Constellation Energy CorpCEG
Constellation Energy Corp Revenue Disclosure
Revenue from Contracts with Customers
We recognize revenue from contracts with customers to depict the transfer of goods or services to customers at an amount that we expect to be entitled to in exchange for those goods or services. Our primary sources of revenue include competitive sales of power, natural gas, and other energy-related products and sustainable solutions. The performance obligations, revenue recognition, and payment terms associated with these sources of revenue are further discussed in the table below. There are no significant financing components for these sources of revenue.
Unless otherwise noted, for each of the significant revenue categories and related performance obligations described below, we have the right to consideration from the customer in an amount that corresponds directly with the value transferred to the customer for the performance completed to date. Therefore, we generally recognize revenue in the amount for which we have the right to invoice the customer. As a result, there are generally no significant judgments used in determining or allocating the transaction price.
| Revenue Source | Description | Performance Obligation | Timing of Revenue Recognition | Payment Terms | ||||||||||
Power Sales | Sales of power and other energy-related products to wholesale and retail customers through our customer-facing business | Various, including the delivery of power (generally delivered over time) and other energy-related products such as capacity (generally delivered over time), CMCs, ZECs, RECs or other ancillary services (generally delivered at a point in time) | Concurrently as power is generated for bundled power sale contracts (a) | Generally within the month following delivery to the customer | ||||||||||
Natural Gas Sales | Sales of natural gas to wholesale and retail customers through our customer-facing business | Various, including the delivery of natural gas (generally delivered overtime) and sustainable natural gas attributes (generally delivered at a point in time) | Over time as the natural gas is delivered to the customer | Generally within the month following delivery to the customer | ||||||||||
Other Products and Services | Sales of other energy-related products and sustainable solutions, such as long-term construction and installation of energy efficiency assets and new power generating facilities, primarily to C&I customers | Construction and/or installation of the asset for the customer | Revenues and associated costs are recognized throughout the contract term using an input method to measure progress towards completion(b) | Generally within 30 or 45 days from the invoice date | ||||||||||
__________
(a)Certain contracts may contain limits on the total amount of revenue we are able to collect over the entire term of the contract. In such cases, we estimate the total consideration expected to be received over the term of the contract net of the constraint and allocate the expected consideration to the performance obligations in the contract such that revenue is recognized ratably over the term of the entire contract as the performance obligations are satisfied.
(b)The method recognizes revenue based on the various inputs used to satisfy the performance obligation, such as costs incurred and total labor hours expended. The total amount of revenue that will be recognized is based on the agreed upon contractually-stated amount. The average contract term for these projects is approximately 18 months.
We incur incremental costs in order to execute certain retail power and gas sales contracts. These costs, which primarily relate to retail broker fees and sales commissions, are capitalized when incurred as contract acquisition costs and generally amortized over the corresponding term of the contract. These capitalized costs and related amortization were not material as of and for the years ended December 31, 2025 and 2024.
Transaction Price Allocated to Remaining Performance Obligations
The following table shows the amounts of future revenues expected to be recorded in each year for performance obligations that are unsatisfied or partially unsatisfied as of December 31, 2025. This disclosure only includes contracts for which the total consideration is fixed and determinable at contract inception. The average contract term varies by customer type and commodity but ranges from one month to several years. This disclosure excludes mark-to-market derivatives and certain power and gas sales contracts which contain variable volumes and/or variable pricing.
| 2026 | 2027 | 2028 | 2029 | 2030 | 2031 and thereafter | Total | |||||||||||||||||||||||||||||||||||
| Remaining performance obligations | $ | 386 | $ | 269 | $ | 135 | $ | 117 | $ | 61 | $ | 79 | $ | 1,047 | |||||||||||||||||||||||||||
Transaction Price Allocated to Previously Satisfied Performance Obligations
Our Clinton and Quad Cities units contract with certain utilities in Illinois which require delivery of all ZECs produced during each planning year (June through May), with total compensation limited by an annual cap for each planning year designed to limit the cost of ZECs to each utility's customers. ZECs delivered that, if paid, would result in the annual cap being exceeded may be paid in subsequent years at the vintage year price as long as the payments would not exceed the annual cap in the year paid. The program commenced June 2017 and continues through May 2027. In various planning years since the program began, we delivered ZECs to the utilities in excess of the annual compensation cap.
The ZEC price and annual compensation cap effective for each planning year are administratively determined by the IPA. For the June 2025 through May 2026 planning year, the ZEC price has been established at $1.17 per ZEC, subject to an annual cap of $224 million. ZECs generated and delivered during this planning year will not exceed the annual cap and, as a result, we recognized $201 million of revenue during the second quarter of 2025 as a receivable for ZECs delivered in prior planning years, with payment expected in the third quarter of 2026. As of December 31, 2025, this receivable is included within Accounts receivable, net in the Consolidated Balance Sheets.
For the June 2024 through May 2025 planning year, the ZEC price was established at $9.38 per ZEC, subject to an annual cap of $222 million. ZECs generated and delivered during this planning year did not exceed the annual cap, however the revenue recognized during the second quarter of 2024 for ZECs delivered in prior planning years was not material.
For the June 2023 through May 2024 planning year, the ZEC price was established at $0.30 per ZEC, subject to an annual cap of $224 million. ZECs generated and delivered during the planning year did not exceed the annual cap, and as a result we recognized $218 million of revenue during the second quarter of 2023, with payment received in the third quarter of 2024.
Revenue Disaggregation
We disaggregate the revenue recognized from contracts with customers into categories that depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. See Note 5 — Segment Information for the presentation of revenue disaggregation.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 25, 2022 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.