Executive Summary

Q1 2025 was solid operationally: revenue grew 3.5% to $107.1M, adjusted diluted EPS rose 28% to $0.96, and funeral revenue increased 4.6% on higher at-need volume and price; GAAP EPS of $1.34 benefited from a discrete tax windfall and divestiture gains .
Results beat S&P Global consensus: revenue $107.1M vs $104.2M* and adjusted EPS $0.96 vs $0.84*, with management maintaining full-year 2025 guidance pending confirmation of momentum in Q2 (potential to raise after Q2) .
Cemetery preneed revenue advanced with higher average price (+11.8%), offset by fewer interment rights sold (-5.8%) due to timing of inventory availability at key cemeteries; management expects a return to 10–20% growth in Q2 as projects complete .
Deleveraging continued: leverage ratio improved to 4.2x (from 5.0x a year ago) as the company paid down $17M on the credit facility; non-core divestitures yielded $18.7M proceeds in Q1, with ~$6M more expected in Q2 (already in guidance) .

What Went Well and What Went Wrong

What Went Well
- Broad-based top-line execution: total revenue +3.5% YoY to $107.1M, with funeral operating revenue +4.6% and financial revenue +9.1% on strong preneed insurance sales and commissions .
- Pricing/volume mix in funeral: at-need funeral volume +2.4% and average revenue per contract +2.2% YoY, aided by the delayed flu season and improved conversion on cremation mix .
- Strategic progress and tone: “While April trends have remained strong… If our current momentum holds throughout the second quarter, we expect to raise guidance accordingly,” underscoring confidence while remaining prudent .
What Went Wrong
- Margin dilution from planned investments: adjusted consolidated EBITDA margin fell 170 bps YoY to 30.8% due to ~$0.8M Trinity ERP and ~$0.8M Managing Partners Forum expenses that are not adjusted out .
- Working capital headwinds: cash provided by operating activities decreased to $13.8M (vs $19.7M in Q1’24) on lower AP and accrued liabilities; adjusted FCF $13.4M vs $18.5M in Q1’24 .
- Cemetery preneed unit softness: preneed interment rights sold declined to 3,100 from 3,244, with management citing temporary permitting/inventory delays at premier cemeteries; growth expected to reaccelerate in Q2 .

Financial Results

Overall performance vs prior year and prior quarter

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$103.5	$97.7	$107.1
GAAP Diluted EPS ($)	$0.45	$0.62	$1.34
Adjusted Diluted EPS ($)	$0.75	$0.62	$0.96
Adjusted EBITDA ($USD Millions)	$33.6	$29.3	$32.9
Adjusted EBITDA Margin (%)	32.5%	30.0%	30.8%
Cash from Operations ($USD Millions)	$19.7	$9.3	$13.8

Consensus vs actual (S&P Global)

Metric	Q1 2025 Consensus	Q1 2025 Actual
Revenue ($USD)	$104,169,750*	$107,069,000
Primary/Adjusted EPS ($)	$0.84*	$0.96

Values marked with * retrieved from S&P Global.

Segment revenue breakdown

Segment Revenue ($USD Millions)	Q1 2024	Q1 2025
Funeral Operating Revenue	$66.0	$69.1
Cemetery Operating Revenue	$26.4	$27.9
Financial Revenue	$6.7	$7.4
Ancillary Revenue	$1.25	$1.03
Divested Revenue	$3.05	$1.65
Total Revenue	$103.5	$107.1

Key operating KPIs

KPI	Q1 2024	Q1 2025
Funeral Contracts (units)	11,773	12,055
Avg Revenue per Funeral Contract ($)	$5,610	$5,731
Burial Rate (%)	33.3%	33.2%
Cremation Rate (%)	59.3%	60.5%
Preneed Interment Rights Sold (units)	3,244	3,100
Avg Price per Preneed Right ($)	$4,985	$5,490

Non-GAAP/context notes: GAAP EPS of $1.34 included a discrete tax windfall from shares vesting above grant price and gains on divestitures; adjusted diluted EPS excludes special items and was $0.96 .

Guidance Changes

Metric	Period	Previous Guidance (Feb 26, 2025)	Current Guidance (Apr 30, 2025)	Change
Total Revenue ($M)	FY 2025	$400–$410	$400–$410	Maintained
Adjusted Consolidated EBITDA ($M)	FY 2025	$128–$133	$128–$133	Maintained
Adjusted Diluted EPS ($)	FY 2025	$3.10–$3.30	$3.10–$3.30	Maintained
Adjusted Free Cash Flow ($M)	FY 2025	$40–$50	$40–$50	Maintained
Overhead (% of revenue)	FY 2025	13–14%	13–14%	Maintained
Divestiture impact (Rev/EBITDA)	1H 2025	$(~~$7.9M)/$(~~$2.3M)	$(~~$7.9M)/$(~~$2.3M)	Maintained
Dividend per share	Next payment	$0.1125 declared Jan/Apr	$0.1125 payable Jun 2, 2025	No change

Management noted April remained strong and they “expect to raise guidance” after Q2 if momentum holds .

Earnings Call Themes & Trends

Topic	Q3 2024 (10/30)	Q4 2024 (2/27)	Q1 2025 (5/1)	Trend
Flu season timing / demand	Noted strong results; no flu shift commentary	Late flu season shifted volume from Q4 to Q1; Jan/Feb up YoY	Q1 benefited; April strong; cautious on extrapolating	Improving near-term; seasonality normalized
Trinity ERP	n/a	Pilot early 2025; efficiency and family portal vision	Phase 1 live; Phase 2 targeted Q3; $0.8M Q1 expense	On track; near-term cost headwind, LT efficiency
Supply chain program	n/a	Launched urn core line; casket/fleet to follow	Urn core live; fleet savings; casket next; EFF partnership rolling out	Cost savings building through 2025
Cemetery preneed	+27.1% preneed sales YoY	Continued strength; FY guide underscored	Q1 units down on inventory timing; expect 10–20% growth from Q2	Short-term dip; rebound expected
Capital allocation / leverage	Leverage 4.3x; deleveraging	Leverage 4.3x; plan 3.7–3.8x YE’25	Leverage 4.2x; $18.7M divestitures; more M&A H2’25	Balance sheet strengthening; M&A to resume
Tariffs/macro	n/a	Cautious macro; price discipline	Tariff impact <10 bps; macro mixed; prudent guidance	Limited tariff risk; macro watch

Management Commentary

“For the first quarter, we reported total revenue of $107.1 million… funeral operating revenue… $69.1 million… driven by… average revenue per contract… and… at-need volume” .
“Adjusted consolidated EBITDA margin was 30.8%, a decrease of 170 bps… primarily driven by… Trinity… $800,000 and… Managing Partners Forum… $800,000. We do not adjust for either of these” .
“While April trends have remained strong… If our current momentum holds throughout the second quarter, we expect to raise guidance accordingly” .
“Cash provided by operating activities… was $13.8 million, down $5.9 million… driven by… reductions in accounts payable and accrued liabilities” .
“We paid $17 million toward our outstanding debt… leverage ratio of 4.2x… credit facility at $120 million drawn” .

Q&A Highlights

Funeral momentum: April tracked low single-digit growth in both pricing and volume, suggesting continued normalization post-COVID .
Cemetery preneed dip: Management attributed lower Q1 units to permitting/inventory delays at key cemeteries; projects are now completing, and 10–20% YoY preneed growth is expected starting Q2 .
Divestitures and M&A: ~$18.7M Q1 proceeds realized; another ~$6M likely in Q2 (already in guide). Back-half 2025 M&A updates expected (Q3/Q4) .
Cost savings: Supply chain initiatives (urns, caskets, fleet) and digital efforts (websites/surveys) are driving or expected to drive savings; fleet (~800 vehicles) is a key focus .
Tariffs: Insignificant 2025 P&L impact (<10 bps full-year) .

Estimates Context

CSV beat S&P Global consensus on both revenue and EPS: $107.1M vs $104.2M* revenue, and $0.96 vs $0.84* adjusted EPS for Q1’25. Guidance was maintained with a stated bias to raise after Q2 if momentum persists .
Prior quarters also beat: Q4’24 revenue $97.7M vs $96.7M* and EPS $0.62 vs $0.51* .
Potential estimate revisions: management’s comment about possibly raising full-year outlook post-Q2, plus continued April strength, may support upward bias to FY EPS/EBITDA if Q2 trends hold .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Quality beats with constructive tone: top and bottom-line beats vs consensus and commentary that April remained strong increase the probability of a mid-year guidance raise if trends persist .
Near-term margin headwind, long-term tailwind: Trinity and leadership investments compressed Q1 margin by 170 bps, but ERP/supply chain initiatives should yield efficiency and savings as rollout progresses in 2H’25 .
Cemetery growth set to reaccelerate: Q1 unit softness was timing-related; management expects a return to 10–20% YoY preneed growth in Q2 as inventory becomes available .
Balance sheet improving; optionality rising: leverage down to 4.2x, continued divestiture proceeds, and back-half M&A create catalysts for growth and multiple support .
Demand normalization: funeral at-need volume and pricing growing modestly; cremation mix managed via improved conversion to services and memorialization, supporting ARPU .
Limited tariff/macro risk cited: management expects tariffs to be immaterial (<10 bps impact in 2025); macro commentary remains cautious but not thesis-breaking .
Trading setup: watch Q2 run-rate and cemetery sales cadence; a confirmed Q2 beat with guidance raise could be a catalyst, while delays in Trinity benefits or cemetery inventory could defer upside .

Appendices

Adjusted vs GAAP EPS context (Q1 2025)

GAAP diluted EPS: $1.34, aided by discrete tax windfall and divestiture gains .
Adjusted diluted EPS: $0.96, up 28% YoY, excludes special items .

Dividend

Quarterly cash dividend of $0.1125 per share declared April 17, 2025; payable June 2, 2025 to holders of record May 5, 2025 .

Full guidance detail (reiterated)

FY25: Revenue $400–$410M; Adjusted EBITDA $128–$133M; Adjusted diluted EPS $3.10–$3.30; Adjusted FCF $40–$50M; Overhead 13–14% of revenue. Includes expected divestitures (~$7.9M revenue, ~$2.3M EBITDA) .

Citations: Q1 2025 press release and 8‑K ; Q1 2025 earnings call ; Q4 2024 press release/call ; Q3 2024 press release ; Dividend PR . Values marked with * retrieved from S&P Global.

CARRIAGE SERVICES INC (CSV)·Q1 2025 Earnings Summary