Should U.S. Companies Shift to Semi-Annual Earnings Reporting?
President Trump has called for U.S. public companies to shift from quarterly to semi-annual earnings reporting. The idea seems simple: fewer filings, less short-term pressure and perhaps a stronger focus on long-term value creation. Should U.S. Companies Shift to Semi-Annual Earnings Reporting?
President Trump has called for U.S. public companies to shift from quarterly to semi-annual earnings reporting. The idea seems simple: fewer filings, less short-term pressure and perhaps a stronger focus on long-term value creation.
The implications, however, are complex and consequential. Quarterly reporting is intended to provide investors with regular visibility into financial and operational performance, enabling informed investment decisions.
Quarterly disclosures were first introduced after the Great Depression to protect shareholders. Over the following decades, new regulations like Reg FD and the Sarbanes-Oxley expanded disclosures, improving transparency but also increasing the cost of compliance.
Below, we explore the pros and cons of moving to a twice-yearly reporting calendar - and why the path forward deserves careful consideration.
Potential Pros
- Reduced Short-Term Pressure: Reporting every six months may give management more room to focus on strategy, innovation, capital allocation and running day-to-day operations. Companies could also pivot away from quarterly guidance, aligning with more realistic business cycles. As Dominic Pappalardo of Morningstar Wealth noted, “Slowing down that cycle may take the pressure off and allow them to take a l longer-term outlook and not necessarily worry about what's coming in one, two, three months down the road.”
- Lower Market Volatility: With fewer earnings events, the cadence of speculative trading could slow, creating a more stable environment for long-term investors.
- Cost and Time Savings: Preparing and auditing quarterly reports is resource-intensive. Semi-annual filings could reduce that burden, freeing capital for growth initiatives. Nasdaq CEO Adena Friedman has publicly supported reforms to give companies flexibility in reporting frequency.
- More Investor Engagement: Two fewer quiet periods would allow companies longer stretches to meet with investors, analysts and other stakeholders, strengthening relationships and providing more opportunities to shape the external narrative.
Potential Cons
- Reduced Transparency: Semi-annual reporting could increase uncertainty, make portfolio management harder and lead to bigger price swings at earnings. As Brian Nick of NewEdge Wealth noted, “Earnings season moves could also be larger as misses get bigger and more consequential.”As Brian Nick of NewEdge Wealth, “Earnings season moves could also be larger as misses get bigger and more consequential.”
- Weaker Oversight: With fewer external reporting checkpoints, boards themselves may lose timely insight into risks, since performance updates often center around quarterly earnings reporting.
- Higher Risk of Selective Disclosure: In the absence of frequent updates, companies may feel pressure to provide informal context to select investors, raising concerns over unequal access to information. Sandra Peters of CFA Institute warned, “Six months is a long time for leakage of information, so there could possibly be an asymmetry of information that’s provided to some investors over the others.”
- Constrained Investor Access: Companies may be limited in how much they can say at conferences if formal updates are less frequent.
- More Reliance on Alternative Data: With fewer official disclosures, investors and analysts may turn to third party data, digital tracking sources and surveys, or even AI-driven responses. This increases the risk of misinterpretation or reliance on rumors or leaks.
- Regulatory Uncertainty: The SEC has long supported quarterly reporting as a pillar of U.S. market structure. A change could bring unintended consequences for disclosure standards and investor protections.
What This Means for Companies:
U.S. public companies should welcome the debate but approach it with caution. Even if the SEC relaxes requirements, many companies may continue quarterly reporting voluntarily to meet investor expectations. Others might shift to semi-annual filings but provide interim updates on select metrics.
The shift would have wide-ranging implications for guidance practices, investor engagement and how companies balance short-term results with long-term value creation. The discussion underscores the need for flexible investor relations strategies.
Possible Next Steps for the SEC:
In response to President Trump’s comments on this topic, an SEC spokesperson said, “At President Trump’s request, Chairman Atkins and the SEC is prioritizing this proposal to further eliminate unnecessary regulatory burdens on companies.”
The likely next step would be a proposed amendment to Rule 13a, which requires periodic company filings. That proposal would go through a public comment period, with possible roundtables for stakeholder input. While the SEC is not bound by a deadline, presidential attention could accelerate action.
Contact: edelmansmithfieldus-ir@edelmansmithfield.com
By Julia Fisher, EVP, Edelman Smithfield, Stacy Turnof, EVP, Edelman Smithfield, Jessica Resnick-Ault, SVP, Edelman Smithfield, and Lauren Torres SVP, Edelman Smithfield.