SERVICE CORP INTERNATIONAL
For the period ended Jun 30, 2025. Filed Jul 31, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Jul 31, 2025
SCI$73.74-2.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0000089089-25-000058
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe CompanyFinancial Condition, Liquidity, and Capital ResourcesCash FlowResults of Operations - Three Months EndedCritical Accounting PoliciesCautionary Statement on Forward-Looking StatementsCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-07-31.
0001628280-25-036985
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe CompanyFinancial Condition, Liquidity, and Capital ResourcesCash FlowResults of Operations - Three and Six Months EndedCritical Accounting PoliciesCautionary Statement on Forward-Looking StatementsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 175 previous paragraphs and 217 current paragraphs.
116 unchanged; 55 reworded; 34 added; 4 removed; 0 previous and 12 current paragraphs rearranged.
Tables are not compared: 8 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
•a $9.8 million decrease in other investing activities primarily for investments in renewable energy tax credits,
Current report
•a $117.1 million increase in debt proceeds, net of repayments,
Current report
During the second quarter of 2025, we replaced our letters of credit with a $46.0 million insurance product and a related indemnity obligation with a large insurance company.
Current report
In addition to the above items, higher funeral operating results and effective cost management drove gross profit growth and margin expansion over the prior year quarter. Higher gross profit and lower share count more than offset the increase in corporate general and administrative expenses.
Current report
Consolidated revenue from funeral operations was $591.4 million for the three months ended June 30, 2025 compared to $565.8 million for the same period in 2024. This $25.6 million increase is primarily attributable to the $11.4 million increase in revenue from acquired and newly constructed properties and the $15.2 million increase in comparable revenue.
Current report
Comparable revenue from funeral operations was $576.8 million for the three months ended June 30, 2025 compared to $561.6 million for the same period in 2024. This $15.2 million, or 2.7%, increase is primarily due to a $10.7 million increase in adjusted comparable funeral revenue and a $7.2 million increase in core general agency revenue and other revenue, partially offset by a $2.7 million decrease in non-funeral home preneed sales revenue.
Current report
Adjusted comparable funeral revenue increased $10.7 million, or 2.2%, primarily due to a favorable 3.1% increase in total average revenue per service, partially offset by a 0.9% decrease in total services performed. The total comparable cremation rate increased 40 basis points over the prior year quarter to 64.3%.
Current report
The comparable cemetery revenue increased $1.8 million, or 0.4%, for the three months ended June 30, 2025 primarily due to higher comparable core revenue of $0.6 million and higher comparable other revenue of $1.2 million. Comparable core revenue was higher by $0.6 million due in large measure to an increase in atneed revenue. Atneed revenue increased $2.7 million due to increased atneed property production of 4.4%. This was partially offset by a $2.1 million decrease in recognized preneed revenue. The decrease was driven by a decline in recognized preneed property revenue related to the timing of revenue recognition on newly constructed property versus the prior year quarter. Preneed sales production increased $18.5 million, or 5.3%, due to an increase in both large and core sales, which will benefit us in future periods, as this current undeveloped property sold is constructed and recognized.
Current report
Consolidated cemetery gross profit slightly decreased $2.0 million, or 1.3%, in the three months ended June 30, 2025 compared to the same period in 2024, which is primarily attributable to a $4.3 million decrease in comparable cemetery gross profit and partially offset by a $2.3 million increase in gross profit contributed by newly constructed and acquired properties. Comparable cemetery gross profit decreased $4.3 million to $153.3 million. The gross profit percentage decreased versus the prior year quarter from 33.7% to 32.6% as modest cemetery revenue growth was offset by higher selling compensation on higher sales production and partially mitigated by modest fixed cost growth as we continue to focus on managing our fixed cost structure.
Current report
Corporate general and administrative expenses were $49.5 million in the second quarter of 2025 compared to the second quarter of 2024 of $39.0 million. Of the increase, $6.4 million is due to the settlement of certain legal matters, with the remainder primarily due to higher auto and general liability claims as well as the timing of incentive compensation accruals versus the prior year quarter.
Current report
Other income, net increased $2.2 million to $3.9 million for the three months ended June 30, 2025 primarily due to the change in foreign currency exchange rates compared to the prior year.
Current report
Our effective tax rate was 25.2% and 25.3% for the three months ended June 30, 2025 and 2024, respectively. The lower effective tax rate in the current period was primarily due to non-taxable gains on the cash surrender value of certain life insurance policies as a result of gains in the financial markets.
Current report
Six Months Ended June 30, 2025 and 2024
Current report
Funeral Gross Profit
Current report
The consolidated revenue from our cemetery operations for the six months ended June 30, 2025 compared to the same period in 2024 was flat, primarily due to a $6.0 million, or 0.7%, decrease in comparable cemetery revenue offset by a $5.9 million increase in revenue contributed by newly constructed and acquired properties.
Current report
Cemetery Gross Profit
Current report
Other Financial Statement Items
Current report
Corporate General and Administrative Expenses
Current report
Corporate general and administrative expenses increased $13.8 million to $94.2 million for the six months ended June 30, 2025. Of the increase, $6.4 million is due to the settlement of certain legal matters, with the remainder primarily due to higher auto and general liability claims, and the timing of incentive compensation accruals versus the prior year.
Current report
Other income, net increased $2.9 million to $7.1 million for the six months ended June 30, 2025 primarily due to the change in foreign currency exchange rates compared to the prior year.
Current report
Provision for Income Taxes
Current report
Weighted Average Shares
Current report
40 Service Corporation International
Removed paragraphs (4)
Previous report
•a $24.0 million decrease in debt repayments, net of proceeds, and
Previous report
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.
Reworded paragraphs (55)
Previous wording
We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries unequaled in geographic scale and reach. At March 31, 2025, we owned and operated 1,489 funeral service locations and 496 cemeteries (of which 309 are combination locations), in 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Our funeral and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis. Our financial position is enhanced by our $15.9 billion backlog of future revenue from both trust and insurance-funded preneed sales at March 31, 2025. Preneed selling provides us with a strategic opportunity to gain future market share. We also believe it adds to the stability and predictability of our revenue and cash flows. While revenue on the majority of preneed merchandise and service sales is deferred until the time of need, sales of preneed cemetery property provide opportunities for full current revenue recognition to the extent that the property is developed and available for use.
Current wording
We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries unequaled in geographic scale and reach. At June 30, 2025, we owned and operated 1,485 funeral service locations and 498 cemeteries (of which 310 are combination locations), in 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Our funeral and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis. Our financial position is enhanced by our $16.4 billion backlog of future revenue from both trust and insurance-funded preneed sales at June 30, 2025. Preneed selling provides us with a strategic opportunity to gain future market share. We also believe it adds to the stability and predictability of our revenue and cash flows. While revenue on the majority of preneed merchandise and service sales is deferred until the time of need, sales of preneed cemetery property provide opportunities for full current revenue recognition to the extent that the property is developed and available for use.
Previous wording
We rely on cash flow from operations as a significant source of liquidity. Our cash flow from operating activities provided $311.1 million in the first three months of 2025. As of March 31, 2025, we had $1,351.0 million in remaining borrowing capacity under our Bank Credit Facility.
Current wording
We rely on cash flow from operations as a significant source of liquidity. Our cash flow from operating activities provided $477.6 million in the first six months of 2025. As of June 30, 2025, we had $1,189.0 million in remaining borrowing capacity under our Bank Credit Facility.
Previous wording
Return Excess Cash to Shareholders. Absent strategic acquisition or other higher return opportunities, we intend to return excess cash to shareholders. Our quarterly dividend rate has steadily grown from $0.025 per common share in 2005 to $0.32 per common share in 2025. We target a payout ratio of 30% to 40% of after tax earnings excluding special items and intend to grow our cash dividend commensurate with the growth in our business. While we intend to pay regular quarterly cash dividends for the foreseeable future, all future dividends are subject to limitations in our debt covenants, and final determination by our Board of Directors each quarter upon review of our financial performance.
Current wording
Returning Excess Cash to Shareholders. Absent strategic acquisitions or other higher return opportunities, we intend to return excess cash to shareholders through dividends. Our quarterly dividend rate has steadily grown from $0.025 per common share in 2005 to $0.32 per common share in 2025. We target a payout ratio of 30% to 40% of after tax earnings excluding special items and intend to grow our cash dividend commensurate with the growth in our business. While we intend to pay regular quarterly cash dividends for the foreseeable future, all future dividends are subject to limitations in our debt covenants, and final determination by our Board of Directors each quarter upon review of our financial performance.
Previous wording
Net cash provided by operating activities was $311.1 million and $220.1 million for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Net cash provided by operating activities was $477.6 million and $417.0 million for the six months ended June 30, 2025 and 2024, respectively.
Previous wording
The $91.0 million increase in operating cash flows from 2024 comprises:
Current wording
The $60.6 million increase in operating cash flows from 2024 comprises:
Previous wording
•a $19.4 million increase in General Agency (GA) commission and other receipts, and
Current wording
•a $43.4 million increase in General Agency (GA) commission and other receipts,
Previous wording
•a $46.6 million decrease in employee compensation payments,
Current wording
•a $37.7 million decrease in employee compensation payments,
Previous wording
•a $0.3 million increase in payments for certain legal matters.
Current wording
•a $22.3 million decrease in payments for certain legal matters,
Previous wording
•a $12.0 million increase in net trust withdrawals, partially offset by
Current wording
•a $0.5 million decrease in cash interest payments, partially offset by
Previous wording
Cash flows from investing activities used $90.7 million and $96.8 million for the three months ended March 31, 2025 and 2024, respectively. The $6.1 million decreased outflow in 2025 over 2024 is primarily due to the following:
Current wording
Cash flows from investing activities used $191.2 million and $235.8 million for the six months ended June 30, 2025 and 2024, respectively. The $44.6 million decreased outflow in 2025 over 2024 is primarily due to the following:
Previous wording
•a $4.9 million decrease in cash spent on real estate acquisitions,
Current wording
•a $16.7 million decrease in cash spent on real estate acquisitions,
Previous wording
•a $1.0 million increase in cash receipts from divestitures and asset sales,
Current wording
•a $15.4 million increase in cash receipts from divestitures and asset sales,
Previous wording
•a $1.0 million decrease in cash spent on business acquisitions, partially offset by
Current wording
•a $10.2 million decrease in cash spent on business acquisitions,
Previous wording
•a $1.1 million decrease in total capital expenditures, which comprises:
Current wording
•a $9.8 million decrease in total capital expenditures, which comprises:
Previous wording
•a $3.5 million net decrease in maintenance capital expenditures, which includes:
Current wording
•a $16.7 million net decrease in maintenance capital expenditures, which includes:
Previous wording
•a $4.2 million decrease in expenditures for capital improvements at existing field locations.
Current wording
•a $4.5 million decrease in expenditures for capital improvements at existing field locations,
Previous wording
•a $2.0 million decrease in expenditures for digital investments and corporate, offset by
Current wording
•a $9.6 million decrease in expenditures for digital investments and corporate, and
Previous wording
•a $2.7 million increase in expenditures for cemetery property development, and
Current wording
•a $2.6 million decrease in expenditures for cemetery property development,
Previous wording
•a $2.4 million increase in expenditures for growth capital expenditures/construction of new funeral service locations,
Current wording
•a $6.9 million increase in expenditures for growth capital expenditures/construction of new funeral service locations,
Previous wording
•a $2.7 million decrease in net payments for Company-owned life insurance policies,
Current wording
•a $2.7 million decrease in net payments for Company-owned life insurance policies, and
Previous wording
•a $3.8 million increase in net proceeds for Company-owned life insurance policies,
Current wording
•a $1.8 million increase in net proceeds for Company-owned life insurance policies, partially offset by
Previous wording
•an $8.4 million increase in capital expenditures related to construction of our new corporate headquarters.
Current wording
•an $21.8 million increase in capital expenditures related to construction of our new corporate headquarters.
Previous wording
Financing activities used $205.7 million for the three months ended March 31, 2025 compared to using $134.0 million for the same period in 2024. The $71.7 million increased outflow from 2025 over 2024 is primarily due to the following:
Current wording
Financing activities used $243.0 million for the six months ended June 30, 2025 compared to using $215.2 million for the same period in 2024. The $27.8 million increased outflow from 2025 over 2024 is primarily due to the following:
Previous wording
•an $81.0 million increase in purchase of Company common stock,
Current wording
•a $147.6 million increase in purchase of Company common stock,
Previous wording
•a $13.3 million decrease in proceeds from exercises of stock options,
Current wording
•a $13.8 million decrease in proceeds from exercises of stock options, and
Current wording
•a $3.8 million increase in payments of dividends, partially offset by
Previous wording
•a $2.5 million increase in borrowings from our corporate headquarters debt facility.
Current wording
•a $17.1 million increase in borrowings from our corporate headquarters debt facility, and
Previous wording
•a $1.8 million increase in bank overdrafts and other, partially offset by
Previous wording
Except for cemetery pre-construction bonds (which are irrevocable), the surety companies generally have the right to cancel the surety bonds at any time with appropriate notice. In the event a surety company were to cancel the surety bond, we are required to obtain replacement surety assurance from another surety company or fund a trust for an amount generally less than the posted bond amount. Management does not expect that we will be required to fund material future amounts related to these surety bonds due to a lack of surety capacity or surety company non-performance.
Current wording
Except for cemetery pre-construction bonds (which are irrevocable), the surety companies generally have the right to cancel the surety bonds at any time with appropriate notice. In the event a surety company were to cancel the surety bond, we are required to obtain replacement surety assurance from another surety company or fund a trust for an amount generally less
Previous wording
The fair value of our trust investments was based on a combination of quoted market prices, observable inputs such as interest rates or yield curves, and appraisals. As of March 31, 2025, the difference between the backlog and asset market amounts represents $0.17 billion related to contracts for which we have posted surety bonds as financial assurance in lieu of trusting, $1.40 billion collected from customers that were not required to be deposited into trusts, and $0.19 billion in allowable cash distributions from trust assets partially offset by $1.55 billion in amounts due on delivered property and merchandise. As of March 31, 2025, the fair value of the total backlog comprised $4.57 billion related to cemetery contracts and $11.35 billion related to funeral contracts. As of March 31, 2025, the fair value of the assets associated with the backlog of trust-funded deferred revenue comprised $4.60 billion related to cemetery contracts and $2.79 billion related to funeral contracts. As of March 31, 2025, the backlog of insurance-funded contracts of $8.32 billion was equal to the proceeds we expect to receive from the associated insurance policies when the corresponding contract is serviced.
Current wording
The fair value of our trust investments was based on a combination of quoted market prices, observable inputs such as interest rates or yield curves, and appraisals. As of June 30, 2025, the difference between the backlog and asset market amounts represents $0.17 billion related to contracts for which we have posted surety bonds as financial assurance in lieu of trusting, $1.39 billion collected from customers that were not required to be deposited into trusts, and $0.20 billion in allowable cash distributions from trust assets partially offset by $1.55 billion in amounts due on delivered property and merchandise. As of June 30, 2025, the fair value of the total backlog comprised $4.83 billion related to cemetery contracts and $11.59 billion related to funeral contracts. As of June 30, 2025, the fair value of the assets associated with the backlog of trust-funded deferred revenue comprised $4.86 billion related to cemetery contracts and $2.92 billion related to funeral contracts. As of June 30, 2025, the backlog of insurance-funded contracts of $8.43 billion was equal to the proceeds we expect to receive from the associated insurance policies when the corresponding contract is serviced.
Previous wording
Equity investments have historically provided long-term capital appreciation in excess of inflation. The trusts have direct investments in individual equity securities primarily in domestic equity portfolios that include large, mid, and small capitalization companies of different investment styles (i.e., growth and value). The majority of the equity allocation is managed by institutional investment managers that specialize in an objective-specific area of expertise. Our equity securities are exposed to market risk; however, we believe these securities are well-diversified. As of March 31, 2025, the largest single equity position represented less than 1% of the total securities portfolio.
Current wording
Equity investments have historically provided long-term capital appreciation in excess of inflation. The trusts have direct investments in individual equity securities primarily in domestic equity portfolios that include large, mid, and small capitalization companies of different investment styles (i.e., growth and value). The majority of the equity allocation is managed by institutional investment managers that specialize in an objective-specific area of expertise. Our equity securities are exposed to market risk; however, we believe these securities are well-diversified. As of June 30, 2025, the largest single equity position represented approximately 1% of the total securities portfolio.
Previous wording
During the three months ended March 31, 2025, the Standard and Poor’s 500 Index decreased 4.3% and the Bloomberg’s US Aggregate Bond Index increased 2.8%. This compares to SCI trusts that decreased 0.5% during the same period. The SCI trusts have a diversified allocation of approximately 59% equities, 27% fixed income securities, 10% alternative and other investments with the remaining 4% available in money market funds.
Current wording
During the six months ended June 30, 2025, the Standard and Poor’s 500 Index increased 6.2% and the Bloomberg’s US Aggregate Bond Index increased 4.0%. This compares to SCI trusts that increased 7.8% during the same period. The SCI trusts have a diversified allocation of approximately 60% equities, 26% fixed income securities, 10% alternative and other investments with the remaining 4% available in money market funds.
Previous wording
Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $48.2 million and $42.7 million for the three months ended March 31, 2025 and 2024, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $26.1 million and $23.3 million for the three months ended March 31, 2025 and 2024, respectively. The increase in recognized trust fund income is primarily due to the market returns experienced over the trailing twelve month period.
Current wording
Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $95.9 million and $88.6 million for the six months ended June 30, 2025 and 2024, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $53.1 million and $48.8 million for the six months ended June 30, 2025 and 2024, respectively. The increase in recognized trust fund income is primarily due to the market returns experienced over the trailing twelve month period.
Previous wording
Results of Operations — Three Months Ended March 31, 2025 and 2024
Current wording
Results of Operations — Three and Six Months Ended June 30, 2025 and 2024
Previous wording
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.
Current wording
Core general agency and other revenue grew $7.2 million, primarily due to growth in general agency revenue from higher commission rates as a result of the change in our preferred preneed insurance provider.
Showing the first 40 of 55 pairs. Open the source sections for the rest.
Rearranged current paragraphs (12)
Current report — wording carried from elsewhere
than the posted bond amount. Management does not expect that we will be required to fund material future amounts related to these surety bonds due to a lack of surety capacity or surety company non-performance.
Current report — wording carried from elsewhere
Three Months Ended June 30, 2025 and 2024
Current report — wording carried from elsewhere
In the second quarter of 2025, we reported consolidated net income attributable to common stockholders of $122.9 million ($0.86 per diluted share) compared to net income attributable to common stockholders in the second quarter of 2024 of $118.2 million ($0.81 per diluted share). These results were impacted by certain items including:
Current report — wording carried from elsewhere
(2) We calculate comparable average revenue per service by dividing comparable funeral revenue, excluding general agency revenue, recognized preneed 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. Recognized preneed revenue is excluded from our calculation of comparable average revenue per service because the associated service has not yet been performed.
Current report — wording carried from elsewhere
Consolidated funeral gross profit increased $15.6 million, or 15.5%, for the three months ended June 30, 2025 compared to the same period in 2024, primarily attributable to the increase in comparable funeral gross profit. Comparable funeral gross profit increased $14.8 million to $114.6 million and the comparable gross profit percentage increased from 17.8% to 19.9%. This increase is primarily due to the growth in revenue described above and our continued focus on managing our fixed cost structure.
Current report — wording carried from elsewhere
We recognized a $4.1 million net pre-tax gain on asset divestitures and impairments in the second quarter of 2025 compared to a $1.9 million net pre-tax gain in the second quarter of 2024 on asset divestitures due to non-strategic asset divestitures.
Current report — wording carried from elsewhere
(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 June 30, 2025.
Current report — wording carried from elsewhere
Core general agency and other revenue grew $15.7 million, primarily due to growth in general agency revenue from higher commission rates as a result of the change in our preferred preneed insurance provider.
Current report — wording carried from elsewhere
Non-funeral home preneed sales revenue decreased $9.5 million, primarily due to an operational decision to defer the delivery of urns on preneed contracts to the time of need. This is short-term in nature as we will recognize deferred urn revenue from the backlog at the time of need as non-funeral home revenue. This decrease is partially offset by an increase in general agency revenue as we shift more production from trust to insurance-funded contracts.
Current report — wording carried from elsewhere
(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 June 30, 2025.
Current report — wording carried from elsewhere
Gains on Divestitures and Impairment Charges, Net
Current report — wording carried from elsewhere
The diluted weighted average number of shares outstanding was 144.1 million for the six months ended June 30, 2025 compared to 147.3 million for the same period in 2024. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.