Exelon Corporation demonstrates a stable cash generation profile with solid profitability metrics and conservative leverage, though near-term liquidity and capital deployment warrant close monitoring. Company Overview Exelon Corporation is a large U.S. utility and power generator with a track record of stable cash generation, double‑digit net margins, and conservative balance‑sheet leverage. Finan
Exelon Corporation demonstrates a stable cash generation profile with solid profitability metrics and conservative leverage, though near-term liquidity and capital deployment warrant close monitoring.
Exelon Corporation is a large U.S. utility and power generator with a track record of stable cash generation, double‑digit net margins, and conservative balance‑sheet leverage.
The company’s cash and profitability profile is a clear strength: trailing twelve‑month operating cash flow was $6.25B versus trailing net income of $2.77B, indicating strong cash conversion (operating cash flow consistently exceeds net income) as shown in Earnings Quality Analysis and Revenue & Net Income.
Capital structure is conservative: interest coverage is extremely high at approximately 396x and debt-to-equity is low at 0.2799, consistent with manageable leverage and debt service capacity as referenced in Strategic Capital Allocation and Return on Equity (ROE).
Earnings and revenue per-share growth show modest momentum but some volatility: most recent year EPS growth was 12.5% while revenue per share growth was 5.3% (2025-12-31). Quarterly net income ranged from $391M (Q2 2025) to $908M (Q1 2025), indicating quarter-to-quarter variability reported in Revenue & Net Income and Revenue & EPS Growth.
Fundamental aspects to watch include operating cash flow relative to net income (OCF $6.25B vs net income $2.77B) and the scale of investing cash flow (-$8.53B) to gauge capital intensity and funding needs. Other critical metrics include:
The foundation of business quality and long-term value creation
EXELON CORP's revenue over the most recent year shows a recurring seasonal pattern with higher top-line quarters in March and September (both $6.71B in 2025) and lower quarters in June and December ($5.43B and $5.41B, respectively). Across 2024–2025 revenue has largely ranged between about $5.3B and $6.7B, with the fourth quarter of 2025 ($5.41B) modestly below the prior fourth quarter ($5.47B).
Net income has been more variable quarter to quarter in 2025, with stronger results in the March and September quarters ($908.0M and $875.0M), a notable trough in June ($391.0M), and a midpoint result in December ($594.0M). The December 2025 net income of $594.0M is lower than December 2024’s $647.0M. The most recent quarterly revenue was $5.41B and the most recent quarterly net income was $594.0M.
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Jan 2025 to Dec 2025
Revenue composition by disclosure category for the latest period
The provided excerpt does not contain the Item 1 (Business) text or any explicit statements of where the company generates revenue. It is limited to a table of contents, glossary, and cautionary statements; it does not include the detailed product or service descriptions, customer types, end markets, geographic or channel information necessary for a complete analysis.
Please supply the Item 1 (Business) section text or the Revenue from Contracts with Customers note from the 10-K, and I will produce the requested breakdown under the specified section labels.
Analyzing long-term margin stability and competitive positioning
EXELON CORP's net profit margin has been relatively stable around the low double digits in recent quarters after recovering from single-digit troughs earlier in the dataset. From 2024-12 (10.7%) it moved to 2025-03 (11.4%), dipped slightly to 2025-06 (11.2%), then rose to 2025-09 (11.6%) and was 2025-12 (11.4%), indicating a narrow range centered near 11–11.5% in the most recent year.
Gross margin readings in the dataset are very high and variable across years, with recent observations above 90% (e.g., 2024-03 (92.7%)) and 2024-06 (96.3%)).
Operating margin shows an upward move into the high teens in the most recent multi-year observations (17.4% on 2022-12 and 18.5% on 2023-12) compared with earlier lower levels.
The most recent observed values are: Net Profit Margin 11.4% (2025-12-31), Gross Margin 96.3% (2024-06-30), Operating Margin 18.5% (2023-12-31).
Understanding Profit Margins
Between Jan 2025 and Dec 2025, Exelon Corp converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
EXELON CORP’s operating cash flow (TTM) and net income (TTM) have both moved higher since the 2021 troughs, with operating cash flow showing larger absolute swings. In 2025 the trailing-12-month operating cash flow rose through the first three quarters to $6.44B (2025-09-30) before easing to $6.25B at year-end, while trailing net income climbed to $2.82B in 2025-09-30 and dipped slightly to $2.77B by 2025-12-31. Over the most recent year the pattern is a modest peak in the September quarter followed by a small decline in the December quarter.
Across the full history shown, operating cash flow has consistently exceeded reported net income in every period, producing a persistent cash-versus-earnings gap. Operating cash flow ranges from a low of $1.89B (2021-03-31) to peaks above $8B in late 2018/early 2019, while net income has generally ranged roughly between $1.6B and $4.0B across the series. The most recent trailing twelve-month operating cash flow was $6.25B and the most recent trailing twelve-month net income was $2.77B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
EXELON CORP's trailing twelve‑month ROE has been largely stable over the past several quarters, fluctuating around the high single digits. From March 2024 (8.9%) through December 2024 (9.1%), ROE was essentially flat, then rose to 9.8% in March 2025 and 10.0% in September 2025 before easing to 9.6% in December 2025. The most recent movement shows a modest uptick through mid‑2025 followed by a slight pullback in the latest quarter.
Looking farther back, ROE was notably lower in 2020–2021 (around 5.0–6.7%) before recovering to the 11% range in mid‑2022 (11.3% and 11.5%). Historical peaks appear in 2010–2011 and 2009 (above 20% and 17.3%, respectively), while the recent multi‑year pattern centers near 9–10%. The most recent Return on Equity (ROE) for EXELON CORP was 9.6% for the period ending 2025-12-31.
Key Finding: EXELON CORP's ROE has remained stable in recent quarters, hovering around 9.6% to 10%. Historically, ROE experienced higher peaks but has settled into a modest range in recent years.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
Over the past year EXELON CORP's operating cash flow TTM has risen versus earlier periods, moving from $5.57B at 2024-12-31 to a peak of $6.44B at 2025-09-30 before a modest decline to $6.25B at 2025-12-31. That recent increase through mid-2025 and slight pullback in the final quarter are the most notable inflection points in operating cash generation across the latest TTM readings.
Investing cash flow TTM has become more negative in the most recent data, reaching -$8.53B at 2025-12-31 compared with -$6.97B at 2024-09-30, indicating larger net cash outflows for investment activity in the latest TTM.
Financing cash flow TTM has strengthened over the same interval, rising from $1.31B at 2024-12-31 to $2.46B at 2025-09-30 and $2.53B at 2025-12-31. The most recent trailing twelve-month values are: operating cash flow $6.25B, investing cash flow -$8.53B, and financing cash flow $2.53B.
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
EXELON CORP's trailing twelve-month P/E has fluctuated materially over the history shown, with multi-year peaks around 25.5x in 2013 and elevated readings above 20x in 2016 and late 2021. There have also been pronounced troughs, notably readings below 8x in 2017–2018 and a dip to 14.4x in the quarter ending 2024-06-30, illustrating a wide historical range between roughly 7.4x and 25.5x.
Focusing on the most recent quarters, the P/E moved from 17.2x at 2025-03-31 to 16.6x (2025-06-30), 16.1x (2025-09-30) and 15.9x at 2025-12-31, showing a modest downward drift over the last three quarters. The most recent P/E ratio observed was 15.9x as of period ending 2025-12-31.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.