Carriage Services, Inc. (CSV): BCG Matrix [Dec-2025 Updated]

As we close out 2025, Carriage Services, Inc. (CSV) presents a fascinating portfolio: the core Funeral Home business remains a solid Cash Cow, projected to deliver the bulk of that $131$ million Adjusted Consolidated EBITDA for the year, but the real momentum is in the Stars, where Cemetery Preneed Sales are surging at 21.4% year-over-year. We need to see if those high-investment Question Marks, like the Titan AI sales agent, can mature fast enough to justify the capital drain, especially as the company actively sheds Dogs by divesting underperforming locations. Let's map out exactly where the capital is flowing right now.

Background of Carriage Services, Inc. (CSV)

You're looking at Carriage Services, Inc. (NYSE: CSV), which, as of late 2025, remains a key provider of funeral and cemetery services and merchandise across the United States. Honestly, this isn't a simple operation; the company structures its business across two main segments: Funeral Home Operations and Cemetery Operations. The Funeral Home segment handles the immediate needs-consultation, removal, preparation, cremation, and selling caskets and urns. The Cemetery segment focuses on long-term assets, selling things like mausoleum spaces, niches, and burial rights.

Looking at the most recent data, specifically the third quarter ended September 30, 2025, Carriage Services, Inc. reported total revenue of $102.7 million, marking a 2.0% year-over-year increase. You should note that the majority of revenue still comes from the Funeral Home Operations segment, though funeral contract volume actually saw a slight dip of about 5.5% in that quarter. Still, the company managed to grow its adjusted diluted Earnings Per Share (EPS) to $0.75, which was a 17.2% jump compared to the prior year's third quarter. That's definitely something to watch.

The real story in Q3 2025 was the strength in the prearranged side of the business. Cemetery operating revenue jumped 12.6% year-over-year, largely fueled by a 21.4% growth in cemetery preneed sales. Plus, financial revenue, which ties into insurance-funded pre-arranged funeral sales, shot up by 27.2%. Strategically, Carriage Services, Inc. was active, divesting seven funeral homes and one cemetery while completing acquisitions generating over $15 million in prior-year revenue, which helped bring the leverage ratio down to 4.1x by the end of the quarter.

Carriage Services, Inc. (CSV) - BCG Matrix: Stars

You're looking at the engine room of Carriage Services, Inc. (CSV) portfolio right now, the areas where market share is high and the market itself is expanding rapidly. These are the segments that demand significant investment to maintain that leadership position, but they are the ones that will mature into your future Cash Cows. Honestly, the data from the third quarter of 2025 clearly points to the prearranged side of the business as the primary Star.

Here's a quick look at the performance metrics that define these high-growth, high-share areas as of September 30, 2025:

The growth in financial revenue is particularly noteworthy; it increased by 27.2% year-over-year, largely thanks to a 27.9% jump in preneed insurance contracts sold, which directly translates to higher general agency commission revenue, which itself surged by 61%. This high-margin component is consuming cash to fuel its expansion but is delivering exceptional returns on that investment right now. To be fair, funeral operating revenue saw a slight dip of 1.3% due to a 2.1% reduction in funeral volume, but the cemetery preneed strength more than compensated.

Carriage Services, Inc. is also actively feeding this Star quadrant through strategic capital deployment. They completed the strategic acquisition of two new businesses in Q3 2025 that, based on prior year figures, generated over $15 million in revenue. This move is designed to capture future market share gains and solidify their leadership in the growing segments.

The strategy underpinning this success has a clear future path. Carriage Services, Inc. is driving its national prearranged funeral and cemetery strategy with a specific goal in mind, anticipating 10%-20% annual preneed cemetery sales growth through 2026. This sustained high growth, if maintained, sets up these units perfectly to transition into Cash Cows when the overall market growth inevitably slows down.

• Cemetery operating revenue increased 12.6% year-over-year in Q3 2025.
• Adjusted diluted Earnings Per Share (EPS) grew 17.2% year-over-year to $0.75 in Q3 2025.
• The company reduced its leverage ratio to 4.1x by the end of Q3 2025.

Finance: draft the Q4 2025 cash flow projection incorporating the run-rate from the two new acquisitions by next Wednesday.

Carriage Services, Inc. (CSV) - BCG Matrix: Cash Cows

The At-Need Funeral Home Operations segment represents the core, stable business for Carriage Services, Inc. This segment is the primary generator of consistent field-level cash flow, characteristic of a Cash Cow in a mature market. While funeral contract volume experienced softness, pricing power demonstrated resilience in the third quarter of 2025.

For the three months ended September 30, 2025, the consolidated average revenue per funeral contract showed an increase of 2.0% over the prior year period, confirming pricing leverage in this mature segment. This pricing strength offset a 2.1% reduction in funeral volume during the same quarter, which resulted in Funeral Operating Revenue decreasing by $753,000, or 1.3% year-over-year. The segment's ability to maintain or increase average revenue per contract despite lower volume is key to its cash generation.

The established network, which the scenario defines as 162 funeral homes and 31 cemeteries, is the foundation supporting this consistent, high-margin field EBITDA. The Total Field EBITDA for the third quarter of 2025 was $46.3 million, showing a year-over-year increase of 3.1%. This segment contributes the bulk of the overall corporate profitability, underpinning the company's financial stability.

This core business unit is responsible for generating the majority of the projected $131 million Adjusted Consolidated EBITDA for the full fiscal year 2025. The third quarter results already contributed $33 million to this total, representing a 7.3% year-over-year increase in Adjusted Consolidated EBITDA for the quarter, with the margin expanding to 32.1%.

Here's a look at the key financial metrics illustrating the stability and margin profile of the core operations in Q3 2025:

The Cash Cow status is further supported by the company's ability to generate significant cash flow from operations, which was up 18.3% year-over-year in Q3 2025, reaching a reported $3.8 million increase for the quarter. This cash flow is essential for funding other portfolio segments and servicing corporate needs.

The operational efficiency is evident in the overhead management; Overhead Expenditure for the quarter was $13.7 million, representing 13.4% of revenues, down from 14.1% in the previous year's third quarter. This disciplined cost control helps maximize the net cash extracted from this mature business.

The company's strategic actions, including the divestiture of non-core assets and the completion of acquisitions that served over 2,600 families in the prior year, are designed to maintain the productivity and cash flow of the remaining core assets. The leverage ratio improved to 4.1 times by the end of Q3 2025, partly due to the capital discipline applied to this segment.

You can see the relative strength of the Cemetery Segment, which is often the growth engine, but the Funeral Home segment remains the reliable cash base:

• Cemetery Segment Revenue (Q3 2025): $35.6 million, up 12.6% YoY.
• Funeral Operating Revenue (Q3 2025): Decreased by $753,000.
• Preneed Cemetery Sales Growth (Q3 2025): 21.4% YoY.
• General Agency Commission Revenue (Q3 2025): $2.6 million, up 61% YoY.

Finance: review the capital allocation plan for Q4 2025 to ensure at least $40 million of the projected Adjusted Free Cash Flow for the year is secured.

Carriage Services, Inc. (CSV) - BCG Matrix: Dogs

The 'Dogs' quadrant in the Boston Consulting Group Matrix represents business units or assets operating in low-growth markets with a low relative market share. For Carriage Services, Inc. (CSV), these are the older, non-strategic assets that consume management attention without generating significant cash flow, making them prime candidates for divestiture.

Carriage Services, Inc. (CSV) actively pruned these units in the third quarter of 2025. The company divested non-core assets, including seven funeral homes and one cemetery sold in Q3 2025 to reallocate capital. This strategic pruning is intended to focus resources on higher-growth areas, such as preneed cemetery sales, which saw a 21.4% year-over-year increase in Q3 2025. The net cash outflow related to these portfolio-shaping activities-acquisitions, divestitures, and capital expenditures-for the third quarter of 2025 amounted to $44.7 million.

The older, non-strategic funeral homes identified for sale were part of a broader trend where certain asset sales were expected to reduce the full-year 2025 revenue by an estimated ~$7.9 million. This aligns with the characteristics of Dogs, which frequently break even or consume cash. Furthermore, locations with consistently low funeral contract volume contributed to a consolidated 5.5% volume decrease in Q3 2025, though the overall funeral operating revenue decline for the quarter was reported as $753,000, or 1.3%. These units represent any service lines or locations with low relative market share and minimal organic growth potential, which the company is systematically moving away from to improve its leverage ratio, which stood at 4.1x as of September 30, 2025.

Here's a look at the financial impact associated with these portfolio adjustments:

The CEO noted that the summer months of July and August saw funeral volumes decline by a mid-single-digit percentage, which is indicative of the low-growth environment these Dog units often face before a September rebound. The strategy is clear: exit these areas to improve overall financial structure and focus on segments like preneed cemetery sales, which showed a 27.2% increase in financial revenue in Q3 2025.

Carriage Services, Inc. (CSV) - BCG Matrix: Question Marks

The Question Marks quadrant for Carriage Services, Inc. (CSV) represents business units or initiatives that operate in high-growth areas but currently hold a low relative market share, demanding significant cash investment to capture future potential. These are the areas where you are betting capital today for a potential Star tomorrow.

New strategic acquisitions, which require significant integration and capital to achieve the desired high-growth, high-share status.

Carriage Services, Inc. is actively pursuing growth through acquisition, signaling a clear strategy to increase market share quickly in fragmented markets. As of the second quarter of 2025, the company was under contract to acquire strategic businesses that generated revenue in excess of $15 million in the prior year. This acquisition spree continued into the third quarter, with the company closing on six funeral homes, one cemetery, and one cremation-focused business in the Orlando, FL area, and two funeral homes in the Pensacola, FL area on September 9 and September 17, 2025, respectively. These moves are capital-intensive integration efforts aimed at rapidly scaling operations, which is the classic Question Mark maneuver. The company also divested non-core assets during the nine months ended September 30, 2025, selling nine funeral homes and four cemeteries to reallocate capital toward these higher-growth opportunities.

Technology initiatives like Sales Edge 2.0 and the Titan AI sales agent, which are high-investment, unproven growth accelerators.

Carriage Services, Inc. is investing in technology to drive organic growth and operational efficiency, positioning these as potential future Stars. Specifically, management highlighted the integration of the Sales Edge 2.0 CRM and Project Trinity as key technology investments supporting long-term value creation. While specific investment dollar amounts for these internal technology projects are not detailed in public filings, their classification as strategic initiatives designed to enhance lead strategy and operational execution places them squarely in the high-investment, unproven growth category. These systems are intended to improve execution across the existing 159 funeral homes and 28 cemeteries.

The overall Cemetery Operations segment, which, despite strong preneed growth, still has a smaller revenue base than Funeral Homes and requires continued heavy investment.

The Cemetery Operations segment fits the Question Mark profile due to its smaller revenue contribution relative to the core business, even with strong growth in its preneed component. As of September 30, 2025, Cemetery Operations accounted for approximately 30% of total revenue, significantly less than the Funeral Home Operations segment at 70%. This segment shows high growth potential, with Cemetery operating revenue increasing 12.6% over the prior year quarter in Q3 2025, driven by a 21.4% growth in cemetery preneed sales. However, for the six months ended June 30, 2025, consolidated cemetery revenue actually declined by $1.0 million, indicating uneven performance or the impact of divestitures, which necessitates continued investment to secure market share.

New market entries or service enhancements that are currently low-share but are positioned to capture future demographic shifts.

The focus on prearranged services, particularly in the Cemetery segment, is a forward-looking play to capture future revenue streams. Financial revenue, which includes preneed insurance contracts, saw an impressive increase of 27.2% over the prior year quarter in Q3 2025, driven by a 27.9% increase in preneed insurance contracts sold. This contrasts with the core funeral business, where funeral contract volume slipped about 2% in the third quarter, and the average revenue per case only increased by 0.7%. The rising cremation rate, hitting 61% in Q3 2025 compared to 60.4% in Q3 2024, also forces investment in cremation-related services to maintain relevance, even as the traditional burial model faces volume pressure.

The cash consumption and growth prospects of these areas can be viewed against the company's overall financial targets for 2025:

You need to monitor the integration costs and the speed at which these new acquisitions and technology rollouts translate into market share gains to avoid these units becoming Dogs. Finance: draft 13-week cash view by Friday.