Carriage Services — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue for the three months ended September 30, 2026, was $100.3 million, a decrease of $2.5 million (2.4%) compared to $102.7 million in the prior year quarter.
• Total revenue for the nine months ended September 30, 2026, was $309.3 million, a decrease of $2.6 million (0.8%) compared to $312.0 million in the prior year period.
• GAAP net income for the three months ended September 30, 2026, was $8.9 million, a 35.2% increase from $6.6 million in the prior year quarter.
• GAAP net income for the nine months ended September 30, 2026, was $34.6 million, a decrease of $4.6 million compared to $39.2 million in the prior year period.
• GAAP diluted EPS for the three months ended September 30, 2026, was $0.56, compared to $0.41 in the prior year quarter.
• GAAP diluted EPS for the nine months ended September 30, 2026, was $2.17, compared to $2.47 in the prior year period.
• Adjusted diluted EPS for the three months ended September 30, 2026, was $0.59, compared to $0.75 in the prior year quarter.
• Adjusted diluted EPS for the nine months ended September 30, 2026, was $2.23, compared to $2.45 in the prior year period.
• Operating income for the three months ended September 30, 2026, was $19.4 million, an increase of 10.8% from $17.5 million in the prior year quarter.
• Operating income for the nine months ended September 30, 2026, was $68.6 million, a decrease from $73.1 million in the prior year period.
• Adjusted consolidated EBITDA for the three months ended September 30, 2026, was $27.7 million, compared to $33.0 million in the prior year quarter.
• Adjusted consolidated EBITDA for the nine months ended September 30, 2026, was $94.7 million, compared to $98.2 million in the prior year period.
• Adjusted consolidated EBITDA margin for the three months ended September 30, 2026, was 27.6%, compared to 32.1% in the prior year quarter.
• Adjusted consolidated EBITDA margin for the nine months ended September 30, 2026, was 30.6%, compared to 31.5% in the prior year period.
• Cash provided by operating activities for the three months ended September 30, 2026, was $24.7 million, flat compared to $24.7 million in the prior year quarter.
• Cash provided by operating activities for the nine months ended September 30, 2026, was $47.2 million, an increase from $46.6 million in the prior year period.
• Adjusted free cash flow for the three months ended September 30, 2026, was $19.3 million, compared to $19.0 million in the prior year quarter.
• Adjusted free cash flow for the nine months ended September 30, 2026, was $33.0 million, compared to $39.3 million in the prior year period.
• Long-term debt as of September 30, 2026, was $516.2 million, compared to $528.3 million as of December 31, 2025.
• Deferred preneed cemetery revenue was $78.3 million as of September 30, 2026, compared to $76.8 million as of December 31, 2025.
• Deferred preneed funeral revenue was $40.6 million as of September 30, 2026, compared to $33.7 million as of December 31, 2025.

Guidance and Future Outlook:

• Revised full-year 2026 total revenue guidance is $415 million to $420 million, down from the previous range of $435 million to $445 million.
• Revised full-year 2026 adjusted consolidated EBITDA guidance is $125 million to $130 million, down from the previous range of $135 million to $140 million.
• Revised full-year 2026 adjusted diluted EPS guidance is $2.90 to $3.05, down from the previous range of $3.35 to $3.55.
• Revised full-year 2026 adjusted free cash flow guidance is $40 million to $45 million, down from the previous range of $40 million to $50 million.
• Full-year 2026 capital expenditures guidance remains unchanged at $20 million to $25 million.
• The revision reflects lower-than-anticipated mortality rates in the first half of 2026, weaker cemetery preneed performance, additional trust taxes from MLP investment sales, and revised timing of expected acquisitions.
• Management expects to close on strategic acquisitions representing over $14 million in annual revenue later in 2026 and in early 2027.

Business Segments and Product Lines:

• Consolidated funeral contract volume increased 2.5% in the third quarter of 2026 compared to the prior year.
• Consolidated average revenue per funeral contract grew 1.9% in the third quarter of 2026.
• Same-store funeral contracts increased 2.3% during the third quarter of 2026.
• Consolidated insurance-funded preneed funeral contracts sold grew 7.0% in the third quarter of 2026.
• Consolidated cemetery comparable revenue declined 7.8% in the third quarter of 2026, driven by lower preneed sales production.
• Cemetery preneed interment rights sold decreased 7.3% in the third quarter of 2026, offset by a 1.7% increase in the consolidated average price per preneed interment right sold.
• For the nine months ended September 30, 2026, cemetery preneed interment rights sold decreased 8.4%, while the average price per preneed interment right sold increased 9.7%.
• Funeral comparable revenue for the nine months ended September 30, 2026, was $175.7 million, compared to $177.8 million in the prior year period.
• Cemetery comparable revenue for the nine months ended September 30, 2026, was $95.3 million, compared to $96.5 million in the prior year period.
• Funeral comparable EBITDA margin for the nine months ended September 30, 2026, was 38.1%, compared to 39.6% in the prior year period.
• Cemetery comparable EBITDA margin for the nine months ended September 30, 2026, was 43.2%, compared to 45.0% in the prior year period.
• The company operates 155 funeral homes in 24 states and 28 cemeteries in 9 states as of September 30, 2026.
• New operational tools introduced in the cemetery business include a comprehensive sales performance dashboard and AI-powered tools to enhance visibility and accountability.

Market and Competitive Landscape:

• The company identified opportunities to strengthen fundamental sales disciplines in the cemetery business following an operational review.
• Management remains confident in its position as the best consolidation platform in the industry.
• The company is executing on a disciplined growth strategy focused on high-quality acquisitions.

Risks and Challenges:

• Financial revenue and Adjusted Consolidated EBITDA were negatively impacted by additional trust taxes associated with the sale of certain Master Limited Partnership (MLP) investments held in trusts.
• Lower-than-anticipated mortality rates during the first half of 2026 negatively impacted results.
• Weaker cemetery preneed sales production contributed to revenue declines.
• A $0.6 million loss on extinguishment of debt was recognized in the third quarter of 2026.
• A $5.0 million decrease in gross profit contribution from businesses impacted net income for the nine-month period.

Management Commentary and Tone:

• Carlos Quezada, Vice Chairman and CEO, stated the company is encouraged by continued momentum in the funeral business and the closing of the gap from a slower first half.
• Management expressed confidence in the funeral operating strategy, citing growth in volume and average revenue per contract.
• Regarding the cemetery business, management acknowledged the decline but expressed encouragement over early progress in restoring consistent performance through targeted sales organization actions.
• Management highlighted excitement regarding the momentum in the strategic acquisition pipeline, with over $14 million in annual revenue under contract or letter of intent.
• The CEO reaffirmed commitment to the 2030 Vision and "The Carriage Way," expressing confidence in the people, strategy, and ability to deliver sustainable growth and long-term value.

Other Key Points:

• The company closed on a new $300 million credit facility agreement, increasing committed borrowing capacity by $50 million.
• Strategic acquisitions under contract or letter of intent represent more than $14 million in annual revenue, with closings anticipated for later in 2026 and early 2027.
• Dividends declared per common share for the three months ended September 30, 2026, were $0.1125.
• Dividends declared per common share for the nine months ended September 30, 2026, were $0.3375.
• The company recognized a $6.9 million favorable change in net gains and losses on divestitures and impairment charges in the third quarter of 2026.
• A former Chief Information Officer's separation agreement effective August 14, 2026, resulted in severance expenses and equity award cancellations.
• A former Executive Chairman of the Board and former Chief Financial Officer received transition and separation payments in the third quarter of 2026.