Exelon Corporation (EXC) | The Buildout — AI Infrastructure
The Verdict
Exelon is a pure utility-services holding company with no owned generation. Through ComEd, PECO, BGE, Pepco, Delmarva Power, and Atlantic City Electric, it owns and operates the regulated transmission and distribution wires that move electricity and gas to customers across Illinois, Pennsylvania, Maryland, Delaware, New Jersey, and the District of Columbia. In the AI buildout, data centers interconnect to those local networks, making Exelon the regulated delivery layer that turns large-load demand into grid investment.
| Market Cap | — |
| Revenue (TTM) | $25.3B |
| Revenue Growth | +6.6% |
| EBITDA Margin (TTM) | 35.6% |
| Net Debt | $51.0B |
| Earnings Beats | 7 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- The capital plan is $41.7B for 2026–2029 with approximately $10B deployment in 2026; management added $1.5B of incremental transmission investment tied to signed TSAs.
- Transmission rate base CAGR was raised to 16% through 2029, against 7.9% total rate base growth, with a $12B–$17B transmission upside maintained outside the base plan.
- The data-center pipeline has 4 GW of signed TSAs backed by approximately $1B of collateral, plus 7 GW high-probability pre-TSA; management says speculative projects were weeded out.
- Cost discipline tightened: adjusted O&M growth target lowered to no more than 2% through 2029 and $350M incremental O&M savings targeted in 2027.
- Adjusted operating EPS guidance of $2.81–$2.91 was reaffirmed through Q2 2026, with long-term EPS growth near the top end of 5%–7% through 2029.
What We’re Watching
- Pepco Maryland base rate case final order expected August 2026 on a $119.9M request, with the filing's subsequent-events note citing a ~$120M increase.
- ComEd grid plan order expected December 15, 2026 on a ~$15.3B multiyear plan — the largest single regulatory decision in the period.
- MISO response expected Q4 2026 on the Iowa MARS and EASL submissions; the earlier Illinois ~$1.9B pair remains pending.
- PECO Pennsylvania rate case refile has no committed date; PECO is on negative outlook and under review for downgrade.
The transmission-led thesis is intact but not fully de-risked. Management reaffirmed guidance, converted 4 GW to collateral-backed TSAs, raised transmission rate base growth to 16%, and funded the capital plan while lowering O&M targets. The one explicit slip is Pennsylvania: PECO's rate cases were withdrawn without a refile date, and PECO sits on negative outlook. Open question: whether a Pennsylvania refile lands constructively enough to protect PECO's allowed return.
Earnings Beat
Exelon's latest quarter was Q2 2026, reported July 30. Revenue was $5,967 million with gross margin of 41.0%; EBITDA was $1,947 million, or 32.6% of revenue. Adjusted operating EPS was $0.43, up from $0.39 in Q2 2025, and management described the quarter as consistent with expectations.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $6.0B | $7.2B | $5.4B | +10.0% |
| Gross margin | 41.0% | 28.3% | 40.7% | +30bps |
| EBITDA | $1.9B | $2.6B | $1.8B | +6.5% |
| EPS | $0.39 | $0.90 | $0.39 | −1.2% |
| Combined data-center pipeline (GW) | 36 | 43 | n/a | — |
Comfort is not the word, but focused on execution is the word.— Calvin Butler, Chief Executive Officer, July 30, 2026
Management tone: Management's tone moved from Q1's action-oriented urgency — "Business as usual is not an option" — to Q2's execution focus. On the Q2 call, management framed the pipeline reduction as the TSA process working and emphasized that the transmission upside is not dependent on one sort of theme.
Management Guidance
Management reaffirmed FY2026 adjusted operating EPS guidance of $2.81–$2.91 at both Q1 and Q2, and reaffirmed long-term EPS growth near the top end of 5%–7% through 2029. It expects 2026 capital deployment of approximately $10 billion, 2026 consolidated operating ROE of 9%–10%, and credit metrics of approximately 14% at Moody's and S&P through 2029.
Trajectory
Latest Q2 revenue rose to $5,967 million from $5,427 million a year earlier; Q1 revenue was $7,242 million versus $6,714 million. The code-computed signals show accelerating revenue but compressing gross, operating, and EBITDA margins. The source attributes reported revenue to purchased-power pass-throughs, while the earnings story is rate base growth, transmission mix shift, and cost discipline — with higher interest expense and BGE credit losses recurring as negative EPS walk items.
The Model
The model projects FY+1 revenue of $26,140 million with EBITDA of $9,489 million (36.3% margin), and FY+2 revenue of $28,200 million with EBITDA of $10,293 million (36.5% margin). The near-term is anchored to the regulated rate base and 2026 capital plan; the FY+2 step-up reflects continued transmission growth and O&M discipline.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $24.3B | $26.1B | $28.2B |
| YoY Growth | — | +7.8% | +7.9% |
| EBITDA | $8.8B | $9.5B | $10.3B |
| EBITDA Margin | 36.2% | 36.3% | 36.5% |
Projections are the median of 5 independent model runs. The model’s revenue sits 8.6% above analyst consensus.
Management reaffirmed FY2026 adjusted operating EPS guidance of $2.81–$2.91 at both Q1 and Q2, and reaffirmed long-term EPS growth near the top end of 5%–7% through 2029. It expects 2026 capital deployment of approximately $10 billion, 2026 consolidated operating ROE of 9%–10%, and credit metrics of approximately 14% at Moody's and S&P through 2029.
What Could Go Right — and Wrong
- MISO awards the Illinois (~$1.9B) and Iowa MARS/EASL transmission bids, adding booked capital inside the $12B–$17B upside.
- Signed TSA pipeline grows beyond 4 GW as the 25 GW under study converts to collateral-backed commitments.
- Pennsylvania refile lands constructively enough to keep PECO from a downgrade and removes the largest regulatory overhang.
- Pittsgrove 500 MW battery receives cost recovery in H1 2027, validating utility-owned storage as a repeatable business line.
- ComEd grid plan order on ~$15.3B through 2031 is constructive on December 15, 2026.
- Pennsylvania refile returns with a lower allowed ROE or equity cap, re-rating PECO's earnings power.
- BGE credit pressure and higher interest expense persist, threatening the ~14% credit metric and financing capacity.
- The 25 GW under study converts slowly or shrinks further under the TSA/collateral filter.
- MISO passes over Exelon's competitive transmission bids, weakening the non-incumbent growth path.
- Supply chain, labor, or tariff disruptions delay capital projects; PECO strike effects spill beyond Q3.
Looking Ahead
The next twelve months run through a dense regulatory and bid decision calendar: Pepco Maryland final order expected August 2026, ComEd grid plan order December 15, 2026, BGE rate case decision January 2027, and MISO response in Q4 2026 on the Iowa and Illinois transmission bids. The period also brings the Illinois IRP preview in November 2026, the Pittsgrove cost-recovery order expected H1 2027, and a possible but undated PECO Pennsylvania refile.
- August 2026Pepco Maryland rate case order — Tests whether Maryland regulatory tone has hardened on ~$120M request.
- Q4 2026MISO transmission response — MISO response on Iowa MARS/EASL expected Q4; Illinois pair pending.
- November 2026Illinois integrated resource plan preview — First IRP preview; ~1 GW of 3 GW storage procurement advancing.
- December 15, 2026ComEd grid plan order — ICC order on ~$15.3B multiyear grid plan; largest single decision.
- January 2027BGE rate case decision — Maryland PSC order on $156.1M request with storm mechanism.
- H1 2027Pittsgrove battery cost-recovery order — Approval of ~$1B 500 MW project would validate utility-owned storage.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $23.0B | $24.3B | $25.3B | +5.3% |
| Gross Margin | 40.9% | 26.1% | 24.5% | 1,475bps |
| EBITDA | $7.9B | $8.8B | $89.8B | +11.0% |
| EBITDA Margin | 34.4% | 36.2% | 35.6% | +185bps |
| Net Income | $2.5B | $2.8B | $2.8B | +12.5% |
| Free Cash Flow | −$1.5B | −$2.3B | −$18.3B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)24.5%
- EBITDA Margin (TTM)35.6%
- Net Margin (TTM)11.0%
- ROIC5.2%
- FCF Conversion-21.2%
- SBC / Revenue0.0%
The Company
Exelon is a pure utility-services holding company: it owns no generation plants, only regulated electric transmission and distribution utilities. Its subsidiaries ComEd, PECO, BGE, Pepco, Delmarva Power, and Atlantic City Electric operate the wires that deliver power across northern Illinois, southeastern Pennsylvania, central Maryland, Washington D.C., Delaware, and southern New Jersey. That makes Exelon the regulated delivery layer between power plants and customers in power-constrained, network-rich locations.
The company operates as a regulated, rate-based business: it puts capital into transmission, distribution, and gas assets, then recovers that investment plus a return through FERC formula rates and state rate cases. Its 10-K strategy is improving reliability and operations, enhancing customer experience, advancing clean and affordable energy choices, and ensuring ratemaking mechanisms provide fair financial returns. It operates 11,000 circuit miles of transmission and management says Exelon is one of very few transmission operators that own and operate 765 kV lines today.
Business Segments
Competitive Landscape
Exelon is primarily a regulated delivery utility, so competition is not described as a direct product rivalry. The active competitive arena in the source is competitive transmission: Exelon pursues MISO Tranche 2.1 opportunities outside its footprint while defending incumbent territories. Management cites 765 kV operating experience as something "one of very few transmission operators" possess.
Supply Chain
Exelon is the regulated transmission and distribution gatekeeper between generation and end users. Its suppliers are grid equipment, software, and EPC providers; its customer base is millions of residential and C&I ratepayers, with no single customer over 10% of revenue.
More on EXC: Earnings recap