Research · Sep 3, 2026
[SCI] Service Corporation International Thesis 2026: Preneed Backlog and Adjusted Earnings Sustain Guided Growth
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.