SERVICE CORP INTERNATIONAL

Results of Operations — Three Months Ended March 31, 2025 and 2024

Management Summary

In the first three months of 2025, we reported consolidated net income attributable to common stockholders of $142.9 million ($0.98 per diluted share) compared to net income attributable to common stockholders for the same period in 2024 of $131.3 million ($0.89 per diluted share). These results were impacted by certain items including:

In addition to the above items, the increase from the prior year quarter is primarily due to higher funeral gross profit on higher services performed and funeral average revenue per service, which was partially offset by slightly lower cemetery gross profit. Also, the increase in corporate general and administrative expense was more than offset by lower interest expense and a lower share count.

Funeral Results

(1) We define comparable (or same store) operations as those funeral locations owned by us for the entire period beginning January 1, 2024 and ending March 31, 2025.

(2) We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, non-funeral home preneed sales revenue, and other revenue to avoid distorting our average of normal funeral services revenue, by the comparable number of funeral services performed during the period.

Funeral Revenue

Consolidated revenue from funeral operations was $639.5 million for the three months ended March 31, 2025, compared to $604.7 million for the same period in 2024. This $34.8 million increase is primarily attributable to $12.6 million of growth in revenue contributed by acquired and newly constructed properties and by a $23.3 million increase in comparable revenue as described below.

32 Service Corporation International

PART I

Comparable revenue from funeral operations was $625.9 million for the three months ended March 31, 2025 compared to $602.6 million for the same period in 2024. The $23.3 million increase was due to an increase of $21.8 million in adjusted comparable funeral revenue and an increase of $8.3 million in core general agency and other revenue, partially offset by a $6.8 million decrease in non-funeral home preneed sales revenue.

Non-funeral home preneed sales revenue decreased by $6.8 million, primarily due to an operational decision to defer the delivery of urns on preneed contracts to the time of need coupled with a $19.9 million, or 25.5%, decline in non-funeral home preneed sales production. The declines in both revenue and production were impacted by expected administrative challenges in our transition from trust to insurance-funded contracts in certain states. Both of these impacts are short-term in nature as we will recognize now deferred urn revenue at the time of need. Partially offsetting these headwinds is an increase in general agency revenue as we shift more production to insurance-funded contracts.

Core general agency and other revenue grew $8.3 million, primarily due to growth in general agency revenue from higher commission rates as a result of the change in our preneed insurance agreement.

Adjusted comparable funeral revenue increased by $21.8 million, or 4.1%, primarily due to a favorable 2.3% increase in total average revenue per service and by a 1.8% increase in total funeral services performed. The cremation rate increased 70 basis points to 64.1%.

Funeral Gross Profit

Consolidated funeral gross profit increased $22.1 million, or 16.8%, in the first three months of 2025 compared to the same period in 2024. Of this increase, $20.7 million, or 15.7%, was an increase in comparable funeral gross profit. Comparable funeral gross profit increased $20.7 million to $152.4 million and the comparable gross profit percentage increased from 21.9% to 24.3%. This increase is primarily due to the growth in revenue described above and our continued successful focus on managing our fixed cost structure.

Cemetery Results

(1) We define comparable (or same store) operations as those cemetery locations owned by us for the entire period beginning January 1, 2024 and ending March 31, 2025.

Cemetery Revenue

Consolidated revenue from our cemetery operations decreased $5.9 million, or 1.3%, for the three months ended March 31, 2025 compared to the same period in 2024 primarily due to a $7.8 million, or 1.8%, decrease in comparable cemetery revenue offset by a $1.8 million increase in revenue contributed by newly constructed and acquired properties.

The $7.8 million, or 1.8%, decrease in comparable cemetery revenue was primarily attributable to a $10.0 million decrease in comparable cemetery core revenue, partially offset by an increase in other revenue of $2.2 million. Core revenue was lower by $10.0 million primarily due to a decline of $11.9 million in recognized preneed property revenue due to lower preneed property sales production. This decline was partially offset by a $2.0 million increase in atneed revenue.

Cemetery Gross Profit

Consolidated cemetery gross profit decreased $4.9 million for the three months ended March 31, 2025 compared to the same period in 2024, which is primarily attributable to a $5.8 million decrease in comparable cemetery gross profit offset by a $0.7 million increase in gross profit contributed by newly constructed and acquired properties. Comparable cemetery gross profit decreased from $142.6 million to $136.8 million, and the gross profit percentage decreased from 32.4% to 31.6% primarily due to the decline in revenue mentioned above, partially offset by the impact of effective cost control measures.

FORM 10-Q 33

PART I

Other Financial Statement Items

Corporate General and Administrative Expenses

Corporate general and administrative expenses increased $3.4 million to $44.7 million for the three months ended March 31, 2025 due to higher workers compensation costs as well as higher expenses related to the timing of incentive compensation accruals versus the prior year quarter.

Gains (Losses) on Divestitures and Impairment Charges, Net

We recognized a $5.0 million net pre-tax gain on asset divestitures and impairments in the three months ended March 31, 2025 compared to a $0.7 million net pre-tax loss in 2024 on asset divestitures due to non-strategic asset divestitures.

Interest Expense

Interest expense decreased $2.9 million to $61.5 million for the three months ended March 31, 2025 primarily due to lower interest rates on our floating rate debt, partially offset by slightly higher average debt outstanding.

Provision for Income Taxes

Our effective tax rate was 26.1% and 22.9% for the three months ended March 31, 2025 and 2024, respectively. The effective higher tax rate for the three months ended March 31, 2025 was primarily due to certain excess tax benefits recognized on the settlement of employee share-based awards in prior year quarter that are no longer deductible. The effective tax rate for the three months ended March 31, 2025 was higher than the federal statutory tax rate of 21.0% primarily due to state and foreign tax expense.

Weighted Average Shares

The diluted weighted average number of shares outstanding was 145.3 million for the three months ended March 31, 2025 compared to 147.9 million for the same period in 2024. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.