Carriage Services Reports Strong Revenue Amid Challenges

Carriage Services ((CSV)) has held its Q1 earnings call. Read on for the main highlights of the call.

Carriage Services’ recent earnings call painted a picture of robust growth tempered by some operational challenges. The company reported strong revenue growth and improvements in several key areas, including a significant surge in net income and positive trends in preneed insurance contracts. However, these positive developments were offset by declines in adjusted consolidated EBITDA, cash flow from operations, and adjusted free cash flow. Despite these hurdles, Carriage Services maintained a positive outlook, emphasizing strategic initiatives and potential future growth.

Revenue Growth

Carriage Services reported a total revenue of $107.1 million for the first quarter of 2025, marking a 3.5% increase compared to the same period last year. This growth reflects the company’s ability to expand its market presence and capitalize on new opportunities.

Funeral Operating Revenue Increase

The company saw its funeral operating revenue rise to $69.1 million, representing a 4.6% increase over the previous year. This growth was driven by a 1.8% rise in average revenue per contract and a 2.4% increase in funeral home at-need volume.

Cemetery Revenue Growth

Cemetery revenue also experienced a boost, reaching $27.9 million for the quarter, which is a 5.8% increase from the prior year. This indicates a strong demand for cemetery services and effective management strategies.

Preneed Insurance Contracts Growth

The quarter ended with a notable increase in preneed insurance contracts, totaling 2,541, which is a 15% rise compared to the same quarter last year. This growth highlights the company’s successful efforts in expanding its insurance offerings.

Adjusted Diluted EPS Increase

Carriage Services reported an impressive 28% increase in adjusted diluted EPS, reaching $0.96 per share. This significant rise underscores the company’s effective cost management and operational efficiency.

Net Income Surge

The company’s GAAP net income surged to $20.9 million, a remarkable 200.1% increase. This surge reflects the company’s strong financial performance and strategic initiatives.

Leverage Ratio Improvement

Carriage Services successfully reduced its leverage ratio to 4.2x from 5x at the end of the first quarter of 2024, demonstrating improved financial stability and reduced debt levels.

Decrease in Adjusted Consolidated EBITDA

Despite the positive revenue trends, adjusted consolidated EBITDA decreased by 1.9% to $32.9 million. This decline suggests challenges in maintaining operational efficiency amidst growth.

Cash Flow from Operations Decline

Cash provided by operating activities fell to $13.8 million, down $5.9 million from the previous year. This decline indicates potential liquidity challenges that the company needs to address.

Decrease in Adjusted Free Cash Flow

Adjusted free cash flow for the first quarter was $13.4 million, a decrease of $5.1 million from the prior year. This reduction highlights the need for improved cash management strategies.

Overhead Increase

The company’s overhead costs were $15.3 million, with adjusted overhead $2.6 million higher than the previous year. This increase points to rising operational expenses that may impact profitability.

Forward-Looking Guidance

Carriage Services remains cautiously optimistic about the future, maintaining its current guidance due to economic uncertainties. However, the company expects to raise its guidance if positive momentum continues into the second quarter. Strategic initiatives, such as the implementation of the Trinity system and supply chain optimizations, are anticipated to drive future growth and efficiencies.

In conclusion, Carriage Services’ earnings call highlighted a mix of strong revenue growth and operational challenges. While the company faces declines in certain financial metrics, its strategic initiatives and potential for future growth provide a positive outlook. Investors and stakeholders will be keen to see how the company navigates these challenges and capitalizes on its growth opportunities.