How SCI Is Turning Cremation and Chaos Into Quarterly Wins

When you’re in the business of funerals, you don’t usually associate words like “growth,” “expansion,” or “profit margins.” But Service Corporation International (SCI) continues to prove that even in the deathcare industry, the economics are very much alive.

SCI’s Q1 2025 performance wasn’t flashy—it was something better: steady, strategic, and surprisingly forward-thinking. This isn’t a company just running on legacy and land plots. They’re tweaking how funerals are sold, priced, and pre-purchased, all while managing shifting consumer behaviors and regulatory headwinds like pros.

Yes, cremation is up. Yes, pre-need sales hit a speed bump. But SCI is quietly building a machine that looks ready to cash in on the eventual flood of baby boomer demand—complete with bundled merchandise, travel protection, and increasingly sophisticated upsells. It’s funerals, but make it fintech-adjacent.

With billions in liquidity, a strong buyback program, and an acquisition pipeline that’s still warming up, SCI is less about burying the past and more about banking on the future. Investors may not find this sector sexy, but it’s hard to argue with its consistency—and its cash flow.

In short: If you’re not paying attention to SCI, you’re missing out on how a legacy industry is modernizing from the casket up.

If there’s one company that knows how to handle “the end” with precision, it’s Service Corporation International (SCI). But in Q1 2025, America’s deathcare juggernaut isn’t just managing funerals—it’s also managing expectations.

The quarter delivered a solid financial performance, but behind the numbers is a story of transitions, demographic tailwinds, and a company trying to prep for the long game—while still making money in the short term.

Earnings Are Alive and Well

SCI reported adjusted EPS of $0.96, up from $0.89 last year. That’s a 7-cent bump driven by increased funeral revenue and better cost management. Fun fact: if not for a weird tax quirk involving stock options, EPS growth would’ve been 12%.

Operating cash flow? $316 million—up more than $90 million YOY.
Liquidity? Still stacked, with $1.6 billion on hand.
Stock buybacks? $130 million repurchased, because nothing says “we’re confident” like investing in yourself.

Funeral Business: Still Kicking

Funeral revenue rose 4%, thanks to more services performed (+1%) and more revenue per service (+2.5%). This growth happened even with cremation inching up another 40 basis points.

And the upsell is working—contracts now more frequently include travel protection and merchandise, adding heft to the price tag when families eventually cash in those preneed plans. Think of it like the funeral industry’s version of bundling your flight, hotel, and insurance—just more eternal.

But here’s the rub:

Preneed funeral sales were down 10% as SCI transitions from trust-based to insurance-based funding.
The SCI Direct team is still catching up—80% of markets are now converted, but the learning curve (and licensing requirements) slowed sales. Expect this to normalize by Q4.

Cemetery Business: Slower But Stable

Cemetery revenue dropped 2%, thanks to lower pre-need property recognition. Why? Big-ticket sales were down. SCI chalked this up to timing—not doom—and they expect to make up ground later in the year.

Gross margin? 32%, still very strong.
April pre-need sales? Looking good. That’s insider-speak for “we’re optimistic again.”

The Long Game: From Boomers to Backlogs

Here’s the play: SCI is banking on aging baby boomers to lift service volume long term. The first wave hits 80 in 2026—just around the corner.

Meanwhile, contracts loaded with deferred merchandise and travel perks are beginning to mature. That means the average revenue per SCI Direct service is projected to double from ~$1,500 to over $3,000 in the coming years. A slow burn, but a valuable one.

And the cremation trend? It’s leveling out. Growth used to be 150 basis points a year; now it’s crawling closer to 100 or less. You can only go so high when you’re already at 60%.

Capital, M&A, and Shareholder Love

SCI continues to flex its financial muscles:

$95M invested in Q1 for new builds, digital upgrades, and cemetery development
$15M in acquisitions, with more on deck (targeting $75–$125M for 2025)
$176M returned to shareholders (dividends + buybacks)

The M&A pipeline? Still hot. But SCI isn’t in a rush—it’s playing matchmaker with independent funeral homes, waiting for the right moment to swoop.

Risks: The Fine Print

Tax headaches are coming. Changes in deduction rules mean SCI will feel a $150M cash tax hit starting in Q2.
Tariffs? Not sweating it—60% of materials like caskets and urns are already U.S.-sourced, and long-term supplier contracts are keeping costs in check (for now).
Regulatory pressure like the FTC’s Funeral Rule updates? SCI’s already ahead of the curve.

Final Word: Predictably Profitable, Quietly Transforming

SCI’s Q1 2025 is proof that even in an industry built around finality, evolution is constant. From insurance transitions and pricing optimization to digital modernization and strategic M&A, the deathcare giant is laying the groundwork for a more profitable (and modernized) future.

The baby boomers are coming. The backlog is bulging. And SCI, with 1,900+ locations across North America, is preparing to capitalize—one cremation, urn, and travel-protected pre-need plan at a time.

📈 The bottom line? This business is alive and well.