Service Corporation International Q1 2025 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Joanna Gajuk - Bank of America - Analyst : Hey, good morning. Thanks so much for taking the question. So, maybe first on the cemetery preneed sales production being done. So, it sounds like some of it was worse, right? So, now you're kind of guiding to a little bit slower growth. So, can you maybe talk about what you assume for the large services score? It sounds like large was worse, but maybe core was a little bit better, and in that context, can you also talk about your, I guess, experience at the Rose Hills location because I guess that the community or the communities around Rose Hills were impacted by the wildfires. So, I just wonder if there's any slowdown there. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, SCI.N - Q1 2025 Service Corporation International Earnings Call

Question: Joanna Gajuk - Bank of America - Analyst : Yeah, no, thank you. And Rose Hills, in particular, or the West Coast, in terms of the Qingming festivities, I guess it sounds like, at least in Rose Hills, based on your response when you said you feel good about things there, sounds like those kind of progressed as normal in terms of just the product that's available and the foot traffic around those festivities.

Question: Joanna Gajuk - Bank of America - Analyst : And if I may, another, I guess, item that's quite topical outside of the discretionary, obviously the tariffs. So maybe you could walk us through how you're thinking about this. Obviously, things are very fluid, but based on what you know, how would you think about any incremental costs? This year, are you including anything in your guidance? And also, if you can give us some sense in terms of the exposure for your purchases to China specifically and other markets. Thank you.

Question: Joanna Gajuk - Bank of America - Analyst : Okay. So, you're saying immaterial and you don't assume anything incremental in the guidance as in like you, you can manage this year. I guess, we'll see how things goes, in terms of next year, later. But, yes, thanks for taking the questions.

Question: Scott Schneeberger - Oppenheimer - Analyst : Thank you very much. Good morning, all. I'd like to start off asking about funeral volume. It's a pretty big swing from down 3.8% in fourth quarter to up 1.8% year-over-year in the first quarter. Could you speak to the drivers of that in the first quarter? Just maybe the top three by degree of magnitude? And then, I'll follow up on that. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, SCI.N - Q1 2025 Service Corporation International Earnings Call

Question: Scott Schneeberger - Oppenheimer - Analyst : Thanks. And when you referenced pull forward, you were speaking to the longer term COVID trend and reversion or perhaps, I think this is a heightened flu season. Just if you could clarify that. Thanks.

Question: Scott Schneeberger - Oppenheimer - Analyst : Thanks. So, the takeaway here is that it could be, I think the full year expectation was flat to slightly down. Sounds like you're trending obviously, you're trending well against that out of the gate. Just curious kind of how you see that shaping over the end of the year, and any change to that specific outlook? Thanks.

Question: Scott Schneeberger - Oppenheimer - Analyst : Thanks. Appreciate that. And just for my follow-up, curious on the cremation makeshift. It's been a little bit below historical average for a while now, over a year I believe. Just comments on what you're seeing there, if you think a new trend is shaping. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, SCI.N - Q1 2025 Service Corporation International Earnings Call

Question: Scott Schneeberger - Oppenheimer - Analyst : Understood. Alright, thanks very much.

Question: AJ Rice - UBS - Analyst : (technical difficulty) Part of your preneed funeral volume to insurance, I think, when you inked the contract last summer, the discussion was around $700 million, $800 million -- a couple of hundred million of SCI Direct, so it's sort of roughly $1 billion of premium. I may have those numbers wrong, correct me if they're wrong. It sounds like now, with this push, you're going to have meaningfully more premium that comes under this agreement. Do you sort of have a target as to where you think you'll end up as to how much insurance annual premium you're going to generate from preneed funeral contracts?

Question: AJ Rice - UBS - Analyst : Okay. And then, just want to also go back to the comment that I think Eric made about more of the cases coming out of the backlog have merchandise and travel associated with them. I know, obviously, the case is coming out of the backlog, you got the investment income build up and so on. But I wonder incrementally, how much do those two things tend to contribute to revenue per case, if there's more of that coming out, and is that fully reflected in the run rate you're seeing now, or do you think that will, the percentage of cases that have those two dynamics will continue to increase for a while?

Question: AJ Rice - UBS - Analyst : And is the average life on the SCI Direct preneed contracts the same as in the core funeral business?

Question: AJ Rice - UBS - Analyst : All right. I just might ask one last thing on your capital deployment. It sounds like you're expecting the deal activity to be about, which a budget $75 million to $125 million. I know you stepped up buybacks in the quarter share repurchases. Any comment on that? And do you think you'll see elevated share repurchase activity as you progress through the rest of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 01, 2025 / 1:00PM, SCI.N - Q1 2025 Service Corporation International Earnings Call

Question: AJ Rice - UBS - Analyst : Okay, thanks a lot.

Question: Tobey Sommer - Truist Securities - Analyst : Thank you. I wanted to start out asking you a question about the sales force, and maybe you could highlight for us what new initiatives and focus you have for this year, sort of headed into next, and what you think the resulting impacts can be on the financials of the business?

Question: Tobey Sommer - Truist Securities - Analyst : Appreciate that. And then, how do you enter this late spring or early summer period from a preneed delivery and RevRec perspective on cemetery? Could you give us a little bit of the buildup of sales production over the last couple of quarters as we look to the better weather quarters ahead of us?

Question: Tobey Sommer - Truist Securities - Analyst : That's helpful. And we haven't -- I don't think we talked about it here. Anything on the funeral rule or anything from a regulatory perspective that you're anticipating this year?

Question: Tobey Sommer - Truist Securities - Analyst : Thank you.

Question: Parker Snure - Raymond James - Analyst : Hey, good morning. Yes, this is Parker on for John Ransom. Maybe just going back on the macro pressure, I understand the pressure on the preneed cemetery production with the tough environment, but do you expect any trade down on the at need funeral side for the funerals that are kind of truly at any, not coming out of the backlog? Would you expect any trade down there, maybe accelerating ship to cremation, maybe trading down on the catering or the flowers? Is that something that you expect or is that something that has historically happened under other tough macro cycles?

Question: Parker Snure - Raymond James - Analyst : Okay, that's helpful. And then maybe just on the impact from M&A, looks like there was a few points of help on the funeral volumes side from the non-same store. Looks like, roughly 2% good guy to volumes. Is that a good way to think about it for the rest of the year? And maybe just remind us how you're thinking about the M&A benefit you're getting this year from the bulls of M&A that you did last year, maybe just on total earnings and also on funeral volumes?

Question: Parker Snure - Raymond James - Analyst : Okay, great. Thank you.