Constellation Energy
CEG · NasdaqNuclear now supplies under half of what Constellation sells
Nuclear output was 49.2% of the 89,815 GWh supplied, against 68.8% a year earlier, as Calpine's natural gas fleet joined the mix.
Q2 FY2026, the quarter to Jun 30, 2026 · 10-Q filed Aug 6, 2026
- Operating margin
- 7.7%
- Net income
- $513.0M
- Free cash flow, quarter
- -$118.0M
Where Constellation Energy's money goes
- 01
Nuclear now supplies under half of what Constellation sells
Nuclear output was 49.2% of the 89,815 GWh supplied, against 68.8% a year earlier, as Calpine's natural gas fleet joined the mix.
Why it matters
Total supply and sales reached 89,815 GWh against 65,641 GWh a year earlier. Nuclear generation fell to 44,160 GWh from 45,170 GWh, while natural gas, oil and renewables output rose to 30,649 GWh from 5,560 GWh. That category moved from 8.5% of supply to 34.1%. The rest of supply is power bought in the market to serve customers.1
Calpine, acquired in January, is now the largest segment by revenue: $2,147 million, 28.6% of $7,504 million in operating revenues. The filing describes the merger as coupling the largest producer of emissions-free energy with Calpine's dispatchable natural gas assets, and as creating the nation's leading competitive retail electric supplier.1
AnalysisAnalysis: this changes what drives profit. A nuclear plant's costs are mostly fixed and its fuel is contracted years ahead; a gas plant earns the spread between power and gas prices each hour it runs. Purchased power and fuel took 53.6% of revenue against 51.3% a year earlier, consistent with a larger fuel-burning fleet, though the filing also cites hedge marks and higher transmission costs.
- 02
Revenue rose 23.0% but operating income fell 39.0%
Total operating expenses grew 34.5%, outpacing sales, and cut the operating margin to 7.7% from 15.6%, with costs the filing ties largely to Calpine.
Why it matters
Operating revenues were $7,504 million against $6,101 million. Purchased power and fuel rose 28.4% to $4,023 million, operating and maintenance 39.3% to $2,253 million, and depreciation and amortization 74.4% to $443 million. Operating income was $580 million against $951 million.1
The filing ties the operating and maintenance increase largely to labor and contracting costs from adding Calpine's operations, to Calpine merger and integration costs, and to nuclear refueling outages, and the depreciation increase mainly to assets acquired from Calpine. It names unrealized losses on economic hedges, merger and integration costs and nuclear outages as the main reasons profit fell, partly offset by higher capacity revenues and the added Calpine operations.1
AnalysisAnalysis: several of these costs come from the deal rather than from running the plants: integration spending, depreciation on assets revalued at purchase, and hedge marks that reflect price moves on power not yet delivered. That makes a single quarter's 7.7% operating margin a weak guide on its own. The test is whether the margin recovers as integration costs fade and the Calpine fleet runs a full year.
- 03
Non-operating gains outweighed operating profit this quarter
Other, net of $603 million exceeded $580 million of operating income and made up 67.0% of pre-tax income, mostly from decommissioning-related activities.
Why it matters
Other, net added $603 million against $440 million a year earlier. The filing attributes it mostly to decommissioning-related activities, which include gains on the nuclear decommissioning trust funds. It equaled 67.0% of the $900 million of income before taxes, against 34.6% of $1,273 million a year earlier.1
The same gains raised the tax bill. Income tax expense was $398 million, 44.2% of pre-tax income against 34.6% a year earlier, which the filing explains by higher qualified trust fund income taxed at a higher rate. Net interest expense, $283 million against $118 million, took 48.8% of operating income against 12.4%.1
Net income to common shareholders was $513 million against $839 million. With 360 million diluted shares against 314 million, after the stock issued for Calpine, earnings per share were $1.42 against $2.67.1
AnalysisAnalysis: trust fund results follow financial markets, not power sales, and the company removes decommissioning-related activities from its adjusted (non-GAAP) operating earnings. Reported net income this quarter therefore says less than usual about the power business; operating income and cash flow are the better read of how the fleet performed.
- 04
Capital spending absorbed all of the quarter's operating cash
Capital spending of $1,246 million was 110.5% of $1,128 million in operating cash flow, turning free cash flow to minus $118 million from $710 million.
Why it matters
Operating cash flow was $1,128 million against $1,477 million a year earlier, and capital spending $1,246 million against $767 million. A year earlier capital spending used 51.9% of operating cash; this quarter it used 110.5%, and it equaled 16.6% of revenue.1
For the first half, the filing attributes higher capital spending to the planned restart of the Crane nuclear plant, the inclusion of Calpine, and infrastructure for large loads co-located at its plants. For the full year 2025, capital spending of $2,949 million was 69.6% of $4,237 million in operating cash flow, leaving free cash flow of $1,288 million.1
AnalysisAnalysis: operating cash flow was 2.2 times net income to common shareholders, so earnings are not the constraint on cash here; the investment program is. Quarterly cash flow also swings with collateral, working capital and the timing of program refunds, so one quarter does not set a trend. The filing expects the required divestitures to close by year end, and their proceeds bear on how much of this spending is funded by borrowing.
Sources
- 1.Constellation Energy 10-Q for the period to 2026-06-30 (the filing), Aug 6, 2026, read Nov 2, 2026
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Growth, profit and margin
Revenue went from $17.6B in FY2020 to $25.5B in FY2025, the operating margin from 1.5% to 12.1%, over 5 years.
- Revenue$25.5B
- Operating income$3.1B
- Operating margin12.1%
- Period
- Q2 FY2026
- Revenue
- $7.5B
- Operating income
- $580.0M
- Operating margin
- 7.7%
- Net income
- $513.0M
- Free cash flow
- -$118.0M
Does the profit turn into cash?
Q2 FY2026: free cash flow of -$118.0M against net income of $513.0M in the quarter.
- Operating cash flow$4.2B
- Capital expenditure$2.9B
- Free cash flow$1.3B
- Net income$2.3B
Capital expenditure is drawn below the axis as cash out. Cash conversion is operating cash flow over net income, shown in the tooltip for years with a profit.
Financial data and sources
How the revenue mix has shifted
Each breakdown the filing reports, as shares of revenue, for every period it restates.
Segment Information - Generation Total Revenues (Details). The filing restates this breakdown for 1 period.
Click a member to isolate it across the years shown.
The figures
Margins, cash and growth for the period, each with what it was computed from.
Not reported, or not derivable
- gross margin: the company reports expenses by nature: no cost of revenue or gross profit line exists
Where revenue comes from
Every breakdown the filing reports for the period, with each item's share.
Segments
| Calpine | $2.1B | 28.6% |
| Midwest | $1.6B | 20.9% |
| Mid-Atlantic | $1.6B | 20.7% |
| Other Power Regions | $964.0M | 12.8% |
| New York | $564.0M | 7.5% |
| Ercot | $446.0M | 5.9% |
These items do not sum to total revenue; the filing states them beside it. Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
RevenueType
| Power and Power-related Revenues | $5.0B | 66.1% |
| Other Revenues | $2.1B | 28.6% |
| Capacity Revenues | $396.0M | 5.3% |
Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
ConsolidationItems
| Operating Segments | $7.2B | 96.5% |
| Segment Reconciling Items | $260.0M | 3.5% |
Source10-Q, us-gaap:Revenues, as reported in the 10-Q filed 2026-08-06
What it costs
The cost lines beneath operating income, each as a share of revenue, then the operating result.
Costs are reported by nature: what they are (food, labor, occupancy, personnel, marketing), not what they were for, so there is no cost-of-revenue line and no gross profit.
| Cost line | Q2 FY2026 | Of revenue | Source |
|---|---|---|---|
| Total operating expenses | $6.9B | 92.3% | Source10-Q, us-gaap:CostsAndExpenses, as reported in the 10-Q filed 2026-08-06 |
| Operating income (loss) | $580.0M | 7.7% | Source10-Q, us-gaap:OperatingIncomeLoss, as reported in the 10-Q filed 2026-08-06 |
Operating figures the company states
From the text of the filing rather than its statements, each with the sentence that states it.
View source
The EFOF for the three and six months ended June 30, 2026 was 6.2% and 5.2%, respectively.
View source
With 55 gigawatts of capacity from nuclear, natural gas, oil, geothermal, hydro, wind and solar facilities
View source
Total Natural Gas, Oil, and Renewables 30,649 5,560 25,089 451.2 % 62,711 11,465 51,246 447.0 %
View source
We have signed an additional 920 MW of long-term PPAs for clean, reliable nuclear generation with a diverse set of investment grade customers to help them meet their evolving energy needs.
View source
Nuclear fleet capacity factor 93.0 % 94.8 % 92.7 % 94.5 %
View source
Total Nuclear Generation 44,160 45,170 (1,010) (2.2) % 88,827 90,753 (1,926) (2.1) %
View source
Refueling outage days 86 41 185 129
View source
serving approximately 2.5 million customer accounts nationwide, including 80% of the Fortune 100
View source
Total Supply/Sales by Segment 89,815 65,641 24,174 36.8 % 183,145 134,064 49,081 36.6 %
The statements, as filed
The income statement, cash flow statement and balance sheet in the company's own order and words. Every line links to the filing.
Income statement32 lines, as presented in the 10-Q
Cash flow statement2 lines, as presented in the 10-Q
Year to date, as a quarterly filing reports it.
| Line | Q2 FY2026 | A year earlier | Change | Source |
|---|---|---|---|---|
| Cash flows from operating activities | ||||
| Net income (loss) | $508.0M | $833.0M | -39% | Source10-Q, us-gaap:ProfitLoss, as reported in the 10-Q filed 2026-08-06 |
| Statement of Cash Flows | ||||
| Cash, restricted cash, and cash equivalents at end of period | $1.08B | $2.06B | -48% | Source10-Q, us-gaap:CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalents, as reported in the 10-Q filed 2026-08-06 |
Balance sheet39 lines, as presented in the 10-Q
About this data
- Source
- Constellation Energy 10-Q, accession 0001868275-26-000104, filed Aug 6, 2026, read on Nov 2, 2026.
- History
- From the SEC's XBRL company facts, the value from the latest filing that stated each period.
- Reading
- Paragraphs marked Analysis are CXProWealth's reading; everything else is the filing's own numbers and words, or a cited source.
- Version
- methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02
What holds Constellation Energy's model up, and what could bend it
Competitive edge
A large nuclear fleet that runs almost continuously
Even with refueling outage days at 86 against 41, the nuclear fleet ran at a 93.0% capacity factor and produced 44,160 GWh.
The detail
The company describes itself as the largest nuclear energy company in the U.S., within 55 gigawatts of total capacity. Capacity factor, the ratio of actual output to output at full capacity, was 93.0% against 94.8% a year earlier.1
AnalysisAnalysis: nuclear costs are largely fixed, so output above that fixed base flows mostly to profit. High uptime across many reactors spreads staff, maintenance and fuel over more megawatt-hours, and a fleet this size can stagger refueling. The edge holds as long as availability does, which is why outage days are worth watching.
Long contracts with large buyers for firm clean power
The company signed another 920 MW of long-term nuclear power agreements with investment grade customers, turning part of a volatile commodity into contracted revenue.
The detail
The filing describes the new agreements as long-term, starting several years from now; one with Walmart supports a capacity expansion at the Dresden plant in Illinois. It also signed agreements to connect and serve a new data center beside its Freestone Energy Center in Texas. Capacity revenues, paid for keeping plants available to the grid, were $396 million, 5.3% of revenue, and the filing ties their rise to higher capacity prices.1
AnalysisAnalysis: data center developers and companies with climate goals need firm, around-the-clock supply, and existing plants with grid connections already in place are hard to replicate quickly. Long contracts let the company capture that value for years rather than take each year's market price.
Its own plants serve its own customers
Pairing 55 gigawatts of plants with about 2.5 million retail accounts lets rising prices lift generation earnings while raising supply costs, narrowing net exposure.
The detail
The filing states the rule: "In locations and periods where our load serving activities do not naturally offset existing generation portfolio risk, remaining commodity price exposure is managed through portfolio hedging activities." Calpine added a second retail platform, which the filing says creates the nation's leading competitive retail electric supplier.1
AnalysisAnalysis: a generator that also sells to end customers needs to hedge only the gap between the two books, which lowers hedging cost and gives it a steady outlet for output. The larger retail book after Calpine widens that offset across more regions.
What to watch
Commodity prices and hedge marks swing reported results
Purchased power and fuel took 53.6% of revenue, and the filing names unrealized hedge losses first among the reasons profit fell this quarter.
The detail
The filing states that electricity, fuel and capacity prices have a significant impact on revenue and purchased power cost, and that generation not hedged moves with forward prices. Hedging is concentrated in the nearest years, where customer demand and market liquidity allow it.1
AnalysisAnalysis: hedges steady cash margins but are marked to market each quarter, so reported revenue and profit can move sharply before the power is delivered. With Calpine's gas fleet, fuel prices now matter on the cost side as much as power prices matter on the revenue side.
More debt raises the stakes of a rating downgrade
Net interest expense was $283 million against $118 million, 48.8% of operating income, and losing investment grade would require substantial extra collateral.
The detail
The filing attributes higher interest expense mainly to debt assumed and financing transactions following the Calpine acquisition. It says access to capital markets and financing costs may depend on credit ratings, and that losing investment grade would require incremental collateral on derivatives and other contracts, possibly beyond its credit facilities and cash on hand.1
AnalysisAnalysis: a business that hedges heavily needs balance sheet strength to post margin when prices move. The ratings were affirmed after the merger closed; keeping them rests on cash flow and on divestiture proceeds reducing borrowing.
Market rules and approvals shape revenue and timing
Capacity prices, how data centers connect beside existing plants, the required divestitures and the Crane restart all depend on regulators, not demand alone.
The detail
The filing describes PJM capacity auctions running under a price collar, with the latest clearing at its cap; FERC orders on serving large loads co-located at existing plants; approvals still needed to close the divestitures required for the merger; and NRC and state approvals for the Crane restart, whose full delivery to the grid depends on transmission upgrades.1
Nuclear fuel is exposed to policy too. The company monitors U.S. restrictions on Russian enriched uranium and Russian export limits, and has contracted to enlarge its nuclear fuel inventory to protect supply.1
AnalysisAnalysis: a price cap protects buyers but also limits capacity revenue when supply is tight, so part of the benefit of rising data center demand is set by rule rather than by scarcity.
Sources
- 1.Constellation Energy 10-Q for the period to 2026-06-30 (the filing), Aug 6, 2026, read Nov 2, 2026
Constellation Energy, further in
Member research, then your own questions on ChatGPT.
What could change the outlook
What Constellation Energy's numbers depend on from here, read from the filing: the conditions behind this period's margins and growth, and where a change would show first.
- What the Calpine deal has to deliver from here
Which costs fade and which stay, and what revenue net of fuel, cash flow and the divestitures would need to show for the larger company to earn back what it paid.
- Separating the run-rate from the one-offs
How hedge marks, trust fund gains, merger costs and outage timing shaped this quarter, and which lines to read first in the next one.
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Have a question about Constellation Energy?
Explore its profit drivers, competitive edge, risks, or your own investment and business questions with CXProWealth on ChatGPT.
- How much of Constellation's power supply now comes from nuclear plants after the Calpine acquisition, and what does that change?
- Why did Constellation's operating income fall 39.0% while revenue rose 23.0% this quarter?
- How much did decommissioning trust gains add to Constellation's pre-tax income this quarter, and why do they raise its tax rate?
Business Lens describes Constellation Energy from its own filings with the SEC. It is not a view on its shares, a target, or advice to buy, sell or hold anything; figures are as filed and may be restated by the company later. The filing, the dates and the version are under the financial data above.