Service International's first quarter results reflected mixed underlying trends, with management pointing to a meaningful decline in funeral service volumes as the primary headwind. The company’s performance was shaped by lower funeral revenues due to a decrease in core services performed, which CEO Thomas Ryan attributed to a strong flu season in the prior year and broader industry mortality trends. Despite the volume pressure, management highlighted robust growth in preneed cemetery sales and disciplined cost management as key factors that helped cushion the impact of softer funeral demand.
Is now the time to buy SCI? Find out in our full research report (it’s free for active Edge members).
Service International (SCI) Q1 CY2026 Highlights:
- Revenue: $1.10 billion vs analyst estimates of $1.09 billion (2.1% year-on-year growth, in line)
- Adjusted EPS: $0.97 vs analyst expectations of $1.00 (2.8% miss)
- Adjusted EBITDA: $325.8 million vs analyst estimates of $337.1 million (29.7% margin, 3.3% miss)
- Management reiterated its full-year Adjusted EPS guidance of $4.20 at the midpoint
- Operating Margin: 22.2%, down from 23.4% in the same quarter last year
- Funeral Services Performed: down 4,168 year on year
- Market Capitalization: $10.97 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Service International’s Q1 Earnings Call
-
Parker Snure (Raymond James) asked about funeral volume trends by month and early Q2, to which CEO Thomas Ryan explained that while volumes were down across all three months, March was slightly better, and April remained down but less severe than Q1.
-
Tomohiko Sano (JPMorgan) asked if funeral volume declines reflected market share loss. CEO Thomas Ryan clarified that declines mirrored industry-wide mortality trends and not SCI-specific share loss, referencing CDC and peer data.
-
Scott Schneeberger (Oppenheimer) inquired about the sustainability of large cemetery sales and their contribution. Ryan noted growth was balanced between large sales and contract velocity, with expanding initiatives like seminars and targeted outreach boosting results beyond one-off transactions.
-
Tyler Barishaw (Truist) requested margin outlook for the funeral segment despite volume pressure. Ryan responded that margins could decline slightly for the year but would improve with even modest volume recovery, highlighting high incremental margins on returning volumes.
-
Joanna Gajuk (Bank of America) questioned the company’s willingness to orient guidance toward either end of the EPS range. Ryan indicated that with current funeral volume trends, results are likely to be at the lower half, but improving volumes and strong cemetery growth could push earnings higher.
Catalysts in Upcoming Quarters
Over the next few quarters, the StockStory team will be watching (1) whether funeral volumes begin to recover as anticipated, (2) the sustainability of mid-single-digit growth in preneed cemetery sales, and (3) the impact of expanded sales force and community outreach initiatives on lead generation and conversion. We will also track margin trends in both segments as cost controls and product mix evolve.
Service International currently trades at $80.05, down from $86.39 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free).
Our Favorite Stocks Right Now
ONE MORE THING: Top 6 Stocks for This Week. This market is separating quality stocks from expensive ones fast. AI taking down whole sectors with no warning. In a rotation this fast, you need more than a list of good companies.
Our AI system flagged Palantir before it ran 1,662%. AppLovin before it ran 753%. Nvidia before it ran 1,178%. Each week it produces 6 new names that pass the same tests. Get Our Top 6 Stocks for Free HERE.
Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.