Exelon's Q2 2026 GAAP EPS was flat at $0.39 as a $0.04 severance charge offset rate-driven gains at ComEd, BGE and PHI; adjusted EPS rose to $0.43 and 2026 guidance of $2.81–$2.91 was affirmed.
Revenue
$6.0B
+10.0% YoY
Net income
$396M
+1.3% YoY
Diluted EPS
$0.39
0.0% YoY
Operating margin
16.4%
Overview
Exelon, which owns six regulated "wires" utilities (ComEd in northern Illinois, PECO around Philadelphia, BGE in Baltimore, and Pepco, Delmarva Power and Atlantic City Electric under the PHI holding company), earned $396 million, or $0.39 per diluted share, in the second quarter of 2026 — essentially flat against $391 million and $0.39 a year earlier. Exelon owns no power plants: it earns a regulator-approved return on the poles, wires, substations and gas mains it builds, so its profit grows mainly when regulators let it recover more investment through rates.
The flat GAAP number hides two things pulling in opposite directions. Rate increases at ComEd, BGE and PHI, higher returns on construction spending at ComEd, and the absence of two 2025 customer credits (a Customer Relief Fund contribution at the holding company and surcharge credits at PECO) lifted earnings. Against that, depreciation and interest costs kept climbing as the asset base grows, and the quarter absorbed $58 million pre-tax ($42 million after tax, $0.04 per share) of costs from a new cost-cutting program, mostly severance. Excluding that charge, adjusted operating EPS rose to $0.43 from $0.39 (+10.3%), in line with what management said to expect on its first-quarter call.
Key metrics — Q2 2026 (quarter ended June 30)
Metric
Q2 2026
Q2 2025
YoY Change
Total operating revenues
$5,967M
$5,427M
+10.0%
Operating income
$979M
$927M
+5.6%
Operating margin
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Operating margin is operating income as a share of revenue — what is left after running the business, before interest and tax. Adjusted operating EPS is Exelon's own non-GAAP measure; the reconciliation is in the 10-Q's MD&A.
Year to date (six months): revenue $13,209 million (+8.8% from $12,141 million), net income $1,315 million (+1.2% from $1,300 million), GAAP diluted EPS $1.28 (down from $1.29 because the share count grew), and adjusted operating EPS $1.33 (up from $1.31).
Why revenue grew 10% but profit didn't
Most of the revenue jump is pass-through, not profit. When a utility buys electricity or gas on behalf of customers, it bills that cost back at no markup. Purchased power and fuel together rose $315 million to $2,211 million, which accounts for well over half of the $540 million revenue increase. Stripping out those energy costs, revenue rose about 6.4% ($3,756 million vs. $3,531 million). The operating margin slipped from 17.1% to 16.4% partly for that mechanical reason (more zero-margin pass-through revenue in the denominator) and partly because of the severance charge booked in operating and maintenance expense, which rose $65 million to $1,386 million.
Below operating income, two cost lines matter for the per-share result:
Interest expense rose $44 million to $568 million, as Exelon keeps borrowing to fund construction.
Income taxes rose to $99 million from $70 million, an effective rate of about 20% vs. about 15% a year ago; the earnings release attributes part of this to tax repairs at PECO, "a portion of which is timing."
Diluted shares also rose about 1.6% to 1,028 million, because Exelon is issuing new stock to help fund its capital program (see Financing below). That is why a 1.3% rise in net income still rounds to flat EPS.
Results by utility (net income)
Utility
GAAP Q2 2026
GAAP Q2 2025
Change
Adjusted Q2 2026
Adjusted Q2 2025
ComEd (Illinois)
$249M
$228M
+$21M
$249M
$228M
PECO (Pennsylvania)
$119M
$136M
-$17M
$130M
$136M
BGE (Maryland)
$55M
$55M
—
$70M
$55M
PHI (DC, MD, DE, NJ)
$109M
$143M
-$34M
$126M
$144M
Holding company & other
-$136M
-$171M
+$35M
n/a
n/a
GAAP figures from the 10-Q; adjusted figures from Exelon's Q2 2026 earnings release (8-K Exhibit 99.1, July 30, 2026). The gap between the two in 2026 is the cost-management (severance) charge.
ComEd was the clear driver: higher distribution and transmission rate base (the regulator-approved value of the grid it has built, on which it earns a return) plus higher AFUDC — allowance for funds used during construction, i.e. the return a utility is allowed to book on projects still being built. ComEd's distribution earnings are "decoupled," meaning they are not supposed to swing with weather or usage.
PECO fell because of higher depreciation, interest and income taxes, plus severance, partly offset by the absence of 2025 surcharge credits to customers and favorable weather. Unlike ComEd, BGE and most of PHI, PECO's distribution earnings are not decoupled, so they still move with weather.
BGE was flat on a GAAP basis but up $15 million adjusted: approved distribution rates and the absence of a 2025 write-off of regulatory assets tied to multi-year-plan reconciliations, offset by higher credit loss expense (customers' unpaid bills) and severance.
PHI fell $34 million, mostly severance plus higher depreciation, property taxes at Delmarva and other operating costs; Pepco's net income dropped to $65 million from $84 million, Delmarva's to $26 million from $39 million, and ACE's to $22 million from $24 million.
The holding company drag narrowed by $35 million, mainly because 2025 included a Customer Relief Fund contribution that did not recur, partly offset by higher interest on parent-level debt.
Rate cases: what's decided and what's pending
A rate case is the formal process in which a utility asks its state regulator to raise customer rates to cover new investment and costs; the regulator sets the allowed return on equity (ROE — the profit rate on shareholders' money invested in the grid).
Pending distribution cases (per the 10-Q):
Utility / state
Filed
Requested increase
Requested ROE
Expected decision
Pepco – Maryland
Oct 14, 2025 (amended Apr 16, 2026)
$120M
10.50%
Q3 2026
Delmarva – Delaware
Dec 9, 2025 (amended Jun 1, 2026)
$45M
10.50%
Q3 2027
BGE – Maryland
Jul 2, 2026
$156M
10.40%
Q1 2027
Per the earnings release, the BGE filing also seeks recovery of storm-event costs. Several setbacks and policy shifts surfaced during the first half:
PECO withdrew its electric and gas rate cases. Filed March 30, 2026, they were withdrawn at PECO's request, with the Pennsylvania PUC approving the withdrawal on April 30. The 10-Q says future grid-modernization spending and filings "will be informed by customer affordability considerations." That leaves PECO absorbing rising depreciation and interest without new base rates for now — already visible in its Q2 decline.
Pepco Maryland reconciliation: in March 2026 the Maryland PSC allowed Pepco to recover about $13 million of the $31 million it sought for the 12 months ended March 31, 2024, and disallowed certain assets, producing a $26 million write-off booked in Q1 — a key reason PHI's six-month net income is down $59 million.
State legislation is tightening: a Maryland law signed May 12, 2026 puts a moratorium on rate cases using forecasted test years until April 1, 2027, and required BGE, Pepco and Delmarva to join a regional transmission organization, which prompted a complaint at FERC seeking removal of their 50-basis-point transmission incentive (Exelon does not expect the outcome to be material). A New Jersey law does the same for ACE from 2027. A Delaware law signed July 13, 2026 caps Delmarva's recoverable non-mandatory capital spending at $70 million a year in 2026 and 2027, and at 5% of its approved rate base from 2028.
PJM cost allocation: a March 2026 FERC order requires PJM, the regional grid operator, to recalculate transmission upgrade cost allocations back to 2015. Exelon's utilities have appealed and say the impact is not yet estimable but "could be material," though they expect to recover any extra charges through customer rates.
Storm costs were not a major swing factor this quarter; PECO's storm-related costs were $32 million lower than a year earlier.
Capital plan, generation and financing
2026 capital expenditures: Exelon's current estimate is $9.9 billion (ComEd $3.5 billion, PECO $2.175 billion, BGE $2.175 billion, PHI $2.05 billion). First-half spending was $4,558 million, up 15% year over year.
Data centers and generation: the 10-Q does not quantify a data-center or large-load pipeline and does not discuss plans to own regulated generation. The closest item is in the earnings release: ACE filed a transmission-connected battery storage proposal with the New Jersey Board of Public Utilities, and management frames storage and virtual power plants as tools for "resource adequacy" (having enough supply to meet peak demand).
Cost savings: in May 2026 Exelon announced plans to identify about $350 million of operating and maintenance savings in 2027 — the program behind this quarter's severance charge.
Financing: the quarter's bond deals included $1,425 million of ComEd first mortgage bonds, $925 million of BGE notes and $130 million of Pepco bonds; per the earnings release, about 86% of 2026's planned debt financing is done. Exelon also issued about 8.7 million new shares through its at-the-market program at a net $44.03 each, raising $382 million.
Credit ratings are drifting lower at two utilities: S&P cut BGE to A- from A on April 30, and Moody's cut PECO to A3 from A2 on July 15, 2026. Other Exelon ratings were unchanged in the first half.
Cash flow: operating cash flow for the six months rose to $3,669 million from $2,711 million, helped by working-capital changes including payments ComEd received under Illinois' nuclear carbon-mitigation-credit program.
Takeaway: Exelon's earnings engine — rate base growth at ComEd and approved rates at BGE and PHI — is working, and adjusted EPS grew about 10% to $0.43. But the quarter also shows pressure building on affordability: PECO pulled its rate case, Maryland and Delaware passed laws limiting how and how fast utilities can raise rates, and two utilities were downgraded. Exelon's response is a $350 million cost-savings target for 2027, and the severance charge for that program is exactly what separates flat GAAP EPS from growing adjusted EPS.
Guidance and outlook
Management affirmed full-year 2026 adjusted operating EPS guidance of $2.81–$2.91 and said it expects annualized operating EPS growth "near the top end of 5% to 7%" from 2025 through 2029 (earnings release). First-half adjusted EPS of $1.33 is about 46% of the guidance midpoint, leaving about $1.53 to earn in the second half. The quarterly dividend is $0.42 per share.
What to watch:
Pepco Maryland decision (expected Q3 2026) and the BGE case (expected Q1 2027) — the ROEs awarded will show how far Maryland's affordability politics compresses returns.
PECO's next step after the withdrawal: without new base rates, rising depreciation and interest will keep weighing on its earnings until it refiles.
Share issuance and credit metrics: funding a roughly $9.9 billion annual capital plan with new stock and debt dilutes EPS and, as the BGE and PECO downgrades show, strains ratings.
Management change: an August 25, 2026 8-K says CFO Jeanne Jones becomes Executive Vice President of Finance and Strategy and controller Robert Kleczynski becomes CFO effective October 5, 2026; COO and PECO CEO Michael Innocenzo will depart in 2027.
Source: Exelon Form 10-Q for the quarter ended June 30, 2026 (filed July 30, 2026). Utility-level adjusted earnings, guidance, the battery storage filing and the financing-progress figure are from Exelon's Q2 2026 earnings release (Form 8-K Exhibit 99.1, July 30, 2026); officer changes are from the 8-K filed August 25, 2026.