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 (30.8% margin), up 11% YoY.
• Adjusted Diluted EPS: $0.75, a 21% increase from $0.62 in Q4 2024.
• Full Year Revenue: $417.4 million (+3.3% YoY), impacted by $9 million from divested noncore businesses.
• Full Year Adjusted EBITDA: $130.7 million (+3.5% YoY).
• Full Year Adjusted Diluted EPS: $3.20, up 20.8% YoY.

2. Strategic Updates and Business Highlights

• The company is transitioning from a rebuilding phase to a compounding phase, focusing on disciplined growth and high-quality acquisitions.
• Investments in systems and infrastructure, including the rollout of Sales Edge 2.0 CRM, have enhanced sales capabilities.
• Continued emphasis on supply chain optimization, with initiatives yielding improved margins and purchasing consistency.
• The company is actively pursuing M&A opportunities, signaling a shift towards a growth-oriented strategy.

3. Forward Guidance and Outlook

• 2026 Revenue Guidance: Expected between $440 million and $450 million (5.5% to 8% growth).
• Adjusted EBITDA Guidance: Forecasted at $135 million to $140 million.
• Adjusted Diluted EPS Guidance: Projected between $3.35 and $3.55.
• Anticipated capital expenditures of $25 million to $30 million, reflecting ongoing investments in growth and maintenance.

4. Bad News, Challenges, or Points of Concern

• An unexpected employee benefit expense of approximately $1.2 million impacted Q4 results, affecting both EBITDA and EPS.
• Overhead expenses rose to 14.4% of revenues, up from 13.2% in Q4 2024, primarily due to increased incentive pay.
• The first quarter of 2026 is expected to present tough year-over-year comparisons due to strong performance in the prior year.

5. Notable Q&A Insights

• The Q&A session highlighted the impact of recent acquisitions, which contributed about $3 million in Q4 and are expected to generate $16 million in revenue in 2026.
• The management acknowledged that the high-end of 2026 guidance assumes optimal performance from new acquisitions and favorable growth in both funeral and cemetery segments.
• Discussions on M&A indicated a disciplined approach to acquisitions, with potential targets being evaluated based on specific criteria.
• The integration process for recent acquisitions is ongoing, with a structured approach to ensure smooth transitions and capitalize on synergies.

Overall, Carriage Services reported a strong finish to 2025, with solid revenue growth and improved profitability metrics, while also laying out an optimistic outlook for 2026 amidst some operational challenges and a focus on strategic growth initiatives.