Improved Adjusted EBITDA and Margin
Adjusted consolidated EBITDA of $33.8M, up $0.805M or 2.4% year-over-year; adjusted EBITDA margin improved 100 basis points to 31.8% from 30.8%.
Carriage Services
· CSV
May 6th, 2026
Summary
- Earnings Call Date:
- 2026-05-06
- Change Since:
- -19.73%
- Next Earnings Date:
- 2026-07-29
Earnings Call Sentiment
PositiveThe call presents a mix of operational and financial progress alongside near-term volume headwinds in the funeral channel. Positive developments include improved adjusted EBITDA and margin expansion, cemetery revenue and preneed growth, stronger operating cash flow, reduced leverage, disciplined overhead control, a strategic ATM program and a robust M&A pipeline with recent successful integrations. Lowlights center on weaker funeral volumes leading to a slight revenue decline, a drop in adjusted and GAAP EPS (partly driven by a higher tax rate and prior-year divestiture gains), a reduction in funeral EBITDA, and adjusted free cash flow being lower versus the prior year. Management reiterated full-year guidance and emphasized disciplined capital allocation and confidence in recovery across the remainder of the year, indicating balanced near-term risks but constructive long-term positioning.
Company Guidance
Carriage reiterated its previously disclosed full‑year 2026 outlook, calling for revenues of $440–$450 million, adjusted consolidated EBITDA of $135–$140 million (adjusted EBITDA margin 30.5%–31.5%), adjusted diluted EPS of $3.35–$3.55, overhead of 13.5%–14.5% of revenue, adjusted free cash flow of $40–$50 million and an expected year‑end bank leverage ratio of 3.5–4.0x; the outlook assumes certain planned acquisitions (previously discussed ~$5–$10 million of revenue scale) and does not factor in any opportunistic use of the newly established at‑the‑market (ATM) equity program.
Cemetery Revenue and Preneed Strength
Comparable cemetery revenue of $29.6M, up $1.7M or 6% YoY, driven by a 9% increase in comparable preneed cemetery sales production and a 15.3% increase in average revenue per property contract.
Financial Revenue Growth from Preneed Funeral Sales
Financial revenue of $8.5M, up 15.7% YoY, reflecting strong preneed funeral sales and associated commission income.
Preneed Funeral Insurance Sales Increase
Consolidated preneed funeral insurance contracts sold increased 8% YoY, indicating scalability and execution strength in the preneed platform.
Operating Cash Flow and Free Cash Flow Improvements
Cash from operating activities increased $1.1M (+8% YoY); free cash flow increased $400k (+3.5% YoY).
Balance Sheet and Leverage Progress
Bank leverage ratio decreased to 4.0x from 4.2x a year ago and remains within the long-term target range (3.5x to 4.0x), reflecting improved balance sheet strength and liquidity.
Cost and Overhead Discipline
Overhead declined to $14.8M (14.0% of revenue) versus $15.3M (14.3% of revenue) a year ago, demonstrating effective cost management and variable expense control.
Strategic Capital Tools and M&A Momentum
Established an at-the-market (ATM) equity offering program to provide flexible funding for disciplined acquisitions; management reports a robust M&A pipeline with recent integrations (Osceola, Faith Chapel) fully integrated and an acquisition expected to close soon, with plans to exceed the $5M–$10M revenue assumption over the next several quarters.
Long-Term Operational Improvements and Technology Rollout
Company reports institutionalized processes, investments in systems and data infrastructure, Trinity rollout planned across funeral homes in 2026 and combos/cemeteries in early 2027, and 2025 was the strongest financial year in company history.
Cemetery Preneed Multi-Year Growth Trend
Preneed cemetery sales show long-term strength with a reported CAGR of 22.4% from Q1 2019 to Q1 2026.
Operator
Good day, and thank you for standing by. Welcome to the Carriage Services Q1 2026 Earnings Webcast. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Steve Metzger, President. Please go ahead, sir.
Steve Metzger
Good morning, everyone, and thank you for joining us to discuss our first quarter results. In addition to myself, on the call this morning from management are Carlos Quezada, Chief Executive Officer and Vice Chairman of the Board of Directors; and John Enwright, Senior Vice President and Chief Financial Officer. On the Carriage Services website, you can find our earnings press release, which was issued yesterday after the market closed. Our press release is intended to supplement our remarks this morning and include supplemental financial information, including the reconciliation of differences between GAAP and non-GAAP financial measures. Today's call will begin with formal remarks from Carlos and John and will be followed by a question-and-answer period. Before we begin, I'd like to remind everyone that during this call, we'll make some forward-looking statements, including comments about our business, projections and plans. Forward-looking statements inherently involve risks and uncertainties and only reflect our views as of today. These risks and uncertainties include, but are not limited to, factors identified in our earnings press release as well as in our SEC filings, all of which can be found on our website.
Thank you all for joining us this morning. And now I'd like to turn the call over to Ca...
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