CSV

• Overall Performance & Resilience

• Despite year-over-year funeral volume declines in the first half of 2026, the company delivered improved profitability and expanded margins, validating the operating leverage and operational discipline built over the past three years.
• Management credits disciplined labor management, controlled discretionary spending, improved productivity, and consistent organizational execution for mitigating a large portion of the volume decline while continuing to invest in long-term business capabilities.
• Funeral volume returned to positive year-over-year growth in July 2026, an encouraging early indicator after a softer first half, though management notes one month does not establish a long-term trend.
• The company's market share remains stable, with volume declines attributed to lower overall mortality, not share loss.

• Strategic Operational Initiatives

• Core merchandise initiatives focused on simplifying urn, casket and package selections, while improving quality and consistency, are gaining traction, enhancing both customer experience and business economics.
• The company is expanding its Passion for Service employee recognition and culture program, which is intended to differentiate Carriage through consistent premier customer service.
• The Trinity program is in an active pilot phase, with 15 additional locations added to the pilot on July 1 2026 for a total of 17 pilot locations; management is collecting performance data to inform future network-wide rollout plans.

• Capital Allocation & Balance Sheet

• The company maintains a healthy balance sheet, with a bank leverage ratio of 4 times at quarter end, down from 4.2 times at the end of Q2 2025; lower leverage reduced borrowing costs, cutting interest expense by approximately $350,000 year-over-year.
• The disciplined acquisition pipeline remains active, with management continuing to prioritize selective, valuation-disciplined deals that deliver long-term shareholder value.
• The majority of underperforming non-strategic properties have already been addressed, and no major divestitures are anticipated moving forward.

Management updated its full-year 2026 guidance primarily to reflect lower-than-expected first half volume and revised acquisition timing, with the following new targets: • Full-year revenue is projected between $435 million and $445 million, a $5 million reduction to the midpoint driven largely by delayed acquisition closing timelines, with most of the reduction expected to fall in Q4 2026. • Adjusted consolidated EBITDA is guided between $135 million and $140 million, with an adjusted EBITDA margin projected between 31% and 31.5%. • Adjusted diluted EPS is expected between $3.35 and $3.55, with management noting confidence in hitting the midpoint of the range supported by strong first half cost performance. • Overhead as a percentage of revenue is projected between 13.5% and 14%, lowered from the prior guidance range of 13.5% to 14.5% based on stronger-than-expected first half cost management. • Adjusted free cash flow is expected between $40 million and $50 million. • The ending bank leverage ratio is targeted between 3.9x and 4.0x. Management expects full-year 2026 volume to be roughly similar to 2025, with low single-digit volume growth in the second half that recaptures much of the first half volume shortfall.

The transcript does not break out financial performance for distinct product or operating segments with separate absolute figures and revenue contribution percentages. Consolidated performance is reported as follows: Q2 2026 adjusted consolidated EBITDA was $33.3 million, up 3.1% year-over-year, representing an adjusted EBITDA margin of 32.3% (an increase of 70 basis points from Q2 2025). Adjusted diluted EPS came in at $0.78, up 5.4% from $0.74 in the prior year quarter. Pre-need cemetery sales production grew 5% year-over-year, with a 17.3% increase in average interment rights sold, but revenue and EBITDA remained relatively flat due to revenue recognition timing. For the first half of 2026, cash from operating activities was $22.5 million, up 2.7% from the first half of 2025; adjusted free cash flow totaled $13.8 million, down from $20.3 million in the prior year first half. Q2 2026 capital expenditures were $5.3 million, up from $2.8 million in Q2 2025: $2.1 million was maintenance capital, and $3.2 million was growth capital, with the increase driven by cemetery development and deferred maintenance projects. Q2 2026 overhead expenses were $12.1 million (11.8% of revenue), down from $12.5 million (12.5% of revenue) in Q2 2025.

• Short-term mortality volatility: Funeral volume was lower than expected in the first half of 2026, and mortality trends are unpredictable in the near term, creating near-term revenue pressure for the fixed-cost business. • Competitive pressure in high-cremation markets: Florida, a key market for Carriage, has seen significant growth in new direct cremation competitors, leading to steeper volume declines than in other markets, even as market share remains stable. • Acquisition execution and valuation risk: While the acquisition pipeline remains active, bridging valuation expectations between Carriage and sellers can delay deal closing timelines, impacting near-term revenue contributions from M&A. • Delayed mortality tailwinds: The expected demographic tailwind from aging baby boomers has not yet materialized in overall mortality volumes, creating uncertainty around the timing of long-term volume growth.

Q: The analyst asks if the mix of cremation vs. traditional burials explains Q2's 4% higher average price per contract and lower margins, and if Cremation mix shifted significantly year-over-year. / A: Management states cremation mix is actually stable, with a 60.6% cremation rate in Q2 2026 versus 61.2% in Q2 2025, so mix shift is not a factor. Higher average price per contract comes from programs that offer cremation families more optional products beyond basic direct cremation. Lower margins are entirely the result of lower volume in the company's fixed-cost business model. The majority of underperforming properties have already been divested, and no large future divestitures are planned.

Q: The analyst asks if volume was negative in all first half 2026 months, if there was an improving trend before July's positive growth, and if full year mortality is expected to remain in line with historical trends. / A: Management confirms volume was negative year-over-year every month from January through June 2026, but the size of the decline steadily decreased through the end of the quarter. July flipped to positive year-over-year volume growth, which is an encouraging start to the second half. Full year total volume is expected to be similar to 2025, with the second half outperforming the first half, and Carriage's market share remains flat year-over-year, so declines are due to lower overall mortality not share loss.

Q: The analyst asks what drove the better-than-expected cost management that supported Q2 EBITDA, and if it was temporary cost cutting or delayed investment rather than structural improvement. / A: Management clarifies the improvement is not temporary cost cutting that compromises service quality. It is the result of three years of investment in new operating systems, process improvements, and talent development that has delivered structural operating leverage that is now kicking in. Management expects this improved cost discipline to be sustained for the rest of the year, supporting the 31% to 31.5% guided EBITDA margin range.

Q: The analyst asks for details on the updated guidance revenue reduction, M&A timing, and the recent McCammon acquisition. / A: Management explains the $5 million midpoint revenue reduction is almost entirely due to delayed acquisition closing timelines, not lower expected organic volume. The M&A pipeline remains very active, but management maintains discipline on valuations and expects more deals to close and be announced in the back half of 2026. The McCammon acquisition, a new market entry in the growing Knoxville TN area, serves just under 300 families annually, has a strong local reputation, and management sees upside for pricing and market share growth with Carriage's operational support.