CSV — Carriage Services, Inc.

Summary of Carriage Services Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Revenue: $105.5 million, up 8% year-over-year.
  • Funeral Operating Revenue: $61.1 million (+9.6% YoY).
  • Cemetery Operating Revenue: $33.8 million (+18.4% YoY).
  • Financial Revenue: $9.3 million (+15.3% YoY).
• Adjusted Consolidated EBITDA: $32.5 million, an 11% increase, with a margin of 30.8%.
• Adjusted Diluted EPS: $0.75, a 21% increase from $0.62 in Q4 2024.
• Full Year Revenue: $417.4 million, up 3.3% YoY.
• Full Year Adjusted Consolidated EBITDA: $130.7 million (+3.5% YoY).
• Full Year Adjusted Diluted EPS: $3.20, up 20.8% from $2.65.

2. Strategic Updates and Business Highlights

• The company is transitioning from a rebuilding phase to a compounding phase, focusing on disciplined execution and value creation.
• Strategic initiatives include optimizing supply chain processes, enhancing service offerings, and pursuing high-quality acquisitions.
• The implementation of Sales Edge 2.0 CRM is achieving approximately 80% adoption, contributing to improved preneed production.
• Continued investments in technology and infrastructure are aimed at supporting growth and improving operational efficiency.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected to be between $440 million and $450 million, representing a growth rate of approximately 5.5% to 8%.
• Adjusted Consolidated EBITDA: Forecasted at $135 million to $140 million.
• Adjusted Diluted EPS: Anticipated to be between $3.35 and $3.55.
• Capital expenditures are projected to be $25 million to $30 million, with a focus on both growth and maintenance.

4. Bad News, Challenges, or Points of Concern

• An unanticipated employee benefit expense of approximately $1.2 million impacted Q4 results, primarily due to high-cost claimants and increased medical claims.
• Overhead expenses rose to 14.4% of revenue in Q4, up from 13.2% in the prior year, driven by higher incentive pay.
• The first quarter of 2026 may face tough year-over-year comparisons due to strong performance in January 2025 driven by flu season.

5. Notable Q&A Insights

• The recent acquisitions contributed about $3 million to Q4 revenue, with expectations for significant revenue growth from these assets in 2026.
• The company is focused on a proactive M&A strategy, with potential acquisitions expected to add $5 million to $10 million in revenue in 2026.
• The integration process for recent acquisitions is ongoing, with a structured approach to ensure smooth transitions and capitalize on growth opportunities.
• The management expressed optimism about the future despite challenges, emphasizing a disciplined approach to capital allocation and operational improvements.

Overall, Carriage Services demonstrated solid financial performance in Q4 2025 and is positioning itself for growth in 2026 through strategic initiatives and acquisitions, while also addressing challenges related to employee expenses and overhead costs.