (Embedded): Multi-year preneed funeral + cemetery contracts that book future revenue. Multi-decade backlog.
Endowment Care Trust: Multi-decade trust fund providing recurring income from cemetery property maintenance.

Strategic moves FY25:

Funeral average revenue per service +3.2% Q4
Cemetery preneed sales production +4% FY (+$15M Q4)
Endowment care trust fund income +$8M Q4 in cemetery
Acquisitions $101M FY (within guidance)
Buyback $461M (+82% YoY)
Dividend $184M (+5%)
Multi-year capital return acceleration
Multi-decade demographic + preneed pipeline thesis

FY25 financial performance

Metric (FY)	2022	2023	2024	2025
Revenue ($B)	4.11	4.10	4.19	4.31
Revenue YoY	n/a	-0.2%	+2%	+3%
Op income ($M)	927	944	928	974
Op margin	22.6%	23.0%	22.2%	22.6%
Net income ($M)	565	537	519	543
Diluted EPS GAAP ($)	3.53	3.53	3.53	3.80
Adj EPS ($)	n/a	n/a	n/a	3.85
FCF ($M)	456	507	556	554
Capex ($M)	-370	-362	-389	-389
Total debt ($B)	4.43	4.80	4.92	5.14
Dividends ($M)	-160	-168	-174	-184
Buyback ($M)	-661	-545	-254	-461

The earnings progression: revenue grew steadily $4.11B → $4.31B (FY22-25, +5% over 3 years). Op margin maintained ~22-23% reflecting structural margin stability. EPS GAAP $3.80 (+8%); adj EPS $3.85 (+9%).

FCF $554M FY25 (essentially flat YoY). Capex $389M (steady reinvestment in cemetery property + funeral home network). Total debt $5.14B (+4%) reflects acquisitions + share repurchases.

Capital allocation

Capex: $-389M FY25 (+0% YoY) — cemetery property development + funeral home maintenance.
Dividends: $-184M FY25 (+5% YoY) — multi-year progressive dividend.
Buybacks: $-461M FY25 (+82% YoY).
Total capital return FY25: ~$645M.
Total debt: $5.14B (+4% YoY).
FCF: $554M FY25.
Acquisitions: $101M FY25 (within guidance).

FY26 outlook (per Q4 2025 call, 2026-02-12)

FY26 framework	Detail
Normalized EPS	$4.05 to $4.35 (midpoint $4.20, +5-13% growth)
Funeral volume	Flat to slightly down
Funeral average revenue per case	Inflationary growth
Cemetery preneed sales production	Low-to-mid-single digit growth
Cemetery revenue growth	2% to 5%
Cemetery gross margin expansion	30-60bp
Funeral general agency revenue	Higher from preneed sales
Funeral fixed costs	Managed below inflation

Management noted continued multi-decade demographic tailwinds, preneed sales platform, capital allocation discipline, and multi-year cemetery property development.

Key risks

Funeral volume cyclicality. Funeral volumes fluctuate based on death rates + demographic shifts + seasonal flu / pneumonia patterns. Multi-quarter volume cycles affect comparable funeral revenue.

Cremation rate trends. US cremation rate continues to grow vs traditional burial. Cremation typically lower-revenue per service. Multi-year mix shift dynamics.

Funeral / cemetery competitive landscape. Carriage Services, Park Lawn, Matthews International, Stonemor (Everstory), regional + independent operators all compete. Multi-region competitive intensity.

Preneed sales execution. Preneed sales force productivity + commission structures + product mix all matter for production growth.

Endowment care trust fund returns. Multi-year trust fund investment performance affects "other revenue" recognition.

Acquisition pricing discipline. $101M FY25 acquisitions within guidance; multi-year acquisition pipeline + valuation discipline matter.

Demographic / death rate trends. Multi-decade death rate trends correlate with population aging; near-term variability around long-term trend.

Real estate / property development. Cemetery property entitlement + development + zoning multi-year challenges.

Pricing power sustainability. +3.2% average revenue per service in Q4 reflects inflation pass-through; multi-year customer pricing acceptance.

Cost management. Multi-year fixed costs + variable cost dynamics + labor environment.

Regulatory environment. State-level funeral + cemetery regulations + consumer protection rules.

Currency / FX (limited). US-domestic primarily.

Trust fund regulations. Multi-state preneed trust fund regulations + consumer protections.

Climate / catastrophic events. Property exposure to hurricanes + floods + earthquakes affecting cemetery operations.

Estate / inheritance dynamics. Multi-year wealth transfer affecting preneed buyer base.

Litigation / consumer complaints. Multi-decade industry consumer complaint dynamics.

Bottom line

Service Corporation International FY25 is the steady multi-decade compounding year: revenue $4.31B (+3%); op income $974M (+5%); NI $543M (+5%); EPS GAAP $3.80 (+8%); adj EPS $3.85 (+9%). Adj operating cash flow $966M; Q4 $213M. Q4 adj EPS $1.14 (+8%). Funeral: Q4 average revenue per service +3.2% / volume -1.9%; FY comparable volume -<1%; non-funeral home avg revenue per service +>11%. Cemetery: Q4 comparable revenue +~1%; preneed production +$15M; FY preneed cemetery sales production +4%. Capex $389M; acquisitions $101M FY. Total debt $5.14B (+4%); buyback $461M (+82%); dividend $184M (+5%); total capital return $645M.

FY26 normalized EPS guide $4.05-$4.35 (midpoint $4.20, +5-13% growth). Funeral flat-to-slightly-down volume + inflationary pricing. Cemetery preneed sales production low-to-mid-single digit; revenue +2-5%; gross margin expansion 30-60bp.

The risks are real — funeral volume cyclicality, cremation rate trends, funeral / cemetery competitive landscape (Carriage Services, Park Lawn, Matthews International, Stonemor / Everstory), preneed sales execution, endowment care trust fund returns, acquisition pricing discipline, demographic / death rate trends, real estate / property development, pricing power sustainability, cost management, regulatory environment, trust fund regulations, climate / catastrophic events, estate / inheritance dynamics, litigation / consumer complaints.

But the structural thesis (largest US funeral + cemetery services operator + multi-region funeral home + cemetery network + preneed sales platform with multi-year backlog + cemetery preneed sales production +4% FY25 + endowment care trust fund + multi-decade demographic tailwinds + average revenue per service +3.2% pricing power + acquisitions $101M FY25 + buyback $461M (+82%) + dividend $184M (+5%) + 22-23% structural op margin + multi-year capital return acceleration) is intact and FY25 confirms.

Quality multi-decade death care services compounder mid-cycle, with structural demographic tailwinds + preneed sales backlog + cemetery property base + endowment care trust + pricing power + multi-year capital return + selective acquisitions. The FY25 +3% revenue + +9% adj EPS + cemetery preneed +4% + funeral pricing +3.2% + buyback +82% + multi-year capital return + FY26 +5-13% EPS midpoint + 30-60bp cemetery margin expansion creates one of the cleaner multi-decade defensive compounding setups for investors seeking exposure to demographic tailwinds + preneed sales backlog + capital allocation discipline + structural margin stability + dividend track record. The conservative FY26 framework + multi-decade preneed pipeline + cemetery property development + capital return acceleration + acquisitions provides multiple paths to outperformance over a multi-year horizon. Funeral volume cycle + cremation mix + competitive landscape + acquisition pricing + regulatory dynamics remain ongoing risks, but the multi-segment diversification + preneed pipeline + endowment trust + structural margins + capital return support continued compounding through cycles.

Citations

Service Corporation International FY25 Form 10-K (filed February 2026, SEC EDGAR).
SCI Q4 2025 earnings call, 2026-02-12 — Q4 adj EPS $1.14 (+8% YoY); FY adj EPS $3.85 (+9%); revenues + gross profit increased in both funeral + cemetery segments. Funeral Q4: comparable revenues +$3M (<1%); core funeral revenue +$6M (>1%); core average revenue per service +3.2% despite +30bp core commission rate; core funeral services performed -1.9%. FY comparable funeral volume -<1%; non-funeral home revenue +$3M (>11% growth in average revenue per service); preneed sales revenue +$2M (>11%); core general agency + other revenue -$8M (~13% decline). Cemetery Q4: comparable revenue +$5M (~1%); other revenue +$8M (endowment care trust fund income); preneed merchandise + service sales production +$15M; comparable preneed cemetery sales production +$8M (~2%); FY preneed cemetery sales production +4%. Q4 adj operating cash flow $213M; FY $966M. Capital investments Q4 $174M; FY $508M. Acquisitions FY $101M (within guidance). FY26 normalized EPS $4.05-$4.35 (midpoint $4.20, +5-13% growth). Funeral volume flat to slightly down with inflationary pricing. Cemetery preneed sales production growth low-to-mid-single digits; cemetery revenue growth 2-5%; gross margin expansion 30-60bp.
SCI Q3 / Q2 / Q1 2025 earnings calls — supporting funeral + cemetery + preneed pipeline trajectory.
Internal financial_statements view (consolidated annual + cash flow + capital structure).

[SCI] Service Corporation International Thesis 2026: Preneed Backlog and Adjusted Earnings Sustain Guided Growth