SERVICE CORP INTERNATIONAL (SCI): Results of Operations and Financial Condition
SERVICE CORP INTERNATIONAL (SCI) filed an SEC Form 8-K — Results of Operations and Financial Condition. EXHIBIT 99.1 SERVICE CORPORATION INTERNATIONAL ANNOUNCES SECOND QUARTER 2026 FINANCIAL RESULTS, CONFIRMS 2026 EARNINGS PER SHARE MIDPOINT GUIDANCE, AND RAISES 2026 CASH FLOW GUIDANCE Conference call on Thursday, July 30, 2026, at 8:00 a.m. Central Time. HOUSTON, Texas, July 29, 2
How this was made
The 30-second read
Why it matters
The key tradable update is the raised 2026 operating cash flow outlook (midpoint $1,085 million) while adjusted EPS guidance is confirmed with a narrower range ($4.10 to $4.30).
Market read
Traders can reprice SCI based on the combination of confirmed adjusted EPS guidance and improved 2026 cash flow expectations tied to preneed cemetery cash receipts.
What to watch
Investors may scrutinize the sustainability of preneed cash receipts and the increased maintenance capex ($335 million) to ensure cash flow strength translates into durable free cash flow.
Service Corporation International announced second quarter 2026 financial results, confirmed the $4.20 midpoint of annual adjusted EPS guidance, and raised 2026 adjusted operating cash flow guidance.
Second-quarter revenue, GAAP EPS, and adjusted EPS increased from the prior-year quarter, while operating cash flow increased 43%. Funeral service volume declined 1%, but higher funeral average revenue per service and cemetery performance supported results. The company confirmed its adjusted EPS midpoint and raised its adjusted operating cash flow outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| RevenueGAAP | $1,103.3 million | – | $37.8 million, or 4% |
| Operating incomeGAAP | $231.6 million | – | – |
| Net income attributable to common stockholdersGAAP | $124.8 million | – | – |
| Diluted earnings per shareGAAP | $0.90 | – | – |
| Earnings excluding special itemsnon-GAAP | $124.9 million | – | – |
| Diluted earnings per share excluding special itemsnon-GAAP | $0.90 | – | – |
| Diluted weighted average shares outstandingGAAP | 138.3 million | – | – |
| Net cash provided by operating activitiesGAAP | $238.7 million | – | $72.2 million, or 43% |
| Net cash provided by operating activities excluding special itemsnon-GAAP | $238.8 million | – | $70.5 million, or 42% |
| Six months revenueGAAP | $2,199.7 million | – | – |
| Six months operating incomeGAAP | $475.4 million | – | – |
| Six months net income attributable to common stockholdersGAAP | $260.6 million | – | – |
| Six months diluted earnings per shareGAAP | $1.87 | – | – |
| Six months earnings excluding special itemsnon-GAAP | $260.1 million | – | – |
| Six months diluted earnings per share excluding special itemsnon-GAAP | $1.87 | – | – |
| Six months diluted weighted average shares outstandingGAAP | 139.1 million | – | – |
| Six months net cash provided by operating activitiesGAAP | $572.4 million | – | – |
| Six months net cash provided by operating activities excluding special itemsnon-GAAP | $573.3 million | – | – |
2026 Outlook Revised outlook
- NoteDiluted earnings per share excluding special items: $4.10 - $4.30
- NoteNet cash provided by operating activities excluding special items and cash taxes: $1,175 - $1,235 million
- NoteCash taxes expected in 2026 (at the midpoint of diluted earnings per share excluding special items guidance): $120 million
- NoteNet cash provided by operating activities excluding special items: $1,055 - $1,115 million
- NoteMidpoint of net cash provided by operating activities excluding special items: $1,085 million
- NoteCapital improvements at existing field locations: $140 million
- NoteDevelopment of cemetery property: $170 million
- NoteDigital investments and corporate: $25 million
- NoteTotal maintenance, cemetery development, and other capital expenditures (Maintenance capital expenditures): $335 million
Capital returns
- Thus far this year, the company returned $363 million to shareholders through dividends and share repurchases.
What drove it
- Consolidated revenue grew $37.8 million, or 4%, over the second quarter of 2025.
- Comparable total funeral sales average grew 3% over the second quarter of 2025.
- Comparable cemetery preneed sales production increased 8% in the current quarter.
- Comparable funeral preneed sales production increased 7% in the current quarter.
- The funeral segment benefited from continued strong average revenue per service, which more than offset a better-than-expected 1% decline in funeral services performed.
- The cemetery segment generated 5% growth in comparable cemetery revenue, primarily driven by higher recognized preneed merchandise and service revenue and higher other revenue reflecting earnings growth from cemetery trust funds.
- Recognized preneed property revenue grew 2%, while preneed property production grew 7%.
- Adjusted operating cash flow increased primarily due to a reduction in cash taxes and strong operating cash receipts from increased preneed cemetery sales production.
Concerns
- Funeral services performed declined 1%.
- The growth of preneed property production relative to recognized property revenue puts temporary pressure on cemetery gross margins.
- The company stated that its 2026 outlook excludes expenses net of insurance recoveries related to hurricanes, asset-divestiture gains or losses, debt-extinguishment gains or losses, potential tax reserve adjustments and IRS payments and/or refunds, acquisition and integration costs, system implementation and transition costs, potential litigation charges or settlements, litigation-related insurance recoveries, and deferred tax payments.
What to watch
- Whether funeral average revenue per service continues to offset changes in funeral services performed.
- Conversion of higher-margin deferred property sales in the cemetery backlog into future revenue.
- Comparable cemetery preneed sales production and the associated cash receipts.
- Delivery against the revised 2026 adjusted operating cash flow range of $1,055 - $1,115 million.
- Total maintenance, cemetery development, and other capital expenditures of $335 million in the revised 2026 outlook.
Balance sheet and cash flow
- Net cash provided by operating activities was $238.7 million in the second quarter of 2026, compared to $166.5 million in the prior-year quarter.
- Net cash provided by operating activities excluding special items was $238.8 million in the second quarter of 2026, compared to $168.3 million in the prior-year quarter.
- Six months net cash provided by operating activities was $572.4 million, compared to $477.6 million in 2025.
- Six months net cash provided by operating activities excluding special items was $573.3 million, compared to $484.2 million in 2025.
Analysis
Service Corporation International reported second-quarter revenue of $1,103.3 million, compared with $1,065.4 million in the second quarter of 2025. The company described the increase as $37.8 million, or 4%. GAAP diluted earnings per share was $0.90 versus $0.86, while diluted earnings per share excluding special items was $0.90 versus $0.88. Operating income was $231.6 million, compared with $224.5 million, and net income attributable to common stockholders was $124.8 million, compared with $122.9 million.
Funeral demand was mixed. Comparable total funeral sales average grew 3%, and management said strong average revenue per service more than offset a better-than-expected 1% decline in funeral services performed. Cemetery performance supplied an additional growth lever, with 5% growth in comparable cemetery revenue, 8% growth in comparable cemetery preneed sales production, and 7% growth in comparable funeral preneed sales production. Higher recognized preneed merchandise and service revenue, higher other revenue, and earnings growth from cemetery trust funds supported cemetery performance.
The company identified a mix trade-off in cemetery. Recognized preneed property revenue grew 2%, while preneed property production grew 7%. Management said this places temporary pressure on cemetery gross margins, but increases backlog through higher-margin deferred property sales. The release does not provide reported gross profit, gross margin, segment revenue, or segment operating profit figures, limiting direct quantification of the segment mix and margin effects.
Cash conversion strengthened in the quarter. GAAP net cash provided by operating activities increased $72.2 million, or 43%, to $238.7 million, and adjusted operating cash flow increased $70.5 million, or 42%, to $238.8 million. Management attributed the adjusted cash-flow increase primarily to lower cash taxes and stronger operating cash receipts from higher preneed cemetery sales production. Thus far this year, the company returned $363 million to shareholders through dividends and share repurchases.
SCI confirmed the $4.20 midpoint of annual adjusted EPS guidance while narrowing the revised range to $4.10 - $4.30. It raised its midpoint for adjusted operating cash flow to $1,085 million from $1,035 million, citing stronger cemetery preneed cash receipts, and increased total maintenance capital expenditures to $335 million. The central execution items are the sustainability of funeral pricing, service-volume trends, cemetery preneed production and cash receipts, and the pace at which deferred property sales contribute to revenue and margins.
Management, verbatim
Today, we reported adjusted earnings per share of $0.90 and adjusted net cash provided by operating activities of $238.8 million, both ahead of the prior year and our expectations.
Tom Ryan, Chairman and CEO
Our funeral segment benefited from a continued strong average revenue per service which more than offset a better-than-expected 1% decline in funeral services performed.
Tom Ryan, Chairman and CEO
This dynamic puts temporary pressure on cemetery gross margins but expands our backlog with higher-margin deferred property sales, which will benefit us in future periods.
Tom Ryan, Chairman and CEO
Not in the filing
stated, not guessed- Quarterly gross profit and gross margin
- Segment revenue amounts for funeral and cemetery
- Segment operating income or segment margins
- Free cash flow
- Cash balance
- Debt balance
- Actual capital expenditures for the second quarter or six months
- Separate dividend amount
- Separate share repurchase amount
- Tax rate
- Prior-quarter comparisons for reported quarterly metrics
- Forward revenue guidance
- Forward gross-margin guidance
- Forward operating-expense guidance
- Forward tax-rate guidance
- Previous-release outlook for comparison with actual reported results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SCI’s 8-K includes Q2 2026 operating results and an updated 2026 outlook, emphasizing preneed cemetery production and cash receipts.
Ticker impact
SCI reported Q2 2026 results and confirmed 2026 adjusted EPS midpoint guidance, while raising 2026 operating cash flow guidance to $1,085 million at the midpoint.
Likely positive bias for SCI shares into/after the earnings call, with focus on whether raised cash flow is sustained in H2.
The filing includes specific, revised 2026 cash flow ranges and confirmed adjusted EPS range, both directly tied to stronger preneed cemetery cash receipts.
Market effects
Deathcare operators may see read-across interest if preneed cemetery cash receipts remain a key driver of earnings quality and free-cash-flow expectations.
Primarily US-focused demand and trust-fund cash receipt dynamics; limited direct regional spillover implied.
Low global relevance; the disclosure is company-specific within a niche North American sector.
Counterpoint
Raised cash flow could be partially offset by temporary cemetery gross margin pressure from higher recognized preneed property revenue, potentially limiting upside to earnings quality.
Key entities
- companyService Corporation International
NYSE-listed deathcare provider reporting Q2 2026 results and revised 2026 cash flow guidance in an SEC 8-K.
