SERVICE CORP INTERNATIONAL

Results of Operations — Three and Six Months Ended June 30, 2025 and 2024

Three Months Ended June 30, 2025 and 2024

Management Summary

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:

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.

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 June 30, 2025.

(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.

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Funeral Revenue

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.

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.

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%.

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.

Non-funeral home preneed sales revenue decreased $2.7 million, or 9.3%, 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.

Funeral Gross Profit

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.

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 June 30, 2025.

Cemetery Revenue

Consolidated revenue from our cemetery operations increased $5.9 million, or 1.3%, for the three months ended June 30, 2025 compared to the same period in 2024 primarily due to a $4.1 million increase in revenue contributed by newly constructed and acquired properties and a $1.8 million increase in comparable cemetery revenue.

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.

Cemetery Gross Profit

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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.

Other Financial Statement Items

Corporate General and Administrative Expenses

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.

Gains on Divestitures and Impairment Charges, Net

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.

Other Income, Net

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.

Provision for Income Taxes

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.

Weighted Average Shares

The diluted weighted average number of shares outstanding was 143.0 million for the three months ended June 30, 2025 compared to 146.8 million for the same period in 2024. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.

Six Months Ended June 30, 2025 and 2024

Management Summary

In the first six months of 2025, we reported consolidated net income attributable to common stockholders of $265.7 million ($1.84 per diluted share) compared to net income attributable to common stockholders for the same period in 2024 of $249.5 million ($1.69 per diluted share). These results were impacted by certain items including:

In addition to the above items, the increase from the prior year is primarily due to higher funeral gross profit driven by an increase in funeral average revenue per service. Also, the increase in corporate general and administrative expense and higher tax rate was partially offset by lower interest expense and a lower share count.

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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 June 30, 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 $1,230.9 million for the six months ended June 30, 2025, compared to $1,170.5 million for the same period in 2024. This $60.4 million increase is primarily attributable to a $38.7 million increase in comparable revenue and $23.9 million growth in revenue contributed by acquired and newly constructed properties.

Comparable revenue from funeral operations was $1,202.5 million for the six months ended June 30, 2025 compared to $1,163.8 million for the same period in 2024. The $38.7 million, or 3.3%, increase was due to a $32.5 million increase in adjusted comparable funeral revenue and a $15.7 million increase in core general agency and other revenue, partially offset by a $9.5 million decrease in non-funeral home preneed sales revenue.

Adjusted comparable funeral revenue increased $32.5 million, or 3.2%, primarily due to a 2.7% increase in total average revenue per service, and a 0.5% increase in total services performed. The total comparable cremation rate increased 50 basis points over prior year to 64.2%.

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.

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.

Funeral Gross Profit

Consolidated funeral gross profit increased $37.7 million, or 16.2%, in the first six months of 2025 compared to the same period in 2024, primarily attributable to the increase in comparable funeral gross profit. Comparable funeral gross profit increased $35.5 million to $267.0 million and the comparable gross profit percentage increased from 19.9% to 22.2%. This increase is primarily due to the growth in revenue described above and our continued focus on managing our fixed cost structure.

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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 June 30, 2025.

Cemetery Revenue

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.

The $6.0 million decrease in comparable cemetery revenue was primarily attributable to a $9.4 million decrease in comparable cemetery core revenue, partially offset by an increase in other revenue of $3.4 million. The decrease in core revenue was primarily due to a $14.1 million decrease in recognized preneed revenue, partially offset by a $4.6 million increase in atneed revenue. The decrease was primarily driven by a decline in recognized preneed property revenue primarily related to timing of newly constructed property versus the prior year. Preneed sales production increased $10.2 million, or 1.5%, which will benefit us in future periods, as this current undeveloped property sold is constructed and recognized.

Cemetery Gross Profit

Consolidated cemetery gross profit decreased $6.9 million for the six months ended June 30, 2025 compared to the same period in 2024, which is primarily attributable to a $10.1 million decrease in comparable cemetery gross profit offset by a $3.1 million increase in gross profit contributed by newly constructed and acquired properties. Comparable cemetery gross profit decreased from $300.2 million to $290.1 million, and the gross profit percentage decreased from 33.0% to 32.1% primarily due to the decline in revenue mentioned above and higher selling compensation on higher sales production and partially mitigated by modest fixed cost growth versus the prior year as we continue to focus on managing our fixed cost structure.

Other Financial Statement Items

Corporate General and Administrative Expenses

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.

Gains on Divestitures and Impairment Charges, Net

We recognized a $9.0 million net pre-tax gain on asset divestitures and impairments in the six months ended June 30, 2025 compared to a $1.2 million net pre-tax gain in 2024 on asset divestitures due to non-strategic asset divestitures.

Interest Expense

Interest expense decreased $3.2 million to $125.6 million for the six months ended June 30, 2025 primarily due to lower interest rates on our floating rate debt, partially offset by higher average debt outstanding.

Other Income, Net

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.

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Provision for Income Taxes

Our effective tax rate was 25.7% and 24.0% for the six months ended June 30, 2025 and 2024, respectively. The higher effective tax rate for the six months ended June 30, 2025 was primarily due to less excess tax benefits recognized on the settlement of employee share-based awards. The effective tax rates were 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 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.