Funeral services company Service International (NYSE: SCI) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 3.6% year on year to $1.10 billion. Its non-GAAP profit of $0.90 per share was 1.4% above analysts’ consensus estimates.
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Service International (SCI) Q2 CY2026 Highlights:
- Revenue: $1.10 billion vs analyst estimates of $1.08 billion (3.6% year-on-year growth, 1.8% beat)
- Adjusted EPS: $0.90 vs analyst estimates of $0.89 (1.4% beat)
- Management reiterated its full-year Adjusted EPS guidance of $4.20 at the midpoint
- Operating Margin: 21%, in line with the same quarter last year
- Free Cash Flow Margin: 21.6%, up from 7.8% in the same quarter last year
- Funeral Services Performed: in line with the same quarter last year
- Market Capitalization: $11.72 billion
Company Overview
Founded in 1962, Service International (NYSE: SCI) is a leading provider of death care products and services in North America.
Revenue Growth
Examining a company’s long-term performance can provide clues about its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Service International grew its sales at a weak 2% compounded annual growth rate. This was below our standards and is a poor baseline for our analysis.
Long-term growth is the most important, but within consumer discretionary, product cycles are short and revenue can be hit-driven due to rapidly changing trends and consumer preferences. Service International’s annualized revenue growth of 2.8% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
We can better understand the company’s revenue dynamics by analyzing its number of funeral services performed, which reached 87,347 in the latest quarter. Over the last two years, Service International’s funeral services performed was flat. Because this number is lower than its revenue growth during the same period, we can see the company’s monetization has risen. 
This quarter, Service International reported modest year-on-year revenue growth of 3.6% but beat Wall Street’s estimates by 1.8%.
Looking ahead, sell-side analysts expect revenue to grow 3.3% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and implies its newer products and services will not accelerate its top-line performance yet.
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Operating Margin
Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.
Service International’s operating margin has more or less stayed the same over the last 12 months , and we generally like to see margin increases due to economies of scale and cost efficiency over time.
This quarter, Service International generated an operating margin profit margin of 21%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.
Sadly for Service International, its EPS declined by 1.4% annually over the last five years while its revenue grew by 2%. This tells us the company became less profitable on a per-share basis as it expanded due to non-fundamental factors such as interest expenses and taxes.
In Q2, Service International reported adjusted EPS of $0.90, up from $0.88 in the same quarter last year. This print beat analysts’ estimates by 1.4%. Over the next 12 months, Wall Street expects Service International’s full-year EPS to grow 12.3% from $3.88 to $4.36.
Key Takeaways from Service International’s Q2 Results
It was encouraging to see Service International beat analysts’ revenue expectations this quarter. We were also glad its full-year EPS guidance exceeded Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 1.2% to $86.79 immediately after reporting.
Is Service International an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
