Service Corporation International (SCI) is a leading provider of comprehensive end-of-life products and services across the United States and Canada. The company ...
Service Corporation International (SCI) is the dominant player in the North American death care industry, structured into two primary segments: Funeral Services and Cemetery Operations. The company's expansive network includes 1,471 funeral homes and 488 cemeteries (299 combined) spanning 44 U.S. states, 8 Canadian provinces, Washington D.C., and Puerto Rico, ...Service Corporation International (SCI) is the dominant player in the North American death care industry, structured into two primary segments: Funeral Services and Cemetery Operations. The company's expansive network includes 1,471 funeral homes and 488 cemeteries (299 combined) spanning 44 U.S. states, 8 Canadian provinces, Washington D.C., and Puerto Rico, as of 2021. SCI generates revenue primarily through pre-need and at-need sales of products and services, including funeral arrangements, cremation services, caskets, urns, burial vaults, memorial markers, and cemetery interment rights. Financially, SCI demonstrates robust performance with a market capitalization of approximately $11.6 billion and annual revenues exceeding $4 billion, featuring a net profit margin of 14.4%. The company maintains a strong operating cash flow, enabling consistent dividend payments (yield around 1.6%) and strategic acquisitions to fuel growth. Key executives include CEO Thomas Ryan, who leads a team of ~18,000 employees. SCI faces significant debt leverage (debt-to-equity ratio of 3.45) but manages it effectively with coverage ratios (interest coverage 3.8x, EBITDA coverage 14.3x). The company competes in the consumer cyclical sector, with a beta of 0.845, indicating lower volatility than the market. With a history of consolidation through acquisitions, SCI remains focused on expanding its footprint and enhancing service quality, aiming to provide compassionate care while delivering shareholder value. Its long-term strategy emphasizes operational efficiency, digital innovation in memorialization, and community engagement.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$4.3B
+2.9%
+0.6%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$542.6M
+4.6%
-44.9%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+26.5%
+1.6%
-5.1%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+22.6%
+2.0%
-5.1%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+12.6%
+1.6%
-45.2%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$554.2M
-0.3%
-43.7%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+12.9%
-3.1%
-44.1%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
313.7%
+7.0%
+5.9%
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
0.55x
+5.9%
-6.2%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Good morning, and welcome to the Second Quarter 2026 SCI Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to SCI management. Please go ahead.
Trey Bocage: Good morning. This is Trey Bocage, AVP of Investor Relations and Treasury. Welcome to our second quarter earnings call of 2026. We are going to have some prepared remarks about the quarter from Tom and Eric in just a minute. But before that, I will quickly go over our safe harbor language. Any comments made by our management team that state our plans, beliefs, expectations or projections for the future are forward-looking statements. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such statements. These risks and uncertainties include, but are not limited to, those factors identified in our earnings release and in our filings with the SEC that are available on our website. Today, we might also discuss certain non-GAAP financial measures. A reconciliation of these measures can be found in the tables at the end of our earnings release and on our website. With that out of the way, I will now turn it over to Tom Ryan, Chairman and CEO.
Thomas Ryan: Thanks, Trey, and good morning, everyone, and thank you for joining us. I'll start with an overview of our quarterly performance, followed by some expectation setting for the back half of 2026 and then a deeper look at our Funeral and Cemetery results for the quarter. For the second quarter, we generated earnings per share of $0.90, which compared to $0.88 in the prior year. Cemetery revenue and gross profit increased, supported by high single-digit growth in preneed cemetery sales production and solid growth from cemetery trust fund income. This favorable impact was slightly enhanced by lower general and administrative expense. Funeral revenues grew marginally where profitability declined somewhat offsetting the favorable impacts, resulting in a $0.02 increase in earnings per share from operating income. Below the line, the favorable impact of a lower share count and a slightly lower effective tax rate was offset by the net negative impact from interest expense and other income expense. While the first and second quarter earnings per share growth was muted by lower Funeral case volumes and deferrals of Cemetery revenue, we have some very positive momentum to carry into the back half of 2026. Comparable preneed cemetery sales production grew by 8% and comparable preneed funeral sales production grew by 7% for the quarter, while adjusted cash by [indiscernible] operating activities increased by $71 million to $239 million, helping to fund our business capital needs and new growth capital investments, while affording us the flexibility to be opportunistic, returning capital through share buybacks and consistently through dividend increases. As we enter the back half of 2026, we …