Last week was Earnings Release week for Service Corporation International (SCI) and readers of Funeral Director Daily are getting their second consecutive article on the company’s performance in this update.  This morning’s article was headlined, “Firing on all cylinders”.

Investor information network Seeking Alpha published an article last week from Lighting Rock Research that you can access here, about SCI and it’s 2nd Quarter 2025 report titled “As steady as she goes”.  It in many ways reaffirms what Funeral Director Daily said about the 2nd Quarter and Half-Year performance of the company so far in 2025 but goes a little bit further making some projections for the future.

In a short sentence Lighting Rock Research makes this comment about the future of SCI, “The company’s stable business model, direct sales transition, and acquisition strategy position it for 5% organic revenue growth from FY26 onward.”

Included in the article is the following chart which the authors use to feature what they believe will be the financial performance of Service Corporation moving forward.  As you can see it projects Revenue, Operating Profits, Net Profits and more through the year 2034.

Projections of SCI’s Revenue, Operating Profits, Net Profits, Free Cash-Flow and more through 2034

Lighting Rock Research mentions two risk factors for SCI going forward.  Here is what they think those may be:

1. In the U.S. market, many Hispanic and Asian customers prefer cemetery services. Due to the Trump administration’s immigration policy, I think some Hispanic and Asian populations might leave the U.S.  If that occurs, the population mix change could pose some growth challenges to Service Corporation..
2. In addition, the gross margin of its cemetery business declined by 110basis points during the quarter, caused by higher sales compensations. Investors need to closely monitor the company’s gross margin in the upcoming quarters to ensure these elevated sales compensation payments do not become a persistent issue.

Funeral Director Daily take:  There has been a lot of anxiety about Death Care moving forward.  The positivity of this article was a refreshing change from some of the bleak predictions of Death Care moving into the future.  I think it shows that the glass is either half-full or half-empty in someone’s opinion.

Lighting Rock Research predicts a “5% organic revenue growth” for SCI annually for the next decade.  In a Death Care world where we see some providers dealing with a Direct Cremation induced revenue decrease that is, in my estimation, a bold prediction that if it rings true indicates a very positive future for SCI.

The projections show an even stronger company going into the future that uses the cash it generates to no only continue growing with acquisitions, but also rewards existing shareholders by reducing the number of shares outstanding through internal stock buy-backs.

As you look at the projection chart, the projections show Revenue going from $4.3 billion to 7.4 billion — a compounded 72% increase in the next ten years.  The projections also show Net Profits more than doubling from $548 million to $1.24 billion in that same time period.

If SCI truly hits those numbers it should mean business is good for Death Care in North America.

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Park Lawn Corporation (PLC), a publicly-held funeral home and cemetery operator reported their 2023 4th Quarter and 2023 Full-Year financial results last week.  In those results, which you can see here, the company reported revenues for both the 4th Quarter and Full-Year of 2023 increasing from the comparable quarter and year.  They did, however, report a Net Loss for both both time periods, explained by the completion of the sale of 83 properties to Everstory Partners which happened in December 2023.

You can read a Funeral Director Daily story about that event here.

In a prepared statement in the Park Lawn Corporation press release PLC Chief Executive Officer J. Bradley Green explained that Net Loss this way:

• “Net (Loss) Earnings for the quarter and year ended 2023 reflect a loss as a result of the disposition of certain legacy businesses completed in December.  However, Adjusted Net Earnings for the three-month period ended December 31, 2023 increased by approximately 5.3% while decreasing by 10.1% over the comparable prior year, principally as a result of the normalization of the death rate. “

A positive attribute of that Everstory transaction was also explained by CEO Green in this manner:

• “At closing, Park Lawn received $70M consisting of $55M in cash and the remaining in deferred compensation, bearing interest at 10% per annum, to be received by PLC within 5 years following the close of the transaction.  The cash proceeds were used to pay down debt resulting in a reduction of Park Lawn’s leverage ratio to  1.95x and 2.75x, including Park Lawn’s outstanding debentures.”

CEO Green also commented on what the divestiture of those 83 properties would do the the company’s previously disclosed aspirational plans:

• “Given the recent completion of the transformational disposition of certain legacy businesses at the end of December, as well as the current macroeconomic environment, we no longer believe that our previously announced five-year long-term aspirational financial targets are achievable by the conclusion of 2026. . . Rather than long-term targets, in an effort to enhance the insight and disclosure around our operating performance, we believe annual guidance will provide improved near-term transparency of our financial expectations and strategic direction to our investors, shareholders and stakeholders.”

Tom Anderson
Funeral Director Daily

Funeral Director Daily take:  Now that we have seen the Full-Year reports for the “Big 3” public funeral home and cemetery operators it is interesting to try to decipher their individual ambitions and plans for moving forward.  It appears to me that the last couple of years have been about “Right-sizing” the ships following what was learned in the pandemic.  I think each of those companies — Park Lawn, Carriage Services, and Service Corporation International — have plans on where they hope to bring their companies and each has a definite path that they want to follow to continue to build out the operations.

Once the Service Corporation International moratorium on selected acquisitions (see Funeral Director Daily article here) is lifted, I think we will get a pretty good idea of where those destinations are.

In the meantime, here’s a little chart I put together on the Revenue increases for each of those companies for the 2023 4th Quarter and the 2023 Full-Year.  The percentage listed is the company’s revenue over the same periods in 2022:

And here is the total revenues as reported by each of the companies for the Full-Year 2023.  You can see, in round numbers, the extreme size of SCI as they continue to have annual revenue of more than 10 times the other companies.

2023 Reported Annual Revenue

• Service Corporation International                  $ 4.09 billion
• Carriage Services                                               $  382.5 million
• Park Lawn Corporation                                    $  347.6 million

More news from the world of Death Care:

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“A servant’s attitude guided by Christ leads to a significant life”