Core Insights - Carriage Services, Inc. reported strong financial performance for Q4 and the full year 2025, with significant growth in both funeral and cemetery operations [3][4]. Financial Highlights - In Q4 2025, total funeral operating revenue increased by 9.6%, while total cemetery operating revenue grew by 18.4% [3]. - Operating income rose by 16.8%, and adjusted consolidated EBITDA increased by 11.0%, with an adjusted consolidated EBITDA margin of 30.8%, up 80 basis points year-over-year [3][4]. - For the full year 2025, GAAP diluted EPS grew nearly 55% to $3.25, and adjusted diluted EPS increased by 21% to $3.20 [6][4]. - Total revenue for the year reached $417.4 million, a 6.1% increase from 2024, driven by higher contract volumes and improved pricing discipline [4][15]. Operational Metrics - The company completed strategic acquisitions of two businesses generating over $15 million in annual revenue and divested non-core assets, resulting in a leverage ratio of 4.0x [4][6]. - Preneed cemetery sales production increased by 13.4% year-over-year, contributing to the overall revenue growth [4][6]. - The average price per preneed interment right sold was $5,643, up from $5,264 in the previous year [7]. Outlook for 2026 - The company projects total revenue between $440 million and $450 million, with adjusted consolidated EBITDA expected to be between $135 million and $140 million [10]. - Adjusted diluted EPS is forecasted to be in the range of $3.35 to $3.55, with adjusted free cash flow anticipated between $40 million and $50 million [10].

Group 1 - Carriage Services, Inc. plans to release its 2025 annual results on February 25, 2026, after market close [1] - A conference call to discuss the annual results is scheduled for February 26, 2026, at 8:00 a.m. Central Time, available via phone and webcast [2] - Carriage Services operates 155 funeral homes across 24 states and 28 cemeteries in 9 states as of December 31, 2025, focusing on delivering premier experiences through innovation and elevated service [3]

Core Viewpoint - The recent commentary on Carriage Services, Inc. (CSV) highlights an upgrade to a 'Buy' rating due to appealing technicals, robust preneed cemetery sales growth, and strong free cash flow [1] Group 1: Company Performance - Carriage Services, Inc. has shown strong preneed cemetery sales growth, indicating a positive trend in future revenue generation [1] - The company is characterized by strong free cash flow, which is a critical indicator of financial health and operational efficiency [1] Group 2: Investment Strategy - The investment strategy focuses on acquiring undervalued profitable stocks with strong balance sheets and minimal debt, which aligns with the characteristics of Carriage Services, Inc. [1] - The approach includes writing calls against positions to generate additional income, showcasing a proactive investment management style [1]

Core Viewpoint - The recent commentary on Carriage Services, Inc. (CSV) highlights an upgrade to a 'Buy' rating due to appealing technicals, robust preneed cemetery sales growth, and strong free cash flow [1] Group 1: Company Performance - Carriage Services, Inc. has shown strong preneed cemetery sales growth, indicating a positive trend in future revenue generation [1] - The company is characterized by strong free cash flow, which is a critical indicator of financial health and operational efficiency [1] Group 2: Investment Strategy - The investment strategy focuses on acquiring undervalued profitable stocks with strong balance sheets and minimal debt, which aligns with the characteristics of Carriage Services, Inc. [1] - The approach includes writing calls against positions to generate additional income when opportunities arise, enhancing overall investment returns [1]

Core Insights - Carriage Services, Inc. announced executive leadership promotions and appointments to support its growth strategy and 2030 Vision [1][2][5] Leadership Changes - Steve Metzger has been promoted to President and Chief Operating Officer, overseeing Operations, Sales, Marketing, and M&A [7] - John Enwright, Chief Financial Officer, will now also oversee Information Technology and Supply Chain, aligning financial discipline with long-term value creation [4] - Rene Negrete joins as Vice President of Operations, bringing over 20 years of experience in the funeral and cemetery sector [7] - Sam A. Mazzu, III has been promoted to Vice President, General Counsel and Secretary, focusing on governance and risk stewardship [7] - Christine Ngo has been promoted to Vice President of Human Resources, enhancing leadership in people and culture development [7] - Alfred White has been promoted to Vice President of Marketing, aiming to strengthen the brand and community connections [7] Strategic Objectives - The new leadership structure supports Carriage's three strategic objectives: Purposeful Growth, Relentless Improvement, and Empowered Partnership [5] - The company aims to scale responsibly, invest in its workforce, and deliver meaningful experiences to families and communities [5] Company Overview - Carriage Services is a leading provider of funeral and cemetery services in the U.S., operating 155 funeral homes in 24 states and 28 cemeteries in 9 states as of December 31, 2025 [6]

Group 1 - The article does not provide any specific content related to a company or industry [1]

Core Insights - Carriage Services reported Q3 CY2025 revenue of $102.7 million, exceeding analyst expectations of $101.4 million, representing a 2% year-on-year growth [1][6] - The company’s non-GAAP profit was $0.75 per share, surpassing the consensus estimate of $0.73 by 3% [1][6] - Management reaffirmed full-year revenue guidance of approximately $415 million, aligning with analyst estimates [1][6] Performance Highlights - The third quarter performance was driven by strong preneed cemetery sales and an increase in insurance-funded prearranged funeral sales, despite weaker funeral home volumes in July and August [3][5] - CEO Carlos Quezada noted a mid-single-digit decline in funeral home volumes before a rebound in September, indicating broad-based industry softness affecting both consolidators and independent operators [3][4] - Adjusted EBITDA for the quarter was $32.98 million, with a margin of 32.1%, exceeding analyst estimates of $31.74 million [6] Future Outlook - The company is focusing on technology investments and expanding cemetery and preneed sales, projecting stable funeral volumes supported by demographic trends [4] - Management highlighted the potential for growth through new AI-enabled sales tools and partnerships with insurance providers, aiming for sustainable preneed sales growth through 2026 [4][5] - Full-year Adjusted EPS guidance was slightly raised to $3.28 at the midpoint, while EBITDA guidance for the full year is set at $131 million, below analyst estimates of $132.3 million [6]

Revenue and Profitability - Total revenue for the nine months ended September 30, 2025, increased by $5.5 million to $311.96 million compared to $306.50 million for the same period in 2024[171]. - Gross profit for the nine months ended September 30, 2025, increased by $0.3 million to $110.02 million compared to $109.74 million for the same period in 2024[175]. - Net income for the nine months ended September 30, 2025, increased by $16.1 million to $39.24 million compared to $23.10 million for the same period in 2024[176]. - Cash provided by operating activities was $46.6 million for the nine months ended September 30, 2025, compared to $42.7 million for the same period in 2024[162]. - Adjusted operating profit decreased by $0.2 million to $54.933 million for the nine months ended September 30, 2025, with a corresponding operating profit margin decrease of 280 basis points to 45.1%[197]. Acquisitions and Divestitures - The company acquired eight funeral homes, one cemetery, and one cremation-focused business for an aggregate price of $56.5 million during the nine months ended September 30, 2025[149]. - The company sold nine funeral homes and four cemeteries for an aggregate of $33.8 million, resulting in a gain of $0.8 million during the nine months ended September 30, 2025[150]. - Net loss on divestitures and impairment charges totaled $6.559 million for the three months ended September 30, 2025, compared to $387,000 in the same period of 2024[204]. Revenue Breakdown - Total revenue for the Funeral Home segment for the nine months ended September 30, 2025, was $202,644 thousand, an increase of $3,516 thousand from $199,128 thousand in 2024[189]. - Cemetery operating revenue increased by $5.3 million to $109.314 million for the nine months ended September 30, 2025, compared to $107.370 million in the same period of 2024, primarily due to a 6.9% increase in the average price per preneed interment right sold[196]. - Cemetery operating revenue increased by $4.0 million to $39,964 thousand for the three months ended September 30, 2025, driven by a 15.1% increase in the average price per interment right sold[193]. - Atneed revenue increased by $1.3 million to $28.405 million for the nine months ended September 30, 2025, driven by an 11.6% increase in atneed property sold[196]. Expenses and Financial Metrics - General, administrative, and other expenses decreased by $10.9 million to $36.2 million for the nine months ended September 30, 2025, primarily due to a decrease in salary and benefits expenses[203]. - Interest expense decreased to $21.278 million for the nine months ended September 30, 2025, from $25.071 million in 2024[205]. - Income tax expense increased by $0.7 million to $13.6 million for the nine months ended September 30, 2025, with an operating tax rate of 32.0% compared to 33.2% in 2024[208]. Contract and Revenue Metrics - Average revenue per funeral contract excluding preneed interest increased by 1.9% to $5,665 for the nine months ended September 30, 2025[171]. - Average revenue per contract, excluding preneed funeral trust earnings, increased by 1.1% to $5,756 for the nine months ended September 30, 2025, compared to $5,691 in 2024[189]. - Preneed revenue as a percentage of operating revenue increased to 70.7% for the nine months ended September 30, 2025, compared to 70.4% in 2024, with preneed revenue rising to $68.385 million from $64.387 million[196]. - Preneed revenue as a percentage of operating revenue for the Cemetery segment was 73.1% for the three months ended September 30, 2025, up from 71.7% in 2024[193]. - The number of preneed interment rights sold increased to 3,567 for the three months ended September 30, 2025, compared to 3,410 in 2024, reflecting a growth of 4.6%[193]. Cash and Capital Expenditures - Capital expenditures for the nine months ended September 30, 2025, totaled $12.7 million, an increase of $1.0 million compared to $11.7 million for the same period in 2024[167]. - The company ended the quarter with $1.2 million in cash, unchanged from the beginning of the year[159]. Volume and Performance Metrics - The company experienced a 1.8% decrease in funeral contract volume for the nine months ended September 30, 2025[174]. - Adjusted operating profit for the Funeral Home segment for the three months ended September 30, 2025, was $24,908 thousand, a decrease of $189 thousand from $25,097 thousand in 2024[179]. - Adjusted operating profit margin for the Funeral Home segment decreased to 36.8% for the three months ended September 30, 2025, down from 38.1% in 2024[186]. - Cemetery adjusted operating profit increased by $1.8 million to $21,411 thousand for the three months ended September 30, 2025, compared to $19,846 thousand in 2024[194]. - Other revenue for the Funeral Home segment increased by $1.4 million to $4,713 thousand for the three months ended September 30, 2025, compared to $3,309 thousand in 2024[188]. - Other revenue decreased by $0.7 million to $11.140 million for the nine months ended September 30, 2025, primarily due to realized capital gains in the third quarter of 2024[198].

Financial Data and Key Metrics Changes - Total operating revenue for Q3 2025 grew to $101.3 million, an increase of 5.2% year-over-year, primarily driven by a 21.4% increase in pre-need cemetery sales [5][6] - Total field EBITDA for the quarter was $46.3 million, up $1.4 million, or 3.1% [8] - Adjusted consolidated EBITDA grew to $33 million, up $2.2 million, or 7.3% year-over-year, with an adjusted EBITDA margin of 32.1%, compared to 30.5% in the same quarter last year [10][13] - Adjusted diluted earnings per share were $0.75, an increase of 17.2% from $0.64 in the same quarter last year [10][14] Business Line Data and Key Metrics Changes - Funeral operating revenue decreased by $753,000, or 1.3%, primarily due to a 2.1% reduction in funeral volume [6] - Cemetery segment operating revenue reached $35.6 million, an increase of $4 million, or 12.6% year-over-year [6][9] - General agency commission revenue tied to insurance-funded pre-arranged funeral sales grew to $2.6 million, up 61% from the previous year [5][6] Market Data and Key Metrics Changes - The company experienced lower funeral home volumes in July and August, with a return to normal volume in September and positive trends in October [21][22] - The company anticipates a normalized growth rate of 1-2% for funeral home volume in 2026 [23] Company Strategy and Development Direction - The company is focused on disciplined capital allocation, relentless improvement, and purposeful growth to create sustainable results [4][11] - The launch of Sales Edge 2.0 and Titan, an AI-powered sales agent, aims to enhance sales capabilities and drive growth in pre-need cemetery sales [9][10] - The company is committed to a long-term growth strategy, having systematically divested non-core assets to focus on strategic markets [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the momentum heading into Q4 2025, with expectations for record highs in revenue, adjusted consolidated EBITDA, and adjusted diluted EPS [19] - The company anticipates revenues in the range of $413-$417 million and adjusted consolidated EBITDA between $130-$132 million for the full year [19] Other Important Information - The company completed the sale of several non-core assets, which represented about $2.4 million in EBITDA and $9 million in revenue [61] - The leverage ratio improved to 4.1 times, down from 4.2 times in the previous quarter, with a focus on managing debt [17] Q&A Session Summary Question: Can you quantify the contract weakness seen in July and August? - Management noted a middle-digit percentage decline in volume for both months, with a strong recovery in September and positive trends in October [21] Question: What is the expected growth for 2026? - Management indicated a reasonable expectation of 1-2% growth on the funeral home side related to volume [23] Question: Was the strong pre-need cemetery business related to specific CapEx projects? - Management confirmed that delays in permitting affected earlier growth, but they expect continued strong performance in the fourth quarter [24][26] Question: Are there any other expenses affecting funeral home margins? - Management clarified that lower margins were primarily due to volume leverage, as the funeral home segment has high fixed costs [32][36] Question: What is the status of the insurance-funded pre-need progress? - Management stated that the rollout has been completed across the network, with expectations for continued growth into 2026 [40][42] Question: What is the competitive landscape for M&A? - Management highlighted two categories of sourcing: internal opportunities with less competition and broker-led businesses that are more competitive, with average multiples around 7-8 times [56][57]

Financial Performance - Adjusted diluted EPS for Q3 2025 was $0.75, a 17.2% increase from $0.64 in Q3 2024[3] - Total operating revenue grew 5.2% year-over-year, driven by a 21.4% increase in cemetery preneed sales and a 27.2% increase in financial revenue[5] - Total revenue for Q3 2025 was $102.7 million, compared to $100.7 million in Q3 2024, reflecting a $2.1 million increase[8] - Net income for Q3 2025 decreased to $6.6 million from $9.9 million in Q3 2024, impacted by a $6.2 million increase in net loss on divestitures[8] - Adjusted net income for Q3 2025 was $11,923,000, representing a 17.9% increase from $10,094,000 in Q3 2024[16] - The company reported a net income of $6,570,000 for Q3 2025, down from $9,866,000 in Q3 2024, primarily due to special items[16] - Basic earnings per share for Q3 2025 were $0.42, a decrease of 35.4% compared to $0.65 in Q3 2024[22] - GAAP basic earnings per share for Q3 2025 was $0.42, down from $0.65 in Q3 2024, a decline of 35.4%[41] Revenue and Sales - Cemetery operating revenue increased by 12.6% year-over-year, with a 15.1% rise in the average price of preneed interment rights sold[6] - The average price per preneed interment right sold in Q3 2025 was $6,257, compared to $5,360 in Q3 2024[7] - Total operating revenue for Q3 2025 was $101,341,000, an increase of 5.1% compared to $96,363,000 in Q3 2024[16] - Cemetery operating revenue rose to $35,586,000 in Q3 2025, up 12.6% from $31,604,000 in Q3 2024[16] - Service revenue for Q3 2025 was $44,204 million, a slight decrease of 1.6% compared to $44,916 million in Q3 2024[22] - Total revenue for the nine months ended September 30, 2025, reached $311,958 million, up 1.5% from $306,498 million in the same period of 2024[22] Cash Flow and Expenses - Cash provided by operating activities for Q3 2025 was $24.7 million, up from $20.8 million in Q3 2024[7] - Adjusted free cash flow for the nine months ended September 30, 2025, was $39.3 million, compared to $35.9 million for the same period in 2024[10] - Cash provided by operating activities for the nine months ended September 30, 2025, was $46,568 million, an increase of 8.7% from $42,716 million in 2024[24] - The company incurred acquisition and divestiture expenses of $395,000 in Q3 2025, compared to no expenses in Q3 2024[40] Outlook and Strategic Initiatives - The revised 2025 outlook projects total revenue between $413 million and $417 million, with adjusted diluted EPS expected to be between $3.25 and $3.30[9] - The company anticipates continued growth in revenue and adjusted EBITDA, driven by strategic acquisitions and market expansion efforts[44] Assets and Liabilities - Total assets increased to $1,342,750,000 as of September 30, 2025, compared to $1,279,580,000 at the end of 2024[19] - The total liabilities stood at $1,100,666,000 as of September 30, 2025, up from $1,071,030,000 at the end of 2024[19] EBITDA and Margins - Consolidated EBITDA for the nine months ended September 30, 2025, reached $97,791,000, a significant increase from $84,493,000 in the same period of 2024, reflecting a margin improvement to 31.3%[16] - The company’s adjusted consolidated EBITDA margin improved to 32.1% in Q3 2025, compared to 30.5% in Q3 2024[17] - The company’s financial EBITDA margin was reported at 89.3% for Q3 2025, down from 92.0% in Q3 2024[16] - Adjusted consolidated EBITDA margin for Q3 2025 was 32.1%, up from 30.5% in Q3 2024[39] Investor Guidance - The company advises investors to review the "Risk Factors" section in the Annual Report on Form 10-K for the year ended December 31, 2024, for material factors that could affect actual results[46] - Investors are cautioned against placing undue reliance on forward-looking statements, which are only valid as of the communication date[46] - The company has no obligation to publicly update or revise forward-looking statements unless required by law[46]