SCI 1Q 2026: Revenues up, but lots of challenges

May 1, 2026/Finance/

Service Corporation International (SCI), the continent’s largest Death Care provider, reported their 1st Quarter of 2026 financial results late Wednesday. You can access a copy of the press release on that report here.

Here’s what Tom Ryan, the company’s Chairman and CEO commented in a prepared statement included in the press release:

“Today, we reported adjusted earnings per share of $0.97 and net cash provided by operating activities of $333.8 million. Comparable funeral service volumes declined 6% year-over-year, reflecting the impact of a particularly strong prior year flu season and aligning with broader demographic trends. Despite this, the Company delivered solid underlying performance driven by a resilient average revenue per service and disciplined cost management, with expenses increasing approximately 1% year-over-year. In addition, preneed funeral sales production remained strong, increasing 6% for the period.

In our cemetery segment, we delivered a strong performance, highlighted by 10% growth in comparable preneed cemetery sales production. This higher production drove 7% growth in comparable cemetery revenue and a 120 basis point improvement in cemetery gross profit.. . “

Here are some numbers from the report that does indeed show Revenue for the entire company growing 2.07% from $1.074.2 billion in 1Q25 to $1.096.5 billion in 1Q 2026:

Cost of Revenue grew to $810.0 million — up 3.4% from $782.8 million in the same quarter of last year.

That increased “Cost of Revenue” led to a drop in Operating Income to $243.8 million in 1Q 2026 as compared to $251.7 million in 1Q 2025 — That’s a drop in Operating Income of abut 3.2% for the quarter.

SCI also saw “Total Comparable Revenue” on the funeral side of the business drop to $620.2 million for the quarter as compared to last year’s 1st quarter number of $637.6 million — a drop of 2.7% of revenue on funeral homes owned by the company for at least one year.

“Comparable Gross Profit” on funerals dropping over $22 million or 14.7% as compared to the 1st Quarter of 2025.

The funeral home side of comparable revenues also saw the “Comparable Gross Profit Percentage” — what I would equate to what I call “Margin” – drop 3 full percentage points, from 24.4% of revenues in 1Q25 to 21.4% of rvenues in 1Q26.

The number of funeral services performed company wide for the 1st Quarter also fell to 93,686 — that’s a 4.3% drop from the number reported in 1Q25 (97,854 services). The “Comparable funeral home” number of services performed” was even worse — a drop of 6.0% in funeral homes owned for at least one year.

The company was able to raise “Comparable Funeral Home” revenues 3.4% on a “per funeral” basis over the 1st Quarter of 2025.

Tom Anderson
Funeral Director Daily

Funeral Director Daily take: Yes, Revenues were up for SCI overall – about 2.07% — and the cemetery and preneed divisions performed admirably.

And, in the business environment of today, with rising costs of doing business and direct cremations taking a larger and larger percentage of the Death Care disposition business, it’s not surprising to see margins compressed.

However, even though CEO Ryan explains the “Comparable funeral service” volume declines by being up against a “strong” comparable number from 2025 because of a “strong prior year flu season”, in a company so geographically widely spread out, a 6.0% drop in “comparable funeral volume” is disconcerning.

I took the liberty of looking up the flu season, flu related deaths in the United States for 2024-2025 and found out, at least from one source, that the approximate number was 45,000 as compared to 28,000 in the prior year. So, CEO Ryan is correct in saying that there probably was an effect on volume because of those 17,000 extra deaths in the 1st Quarter of 2025 as compared to a milder flu-season in 2026.

However, if SCI does 20% of all funerals in the United States that would suggest that they suffered a loss of opportunity of about 3,400 deaths (20% of 17,000) in 1Q26 as compared to 1Q2025. Even adding those 3.400 deaths to the number of “Comparable Funeral Services Performed” as reported for 1Q26 by SCI would leave a number of funeral services performed about 2.5% less in 1Q26 than in 1Q25 in their historical funeral homes.

Tom Ryan
SCI CEO

Service Corporation International is historically, and especially under Tom Ryan’s leadership as CEO, the most successful public company in the history of Death Care. However, I think some of the numbers in the 1Q2026 report show they are not immune to some of the problems plaguing traditional funeral homes at this time — Those problems include, among others, a shifting allegiance among Death Care providers by consumers – many who may have been legacy family clientele for generations, lower revenues spent on services and merchandise per death, and increased expenses in the operation of a traditional funeral home.

The good news for these traditional funeral homes is that there will be increased deaths moving forward as today’s Baby Boomers become older and older and begin using the services of Death Care providers. While the numbers are not visible, the graph below indicates the number/ per thousand of population that will die in a single year. Currently, the United States is at about 9.4 deaths/thousand of population and that number is expected to increase. . . . leading to a higher number of deaths per year through, at least 2040.

Death Rate per thousand of population in the United States from 1950 to present. Notice: 1) The Pandemic Years and 2) How the rate is increasing, and has been since 2010 to represent the large number of Baby Boomers who have now entered the Death Care years.

Disclaimer –– The author of this article for Funeral Director Daily is a shareholder of Service Corporation International.

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