SEC Form 10-Q filed by Service Corporation International

10/30/25 2:00:59 PM ET

Other Consumer Services

Consumer Discretionary

Get the next $SCI alert in real time by email

sci-20250930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	SEPTEMBER 30, 2025
		OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Commission file number 1-6402-1

SERVICE CORPORATION INTERNATIONAL

(Exact name of registrant as specified in its charter)

Texas

74-1488375

(State or other jurisdiction of incorporation or organization)

(I.R.S. employer identification no.)

1929 Allen Parkway

Houston

Texas

77019

(Address of principal executive offices)

(Zip code)

Registrant’s telephone number, including area code: (713) 522-5141

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol (s)

Name of Each Exchange on Which Registered

Common Stock ($1 par value)

SCI

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in 12b-2 of the act).

Yes

☐

The number of shares outstanding of the registrant’s common stock as of October 30, 2025 was 140,181,355 (net of treasury shares).


SERVICE CORPORATION INTERNATIONAL INDEX

Page
GLOSSARY		3
PART I. FINANCIAL INFORMATION		5
Item 1.	Financial Statements	5
	Unaudited Condensed Consolidated Statement of Operations - Three and Nine Months Ended September 30, 2025 & 2024	5
	Unaudited Condensed Consolidated Statement of Comprehensive Income - Three and Nine Months Ended September 30, 2025 & 2024	6
	Unaudited Condensed Consolidated Balance Sheet - September 30, 2025 & December 31, 2024	7
	Unaudited Condensed Consolidated Statement of Cash Flows - Nine Months Ended September 30, 2025 & 2024	8
	Unaudited Condensed Consolidated Statement of Equity - Three and Nine Months Ended September 30, 2025 & 2024	9
	Notes to Unaudited Condensed Consolidated Financial Statements	11
	1. Nature of Operations	11
	2. Summary of Significant Accounting Policies	11
	3. Preneed Activities	13
	4. Income Taxes	19
	5. Debt	20
	6. Credit Risk and Fair Value of Financial Instruments	22
	7. Equity	22
	8. Segment Reporting	23
	9. Commitments and Contingencies	25

	10. Earnings Per Share	25
	11. Acquisitions and Divestiture-Related Activities	26
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
	The Company	28
	Financial Condition, Liquidity, and Capital Resources	28
	Results of Operations - Three an d Nine Months Ended September 30, 2025 & 2024	35
	Critical Accounting Policies	40
	Cautionary Statement on Forward-Looking Statements	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	42
Item 4.	Controls and Procedures	42
PART II. OTHER INFORMATION		43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	43
Item 4.	Mine Safety Disclosures	43
Item 5.	Other Information	43
Item 6.	Exhibits	44
SIGNATURE		45

2 Service Corporation International

Glossary

The following terms are common to the deathcare industry, are used throughout this report, and have the following meanings:

Atneed — Funeral, including cremation, and cemetery arrangements sold once death has occurred.

Average Revenue per Service — Average revenue per funeral service performed, excluding the impact of non-funeral home preneed sales revenue, core general agency revenue, and certain other revenue.

Cancellation — Termination of a preneed contract, which relieves us of the obligation to provide the goods and services included in the contract. Cancellations may be requested by the customer or be initiated by us if the customer fails to comply with the contractual terms of payment. State or provincial laws govern the amount of refund, if any, owed to the customer.

Care Trusts' Corpus — The deposits and net realized capital gains included in the cemetery perpetual care trusts that may not be withdrawable. In certain states, some or all of the net realized capital gains can be distributed to us. Additionally, some states allow a total return distribution that may contain elements of income, capital appreciation, and principal.

Cemetery Marker — An item used to identify the deceased person in a particular burial space, crypt, niche, or cremation memorialization property. Permanent burial and cremation memorialization cemetery markers are usually made of bronze or stone.

Cemetery Merchandise and Services — Merchandise and services used in connection with a cemetery interment, including stone and bronze memorials, cemetery markers, outer burial containers, floral placement, graveside services, merchandise installations, urns, and interments.

Cemetery Perpetual Care Trust or Endowment Care Fund (ECF) — A trust fund established for the purpose of maintaining cemetery grounds and property into perpetuity. For these trusts, the corpus generally remains in the trust in perpetuity and the investment earnings or elected distributions are withdrawn regularly and are intended to defray our expenses incurred to maintain the cemetery. In certain states, some or all of the net realized capital gains can also be distributed. Additionally, some states generally allow a total return distribution that may contain elements of income, capital appreciation, and principal.

Cemetery Property — Developed lots, lawn crypts, mausoleum spaces, cremation niches, and cremation memorialization property items (constructed and ready to accept interments) and undeveloped land we intend to develop for the sale of interment rights. Includes the construction-in-progress balance during the pre-construction and construction phases of projects creating new developed property items.

Cemetery Property Amortization or Amortization of Cemetery Property — The non-cash recognized expenses of cemetery property interment rights, which are recorded by specific identification with the cemetery property revenue for each contract.

Cemetery Property Interment Rights — The exclusive right to determine the human remains that will be interred in a specific cemetery property space. See also Cemetery Property Revenue below.

Cemetery Property Revenue — Recognized sales of interment rights in cemetery property when the receivable is deemed collectible and the property is fully constructed and available for interment.

Combination Location (Combos) — Locations where a funeral service location is physically located within or adjoining a SCI-owned cemetery location.

Cremation — The reduction of human remains to bone fragments by intense heat.

Cremation Memorialization — Products specifically designed to commemorate and honor the life of an individual who has been cremated. These products include cemetery property items that provide for the disposition of cremated remains within our cemeteries such as benches, boulders, statues, cremation niches, etc. They also include memorial walls and books where the name of the individual is inscribed but the remains have been scattered or kept by the family.

Cremation Niche — An aboveground burial space, in which a decedent's urn, containing their cremated remains and other keepsakes, is placed and sometimes sealed.

Funeral Merchandise and Services — Merchandise such as burial caskets and related accessories, outer burial containers, urns and other cremation receptacles, casket and cremation memorialization products, flowers, and professional services relating to funerals including arranging and directing services, use of funeral facilities and motor vehicles, removal, preparation, embalming, cremations, memorialization, visitations, travel protection, and catering.

Funeral Services Performed — The number of funeral services, including cremations, provided after the date of death, sometimes referred to as funeral volume.

General Agency (GA) Revenue — Commissions we receive from third-party life insurance companies for life insurance policies sold to preneed customers for the purpose of funding preneed funeral arrangements. The commission rate paid is determined based on the product type sold, the length of payment terms, and the health and age of the insured/annuitant.

FORM 10-Q 3

Interment — The burial or final placement of human remains in the ground (interment), in mausoleums (entombment), or in cremation niches or cremation memorialization property (inurnment).

Lawn Crypt — Cemetery property in which an underground outer burial receptacle constructed of concrete and reinforced steel has been pre-installed in designated areas.

Maturity — When the underlying contracted merchandise is delivered or service is performed, typically at death. This is the point at which preneed funeral contracts are converted to atneed contracts (note — delivery of certain merchandise and services can occur prior to death).

Mausoleum — An above ground structure that is designed to house caskets and/or cremation urns.

Merchandise and Service Trust — A trust account established in accordance with state or provincial law into which we deposit the required percentage of customers’ payments for preneed funeral, cremation, or cemetery merchandise and services to be delivered or performed by us in the future. The amounts deposited can be withdrawn only after we have completed our obligations under the preneed contract or upon the cancellation of the contract. Also referred to as a preneed trust.

Non-Funeral Home Preneed Sales Revenue — Non-funeral home general agency revenue and merchandise and travel protection revenue, net, sold to a preneed customer and delivered before a death has occurred.

Outer Burial Container — A reinforced container intended to inhibit the subsidence of the earth and house the casket after it is placed in the ground, also known as a burial vault.

Preneed — Purchase of cemetery property interment rights or any funeral or cemetery merchandise and services prior to death occurring or prior to delivery of products and services.

Preneed Backlog or Backlog of Preneed Revenue — Future revenue from unfulfilled preneed funeral, cremation, and cemetery contractual arrangements.

Preneed Cemetery Sales Production — Sales of preneed cemetery contracts. These sales are recorded in Deferred revenue, net until the merchandise is delivered, the service is performed, or the property has been constructed and is available for interment.

Preneed Funeral Sales Production — Sales of preneed funeral trust-funded and insurance-funded contracts. Preneed funeral trust-funded contracts are recorded in Deferred revenue, net until the merchandise is delivered or the service is performed. We do not reflect the unfulfilled insurance-funded preneed funeral contract amounts in our Consolidated Balance Sheet. The proceeds of the life insurance policies will be reflected in revenue as these funerals are performed by us in the future.

Preneed Receivables, Net — Amounts due from customers when we have delivered the merchandise, performed the service, or transferred control of the cemetery property interment rights prior to a death occurring and amounts due from customers on irrevocable preneed contracts.

Travel Protection — A service provided by a third-party that provides shipment of remains to the servicing funeral home of choice if the purchaser passes away outside of a certain radius of their residence.

Trust Fund Income — Recognized investment earnings from our merchandise, service, and perpetual care trust investments.

As used herein, “SCI,” “Company,” “we,” “our,” and “us” refer to Service Corporation International and companies owned directly or indirectly by Service Corporation International, unless the context requires otherwise. Management has published a white paper on the corporate website for further understanding of accounting for preneed sales. You can view the white paper at http://investors.sci-corp.com under Featured Documents. Documents and information on our website are not incorporated by reference herein.

4 Service Corporation International


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Service Corporation International

Condensed Consolidated Statement of Operations (Unaudited)


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(In thousands, except per share amounts)
Revenue
Property and merchandise revenue	$	519,210	$	504,565	$	1,530,876	$	1,549,461
Service revenue	431,785		422,739		1,351,994		1,295,701
Other revenue	107,101		86,654		314,837		248,194
Total revenue	1,058,096		1,013,958		3,197,707		3,093,356

Costs of revenue
Cost of property and merchandise	(269,857)		(259,168)		(806,641)		(794,176)
Cost of service	(242,007)		(232,989)		(731,562)		(706,646)
Overhead and other expenses	(280,689)		(269,162)		(831,106)		(807,767)
Costs of revenue	(792,553)		(761,319)		(2,369,309)		(2,308,589)
Gross profit	265,543		252,639		828,398		784,767
Corporate general and administrative expenses	(38,332)		(43,732)		(132,499)		(124,055)
Restructuring charge	(405)		—		(1,980)		—
(Losses) gains on divestitures and impairment charges, net	(415)		3,515		8,618		4,755



Operating income	226,391		212,422		702,537		665,467
Interest expense	(65,683)		(65,804)		(191,237)		(194,540)
Losses on early extinguishment of debt	—		(25)		—		(25)
Other income, net	153		2,815		7,219		7,002
Income before income taxes	160,861		149,408		518,519		477,904
Provision for income taxes	(43,339)		(31,547)		(135,146)		(110,549)


Net income	117,522		117,861		383,373		367,355
Net income attributable to noncontrolling interests	(49)		(34)		(155)		(61)
Net income attributable to common stockholders	$	117,473	$	117,827	$	383,218	$	367,294
Basic earnings per share:
Net income attributable to common stockholders	$	0.84	$	0.81	$	2.70	$	2.53
Basic weighted average number of shares	140,318		144,706		142,097		145,421
Diluted earnings per share:
Net income attributable to common stockholders	$	0.83	$	0.81	$	2.68	$	2.50
Diluted weighted average number of shares	141,424		146,223		143,227		146,978

(See notes to unaudited condensed consolidated financial statements)

FORM 10-Q 5

PART I

Service Corporation International

Condensed Consolidated Statement of Comprehensive Income (Unaudited)


	Three months ended September 30,			Nine months ended September 30,
		2025			2024		2025		2024
		(In thousands)
Net income		$	117,522		$	117,861	$	383,373	$	367,355
Other comprehensive income:
Foreign currency translation adjustments		(8,130)			4,894		12,992		(7,503)

Total comprehensive income		109,392			122,755		396,365		359,852
Total comprehensive income attributable to noncontrolling interests		(49)			(35)		(155)		(58)
Total comprehensive income attributable to common stockholders		$	109,343		$	122,720	$	396,210	$	359,794

(See notes to unaudited condensed consolidated financial statements)

6 Service Corporation International

PART I

Service Corporation International

Condensed Consolidated Balance Sheet (Unaudited)


	September 30, 2025		December 31, 2024
	(In thousands, except share amounts)

ASSETS
Current assets:
Cash and cash equivalents	$	241,339	$	218,766
Receivables, net of reserves of $3,813 and $4,040, respectively	93,759		94,341
Inventories	31,641		33,318
Income tax receivable	18,758		3,775
Other	34,219		27,130
Total current assets	419,716		377,330
Preneed receivables, net of reserves of $35,819 and $35,857, respectively, and trust investments	7,270,261		6,739,332
Cemetery property	2,177,777		2,129,404
Property and equipment, net	2,679,206		2,581,069
Goodwill	2,146,617		2,081,015
Deferred charges and other assets, net of reserves of $2,389 and $2,367, respectively	1,293,808		1,317,256
Cemetery perpetual care trust investments	2,374,391		2,154,032
Total assets	$	18,361,776	$	17,379,438

LIABILITIES & EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	684,873	$	639,989
Current maturities of long-term debt	67,284		83,850

Total current liabilities	752,157		723,839
Long-term debt	4,962,355		4,751,448
Deferred revenue, net	1,776,500		1,755,170
Deferred tax liability	680,428		649,195
Other liabilities	541,343		513,480
Deferred receipts held in trust	5,717,725		5,162,525
Care trusts’ corpus	2,363,984		2,145,112
Commitments and contingencies (Note 9)

Equity:
Common stock, $1 per share par value, 500,000,000 shares authorized, 147,334,081 and 146,668,589 shares issued, respectively, and 140,246,179 and 144,694,887 shares outstanding, respectively	140,246		144,695
Capital in excess of par value	980,594		986,830
Retained earnings	440,061		553,701
Accumulated other comprehensive gain (loss)	5,771		(7,221)
Total common stockholders’ equity	1,566,672		1,678,005
Noncontrolling interests	612		664
Total equity	1,567,284		1,678,669
Total liabilities and equity	$	18,361,776	$	17,379,438

(See notes to unaudited condensed consolidated financial statements)

FORM 10-Q 7

PART I

Service Corporation International

Condensed Consolidated Statement of Cash Flows (Unaudited)


	Nine months ended September 30,
	2025		2024
	(In thousands)
Cash flows from operating activities:
Net income	$	383,373	$	367,355
Adjustments to reconcile net income to net cash provided by operating activities:

Loss on early extinguishment of debt	—		25

Depreciation and amortization	163,462		153,932
Amortization of intangibles	12,353		12,759
Amortization of cemetery property	73,785		70,431
Amortization of loan costs	6,605		5,365
Provision for expected credit losses	7,394		9,693
Provision for deferred income taxes	32,310		15,243
Gains on divestitures and impairment charges, net	(8,618)		(4,755)

Share-based compensation	13,624		13,662

Change in assets and liabilities, net of effects from acquisitions and divestitures:
(Increase) decrease in receivables	(2,487)		11,366
(Increase) decrease in other assets	(18,115)		12,464
Increase in payables and other liabilities	26,006		19,148
Effect of preneed sales production and maturities:
Increase in preneed receivables, net and trust investments	(34,056)		(139,876)
Increase in deferred revenue, net	29,994		83,331
Increase in deferred receipts held in trust	44,230		50,652



Net cash provided by operating activities	729,860		680,795
Cash flows from investing activities:
Capital expenditures	(262,818)		(267,485)
Business acquisitions, net of cash acquired	(65,098)		(161,865)
Real estate acquisitions	(6,610)		(53,329)
Corporate headquarters	(44,942)		(9,352)
Proceeds from divestitures and sales of property and equipment	28,267		21,632

Payments for Company-owned life insurance policies	(216)		(3,009)
Proceeds from Company-owned life insurance policies and other	11,433		2,673
Other investing activities	(1,435)		(13,864)


Net cash used in investing activities	(341,419)		(484,599)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	655,011		1,336,137
Debt issuance costs	—		(15,246)
Scheduled payments of debt	(19,117)		(18,421)
Early payments and extinguishment of debt	(490,000)		(1,210,024)
Proceeds from corporate headquarters debt facility	33,533		—

Principal payments on finance leases	(28,590)		(27,524)
Proceeds from exercise of stock options	20,904		42,898

Purchase of Company common stock	(402,093)		(197,511)
Payments of dividends	(135,977)		(130,811)

Bank overdrafts and other	(2,548)		(10,253)

Net cash used in financing activities	(368,877)		(230,755)


Effect of foreign currency	3,522		(1,566)
Net increase (decrease) in cash, cash equivalents, and restricted cash	23,086		(36,125)
Cash, cash equivalents, and restricted cash at beginning of period	221,399		224,761
Cash, cash equivalents, and restricted cash at end of period	$	244,485	$	188,636

(See notes to unaudited condensed consolidated financial statements)

8 Service Corporation International

PART I

Service Corporation International

Condensed Consolidated Statement of Equity (Unaudited)


	Common Stock		Treasury Stock, Par Value		Capital in Excess of Par Value			Retained Earnings			Accumulated Other Comprehensive Income (loss)		Noncontrolling Interest		Total
	(In thousands, except per share amounts)
Balance at December 31, 2023	$	148,298	$	(1,975)	$	937,596		$	432,454		$	24,891	$	209	$	1,541,473
Comprehensive income (loss)	—		—		—		x2	131,301		x2	(8,477)		(30)		122,794
Dividends declared on common stock ($0.30 per share)	—		—		—			(43,944)			—		—		(43,944)
Share-based compensation earned	—		—		3,926			—			—		—		3,926
Stock option exercises	544		—		16,693			—			—		—		17,237
Restricted stock awards, net of forfeitures	138		—		(138)			—			—		—		—
Purchase of Company common stock	—		(706)		(4,518)			(44,266)			—		—		(49,490)

Other	—		—		(1,215)			—			—		—		(1,215)
Balance at March 31, 2024	$	148,980	$	(2,681)	$	952,344		$	475,545		$	16,414	$	179	$	1,590,781
Comprehensive income (loss)	—		—		—			118,166			(3,916)		53		114,303
Dividends declared on common stock ($0.30 per share)	—		—		—			(43,384)			—		—		(43,384)
Share-based compensation earned	24		—		5,636			—			—		—		5,660
Stock option exercises	14		—		608			—			—		—		622

Purchase of Company common stock	—		(1,799)		(12,942)			(113,431)			—		—		(128,172)
Noncontrolling interest payments	—		—		—			—			—		(120)		(120)

Balance at June 30, 2024	$	149,018	$	(4,480)	$	945,646		$	436,896		$	12,498	$	112	$	1,539,690


Comprehensive income	—		—		—			117,827			4,893		35		122,755
Dividends declared on common stock ($0.30 per share)	—		—		—			(43,483)			—		—		(43,483)
Share-based compensation earned	—		—		4,076			—			—		—		4,076
Stock option exercises	725		—		24,314			—			—		—		25,039

Purchase of Company common stock	—		(284)		(1,525)			(18,946)			—				(20,755)

Noncontrolling payments	—		—		—			—			—		479		479

Balance at September 30, 2024	$	149,743	$	(4,764)	$	972,511		$	492,294		$	17,391	$	626	$	1,627,801

(See notes to unaudited condensed consolidated financial statements)

FORM 10-Q 9

PART I


	Common Stock		Treasury Stock, Par Value		Capital in Excess of Par Value		Retained Earnings			Accumulated Other Comprehensive Income (loss)		Noncontrolling Interest		Total
	(In thousands, except per share amounts)
Balance at December 31, 2024	$	146,670	$	(1,975)	$	986,830	$	553,701		$	(7,221)	$	664	$	1,678,669
Comprehensive income	—		—		—		142,880		x2	527		47		143,454
Dividends declared on common stock $0.32 per share)	—		—		—		(45,991)			—		—		(45,991)
Share-based compensation earned	—		—		3,841		—			—		—		3,841
Stock option exercises	95		—		3,812		—			—		—		3,907
Restricted stock awards, net of forfeitures	120		—		(120)		—			—		—		—
Purchase of Company common stock	—		(1,636)		(12,619)		(116,558)			—		—		(130,813)
Noncontrolling interest payments	—		—		—		—			—		(166)		(166)
Other	—		—		(1,281)		—			—		—		(1,281)
Balance at March 31, 2025	$	146,885	$	(3,611)	$	980,463	$	534,032		$	(6,694)	$	545	$	1,651,620
Comprehensive income	—		—		—		122,865			20,595		59		143,519
Dividends declared on common stock ($0.32 per share)	—		—		—		(45,138)			—		—		(45,138)
Share-based compensation earned	22		—		5,726		—			—		—		5,748
Stock option exercises	3		—		130		—			—		—		133

Purchase of Company common stock	—		(2,493)		(18,988)		(174,007)			—		—		(195,488)
Noncontrolling interest payments	—		—		—		—			—		(40)		(40)
Other	—		—		(2)		—			—		1		(1)
Balance at June 30, 2025	$	146,910	$	(6,104)	$	967,329	$	437,752		$	13,901	$	565	$	1,560,353
Comprehensive income (loss)	—		—		—		117,473			(8,130)		49		109,392
Dividends declared on common stock ($0.32 per share)	—		—		—		(44,848)			—		—		(44,848)
Share-based compensation earned	—		—		4,035		—			—		—		4,035
Stock option exercises	424		—		16,440		—			—		—		16,864

Purchase of Company common stock	—		(985)		(7,207)		(70,316)			—		—		(78,508)


Other	1		—		(3)		—			—		(2)		(4)
Balance at September 30, 2025	$	147,335	$	(7,089)	$	980,594	$	440,061		$	5,771	$	612	$	1,567,284

(See notes to unaudited condensed consolidated financial statements)

10 Service Corporation International

PART I

Service Corporation International

Notes to Unaudited Condensed Consolidated Financial Statements

1. Nature of Operations

Service Corporation International (SCI) is a holding company and all operations are conducted by its subsidiaries. We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries operating in the United States and Canada. Our funeral service and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis. We strive to offer families exceptional service in planning life celebrations and personalized remembrances.

Funeral service locations provide all professional services relating to funerals and cremations, including the use of funeral facilities and motor vehicles, arranging and directing services, removal, preparation, embalming, cremations, memorialization, travel protection, and catering. Funeral merchandise, including burial caskets and related accessories, urns and other cremation receptacles, outer burial containers, flowers, online and video tributes, stationery products, casket and cremation memorialization products, and other ancillary merchandise, is sold at funeral service locations.

Our cemeteries provide cemetery property interment rights, including developed lots, lawn crypts, mausoleum spaces, cremation niches, and other cremation memorialization and interment options. Cemetery merchandise and services, including cemetery markers and bases, outer burial containers, flowers and floral placement, other ancillary merchandise, graveside memorial services, merchandise installation, and interments, are sold at our cemeteries.

2. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

Our unaudited condensed consolidated financial statements include the accounts of Service Corporation International and all subsidiaries in which we hold a controlling financial interest. Intercompany balances and transactions have been eliminated in consolidation.

Our unaudited condensed consolidated financial statements also include the accounts of the merchandise, service, and cemetery perpetual care trusts in which we have a variable interest and are the primary beneficiary. We have retained the specialized industry accounting principles when consolidating the trusts. Although we consolidate the trusts, it does not change the legal relationships among the trusts, us, or our customers. The customers are the legal beneficiaries of these trusts; therefore, their interests in these trusts represent a liability to us.

Our interim condensed consolidated financial statements are unaudited but include all adjustments, consisting of normal recurring accruals and any other adjustments, which management considers necessary for a fair statement of our results for these periods. Our unaudited condensed consolidated financial statements have been prepared in a manner consistent with the accounting policies described in our Annual Report on Form 10-K for the year ended December 31, 2024, unless otherwise disclosed herein, and should be read in conjunction therewith. The accompanying year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. Operating results for interim periods are not necessarily indicative of the results that may be expected for the full year period.

Certain reclassifications have been made to prior period amounts to conform to the current period disclosure presentation with no effect on our consolidated net income or cash flows.

Use of Estimates in the Preparation of Financial Statements

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. As a result, actual results could differ from these estimates.

Cash, Cash Equivalents, and Restricted Cash

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. The carrying amounts of our cash and cash equivalents approximate fair value due to the short-term nature of these instruments.

FORM 10-Q 11

PART I

The components of cash, cash equivalents, and restricted cash were as follows:


	September 30, 2025		December 31, 2024
	(In thousands)
Cash and cash equivalents	$	241,339	$	218,766
Restricted cash(1):
Included in Other current assets	2,492		2,000
Included in Deferred charges and other assets, net	654		633
Total restricted cash	3,146		2,633
Total cash, cash equivalents, and restricted cash	$	244,485	$	221,399

(1) Restricted cash in both periods primarily consists of proceeds from divestitures deposited into escrow accounts under IRS code section 1031 and collateralized obligations under certain insurance policies.

Receivables, net

The components of Receivables, net in our unaudited Condensed Consolidated Balance Sheet were as follows:


	September 30, 2025
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	32,498	$	20,523	$	44,379	$	172	$	97,572
Reserve for credit losses	(1,273)		(2,000)		(430)		(110)		(3,813)
Receivables, net	$	31,225	$	18,523	$	43,949	$	62	$	93,759


	December 31, 2024
	Atneed Funeral		Atneed Cemetery		Miscellaneous		Current Portion of Notes		Total
	(In thousands)
Receivables	$	35,950	$	21,703	$	40,559	$	169	$	98,381
Reserve for credit losses	(1,558)		(2,048)		(320)		(114)		(4,040)
Receivables, net	$	34,392	$	19,655	$	40,239	$	55	$	94,341

12 Service Corporation International

PART I

Recently Issued Accounting Standards

Income Tax

In December 2023, the FASB amended guidance that requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The new guidance is effective for us for the 2025 annual period. We are currently assessing the impact of this guidance on our disclosures, and upon adoption, we will include the required disclosures in our financial statements and related notes. We do not anticipate that the guidance will have a material effect on our financial position or results of operations.

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued guidance that requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, with early adoption permitted, and it can be adopted either on a prospective or retrospective basis. Upon adoption, we will include the additional disclosures in our financial statements and related notes; however, the guidance will not have a material effect on our financial position or results of operations.

Internal-Use Software

In September 2025, the FASB issued guidance to modernize the accounting for software costs that are accounted for under Subtopic 350-40, Intangibles-Goodwill and Other-Internal-Use Software. The new guidance is effective for us for the 2028 annual period, with early adoption permitted, and it can be adopted either on a prospective, modified or retrospective basis. We are currently assessing the impact of this guidance on our disclosures, and upon adoption, we will include the required disclosures in our financial statements and related notes. We do not anticipate that the guidance will have a material effect on our financial position or results of operations.

3. Preneed Activities

Preneed Receivables, Net and Trust Investments

The components of Preneed receivables, net and trust investments in our unaudited Condensed Consolidated Balance Sheet were as follows:



	September 30, 2025		December 31, 2024
	(In thousands)
Preneed receivables, net	$	1,541,176	$	1,570,773

Trust investments, at market	7,870,586		7,084,723

Insurance-backed fixed income securities and other	232,890		237,868
Trust investments	8,103,476		7,322,591
Less: Cemetery perpetual care trust investments	(2,374,391)		(2,154,032)
Preneed trust investments	5,729,085		5,168,559

Preneed receivables, net and trust investments	$	7,270,261	$	6,739,332

FORM 10-Q 13

PART I

Preneed receivables, net comprised the following:


	September 30, 2025
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	151,117	$	1,453,489	$	1,604,606
Unearned finance charges	(13,119)		(14,492)		(27,611)
Preneed receivables, at amortized cost	137,998		1,438,997		1,576,995
Reserve for credit losses	(20,472)		(15,347)		(35,819)
Preneed receivables, net	$	117,526	$	1,423,650	$	1,541,176

	December 31, 2024
	Funeral		Cemetery		Total
	(In thousands)
Preneed receivables	$	183,016	$	1,444,084	$	1,627,100
Unearned finance charges	(11,083)		(9,387)		(20,470)
Preneed receivables, at amortized cost	171,933		1,434,697		1,606,630
Reserve for credit losses	(20,132)		(15,725)		(35,857)
Preneed receivables, net	$	151,801	$	1,418,972	$	1,570,773

At September 30, 2025, the amortized cost basis of our preneed receivables by year of origination was as follows:



	2025		2024		2023		2022		2021		Prior		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	22,792	$	39,124	$	33,353	$	17,122	$	8,517	$	17,090	$	137,998
Cemetery	427,841		440,701		290,784		166,734		69,246		43,691		1,438,997
Total preneed receivables, at amortized cost	$	450,633	$	479,825	$	324,137	$	183,856	$	77,763	$	60,781	$	1,576,995

At September 30, 2025, the payment status of our preneed receivables was as follows:


	Past Due
	<30 Days		30-90 Days		90-180 Days		>180 Days		Total		Current		Total
	(In thousands)
Preneed receivables, at amortized cost:
Funeral	$	3,539	$	2,119	$	1,590	$	31,074	$	38,322	$	99,676	$	137,998
Cemetery	56,744		46,610		17,146		6,705		127,205		1,311,792		1,438,997
Total preneed receivables, at amortized cost	$	60,283	$	48,729	$	18,736	$	37,779	$	165,527	$	1,411,468	$	1,576,995

14 Service Corporation International

PART I

The following table summarizes the activity for the reserve for credit losses on preneed receivables for the nine months ended September 30, 2025:



	December 31, 2024		Provision for Expected Credit Losses		Write Offs		Effect of Foreign Currency and Other		September 30, 2025
	(In thousands)
Funeral	$	(20,132)	$	(3,298)	$	2,960	$	(2)	$	(20,472)
Cemetery	(15,725)		(8)		397		(11)		(15,347)
Total reserve for credit losses on preneed receivables	$	(35,857)	$	(3,306)	$	3,357	$	(13)	$	(35,819)

The table below sets forth certain investment-related activities associated with our trusts:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(In thousands)
Deposits	$	172,169	$	164,064	$	488,925	$	479,924
Withdrawals	$	161,288	$	161,622	$	437,892	$	431,816
Purchases of securities	$	468,919	$	350,799	$	1,854,184	$	1,433,451
Sales of securities	$	401,392	$	384,336	$	1,728,555	$	1,443,426
Realized gains from sales of securities(1)	$	114,746	$	94,604	$	344,420	$	373,094
Realized losses from sales of securities(1)	$	(20,908)	$	(31,283)	$	(96,108)	$	(88,834)

(1)All realized gains and losses are recognized in Other income, net for our trust investments and are offset by a corresponding reclassification in Other income, net to Deferred receipts held in trust and Care trusts’ corpus.

FORM 10-Q 15

PART I

The cost and market values associated with trust investments recorded at market value are detailed below. Cost reflects the investment of control holders in the trusts. Fair value represents the value of the underlying securities held by the trusts.


		September 30, 2025
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	47,306	$	295	$	(536)	$	47,065
Canadian government	2	27,303		—		—		27,303
Corporate	2	10,441		390		(9)		10,822
Residential mortgage-backed	2	3,535		51		(32)		3,554
Asset-backed	2	280		—		(45)		235
Equity securities:
Preferred stock	2	14,986		2,680		(59)		17,607
Common stock:
United States	1	2,035,533		788,788		(93,676)		2,730,645
Canada	1	38,434		31,241		(484)		69,191
Other international	1	171,469		42,487		(4,609)		209,347
Mutual funds:
Equity	1	941,938		287,231		(701)		1,228,468
Fixed income	1	659,451		8,945		(27,245)		641,151

Trust investments, at fair value		3,950,676		1,162,108		(127,396)		4,985,388
Commingled funds
Fixed income		1,319,364		16,298		(48,069)		1,287,593
Equity		354,092		150,439		(557)		503,974
Money market funds		402,531		—		—		402,531
Alternative investments		481,364		219,117		(9,381)		691,100
Trust investments, at net asset value		2,557,351		385,854		(58,007)		2,885,198
Trust investments, at market		$	6,508,027	$	1,547,962	$	(185,403)	$	7,870,586

16 Service Corporation International

PART I


		December 31, 2024
	Fair Value Hierarchy Level	Cost		Unrealized Gains		Unrealized Losses		Value
				(In thousands)
Fixed income securities:
U.S. Treasury	2	$	43,699	$	178	$	(849)	$	43,028
Canadian government	2	25,979		—		—		25,979
Corporate	2	10,087		326		(11)		10,402
Residential mortgage-backed	2	3,811		39		(49)		3,801
Asset-backed	2	290		—		(47)		243
Equity securities:
Preferred stock	2	8,059		930		(25)		8,964
Common stock:
United States	1	1,887,854		617,695		(68,404)		2,437,145
Canada	1	41,362		20,164		(1,160)		60,366
Other international	1	120,605		34,414		(10,382)		144,637
Mutual funds:
Equity	1	950,990		121,006		(13,892)		1,058,104
Fixed income	1	1,028,622		4,183		(46,391)		986,414

Trust investments, at fair value		4,121,358		798,935		(141,210)		4,779,083
Commingled funds
Fixed income		862,350		2,597		(60,646)		804,301
Equity		346,553		99,647		(316)		445,884
Money market funds		432,821		—		—		432,821
Alternative investments		438,449		193,638		(9,453)		622,634
Trust investments, at net asset value		2,080,173		295,882		(70,415)		2,305,640
Trust investments, at market		$	6,201,531	$	1,094,817	$	(211,625)	$	7,084,723

Our alternative investments include funds invested in limited partnerships with interests in private equity, private market real estate, energy and natural resources, infrastructure, transportation, and private debt including both distressed debt and mezzanine financing. These investments can never be redeemed by the funds. Instead, due to the nature of the investments in this category, distributions are received through the liquidation of the underlying assets of the funds. The funds' managers have not communicated the timing of any liquidations.

Maturity dates of our fixed income securities range from 2025 to 2044. Maturities of fixed income securities (excluding mutual and commingled funds) at September 30, 2025 are estimated as follows:


	Fair Value
	(In thousands)
Due in one year or less	$	48,766
Due in one to five years	35,077
Due in five to ten years	4,922
Thereafter	214
Total estimated maturities of fixed income securities	$	88,979

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $51.0 million and $45.7 million for the three months ended September 30, 2025 and 2024, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $27.7 million and $24.7 million for the three months ended September 30, 2025 and 2024, respectively.

FORM 10-Q 17

PART I

Recognized trust fund income (realized and unrealized) related to our preneed trust investments was $146.9 million and $134.3 million for the nine months ended September 30, 2025 and 2024, respectively. Recognized trust fund income (realized and unrealized) related to our cemetery perpetual care trust investments was $80.8 million and $73.5 million for the nine months ended September 30, 2025 and 2024, respectively.

Deferred Revenue, Net

Deferred revenue, net represents future revenue, including distributed trust investment earnings associated with unperformed trust-funded preneed contracts that are not held in trust accounts. Future revenue and net trust investment earnings that are held in trust accounts are included in Deferred receipts held in trust.

The components of Deferred revenue, net in our unaudited Condensed Consolidated Balance Sheet were as follows:


	September 30, 2025		December 31, 2024
	(In thousands)
Deferred revenue	$	2,784,235	$	2,745,104
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	(1,007,735)		(989,934)
Deferred revenue, net	$	1,776,500	$	1,755,170

The following table summarizes the activity for our contract liabilities, which are reflected in Deferred revenue, net and Deferred receipts held in trust:


	Nine months ended September 30,
	2025		2024
	(In thousands)
Beginning balance — Deferred revenue, net and Deferred receipts held in trust	$	6,917,695	$	6,374,393
Net preneed contract sales	988,477		1,061,518
Acquisitions of businesses, net	6,841		76,077
Net investment gains(1)	496,097		453,863
Recognized revenue from backlog(2)	(416,911)		(443,685)
Recognized revenue from current period sales	(483,301)		(469,085)
Change in amounts due on unfulfilled performance obligations	(17,012)		(68,662)
Change in cancellation reserve	(1,259)		(188)
Effect of foreign currency and other	3,598		(7,598)
Ending balance — Deferred revenue, net and Deferred receipts held in trust	$	7,494,225	$	6,976,633

(1)Includes both realized and unrealized investment gains (losses)

(2)Includes current year trust fund income through the date of performance

18 Service Corporation International

PART I

4. Income Taxes

Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur. Discrete items include, among others, events such as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was 26.9% and 21.1% for the three months ended September 30, 2025 and 2024, respectively. Our effective tax rate was 26.1% and 23.1% for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate was higher for the three and nine months ended September 30, 2025 primarily due to a change in estimate recorded in the current year related to the finalization of the 2024 tax return, as well as less excess tax benefit recognized upon the settlement of employee share-based awards. The effective tax rate for the three and nine months ended September 30, 2025 was higher than the federal statutory tax rate of 21.0% primarily due to state and foreign tax expense.

We actively participate in tax credit equity investments for projects eligible to receive renewable energy tax credits. These investments, accounted for under the equity method, are recorded in Deferred charges and other assets, net of reserves on our Consolidated Balance Sheet. Upon realization, tax credits associated with these investments are recognized as a reduction of tax expense. This reduction is offset by amortization of the investment in proportion to the tax benefits received during the period under the proportional amortization method. During 2025, we recognized investment tax credits and other tax benefits totaling $5.3 million and amortized the equity investment by $5.2 million to reflect the realization of these benefits. This amortization is reflected within the Provision for income taxes in the Consolidated Statement of Operations.

The federal statutes of limitations have expired for all tax years prior to 2021. Our 2022 federal income tax return is currently under audit by the IRS. Various state and foreign jurisdictions are auditing years 2020 through 2023. The outcome of each of these audits cannot be predicted at this time.

Following the enactment of the new U.S. tax legislation, Public Law No. 119-21, on July 4, 2025, we adopted the relevant provisions during the third quarter of 2025, including those pertaining to bonus depreciation and interest expense. Consistent with our expectations, the adoption of these provisions did not have a material effect on our consolidated financial statements.

FORM 10-Q 19

PART I

5. Debt

The components of Debt are:


	September 30, 2025		December 31, 2024
	(In thousands)
7.5% Senior Notes due April 2027	$	136,924	$	136,924
4.625% Senior Notes due December 2027	550,000		550,000
5.125% Senior Notes due June 2029	750,000		750,000
3.375% Senior Notes due August 2030	850,000		850,000
4.0% Senior Notes due May 2031	800,000		800,000

5.75% Senior Notes due October 2032	800,000		800,000
Term Loan due January 2028	628,594		641,250

Bank Credit Facility due January 2028	285,000		120,000
Corporate Headquarters Debt Facility due February 2037	33,533		—
Obligations under finance leases	152,596		145,061
Mortgage notes and other debt, maturities through 2050	81,505		86,044

Unamortized debt issuance costs	(38,513)		(43,981)
Total debt	5,029,639		4,835,298
Less: Current maturities of long-term debt	(67,284)		(83,850)
Total long-term debt	$	4,962,355	$	4,751,448

Current maturities of debt at September 30, 2025 include amounts due under our term loan, mortgage notes and other debt, and finance lease payments due within the next year as well as the portion of unamortized debt issuance costs expected to be recognized in the next twelve months.

Approximately 81% and 84% of our total debt had a fixed interest rate at September 30, 2025 and December 31, 2024, respectively.

The components of our ending interest rate are as follows:


	September 30, 2025		December 31, 2024
Fixed Debt	4.67	%	4.64	%
Floating Debt	6.26	%	6.50	%
Total Debt	4.97	%	4.93	%

During the nine months ended September 30, 2025 and 2024, we paid $159.5 million and $172.5 million in cash interest, respectively.

Bank Credit Agreement

The Bank Credit Facility due January 2028 provides us with flexibility for working capital, if needed, and is guaranteed by a majority of our domestic subsidiaries. The subsidiary guaranty is a guaranty of payment of the outstanding amount of the total lending commitment, including letters of credit. The Bank Credit Facility contains a maximum leverage ratio financial covenant and certain dividend and share repurchase restrictions. As of September 30, 2025, we were in compliance with all of our debt covenants. We have $1.0 million of letters of credit outstanding and pay a quarterly fee of 0.20% on the unused commitment at September 30, 2025. As of September 30, 2025, we had $1,214.0 million in borrowing capacity under the Bank Credit Facility. The Bank Credit Facility had an interest rate of 6.26% and 6.46% at September 30, 2025 and December 31, 2024, respectively.

As of December 31, 2024, we had $39.0 million of letters of credit outstanding. During the second quarter of 2025, we replaced our letters of credit with a $46.0 million surety bond and a related indemnity obligation with a large insurance company.

Debt Issuances and Additions

During the nine months ended September 30, 2025, we issued or added $688.5 million of debt including:

20 Service Corporation International

PART I

•$655.0 million on our Bank Credit Facility due January 2028; and

•$33.5 million on our Corporate Headquarters Debt Facility due February 2037.

Net proceeds were used for general corporate purposes and to fund the construction of the new corporate headquarters building.

During the nine months ended September 30, 2024, we issued or added $1,336.1 million of debt including:

•$800.0 million unsecured 5.75% Senior Notes due October 2032;

•$530.0 million on our Bank Credit Facility due January 2028; and

•$6.1 million in other debt.

Net proceeds from newly issued debt during the nine months ended September 30, 2024 were used to pay down our Bank Credit Facility due January 2028 and for general corporate purposes. These transactions resulted in additional debt issuance costs of $14.1 million.

Debt Extinguishments and Reductions

During the nine months ended September 30, 2025, we made aggregate debt payments of $509.2 million for scheduled and early debt extinguishment payments including:

•$490.0 million in aggregate principal of our Bank Credit Facility due January 2028;

•$12.7 million in aggregate principal of our Term Loan due January 2028; and

•$6.5 million in other debt.

During the nine months ended September 30, 2024, we made aggregate debt payments of $1,228.5 million for scheduled and early debt extinguishment payments including:

•$1,210.0 million in aggregate principal of our Bank Credit Facility due January 2028;

•$12.7 million in aggregate principal of our Term Loan due January 2028;

•$0.5 million in aggregate principal of our 7.5% Senior Notes due April 2027 repurchased in the open market; and

•$5.3 million in other debt.

FORM 10-Q 21

PART I

6. Credit Risk and Fair Value of Financial Instruments

Fair Value Estimates

The fair value estimates of the following financial instruments have been determined using available market information and appropriate valuation methodologies. The carrying values of cash and cash equivalents, trade receivables, and trade payables approximate the fair values of these instruments due to the short-term nature of the instruments. The carrying values of receivables on preneed funeral and cemetery contracts approximate fair value as the terms and conditions of these contracts are comparable to our current contract offerings.

The fair value of our debt instruments was as follows:


	September 30, 2025		December 31, 2024
	(In thousands)
7.5% Senior Notes due April 2027	$	143,285	$	140,615
4.625% Senior Notes due December 2027	546,018		536,052
5.125% Senior Notes due June 2029	750,563		728,430
3.375% Senior Notes due August 2030	787,712		745,612
4.0% Senior Notes due May 2031	754,856		712,640
5.75% Senior Notes due October 2032	811,624		778,752
Term Loan due January 2028	628,594		641,250
Bank Credit Facility due January 2028	285,000		120,000
Corporate Headquarters Debt Facility due February 2037	33,533		—
Mortgage notes and other debt, maturities through 2050	82,371		85,574
Total fair value of debt instruments	$	4,823,556	$	4,488,925

The fair values of our long-term, fixed rate loans were estimated using market prices for those loans, and therefore they are classified within Level 2 of the fair value measurements hierarchy. The Term Loan, Bank Credit Facility, Corporate Headquarters Debt Facility, and the mortgage and other debt are classified within Level 3 of the fair value measurements hierarchy. The fair values of these instruments have been estimated using discounted cash flow analysis based on our incremental borrowing rate for similar borrowing arrangements. An increase (decrease) in the inputs results in a directionally opposite change in the fair value of the instruments.

7. Equity

(All shares reported in whole numbers)

Share Repurchase Program

Subject to market conditions, normal trading restrictions, and limitations in our debt covenants, we may make purchases of our common stock in the open market or through privately negotiated transactions under our share repurchase program. During the nine months ended September 30, 2025, we repurchased 5,114,200 shares of common stock at an aggregate cost of $404.4 million, which is an average cost per share of $79.08. Additionally, in May 2025, our Board of Directors increased our share repurchase authorization to $600.0 million. After these repurchases, the remaining dollar value of shares authorized to be purchased under the share repurchase program was $414.4 million at September 30, 2025.

Subsequent to September 30, 2025, we repurchased 64,824 shares for $5.3 million at an average cost per share of $82.34.

22 Service Corporation International

PART I

8. Segment Reporting

Our operations are both product-based and geographically-based, and the reportable operating segments presented below include our funeral and cemetery operations. Our geographic areas include the United States and Canada, where we conduct both funeral and cemetery operations.

Our Chief Operating Decision Maker (CODM) is our Chief Executive Officer, who is responsible for making key operating, finance, and capital allocation decisions and specifically uses segment gross profit to aid in the decision making and to assess the performance of the operating segments.

Our reportable segment information, including disaggregated revenue, was as follows and includes a reconciliation of gross profit to our consolidated income before income taxes.

FORM 10-Q 23

PART I


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(In thousands)
Revenue from customers:
Funeral revenue:
Atneed revenue	$	284,997	$	289,077	$	910,182	$	887,812
Matured preneed revenue	183,332		173,759		572,677		542,488
Core funeral revenue	468,329		462,836		1,482,859		1,430,300
Non-funeral home revenue	26,181		23,214		79,538		69,765
Non-funeral home preneed sales revenue	22,548		26,923		71,169		85,141
Core general agency and other revenue	57,005		53,006		171,356		151,292
Total funeral revenue	$	574,063	$	565,979	$	1,804,922	$	1,736,498
Direct cost	(82,099)		(83,238)		(259,882)		(260,358)
Selling compensation	(48,919)		(42,270)		(141,840)		(132,945)
Salaries & fringe expense	(167,098)		(163,841)		(502,413)		(486,939)
Facility expenses	(69,220)		(65,516)		(203,838)		(192,668)




Other costs and overhead	(107,128)		(103,236)		(327,395)		(323,410)
Total funeral expense	$	(474,464)	$	(458,101)	$	(1,435,368)	$	(1,396,320)
Funeral gross profit	$	99,599	$	107,878	$	369,554	$	340,178

Cemetery revenue:
Atneed revenue	$	107,503	$	106,965	$	330,823	$	324,390
Recognized preneed property revenue	228,609		203,376		637,690		628,223



Recognized preneed merchandise and services revenue	109,948		103,585		314,266		301,844
Core cemetery revenue	446,060		413,926		1,282,779		1,254,457
Other revenue	37,973		34,053		110,006		102,401
Total cemetery revenue	$	484,033	$	447,979	$	1,392,785	$	1,356,858
Direct cost	(63,549)		(62,118)		(188,571)		(188,516)
Selling compensation	(84,747)		(78,360)		(251,817)		(240,761)
Maintenance expense	(67,758)		(65,999)		(198,696)		(194,761)



Other costs and overhead	(102,035)		(96,741)		(294,857)		(288,231)
Total cemetery expense	$	(318,089)	$	(303,218)	$	(933,941)	$	(912,269)
Cemetery gross profit	$	165,944	$	144,761	$	458,844	$	444,589

Total revenue from customers	$	1,058,096	$	1,013,958	$	3,197,707	$	3,093,356
Total segment expenses	(792,553)		(761,319)		(2,369,309)		(2,308,589)
Gross profit from reportable segments	$	265,543	$	252,639	$	828,398	$	784,767
Corporate general and administrative expenses	(38,332)		(43,732)		(132,499)		(124,055)
Restructuring charge	(405)		—		(1,980)		—
(Losses) gains on divestitures and impairment charges, net	(415)		3,515		8,618		4,755

Operating income	$	226,391	$	212,422	$	702,537	$	665,467
Interest expense	(65,683)		(65,804)		(191,237)		(194,540)
Losses on early extinguishment of debt	—		(25)		—		(25)
Other income, net	153		2,815		7,219		7,002
Income before income taxes	$	160,861	$	149,408	$	518,519	$	477,904

24 Service Corporation International

PART I

Our geographic area information was as follows:


	United States		Canada		Total
	(In thousands)
Three months ended September 30,
Revenue from external customers:
2025	$	1,010,103	$	47,993	$	1,058,096
2024	$	961,866	$	52,092	$	1,013,958
Nine months ended September 30,
Revenue from external customers:
2025	$	3,039,956	$	157,751	$	3,197,707
2024	$	2,928,382	$	164,974	$	3,093,356

9. Commitments and Contingencies

Insurance Loss Reserves

We purchase various insurance products with high deductibles including: comprehensive general liability, morticians and cemetery professional liability, automobile liability, and workers’ compensation. The high-deductible insurance program means we are primarily self-insured for claims and associated costs and losses covered by these policies. As of September 30, 2025 and December 31, 2024, we had self-insurance reserves of $110.4 million and $105.8 million, respectively.

Litigation and Regulatory Matters

We are a party to various litigation and regulatory matters, investigations, and proceedings. Some of the more frequent routine litigations incidental to our business are based on operational claims and employment-related matters, including discrimination, harassment, and wage and hour laws and regulations. For each of our outstanding legal matters, we evaluate the merits of the case, our exposure to the matter, possible legal or settlement strategies, and the likelihood of an unfavorable outcome. We intend to vigorously defend ourselves in the matters described herein; however, if we determine that an unfavorable outcome is probable and can be reasonably estimated, or if we determine an amount for which we would be willing to settle the matter to avoid further costs and risk, we establish the necessary accruals. We hold certain insurance policies that may reduce cash outflows with respect to an adverse outcome of these matters. We accrue such insurance recoveries when they become probable of being paid and can be reasonably estimated.

Unclaimed Property Audits

We have received notices from auditors representing the unclaimed property departments of approximately forty states regarding the escheatment of preneed trust funds held in association with unused preneed funeral and cemetery contracts ("Unused Preneed Trust Funds"). The states claim that these Unused Preneed Trust Funds are subject to the states’ unclaimed property or escheatment laws and generally assert that all or a portion of the Unused Preneed Trust Funds are escheatable if the beneficiary and/or purchaser is deceased or presumed deceased and no services or merchandise have been provided. We received notice that no additional property is due to be reported for the states of Alabama, Connecticut, Iowa, Kentucky, Maryland, Massachusetts, Montana, Nebraska, Nevada, New Mexico, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas, West Virginia, and Wyoming. We consider the unclaimed property audits resolved in those nineteen states.

We have entered into an audit resolution agreement with the State of Florida Department of Financial Services and Division of Unclaimed Property ("Florida Agreement"). The Florida Agreement provides for us to retain the trust fund earnings and to escheat the principal to the State of Florida, which resulted in an increase in trust fund income in 2023, 2024, and 2025.

We have reserved all of our rights, claims, and defenses. Given the nature of these matters, we are unable to reasonably estimate the total possible loss or ranges of loss, if any.

10. Earnings Per Share

Basic earnings per common share (EPS) excludes dilution and is computed by dividing Net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other obligations to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that shared in our earnings.

A reconciliation of the numerators and denominators of basic and diluted EPS is presented below:

FORM 10-Q 25

PART I


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(In thousands, except per share amounts)
Amounts attributable to common stockholders:







Net income — basic and diluted	$	117,473	$	117,827	$	383,218	$	367,294
Weighted average shares:
Weighted average shares — basic	140,318		144,706		142,097		145,421
Stock options	1,045		1,452		1,073		1,499
Restricted share units	61		65		57		58

Weighted average shares — diluted	141,424		146,223		143,227		146,978
Amounts attributable to common stockholders:






Earnings per share:
Basic	$	0.84	$	0.81	$	2.70	$	2.53
Diluted	$	0.83	$	0.81	$	2.68	$	2.50

The computation of diluted EPS excludes outstanding stock options and restricted share units in certain periods in which the inclusion of such equity awards would be antidilutive to the periods presented. Total antidilutive options not currently included in the computation of diluted earnings per share are as follows (in shares):


	Three months ended September 30,		Nine months ended September 30,
	2025	2024	2025	2024
	(In thousands)

Antidilutive options	331	754	623	693

11. Acquisitions and Divestiture-Related Activities

Acquisitions

We spent $65.3 million and $164.2 million, including $0.2 million and $2.3 million of cash acquired, for several business acquisitions during the nine months ended September 30, 2025 and 2024, respectively. In addition, we spent $6.6 million and $53.3 million, for several real estate acquisitions during the nine months ended September 30, 2025 and 2024, respectively.

In the third quarter of 2024, we acquired a total of 10 funeral homes and 2 cemeteries. This includes two separate acquisitions in major metropolitan markets for $120.6 million in cash in the third quarter.

The primary reasons for the acquisitions and the principal factors that contributed to the recognition of goodwill in these acquisitions were:

•the acquisitions are intended to grow the company by utilizing our capital to invest in the highest relative return opportunities;

•the acquisitions enhance our network footprint, enabling us to serve a number of complementary areas; and

•the acquisitions of the preneed backlog of deferred revenues enhance our long-term stability.

The following table summarizes the fair values of the assets acquired and liabilities assumed in the two separate acquisitions in the third quarter of 2024 (in thousands):

26 Service Corporation International

PART II




Other current assets	$	2,201
Cemetery property	2,143
Property and equipment, net	51,259
Preneed receivables, net and trust investments	41,018


Deferred charges and other assets	340
Cemetery perpetual care trust investments	9,223
Goodwill	97,768
Total assets acquired	203,952

Current liabilities	2,369
Deferred revenue and deferred receipts held in trust	55,806
Long-term debt	15,431

Care trusts' corpus	9,223
Other liabilities	476
Total liabilities assumed	83,305

Net assets acquired	$	120,647

Goodwill and land recorded in the acquisition are not subject to amortization; however, goodwill will be tested periodically for impairment. Of the $97.8 million in recognized goodwill, $77.9 million is deductible for tax purposes. Of this total, $34.0 million was allocated to our cemetery segment, while $63.8 million was allocated to our funeral segment.

Divestiture-Related Activities

As divestitures occur in the course of business, gains or losses on the sale of such locations are recognized in the unaudited Condensed Consolidated Statement of Operations line item (Losses) gains on divestitures and impairment charges, net, which comprised the following:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(In thousands)
(Losses) gains on divestitures, net	$	(415)	$	7,445	$	9,540	$	9,764
Impairment losses	—		(3,930)		(922)		(5,009)
(Losses) gains on divestitures and impairment charges, net	$	(415)	$	3,515	$	8,618	$	4,755

FORM 10-Q 27

PART II

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The Company

We are North America’s largest provider of deathcare products and services, with a network of funeral service locations and cemeteries unequaled in geographic scale and reach. At September 30, 2025, we owned and operated 1,487 funeral service locations and 499 cemeteries (of which 312 are combination locations), in 44 states, eight Canadian provinces, the District of Columbia, and Puerto Rico. Our funeral and cemetery operations consist of funeral service locations, cemeteries, funeral service/cemetery combination locations, crematoria, and other related businesses, which enable us to serve a wide array of customer needs. We sell cemetery property and funeral and cemetery merchandise and services at the time of need and on a preneed basis. Our financial position is enhanced by our $16.8 billion backlog of future revenue from both trust and insurance-funded preneed sales at September 30, 2025. Preneed selling provides us with a strategic opportunity to gain future market share. We also believe it adds to the stability and predictability of our revenue and cash flows. While revenue on the majority of preneed merchandise and service sales is deferred until the time of need, sales of preneed cemetery property provide opportunities for full current revenue recognition to the extent that the property is developed and available for use.

We strive to offer families exceptional service in planning life celebrations and personalized remembrances. Our Dignity Memorial® brand serves with professionalism, compassion, and attention to detail approximately 700,000 families each year at their time of need or through prearrangement sales services.

Factors affecting our operating results include: demographic trends in terms of population growth and average age, which impact death rates and number of deaths; establishing and maintaining leading market share positions supported by strong local heritage and relationships; effectively responding to increasing cremation trends by selling complementary services and merchandise; controlling salary and merchandise costs; and exercising pricing leverage related to our atneed revenue. The average revenue per funeral contract is influenced by the mix of traditional and cremation services because our average revenue for cremations is lower than that for traditional burials. To further enhance revenue opportunities, we continue to focus on our cremation customers' preferences, remaining relevant by developing additional memorialization merchandise and services that specifically appeal to cremation customers. We believe the presentation of these additional merchandise and services through our customer-facing technology improves our customers' experience by reducing administrative burdens and allowing them to visualize the enhanced product and service offerings, which we believe will help drive increases in the average revenue for a cremation in future periods.

Tariffs and Trading Relationships

Since the start of 2025, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which have led, and may continue to lead, to the imposition of retaliatory tariffs or other measures taken by foreign jurisdictions. These tariffs and retaliatory tariffs have increased uncertainty regarding the ultimate scope, durability and effect of existing and future tariffs on economic conditions. Current uncertainties about tariffs and their effects on trading relationships may affect costs for and availability of raw materials or contribute to inflation in the markets in which we operate. Although we are continuing to monitor the economic effects of such announcements, as well as opportunities to mitigate their related impacts, costs and other effects associated with the tariffs remain uncertain.

For further discussion of our key operating metrics, see our "Cash Flow" and “Results of Operations” sections below.

Financial Condition, Liquidity, and Capital Resources

We have adequate liquidity and a favorable debt maturity profile, which allow us to reinvest and grow our business as well as return capital to shareholders through share repurchases and dividends.

Capital Allocation Considerations

We rely on cash flow from operations as a significant source of liquidity. Our cash flow from operating activities provided $729.9 million in the first nine months of 2025. As of September 30, 2025, we had $1,214.0 million in remaining borrowing capacity under our Bank Credit Facility.

Our Bank Credit Facility requires us to maintain a certain leverage ratio with which we were in compliance at September 30, 2025. We target a leverage ratio of 3.5x to 4.0x.

28 Service Corporation International

PART I

Our leverage ratio requirement and actual ratio as of September 30, 2025 were as follows:


	Per Credit Agreement	Actual
Leverage ratio	5.00 (Max)	3.61

We have the financial strength and flexibility to reward shareholders with dividends while maintaining a prudent capital structure and pursuing new opportunities for profitable growth.

Our unencumbered cash on hand, future operating cash flows, and the available capacity under our Bank Credit Facilities will give us adequate liquidity to meet our short-term needs as well as our long-term financial obligations. A portion of our cash on hand is encumbered primarily due to cash balances residing in Canada and Puerto Rico, as well as minimum captive insurance balance and operating cash requirements.

We consistently evaluate the best uses of our cash flow that will yield the highest value and return on capital. Our capital allocation strategy is prioritized as follows:

Investing in Acquisitions and Building New Funeral Service and Cemetery Locations. We manage our footprint by focusing on strategic acquisitions and building new funeral service and cemetery locations where the expected returns are attractive and exceed our weighted average cost of capital by a meaningful margin. We target businesses with favorable customer dynamics and/or where we can achieve additional economies of scale. We continue to pursue strategic acquisitions and build new funeral service and cemetery locations in areas that provide us with the potential for scale.

Returning Excess Cash to Shareholders. Absent strategic acquisitions or other higher return opportunities, we intend to return excess cash to shareholders through dividends. Our quarterly dividend rate has steadily grown from $0.025 per common share in 2005 to $0.32 per common share in 2025. We target a payout ratio of 30% to 40% of after tax earnings excluding special items and intend to grow our cash dividend commensurate with the growth in our business. While we intend to pay regular quarterly cash dividends for the foreseeable future, all future dividends are subject to limitations in our debt covenants, and final determination by our Board of Directors each quarter upon review of our financial performance.

Managing Debt. We continue to focus on maintaining optimal levels of liquidity and financial flexibility. We generate a relatively consistent annual cash flow stream that is generally resistant to down economic cycles. This cash flow stream and our significant liquidity allow us to opportunistically manage our debt maturity profile as we intend to maintain a target leverage ratio of 3.5x to 4.0x.

Cash Flow

Our ability to generate strong operating cash flow is one of our fundamental financial strengths and provides us with substantial flexibility in meeting operating and investing needs.

Operating Activities

Net cash provided by operating activities was $729.9 million and $680.8 million for the nine months ended September 30, 2025 and 2024, respectively.

The $49.1 million increase in operating cash flows from 2024 comprises:

•a $120.1 million increase in cash receipts from customers, General Agency (GA) commission and other receipts,

•a $27.8 million decrease in payments for certain legal matters,

•a $12.5 million decrease in employee compensation payments,

•a $13.0 million decrease in cash interest payments, partially offset by

•a $98.5 million increase in cash tax payments,

•a $21.5 million increase in restructuring payments,

•a $2.2 million increase in vendor and other payments, and

•a $2.1 million increase in net trust deposits.

Investing Activities

Cash flows from investing activities used $341.4 million and $484.6 million for the nine months ended September 30, 2025 and 2024, respectively. The $143.2 million decreased outflow in 2025 over 2024 is primarily due to the following:

•a $96.8 million decrease in cash spent on business acquisitions,

•a $46.7 million decrease in cash spent on real estate acquisitions,

•a $12.4 million decrease in other investing activities primarily for investments in renewable energy tax credits,

FORM 10-Q 29

PART I

•an $8.8 million increase in net proceeds for Company-owned life insurance policies

•a $6.6 million increase in cash receipts from divestitures and asset sales, and

•a $4.7 million decrease in total capital expenditures, which comprises:

•a $14.7 million net decrease in maintenance capital expenditures, which includes:

•a $6.7 million decrease in expenditures for capital improvements at existing field locations,

•a $6.7 million decrease in expenditures for digital investments and corporate, and

•a $1.3 million decrease in expenditures for cemetery property development, partially offset by

•a $10.0 million increase in expenditures for growth capital expenditures/construction of new funeral service locations,

•a $2.8 million decrease in net payments for Company-owned life insurance policies, partially offset by

•a $35.6 million increase in capital expenditures related to construction of our new corporate headquarters which is financed through a separate construction loan facility.

Financing Activities

Financing activities used $368.9 million for the nine months ended September 30, 2025 compared to using $230.8 million for the same period in 2024. The $138.1 million increased outflow from 2025 over 2024 is primarily due to the following:

•a $204.6 million increase in purchase of Company common stock,

•a $22.0 million decrease in proceeds from exercises of stock options, and

•a $5.2 million increase in payments of dividends, partially offset by

•a $52.4 million increase in debt proceeds, net of repayments,

•a $33.5 million increase in borrowings from our corporate headquarters debt facility, and

•a $7.8 million decrease in bank overdrafts and other.

Financial Assurances

In support of our operations, we have entered into arrangements with certain surety companies whereby such companies agree to issue surety bonds on our behalf as financial assurance and/or as required by existing state and local regulations. The surety bonds are used for various business purposes; however, the majority of the surety bonds issued and outstanding have been used to support our preneed sales activities. The obligations underlying these surety bonds are recorded on our unaudited Condensed Consolidated Balance Sheet as Deferred revenue, net. The breakdown of surety bonds between funeral and cemetery preneed arrangements, as well as surety bonds for other activities, is described below.


	September 30, 2025		December 31, 2024
	(In millions)
Preneed funeral	$	222.9	$	226.8
Preneed cemetery:
Merchandise and services	134.9		135.6
Pre-construction	62.4		56.4
Bonds supporting preneed funeral and cemetery obligations	420.2		418.8
Bonds supporting preneed business permits	8.5		8.1
Other bonds	76.2		27.5
Total surety bonds outstanding	$	504.9	$	454.4

When selling preneed contracts, we may post surety bonds where allowed by state law. We post the surety bonds in lieu of trusting a certain amount of funds received from the customer. The amount of the bond posted is generally determined by the total amount of the preneed contract that would otherwise be required to be trusted, in accordance with applicable state law.

Surety bond premiums are paid annually and the bonds are automatically renewable until maturity of the underlying preneed contracts, unless we are given prior notice of cancellation.

30 Service Corporation International

PART I

Except for cemetery pre-construction bonds (which are irrevocable), the surety companies generally have the right to cancel the surety bonds at any time with appropriate notice. In the event a surety company were to cancel the surety bond, we are required to obtain replacement surety assurance from another surety company or fund a trust for an amount generally less than the posted bond amount. Management does not expect that we will be required to fund material future amounts related to these surety bonds due to a lack of surety capacity or surety company non-performance.

During the second quarter of 2025, we replaced our letters of credit with a $46.0 million surety bond and a related indemnity obligation with a large insurance company, which is included in Other bonds in the table above.

Preneed Activities and Backlog of Contracts

In addition to selling our products and services to client families at the time of need, we enter into price-guaranteed preneed contracts, which provide for future funeral or cemetery merchandise and services. Because preneed funeral and cemetery merchandise and services will generally not be provided until sometime in the future, most states and provinces require that all or a portion of the funds collected from customers on preneed contracts be deposited into merchandise and service trusts until the merchandise is delivered or the service is performed. In certain situations, as described above, where permitted by state or provincial laws, we may post a surety bond as financial assurance for a certain amount of the preneed contract in lieu of placing funds into trust accounts. Alternatively, we may sell a life insurance or annuity policy from third-party insurance companies.

Insurance-Funded Preneed Contracts

Where permitted by state or provincial law, we may sell a life insurance or annuity policy from third-party insurance companies for which we earn a commission as general sales agent for the insurance company. These general agency revenues are based on a percentage per contract sold and are recognized as funeral revenue when the insurance purchase transaction between the preneed purchaser and third-party insurance provider is complete. All selling costs incurred pursuant to the sale of insurance-funded preneed contracts are expensed as incurred. We do not reflect the unfulfilled insurance-funded preneed contract amounts in our unaudited Condensed Consolidated Balance Sheet. The proceeds of the life insurance policies or annuity contracts will be reflected in funeral revenue as we perform these funerals. In early July 2024, we finalized our agreement to change our preferred preneed insurance provider in the United States, which will allow us to further utilize our scale and streamline our processes across our network.

The table below details our results of insurance-funded preneed and third-party preneed production and maturities.


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(Dollars in millions)
Preneed insurance-funded:
Sales production(1)	$	214.3	$	164.1	$	603.3	$	516.7
Sales production (number of contracts)(1)	41,617		28,000		118,797		85,553
General agency revenue	$	75.9	$	58.5	$	221.6	$	162.5
Maturities	$	95.5	$	90.9	$	303.4	$	283.6
Maturities (number of contracts)	15,438		14,961		48,944		46,352
Preneed third party:
Sales production(1)	$	11.1	$	10.3	$	31.0	$	32.2
Sales production (number of contracts)(1)	1,109		1,127		3,206		3,497
Maturities	$	7.2	$	6.7	$	22.7	$	21.1
Maturities (number of contracts)	704		719		2,297		2,319

(1) Amounts are not included in our unaudited Condensed Consolidated Balance Sheet.

Trust-Funded Preneed Contracts

The funds collected from customers, and required by state or provincial law, are deposited into trusts. We retain any funds above the amounts required to be deposited into trust accounts and use them for working capital purposes, generally to offset the selling and administrative costs of our preneed programs. Although this represents cash flow to us, the associated revenues are deferred until the merchandise is delivered or services are performed (typically at maturity). The funds in trust are then invested by professional money managers with oversight by independent trustees in accordance with state and provincial laws.

FORM 10-Q 31

PART I

The tables below detail our results of preneed production and maturities, excluding insurance contracts:


	Three months ended September 30,				Nine months ended September 30,
	2025		2024		2025		2024
	(Dollars in millions)
Funeral:
Preneed trust-funded (including bonded):
Sales production	$	80.5	$	121.1	$	262.8	$	391.3
Sales production (number of contracts)	12,775		29,188		45,226		95,436
Maturities	$	97.8	$	91.1	$	298.1	$	281.9
Maturities (number of contracts)	20,206		20,217		63,421		63,214
Cemetery:
Sales production:
Preneed	$	352.3	$	312.7	$	1,046.7	$	994.3
Atneed	104.9		105.5		326.6		319.9
Total sales production	$	457.2	$	418.2	$	1,373.3	$	1,314.2
Sales production deferred to backlog:
Preneed	$	188.3	$	150.9	$	521.8	$	467.8
Atneed	73.4		73.6		228.1		228.4
Total sales production deferred to backlog	$	261.7	$	224.5	$	749.9	$	696.2
Revenue recognized from backlog:
Preneed	$	135.5	$	113.1	$	345.8	$	335.1
Atneed	75.4		74.7		230.3		230.1
Total revenue recognized from backlog	$	210.9	$	187.8	$	576.1	$	565.2

Backlog of Preneed Contracts

The following table reflects our backlog of trust-funded deferred preneed contract revenue, including amounts related to deferred receipts held in trust at September 30, 2025 and December 31, 2024. Additionally, the table reflects our backlog of unfulfilled insurance-funded contracts (which are not included in our unaudited Condensed Consolidated Balance Sheet) at September 30, 2025 and December 31, 2024. The backlog amounts presented include amounts due from customers for undelivered performance obligations on cancelable preneed contracts to arrive at our total backlog of deferred revenue. The table does not include the backlog associated with businesses that are held for sale.

The table also reflects our preneed receivables and trust investments associated with the backlog of deferred preneed contract revenue, including the amounts due from customers for undelivered performance obligations on cancelable preneed contracts. We believe that the table below is meaningful because it sets forth the aggregate amount of future revenue we expect to recognize as a result of preneed sales, as well as the amount of funds associated with this revenue. Because the future revenue exceeds the assets, future revenue will exceed the cash distributions actually received from the associated trusts and future collections from the customer.

32 Service Corporation International

PART I


	September 30, 2025				December 31, 2024
	Fair Value		Cost		Fair Value		Cost
	(In billions)
Deferred revenue, net	$	1.78	$	1.78	$	1.76	$	1.76
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	1.01		1.01		0.99		0.99
Deferred receipts held in trust	5.72		4.72		5.16		4.50
Allowance for cancellation on trust investments	(0.30)		(0.25)		(0.27)		(0.24)
Backlog of trust-funded deferred revenue, net of estimated allowance for cancellation	8.21		7.26		7.64		7.01
Backlog of insurance-funded revenue(1)	8.56		8.56		8.37		8.37
Total backlog of deferred revenue	$	16.77	$	15.82	$	16.01	$	15.38

Preneed receivables, net and trust investments	$	7.27	$	6.27	$	6.74	$	6.08
Amounts due from customers for unfulfilled performance obligations on cancelable preneed contracts	1.01		1.01		0.99		0.99
Allowance for cancellation on trust investments	(0.30)		(0.25)		(0.27)		(0.24)
Assets associated with backlog of trust-funded deferred revenue, net of estimated allowance for cancellation	7.98		7.03		7.46		6.83
Insurance policies associated with insurance-funded deferred revenue (1)	8.56		8.56		8.37		8.37
Total assets associated with backlog of preneed revenue	$	16.54	$	15.59	$	15.83	$	15.20

(1) Amounts are not included in our unaudited Condensed Consolidated Balance Sheet.

The fair value of our trust investments was based on a combination of quoted market prices, observable inputs such as interest rates or yield curves, and appraisals. As of September 30, 2025, the difference between the backlog and asset market amounts represents $0.17 billion related to contracts for which we have posted surety bonds as financial assurance in lieu of trusting, $1.40 billion collected from customers that were not required to be deposited into trusts, and $0.20 billion in allowable cash distributions from trust assets partially offset by $1.54 billion in amounts due on delivered property and merchandise. As of September 30, 2025, the fair value of the total backlog comprised $4.97 billion related to cemetery contracts and $11.80 billion related to funeral contracts. As of September 30, 2025, the fair value of the assets associated with the backlog of trust-funded deferred revenue comprised $5.00 billion related to cemetery contracts and $2.98 billion related to funeral contracts. As of September 30, 2025, the backlog of insurance-funded contracts of $8.56 billion was equal to the proceeds we expect to receive from the associated insurance policies when the corresponding contract is serviced.

Trust Investments

Investment earnings associated with the trust investments are expected to mitigate the inflationary costs of providing the preneed funeral and cemetery merchandise and services in the future at the prices that were guaranteed at the time of sale. Also, we are required by state and provincial law to pay a portion of the proceeds from the preneed or atneed sale of cemetery property interment rights into perpetual care trusts. For these investments, the original corpus generally remains in the trust in perpetuity and the earnings or elected distributions are withdrawn as allowed to defray the expenses to maintain the cemetery property. While many states require that net capital gains or losses be retained and added to the corpus, certain states allow the net realized capital gains and losses to be included in the earnings that are distributed. Additionally, some states allow a total return distribution that may contain elements of income, capital appreciation, and principal.

Independent trustees manage and invest the majority of the funds deposited into the funeral and cemetery merchandise and service trusts as well as the cemetery perpetual care trusts. The majority of the trustees are selected based on their respective geographic footprint and qualifications per state and provincial regulations. These trustees, with input from SCI's wholly-owned registered investment advisor, establish an investment policy that serves as an operating document to guide the investment activities of the trusts including asset allocation and manager selection. The investments are also governed by state and provincial guidelines. All of the trusts are intended to control risk and volatility through a combination of asset classes, investment styles, and a diverse mix of investment managers.

Asset allocation is based on the liability structure of each funeral, cemetery, and perpetual care trust. Based on the various criteria set forth in the investment policy, the investment advisor recommends investment managers to the trustees. The primary investment objectives for the funeral and cemetery merchandise and service trusts include 1) preserving capital within acceptable levels of volatility and risk and 2) achieving growth of principal over time sufficient to preserve and increase

FORM 10-Q 33

PART I

the purchasing power of the assets. Preneed funeral and cemetery contracts generally take several years to mature; therefore, the funds associated with these contracts are often invested through several market cycles.

Where allowed by state and provincial regulations, the cemetery perpetual care trusts’ primary investment objectives are growth-oriented to provide for a fixed distribution rate from the trusts’ assets. Where such distributions are limited to ordinary income, the cemetery perpetual care trusts’ investment objectives emphasize providing a steady stream of current investment income with some capital appreciation. Both types of distributions are used to provide for the current and future maintenance and beautification of the cemetery properties.

As of September 30, 2025, approximately 95% of our trusts were under the control and custody of five large financial institutions. The U.S. trustees primarily use four managed limited liability companies (LLCs), two for funeral and cemetery merchandise and service trust types and two for the cemetery perpetual care trust types, each with an independent trustee as custodian. Each financial institution acting as trustee, manages its allocation of trust assets in accordance with the investment policy through the purchase of the appropriate LLCs' units. For those accounts not eligible for participation in the LLCs or where a particular state's regulations contain other investment restrictions, the trustee utilizes institutional mutual funds that comply with our investment policy or with such state restrictions. The U.S. trusts include a modest allocation to alternative investments.

Investment Structures

The managed LLCs use the following structures for investments:

Commingled funds allow the trusts to access, at a reduced cost, some of the same investment managers and strategies used elsewhere in the portfolios.

Separately managed accounts are trusts that utilize separately managed accounts, where appropriate, to reduce the costs to the investment portfolios.

Mutual funds employ institutional share class mutual funds where operationally or economically efficient. These mutual funds are utilized to invest in various asset classes including U.S. equities, non-U.S. equities, corporate bonds, government bonds, high yield bonds, and commodities, all of which are governed by guidelines outlined in their individual prospectuses.

Asset Classes

Equity investments have historically provided long-term capital appreciation in excess of inflation. The trusts have direct investments in individual equity securities primarily in domestic equity portfolios that include large, mid, and small capitalization companies of different investment styles (i.e., growth and value). The majority of the equity allocation is managed by institutional investment managers that specialize in an objective-specific area of expertise. Our equity securities are exposed to market risk; however, we believe these securities are well-diversified. As of September 30, 2025, the largest single equity position represented approximately 1% of the total securities portfolio.

Fixed income investments are intended to preserve principal, provide a source of current income, and reduce overall portfolio volatility. The majority of the fixed income allocation for the trusts is invested in institutional share class mutual funds. Where the trusts have direct investments in individual fixed income securities, these are primarily in government and corporate instruments.

Canadian government fixed income securities are investments in Canadian federal and provincial government instruments. In many cases, regulatory restrictions mandate that the funds from the sales of preneed funeral and cemetery contracts sold in certain Canadian jurisdictions must be invested in these instruments.

Alternative investments serve to provide high rates of return with reduced volatility and lower correlation to publicly-traded securities. These investments are typically longer term in duration and are diversified by strategy, sector, manager, geography, and vintage year. The investments consist of numerous limited partnerships invested in private equity, private market real estate, energy and natural resources, infrastructure, transportation, and private debt including both distressed debt and mezzanine financing. The trustees that have oversight of their respective alternative LLCs work closely with the investment advisor in making all investment decisions.

Trust Performance

During the nine months ended September 30, 2025, the Standard and Poor’s 500 Index increased 14.8% and the Bloomberg’s US Aggregate Bond Index increased 6.1%. This compares to SCI trusts that increased 13.0% during the same period. The SCI trusts have a diversified allocation of approximately 61% equities, 26% fixed income securities, 9% alternative and other investments with the remaining 4% available in money market funds.

34 Service Corporation International

PART I

SCI, the trustees, and the investment advisor monitor the capital markets and the trusts on an on-going basis. The trustees, with input from the investment advisor, take prudent action as needed to achieve the investment goals and objectives of the trusts.

Results of Operations — Three and Nine Months Ended September 30, 2025 and 2024

Three Months Ended September 30, 2025 and 2024

Management Summary

In the third quarter of 2025, we reported consolidated net income attributable to common stockholders of $117.5 million ($0.83 per diluted share) compared to net income attributable to common stockholders in the third quarter of 2024 of $117.8 million ($0.81 per diluted share). These results were impacted by certain items including:


	Three months ended September 30,
	2025		2024
	(In millions)
Pre-tax (losses) gains on divestitures and impairment charges, net	$	(0.4)	$	3.5





Pre-tax restructuring charge	$	(0.4)	$	—

Tax effect from significant items	$	0.1	$	(1.1)
Change in non-recurring tax items	$	(4.5)	$	0.1

In addition to the above items, the decrease from prior year is primarily due to lower funeral gross profit on lower services performed, and higher tax rate. This decline was partially offset by higher cemetery gross profit, lower corporate general and administrative expenses, and lower share count over the prior year quarter.

Funeral Results


	Three months ended September 30,
	2025		2024
	(Dollars in millions, except average revenue per service)
Consolidated funeral revenue	$	574.1	$	566.0
Less: revenue associated with acquisitions/new construction	15.4		4.6
Less: revenue associated with divestitures	0.2		1.0
Comparable(1) funeral revenue	558.5		560.4
Less: non-funeral home preneed sales revenue	22.3		26.9
Less: core general agency and other revenue	56.0		52.9
Adjusted comparable funeral revenue	$	480.2	$	480.6
Comparable services performed	82,057		84,645
Comparable average revenue per service(2)	$	5,852	$	5,678

Consolidated funeral gross profit	$	99.6	$	107.9
Less: gross profit associated with acquisitions/new construction	2.0		1.2
Less: gross losses associated with divestitures	(0.4)		(0.8)
Comparable(1) funeral gross profit	$	98.0	$	107.5

(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 September 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.

FORM 10-Q 35

PART I

Funeral Revenue

Consolidated revenue from funeral operations was $574.1 million for the three months ended September 30, 2025 compared to $566.0 million for the same period in 2024. This $8.1 million increase is primarily attributable to the $10.8 million increase in revenue from acquired and newly constructed properties partially offset by the $1.9 million decrease in comparable revenue.

Comparable revenue from funeral operations was $558.5 million for the three months ended September 30, 2025 compared to $560.4 million for the same period in 2024. This $1.9 million, or 0.3%, decrease is primarily due to a $4.6 million decrease in non-funeral home preneed sales revenue partially offset by a $3.1 million increase in core general agency revenue and other revenue.

Adjusted comparable funeral revenue decreased $0.4 million due to a 3.1% decrease in funeral services performed, partially offset by a 3.1% increase in average revenue per service. The total comparable cremation rate increased slightly by 50 basis points to 64.4%.

Non-funeral home preneed sales revenue decreased $4.6 million, primarily due to an operational shift 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.

Core general agency and other revenue grew $3.1 million, due to an 8.7% increase in core production primarily driven by higher preneed insurance production.

Funeral Gross Profit

Consolidated funeral gross profit decreased $8.3 million, or 7.7%, for the three months ended September 30, 2025 compared to the same period in 2024, primarily attributable to a decrease in comparable funeral gross profit. Comparable funeral gross profit decreased $9.5 million to $98.0 million, and the comparable gross profit percentage decreased from 19.2% to 17.5%. This is primarily due to a $6.0 million increase in selling compensation costs, on a $47.1 million increase in funeral preneed insurance sales production, which are expensed as incurred. In addition, there was a slight decrease in revenue mentioned above.

Cemetery Results


	Three months ended September 30,
	2025		2024
	(In millions)
Consolidated cemetery revenue	$	484.0	$	448.0
Less: revenue associated with acquisitions/new construction	5.4		0.4

Comparable(1) cemetery revenue	$	478.6	$	447.6

Consolidated cemetery gross profit	$	165.9	$	144.8
Less: gross profit associated with acquisitions/new construction	3.1		—

Comparable(1) cemetery gross profit	$	162.8	$	144.8

(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 September 30, 2025.

Cemetery Revenue

Consolidated revenue from our cemetery operations increased $36.0 million, or 8.0%, for the three months ended September 30, 2025 compared to the same period in 2024 primarily due to a $31.0 million increase in comparable cemetery revenue and a $5.0 million increase in revenue contributed by newly constructed and acquired properties.

The comparable cemetery revenue increased $31.0 million, or 6.9%, for the three months ended September 30, 2025 primarily due to higher comparable core revenue of $27.5 million and higher comparable other revenue of $3.5 million. The comparable core revenue increase of $27.5 million was primarily due to a $27.3 million increase in recognized preneed revenue, from higher recognized preneed property revenue of $21.3 million and higher recognized preneed merchandise and service revenue of $6.0 million. Total recognized preneed revenue benefited from growth in comparable cemetery preneed sales production of $30.3 million, or 9.6%.

36 Service Corporation International

PART I

Cemetery Gross Profit

Consolidated cemetery gross profit increased $21.1 million, or 14.6%, in the three months ended September 30, 2025 compared to the same period in 2024, which is primarily attributable to an $18.0 million increase in comparable cemetery gross profit and a $3.1 million increase in gross profit contributed by newly constructed and acquired properties. Comparable cemetery gross profit increased $18.0 million to $162.8 million. The gross profit percentage increased versus the prior year quarter from 32.4% to 34.0% primarily due to the growth in core revenue mentioned above.

Other Financial Statement Items

Corporate General and Administrative Expenses

Corporate general and administrative expenses decreased $5.4 million to $38.3 million in the third quarter of 2025 compared to the third quarter of 2024 of $43.7 million. The decrease is primarily due to the timing of incentive compensation accruals versus the prior year quarter.

Other Income, Net

Other income, net decreased $2.7 million to $0.2 million for the three months ended September 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 26.9% and 21.1% for the three months ended September 30, 2025 and 2024, respectively. The higher effective tax rate in the current period was primarily due to a change in estimate recorded in the current year related to the finalization of the 2024 tax return, as well as less excess tax benefit recognized upon the settlement of employee share-based awards. The effective tax rate was 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 141.4 million for the three months ended September 30, 2025 compared to 146.2 million for the same period in 2024. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.

Nine Months Ended September 30, 2025 and 2024

Management Summary

In the first nine months of 2025, we reported consolidated net income attributable to common stockholders of $383.2 million ($2.68 per diluted share) compared to net income attributable to common stockholders for the same period in 2024 of $367.3 million ($2.50 per diluted share). These results were impacted by certain items including:


	Nine months ended September 30,
	2025		2024
	(In millions)
Pre-tax gains on divestitures and impairment charges, net	$	8.6	$	4.8




Pre-tax legal settlements	$	(6.4)	$	—
Pre-tax restructuring charge	$	(2.0)	$	—
Tax effect from significant items	$	(0.3)	$	(1.6)
Change in non-recurring tax items	$	(4.5)	$	1.0

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 and higher cemetery gross profit. The increase in corporate general and administrative expense and higher tax rate was partially offset by lower interest expense and a lower share count.

FORM 10-Q 37

PART I

Funeral Results


	Nine months ended September 30,
	2025		2024
	(Dollars in millions, except average revenue per service)
Consolidated funeral revenue	$	1,804.9	$	1,736.5
Less: revenue associated with acquisitions/new construction	42.7		7.9
Less: revenue associated with divestitures	1.6		4.7
Comparable(1) funeral revenue	1,760.6		1,723.9
Less: non-funeral home preneed sales revenue	70.9		85.0
Less: core general agency and other revenue	169.4		150.6
Adjusted comparable funeral revenue	$	1,520.3	$	1,488.3
Comparable services performed	262,144		263,805
Comparable average revenue per service(2)	$	5,799	$	5,642

Consolidated funeral gross profit	$	369.6	$	340.2
Less: gross profit associated with acquisitions/new construction	5.5		2.0
Less: gross losses associated with divestitures	(1.1)		(1.0)
Comparable(1) funeral gross profit	$	365.2	$	339.2

(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 September 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 $1,804.9 million for the nine months ended September 30, 2025, compared to $1,736.5 million for the same period in 2024. This $68.4 million increase is primarily attributable to a $36.7 million increase in comparable revenue and $34.8 million growth in revenue contributed by acquired and newly constructed properties.

Comparable revenue from funeral operations was $1,760.6 million for the nine months ended September 30, 2025 compared to $1,723.9 million for the same period in 2024. The $36.7 million, or 2.1%, increase was due to a $32.0 million increase in adjusted comparable funeral revenue and a $18.8 million increase in core general agency and other revenue, partially offset by a $14.1 million decrease in non-funeral home preneed sales revenue.

Adjusted comparable funeral revenue increased $32.0 million, or 2.2%, primarily due to a 2.8% increase in total average revenue per service, partially offset by a 0.6% decrease in total services performed. The total comparable cremation rate increased 60 basis points over prior year to 64.3%.

Core general agency and other revenue grew $18.8 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 $14.1 million, primarily due to an operational shift 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 $29.4 million, or 8.6%, in the first nine 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 $26.0 million to $365.2 million, and the comparable gross profit percentage increased from 19.7% to 20.7%. This is primarily due to the growth in revenue described above, partially offset by a $7.5 million increase in selling compensation costs, on a $79.3 million increase in funeral preneed insurance sales production, which are expensed as incurred.

FORM 10-Q 38

PART I

Cemetery Results


	Nine months ended September 30,
	2025		2024
	(In millions)
Consolidated cemetery revenue	$	1,392.8	$	1,356.9
Less: revenue associated with acquisitions/new construction	11.2		0.4
Less: revenue associated with divestitures	0.1		(0.1)
Comparable(1) cemetery revenue	$	1,381.5	$	1,356.6

Consolidated cemetery gross profit	$	458.8	$	444.6
Less: gross profit (loss) associated with acquisitions/new construction	5.8		(0.2)
Less: gross profit (loss) associated with divestitures	0.1		(0.2)
Comparable(1) cemetery gross profit	$	452.9	$	445.0

(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 September 30, 2025.

Cemetery Revenue

The consolidated revenue from our cemetery operations for the nine months ended September 30, 2025 increased $35.9 million, or 2.6%, compared to the same period in 2024, primarily due to a $24.9 million, or 1.8%, increase in comparable cemetery revenue and a $10.8 million increase in revenue contributed by newly constructed and acquired properties.

The $24.9 million increase in comparable cemetery revenue was primarily attributable to a $18.0 million increase in comparable cemetery core revenue and an increase in other revenue of $7.0 million. The increase in core revenue was primarily due to a $13.1 million increase in recognized preneed revenue and a $4.8 million increase in atneed revenue. Total recognized preneed revenue benefited from growth in comparable preneed sales production of $40.4 million, or 4.1%.

Cemetery Gross Profit

Consolidated cemetery gross profit increased $14.2 million for the nine months ended September 30, 2025 compared to the same period in 2024, which is primarily attributable to a $7.9 million increase in comparable cemetery gross profit and a $6.0 million increase in gross profit contributed by newly constructed and acquired properties. Comparable cemetery gross profit increased from $445.0 million to $452.9 million. The gross profit percentage remained flat at 32.8% as the increase in revenue mentioned above was partially offset by higher selling compensation on higher sales production and 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 $8.4 million to $132.5 million for the nine months ended September 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, partially offset by lower salaries and incentive compensation accruals versus the prior year.

Gains on Divestitures and Impairment Charges, Net

We recognized a $8.6 million net pre-tax gain on asset divestitures and impairments in the nine months ended September 30, 2025 compared to a $4.8 million net pre-tax gain in 2024 on asset divestitures due to non-strategic asset divestitures.

Interest Expense

Interest expense decreased $3.3 million to $191.2 million for the nine months ended September 30, 2025 primarily due to lower interest rates on our floating rate debt, partially offset by higher average debt outstanding.

Provision for Income Taxes

Our effective tax rate was 26.1% and 23.1% for the nine months ended September 30, 2025 and 2024, respectively. The higher effective tax rate in the current period was primarily due to a change in estimate recorded in the current year related to the finalization of the 2024 tax return, as well as less excess tax benefit recognized upon the settlement of employee share-

FORM 10-Q 39

PART I

based awards. The effective tax rate was 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 143.2 million for the nine months ended September 30, 2025 compared to 147.0 million for the same period in 2024. The decrease primarily reflects the impact of shares repurchased under our share repurchase program.

Critical Accounting Policies, Recent Accounting Pronouncements, and Accounting Changes

The preparation of financial statements in accordance with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Although we base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, actual results may differ from the estimates on which our financial statements are prepared at any given point of time. Changes in these estimates could materially affect our consolidated financial position, consolidated results of operations, or cash flows. Significant items that are subject to such estimates and assumptions include revenue and expense accruals, fair value of merchandise and perpetual care trust assets, and the allocation of purchase price to the fair value of assets acquired. Our critical accounting policies have not significantly changed since December 31, 2024 and are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements and Accounting Changes

For discussion of recent accounting pronouncements and accounting changes, see Part I, Item 1. Financial Statements, Note 2 of this Form 10-Q.

Cautionary Statement on Forward-Looking Statements

The statements in this Form 10-Q that are not historical facts are forward-looking statements made in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. These statements may be accompanied by words such as “believe”, “estimate”, “project”, “expect”, “anticipate”, “predict” that convey the uncertainty of future events or outcomes. These statements are based on assumptions that we believe are reasonable; however, many important factors could cause our actual consolidated results in the future to differ materially from the forward-looking statements made herein and in any other documents or oral presentations made by, or on behalf of, the Company. These factors are discussed below. We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the Company, whether as a result of new information, future events, or otherwise.

•Our affiliated trust funds own investments in securities, which are affected by market conditions that are beyond our control.

•We may be required to replenish our affiliated funeral and cemetery trust funds to meet minimum funding requirements, which would have a negative effect on our earnings and cash flow.

•Our ability to execute our strategic plan depends on many factors, some of which are beyond our control.

•We may be adversely affected by the effects of inflation, significant reduction in consumer confidence and customer demand, and/or recession.

•Our results may be adversely affected by significant weather events, natural disasters, catastrophic events, or public health crises.

•Our credit agreements contain covenants that may prevent us from engaging in certain transactions.

•If we lost the ability to use surety bonding to support our preneed activities, we may be required to make material cash payments to fund certain trust funds.

•The financial condition of third-party life insurance companies that fund our preneed contracts may impact our future revenue.

•Unfavorable publicity could affect our reputation and business.

•Our failure to attract and retain qualified sales personnel and licensed funeral professionals could have an adverse effect on our business and financial condition.

•We use a combination of insurance, self-insurance, and large deductibles in managing our exposure to certain inherent risks; therefore, we could be exposed to unexpected costs that could negatively affect our financial performance.

FORM 10-Q 40

PART I

•Declines in overall economic conditions beyond our control could reduce future potential earnings and cash flows and could result in future impairments to goodwill and/or other intangible assets.

•Any failure to maintain the security of the information relating to our customers, their loved ones, our associates, and our vendors could damage our reputation, could cause us to incur substantial additional costs and to become subject to litigation, and could adversely affect our operating results, financial condition, or cash flow.

•Our Canadian business exposes us to operational, economic, and currency risks.

•Our level of indebtedness could adversely affect our cash flows, our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, and may prevent us from fulfilling our obligations under our indebtedness.

•A failure of a key information technology system or process could disrupt and adversely affect our business.

•The funeral and cemetery industry is competitive.

•If the number of deaths in our markets declines, our cash flows and revenue may decrease. Changes in the number of deaths are not predictable from market to market or over the short term.

•If we are not able to respond effectively to changing consumer preferences, our market share, revenue, and/or profitability could decrease.

•The continuing upward trend in life expectancy and the number of cremations performed in North America could result in lower revenue, operating profit, and cash flows.

•Our funeral and cemetery businesses are high fixed-cost businesses.

•Risks associated with our supply chain could materially adversely affect our financial performance.

•Disruptions in global trade, including as a result of tariffs, trade restrictions, retaliatory trade measures or the effect of such actions on trading relationships between the United States and other countries could increase costs to our business.

•Regulation and compliance could have a material adverse impact on our financial results.

•Unfavorable results of litigation could have a material adverse impact on our financial statements.

•Cemetery operational claims could have a material adverse impact on our financial results.

•The application of unclaimed property laws by certain states to our preneed funeral and cemetery backlog could have a material adverse impact on our liquidity, cash flows, and financial results.

•Changes in taxation, or the interpretation of tax laws or regulations, as well as the inherent difficulty in quantifying potential tax effects of business decisions could have a material adverse effect on the results of our operations, financial condition, or cash flows.

For further information on these and other risks and uncertainties, see our Securities and Exchange Commission filings, including our 2024 Annual Report on Form 10-K. Copies of this document as well as other SEC filings can be obtained from our website at www.sci-corp.com. We assume no obligation and make no undertaking to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by us whether as a result of new information, future events, or otherwise.

FORM 10-Q 41

PART I

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our potential exposure to market risks. The term “market” risk refers to the risk of gains or losses arising from changes in interest rates and prices of marketable securities. The disclosures are not meant to be precise indicators of expected future gains or losses, but rather indicators of reasonably possible gains or losses. This forward-looking information provides indicators of how we view and manage our ongoing market risk exposures. All of our market risk-sensitive instruments were entered into for purposes other than trading.

Marketable Equity and Debt Securities — Price Risk

In connection with our preneed operations and sales, the related trust funds own investments in equity and debt securities and mutual funds, which are sensitive to current market prices. Cost and market values as of September 30, 2025 are presented in Part I, Item 1. Financial Statements, Note 3 of this Form 10-Q. Also, see Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations "Financial Condition, Liquidity, and Capital Resources" section for discussion of trust investments.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of September 30, 2025, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act)). Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the Securities and Exchange Commission (SEC) reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time period specified by the SEC’s rules and forms and that such information is accumulated and communicated to management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure. Based on our evaluation, our CEO and CFO have concluded that our disclosure controls and procedures are effective as of September 30, 2025 and that the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, our consolidated financial condition, consolidated results of operations, and cash flows for the periods presented in conformity with US GAAP.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended September 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

42 Service Corporation International


PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Information regarding legal proceedings is set forth in Part I, Item 1. Financial Statements, Note 9 of this Form 10-Q, which information is hereby incorporated by reference herein.

Item 1A. Risk Factors

There have been no material changes in our Risk Factors as set forth in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The following table summarizes our share repurchases during the three months ended September 30, 2025:


Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under the Program
July 1, 2025 — July 31, 2025 (1)	566,521	$	79.02	557,707	$	447,702,603
August 1, 2025 — August 31, 2025	307,398	$	79.67	307,398	$	423,213,662
September 1, 2025 — September 30, 2025	110,850	$	79.27	110,850	$	414,426,054
	984,769			975,955

(1) 8,814 shares were purchased in July 2025 in connection with the surrender of shares by associates to satisfy certain tax withholding obligations under compensation plans. These repurchases were not part of our publicly announced program and do not affect our share repurchase program.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) Not applicable.

(b) Not applicable.

(c) During the three months ended September 30, 2025, no director or officer (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

FORM 10-Q 43

PART II

Item 6. Exhibits


Exhibit Number		Description
3.1	—	Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Registration Statement No. 333-10867 on Form S-3).
3.2	—	Articles of Amendment to Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Form 10-Q for the fiscal quarter ended September 30, 1996).
3.3	—	Certificate of Amendment to Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.1 to Form 8-K filed May 25, 2018).
3.4	—	Statement of Resolution Establishing Series of Shares of Series D Junior Participating Preferred Stock, dated July 27, 1998 (Incorporated by reference to Exhibit 3.2 to Form 10-Q for the fiscal quarter ended June 30, 1998).
3.5	—	Bylaws of the Company (Incorporated by reference to Exhibit 3.1 to Form 8-K filed August 7, 2025).
4.1	—	Senior Indenture dated as of February 1, 1993 by and between the Company and The Bank of New York, as trustee (Incorporated by reference as Exhibit 4.1 to Form S-4 filed September 2, 2004 (File No. 333-118763)).
4.2	—	Agreement of Resignation, Appointment of Acceptance, dated December 12, 2005, among the Company, The Bank of New York and The Bank of New York Trust Company, N.A., appointing a successor trustee for the Senior Indenture dated as of February 1, 1993 (Incorporated by reference to Exhibit 4.1 to Form 10-Q for the fiscal quarter ended June 30, 2005).






31.1	—	Certification of Thomas L. Ryan as Principal Executive Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	—	Certification of Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	—	Certification of Periodic Financial Reports by Thomas L. Ryan as Principal Executive Officer in satisfaction of Section 906 of the Sarbanes- Oxley Act of 2002.
32.2	—	Certification of Periodic Financial Reports by Eric D. Tanzberger as Principal Financial Officer in satisfaction of Section 906 of the Sarbanes-Oxley Act of 2002.
101	—	Interactive data file formatted Inline XBRL.
104	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

44 Service Corporation International

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


October 30, 2025	SERVICE CORPORATION INTERNATIONAL
	By:	/s/ TAMMY MOORE
		Tammy Moore Vice President and Chief Accounting Officer (Principal Accounting Officer)

FORM 10-Q 45

Get the next $SCI alert in real time by email

Date	Price Target	Rating	Analyst
11/30/2023	$72.00	Buy	UBS
10/7/2022	$72.00	Buy	Truist
2/16/2022	$80.00 → $81.00	Outperform	Credit Suisse
1/19/2022	$72.00 → $75.00	Outperform	Oppenheimer
10/29/2021	$70.00 → $75.00	Outperform	Raymond James
10/29/2021	$74.00 → $75.00	Outperform	Credit Suisse
8/2/2021	$65.00 → $70.00	Outperform	Raymond James
7/30/2021	$60.00 → $74.00	Outperform	Credit Suisse

SEC Form 10-Q filed by Service Corporation International

Crush Q3 2025 with the Best AI Superconnector

Recent Analyst Ratings for
$SCI

$SCI
Analyst Ratings

UBS initiated coverage on Service Corp with a new price target

Truist initiated coverage on Service Corp with a new price target

Credit Suisse reiterated coverage on Service Corp Intl with a new price target

$SCI
SEC Filings

Service Corporation International filed SEC Form 8-K: Leadership Update, Regulation FD Disclosure, Financial Statements and Exhibits