SCI Earnings Call: CEO Tom Ryan answers on Preneed and Managing

May 11, 2026/Cemetery, Finance, Preneed/

Service Corporation International reported on their 1st Quarter of 2026 about ten days ago and then followed that up with an Earnings Call with stock analysts that follow the company. As usual Funeral Director Daily took a look at the Earnings Call transcript which you can access here and decided to lay out some of the Question and Answer session for our readers.

There is a lot of talk on how the income from preneed can become more and more valuable to funeral homes as their margins, and in some cases, market share drops because of the increased use of direct cremation providers by consumers. And, in reading the SCI Earnings Call we noticed much of it centered around that issue.

As is our custom with Earnings Calls, we will simply report what was said without a “take” on it. Today’s version of our newsletter will center on the Preneed discussions in the SCI Earnings Call. Here are some exerpts:

SCI’s CEO Thomas Ryan and his Opening Statement comments about Preneed:

“Preneed funeral sales production increased by $18 million or about 6% over the first quarter of 2025. Core preneed funeral sales production increased by $13 million or 6% Nonfuneral home preneed sales production increased by over $5 million or 9% over the prior year quarter. We feel great about our momentum in both channels as we have worked through the initial challenges of the insurance partner transition in the core segment. And as of the end of 2025, we have now rolled the insurance product into 100% of our SCI Direct locations.

Comparable preneed cemetery sales production grew an impressive $32 million or 10% in the quarter. Large sales drove $20 million of that increase with core sales contributing the remaining $12 million, supported by continued strong underlying sales velocity. This performance reflects the strength of our sales organization, which continues to expand preneed production despite lower first quarter funeral volumes. Ongoing investment in sales force retention and growth, particularly in our community-based teams has broadened our reach beyond location-generated leads.”

Tom Ryan
SCI CEO

SCI CEO Thomas Ryan responding to a question pertaining to Cemetery Preneed and the Sales Channels used:

“One of the channels is large sales. One of them is headcount. And so what we’re seeing today, and I touched upon it a little bit on the call, is that we’re growing the headcount. Part of that is we’re trying to retain more of our employees, and that’s being successful and then hire new ones. And we believe we’ve got better leads. Our next KPI is our lead-to-sale ratio. And so that’s really focused on the quality of leads and our ability to follow those up. And then the third bucket before large sales is seminars. We found that seminars are a way that we can educate the consumer, get in front of them. And so Jay really pushed the initiative to say, let’s expand the number of seminars we’re doing, and we’re seeing great success with that.

And those are the types of things where you’re out in the community, you’re not getting your leads to the funeral home. And that’s why I think we can say we grew velocity in a quarter even though funeral volumes were down. And by the way, funeral volumes are a great lead source, but we’re finding other ways to get out to the consumer and seeing real success there. So we feel great about the momentum.”

SCI CEO Thomas Ryan responding to a cemetery question with an answer about how SCI has focused on what they call their Cremation/Cemetery strategy:

“The other thing I’ll mention, and we talked about it earlier since you asked, the cremation cemetery strategy. I think we talked to you guys a while back that it’s our belief based upon some studies and surveys that we did with consumers that there’s a real lack of understanding of what we have to offer to the cremation consumer on the cemetery side. So we were good at the funeral side, but we weren’t getting the point across, at least consistently. So we worked really hard, and we actually piloted 10 markets in the first quarter. And I would tell you that it was very successful.

And again, it’s only 10 markets, so I don’t want to get overly excited, but it’s really focusing on communicating with the consumer through advertising, through in-lobby presentations, different types of media and presentation materials. And what we’re seeing was a real difference maker in those 10 markets versus what we saw in the other markets. So that’s just on its beginning, and we’re intending to roll out, I think, another 80 or so markets in July. So really, really happy about that, that we feel like that’s a market that we haven’t addressed as aggressively as we should have been, and we’re on it now. So a lot of good momentum on the cemetery sales side and feel good about directionally where we’re headed. . . . . .

” . . . I think where it’s going to show up is in the revenue growth and pretty high-margin products. We really don’t — and I hesitate to do that, because like I said, 10 markets does not make an initiative. So feel free to ask me as we continue how successful it is. But I would just tell you, we’re very excited because in each of these 10 markets, it exceeded the average of everybody else in some markets by quite a bit.”

SCI CEO Thomas Ryan responding to a question dealing with the strength of SCI’s “funeral” prearrangement success:

“I think a couple of things. First and foremost, you’re exactly right. I’m going to say the same thing, particularly the seminars. The seminars are put on in markets. They probably are not at one of our locations. They’re probably at a restaurant, somewhere, a hotel. So the draw that you’re getting for the attendees has nothing to do with your funeral home traffic. So over time, I think we’re pushing more and more of these leads outside of our locations. And therefore, we’re less sensitive to volumes as they walk through the door. So I think our focus on that particularly probably has driven a lot of it. . . . . . I would point back to the lead sources are more outside the funeral home, and we’re able to generate better leads, have better closing rates. . . . “

Finally while not preneed, there was an interesting question on “managing” funeral homes through low-volume times. Here’s how CEO Thomas Ryan answered that question:

” . . .I think I’ve spoken before that the field has the ability when volumes are down to manage labor costs. How many people we’re bringing in, part-time help versus full-time help. And so they’re really good at leveraging that model without us having to say anything. So a lot of that is built into the DNA, built into the systems that we utilize. And so they’re very good at leveraging those costs, and we really don’t have to say a thing. So I feel good about the team’s ability to pivot. . . .”

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