Durable Portfolio Continues to CEG Along: Earnings Beat, Reaffirmed Outlook

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Durable Portfolio Continues to CEG Along: Earnings Beat, Reaffirmed Outlook

May 11, 2026

Earnings Beat Driven by Portfolio Expansion and Market Tailwinds: Constellation reported

Q1 adjusted operating EPS of $2.74, ahead of expectations, with upside primarily driven by the

Calpine acquisition, stronger capacity pricing, and lower stock-based compensation. Incremental

earnings from Calpine were a key contributor, with management noting ~$2/share of annual

accretion embedded in guidance. Offsets included higher nuclear refueling outage activity,

weather-related costs tied to Winter Storm Fern, and lower ZEC pricing. Overall, we believe the

quarter reinforces the earnings power of the combined platform, particularly in volatile market

conditions.

Data Center Demand and Regulatory Clarity as Key Catalysts: A central theme of the call

was accelerating demand from data centers and AI-driven load growth, with hyperscaler capex

expectations continuing to rise meaningfully. Constellation is positioning its fleet to capture this

demand through bilateral contracting and “powered land” solutions, leveraging both nuclear and

gas assets. Regulatory progress in PJM, including a proposed framework for large-load capacity

procurement, is viewed as a key enabler. While some customers are awaiting clarity, others

continue to advance negotiations, suggesting demand remains intact but timing is policy-

dependent.

Capital Allocation Reflects Balance of Growth and Shareholder Returns: Constellation

deployed ~$335M in share repurchases during the quarter, signaling confidence in valuation and

near-term cash flow visibility. Management reiterated a balanced capital allocation approach,

prioritizing investment-grade credit, organic growth opportunities with double-digit returns, and