Funeral services company Carriage Services (NYSE:CSV) beat Wall Street’s revenue expectations in Q3 CY2025, with sales up 2% year on year to $102.7 million. The company expects the full year’s revenue to be around $415 million, close to analysts’ estimates. Its non-GAAP profit of $0.75 per share was 3% above analysts’ consensus estimates.
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Carriage Services (CSV) Q3 CY2025 Highlights:
- Revenue: $102.7 million vs analyst estimates of $101.4 million (2% year-on-year growth, 1.3% beat)
- Adjusted EPS: $0.75 vs analyst estimates of $0.73 (3% beat)
- Adjusted EBITDA: $32.98 million vs analyst estimates of $31.74 million (32.1% margin, 3.9% beat)
- The company reconfirmed its revenue guidance for the full year of $415 million at the midpoint
- Management slightly raised its full-year Adjusted EPS guidance to $3.28 at the midpoint
- EBITDA guidance for the full year is $131 million at the midpoint, below analyst estimates of $132.3 million
- Operating Margin: 23.4%, in line with the same quarter last year
- Market Capitalization: $656.4 million
StockStory’s Take
Carriage Services delivered third quarter results that exceeded Wall Street’s revenue and adjusted profit expectations, but the market responded negatively to the report. Management attributed the quarter’s mixed performance to strong preneed cemetery sales, which benefited from the resolution of earlier permit delays, as well as a notable increase in insurance-funded prearranged funeral sales. However, CEO Carlos Quezada acknowledged that funeral home volumes were weaker than anticipated during July and August, with a mid-single-digit decline, before rebounding in September. Quezada described the industry-wide softness in funeral volumes as broad-based, impacting both consolidators and independent operators.
Looking forward, Carriage Services’ updated guidance is underpinned by ongoing investments in technology and a continued focus on expanding its cemetery and preneed sales businesses. Management projects stable funeral volumes, supported by demographic trends and a gradual return to normalized death rates, but cautioned that short-term results could be influenced by seasonal factors like the flu season. Quezada noted that the launch of new AI-enabled sales tools and expanded partnerships with insurance providers are expected to drive further growth, stating, “We continue to leverage technology and partnerships to grow preneed sales sustainably through 2026.”
Key Insights from Management’s Remarks
Management emphasized that third quarter results were driven by a surge in preneed cemetery sales, advances in technology adoption, and continued divestitures of noncore assets.
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Preneed cemetery sales surge: Preneed cemetery sales rose 21.4% year-over-year, fueled by clearing permit delays in key markets and renewed sales momentum. Management expects this segment to remain a long-term growth engine, citing ongoing property development and new sales technology rollouts.
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Insurance-funded preneed sales expansion: Insurance-funded prearranged funeral sales grew 61% versus last year, with September marking an all-time high. The rollout of partnerships with National Guardian Life Insurance Company and Precoa, along with new AI-driven sales tools, has accelerated growth and is expected to drive continued expansion.
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Funeral home volume softness: Funeral home revenue fell modestly due to a 2.1% decline in call volume during July and August. Management indicated this weakness was industry-wide and anticipates a return to normalized volumes in future quarters as death rates stabilize.
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Divestiture of noncore assets: The company completed the sale of several noncore funeral homes and a cemetery in the quarter, generating $19 million in proceeds. Management noted these divestitures align with a long-term strategy to focus on core growth markets and improve balance sheet strength.
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Technology investments: The launch of Sales Edge 2.0, an upgraded customer relationship management (CRM) platform, and the introduction of Titan, an AI-enabled sales agent, were highlighted as significant steps to enhance lead generation and operational efficiency in preneed sales.
Drivers of Future Performance
Management expects technology enhancements, cemetery growth, and demographic trends to shape the company’s outlook for the coming year.
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AI-enabled sales technology: The adoption of Sales Edge 2.0 and the upcoming Titan AI agent are expected to boost preneed cemetery and funeral sales efficiency, enabling the company to better identify and convert leads. Management believes these tools will drive sustainable growth through improved marketing and sales execution.
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Demographic tailwinds: As the U.S. population ages, Carriage Services anticipates a gradual increase in funeral and cemetery volumes. Management noted that the oldest baby boomers are now approaching the average age of death, creating a favorable long-term demand environment, though short-term results may still be influenced by seasonal factors.
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Strategic acquisitions and divestitures: The company plans to pursue select acquisitions in demographically attractive markets while continuing to divest lower-performing assets. Management stated that integration of recent acquisitions is on track, and the pipeline for new deals remains active, with expectations for increased activity in the next year.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the impact of AI-enabled tools like Sales Edge 2.0 and Titan on preneed sales growth, (2) integration progress and financial contribution from recent acquisitions, and (3) stabilization in funeral volume trends as demographic shifts and seasonal factors play out. Additionally, we will track the company’s success in executing its divestiture strategy and leveraging partnership-driven insurance sales.
Carriage Services currently trades at $40.40, down from $43.57 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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