Earnings Reports Every Quarter? The Pros and Cons From Wall Street Insiders

(Illustration by Michael Haddad)

Editor’s note: President Donald Trump called in September for the Securities and Exchange Commission to end its requirement for public companies to report their earnings every quarter. Companies would report semiannually instead. The government shutdown delayed work on the proposal, but the SEC has said an update may come in late 2025 or early 2026.

Barron’s asked a select group of experts in public-company reporting to weigh in on the pros and cons.

In favor of ending quarterly reporting: Nasdaq CEO Adena Friedman says the costs of quarterly reporting discourages companies from going public, to the detriment of everyday investors. Michael Archbold, a former CEO and CFO of Fortune 500 companies*, argues changing the requirement is an important step toward getting companies to think long-term.*

Against the proposal: Portfolio managers Charlie Dreifus, Tim Hipskind, and Steven McBoyle say less-frequent reporting will deprive investors of the crucial information they need. Securities litigator Darren Robbins contends that in the hype-driven AI era, less transparency is risky. And securities litigators Christine M. Fox and David Saldamando argue less reporting could drive more volatility in the public markets.

Their full perspectives are presented below.

Public Markets Need the Boost

Adena Friedman is chair and CEO of Nasdaq.

Every day I talk to business leaders who want to take their companies public but are discouraged by costly and complicated regulatory reporting requirements. That’s why Trump is right to call upon the SEC to end mandatory quarterly reporting for publicly traded companies.

By streamlining compliance requirements, we can bring more companies into the public markets, strengthening the economy to the benefit of everyday investors.

Markets were dramatically slower when quarterly earnings reports became mandatory in 1970. Investors had limited visibility into company performance. Today, we live in the age of real-time access. Research tools and analytics are available to every investor. CEOs regularly provide insights and updates on cable news and social media.

Yet quarterly earnings reports—formally known as Form 10-Q filings—persist. They are time-consuming and costly to produce, and they reinforce a short-term mind-set. These burdens discourage companies from going public—to the detriment of investors.

Regulatory compliance for the median U.S. public company can amount to 4.3% of market capitalization, according to a study by Columbia Business School. This cost weighs on balance sheets and meaningfully impacts management’s ability to invest in growth and innovation.

Small- and medium-cap companies face a disproportionate burden. Take, for example, a biotech firm in the research phase of a breakthrough medicine. It may be years away from seeing revenue, but it must file detailed reports quarter to quarter even as little changes. This doesn’t materially improve transparency for investors, but it diverts time and money from the company’s mission of developing lifesaving therapies.

An equally big problem with quarterly reporting is the mind-set it reinforces. Investors get hooked on short-term results and executives and boards spend more time focusing on the next earnings call than on the key strategic decisions that will drive success for the next decade.

Protecting the public company model is of particular importance right now. The number of publicly traded companies in the U.S. has declined by about 36% since 2000. The number of private-equity-backed companies has increased by about 475% in the same period. A full quarter of companies valued at more than $1 billion are now private. Each company that chooses to stay private sequesters wealth creation in the hands of a select few, rather than giving Main Street investors a chance to take a stake in the success of American enterprise.

Yet, as private markets are opened further to retail investors, disclosure discrepancies will become more pronounced. That could drive even more companies from the public markets, hollowing out one of the most powerful assets the U.S. has to compete in the global economy.

Ending quarterly reporting won’t radically reduce transparency for investors. Annual reports—or 10-Ks—will remain. Companies will still disclose material developments in 8-Ks. Many companies already voluntarily provide relevant, interim updates on key performance metrics. Reducing mandatory reporting won’t diminish companies’ legal requirement to serve as fiduciaries to shareholders.

Outdated rules need updating to match the dynamics of today’s markets. The SEC should act on the president’s suggestion to promote longer-term planning and investing and ensure that the best companies in the world remain accessible to all American investors. It’s time to unleash tomorrow’s IPOs.

A Nudge Toward the Long Term

Michael Archbold is the co-author of Smart Regulation: Changing Speed Bumps into Guardrails*. He was previously the CEO of General Nutrition Centers and Talbots and CFO of Saks Fifth Avenue and AutoZone.*

I applaud the SEC’s willingness to revisit its rules and to retrospectively evaluate the costs and benefits of its regulations—a practice to be admired and emulated.

Reducing the frequency of earnings reporting has the potential to meaningfully lower costs for companies. Firms currently have to pay for internal and external auditors, the preparation of the actual reports, legal reviews, and more each quarter. While large companies can generally absorb these costs, they pose a much greater burden for smaller companies. They may even deter small companies from going public, thus restricting their access to some of the world’s most efficient capital markets.

For this reason alone, the SEC should proceed with reducing reporting frequency. But don’t expect that to fix one of the oft-cited issues with quarterly reporting—that it creates short-term thinking among executives and boards. One of the most frequently cited potential benefits of less-frequent reporting is that it gives management breathing room to make long-term investments. But those who are hoping for such a propitious outcome will be disappointed. Shifting a reporting horizon from three months to six months hardly qualifies as “long term.”

Many of the other factors that contribute to corporate short-termism will continue. Some of these factors come from within companies. According to an Equilar study, the median tenure of a Fortune 500 CEO declined from six years in 2013 to just 4.8 years in 2022. This downward trend in tenure significantly increases pressure on CEOs to focus on short-term results. Similar reductions in tenure are also affecting board directors.

Short-term pressures aren’t solely coming from within. Companies also face mounting pressures and scrutiny from hedge funds (activist or otherwise), pension funds, proxy advisors, and issues-based activists focused on ESG, executive compensation, labor, governance, or other moral or political issues. A reporting rule change won’t counteract or subdue these demands.

Promoting long-term investing is admirable. To do so, boards need to ensure that executives allocate resources—both capital and labor—in alignment with long-term strategies while remaining sufficiently responsive to short-term issues. That includes geopolitical tensions, supply-chain disruptions, trade and tariff volatility, technological advancements, and cyberthreats.

Boards must also have the flexibility and fortitude to design incentive compensation structures as they see fit to align with long-term strategies, while still rewarding short-term achievements that enable those long-term goals.

These aren’t easy balances to strike. Still, reducing short-term thinking and incentivizing long-term investments is a worthwhile objective. Shifting reporting regulations to reduce costs while allowing shareholders and companies greater flexibility to determine appropriate frequency of reporting isn’t a panacea. But it’s a good start.

Markets Thrive on Transparency. We Need More of It.

Charlie Dreifus, Tim Hipskind, and Steven McBoyle are portfolio managers at Royce Small Cap Special Equity Fund. Dreifus and Hipskind are chartered financial analysts.

The liquidity and robustness of U.S. capital markets are due, in no small part, to the frequency and regulatory requirements of the information released by U.S. companies. We worry that less frequent disclosure of important financial information will reduce the attractiveness of those markets.

We try to approach issues like this through the lens of a late mentor, the accounting scholar and professor Abe Briloff. Longtime readers of Barron’s will know Briloff as an advocate for passage of Sarbanes-Oxley in 2002 and author of dozens of Barron’s articles on accounting and governance matters.

Briloff would say that markets abhor uncertainty, and less frequent reporting only adds more. Moving to less reporting would be a significant step in the wrong direction.

Markets live and breathe on timely information. Reducing disclosures, and thus transparency, results in less data, which then reduces investors’ ability to make decisions and price assets rationally. If regulators aim to reduce accounting fraud and insider information breaches to preserve the attractiveness of the U.S. capital markets, less transparency doesn’t help. Our markets are deep precisely because they are transparent.

Less public disclosure could also create distortions. Large investors may gain an advantage over individual and small investors who don’t have comparable access to management, nor the resources to hire independent research firms. And for small and mid-cap companies, less transparency usually means higher funding costs and less analyst coverage.

As to the contention that less frequent reporting would foster more long-term planning by companies, evidence points otherwise.

The United Kingdom switched to semiannual reporting in 2014. The European Union did the same in 2013. Yet many U.K. and EU companies voluntarily continue to report quarterly data in an informal manner, for the express purpose of maintaining transparency. And a 2017 study by the Chartered Financial Analyst Institute found that in Britain, the shift to semiannual reporting didn’t lead to longer-term thinking by corporate managers. The study’s lead, Robert Pozen, former president of Fidelity and lecturer at Massachusetts Institute of Technology, pointed out that because of less frequent reporting, stock market volatility went up, likely as a result of reaction to information that had been delayed in reporting.

If the goal is to change time horizons, change what is rewarded. Require boards to oversee guidance rigorously. And, most important, prevent adjustments that are outside of the Generally Accepted Accounting Principles from entering into the incentive metrics for executives. Managements will undoubtedly shift their focus away from quarter-based outcomes if they are compensated on long-term value creation.

If less interim information is required, it strikes us that there will just be a greater need for, and scrutiny by, investors of 8-K filings. That form requires public companies to report events that may be important to shareholders within four business days.

Reporting demands won’t necessarily lessen—they’ll just shift elsewhere.

The Wrong Move for the AI Era

Darren Robbins is a founding partner of Robbins Geller Rudman & Dowd LLP.

The debate over whether public companies should report financial results quarterly or semiannually is hardly new. Back in 2019, the SEC explored shifting to semiannual reporting, but ultimately maintained quarterly reporting. For good reason, as investors prefer more transparency and information, not less. And in the AI era, in which innovation and risk are changing market dynamics at lightning speed, reducing transparency would be a step backward at exactly the wrong time.

Front-runners change spots quickly in the AI race. Last week’s winner is this week’s laggard. Just this month, OpenAI’s GPT 5.1 was received with a polite golf clap while Alphabet’s Gemini 3 provoked oohs and aahs with its surprisingly strong performance. Six months is an eternity these days. Just look at the difference between the market on “Liberation Day” in April, when stocks were plummeting, and the first week of October, when they hit successive record highs.

Risks to investors are also accumulating more rapidly. Hype seems to be in overdrive in the AI space, and some AI players are engaged in circular transactions. Investors need to know if there are viable, profitable businesses beneath all these transactions and glitzy product launches, especially as valuations continue to rise.

Public reporting is where the hype meets cold, hard reality. Introducing a six-month lag would only deepen investor suspicion and hinder the capital markets at a critical time. And if prior misleading statements are revealed in a semiannual reporting regime, we can expect to see sharper market reactions and steeper investor losses.

Investors clearly prefer more-frequent reporting. In a CFA Institute survey of institutional investors, 84% of respondents said that they rely on quarterly releases. More than 90% said such releases add valuable insight beyond press-release earnings. Another study found quarterly data improved analysts’ ability to forecast long-term earnings trends, increasing model accuracy by roughly 25%.

The best argument against quarterly reporting is that it forces managers to focus on short-term targets rather than long-term growth. In 30 years of prosecuting securities fraud for institutional investors, I can tell you that the curse of short-termism is real. What is certain, however, is that the cause isn’t frequent disclosure or excessive transparency. Rather, it is likely a combination of perverse incentives and suboptimal policies.

By all measures, a shift to semiannual reporting is a solution in search of a problem. In the AI era, where it is harder than ever to tell a winner from a fugazi, sunlight every quarter is pretty darn essential.

Slower Reporting Can Empower Bad Actors

Christine M. Fox is a partner at Labaton Keller Sucharow LLP. David Saldamando is an associate at the firm. Fox is also co-chair of the Securities Litigation Committee of the New York City Bar Association.

For investors who commit trillions of dollars to U.S. public companies, nothing is more essential than access to accurate, timely financial information.

A similar rule change to make reporting less frequent was raised by former SEC Chair Jay Clayton in 2019. It was dropped after institutional investors and others raised concerns over the proposed rule change. The Council for Institutional Investors, a group of investors in the public markets, wrote in a letter to the SEC at the time that quarterly reporting “underpins the quality and efficiency of our capital markets” by “allowing investors to assess concrete progress against strategic goals.”

We agree. The SEC should listen to the concerns of investors who risk trillions of dollars by investing in the U.S. stock market.

The U.S. markets operate successfully because investors of all sizes and sophistication have equal access to company-specific information.  If companies remain silent for up to six months between earnings reports, smaller shareholders without the financial resources to fill in information gaps through their own investigation could be disadvantaged, and the strength of the U.S. markets could be negatively impacted.

Studies show that less frequent reporting encourages investors to seek out and potentially react to alternative, and sometimes less reliable, sources of financial information. That can then lead to market speculation.  If reporting is reduced, when companies do eventually release earnings information they have been holding onto for months, stock prices are likely to be volatile and trading volumes could be more concentrated around such releases, potentially driving up overall market volatility.

What is also clear is that less frequent financial reporting could create a longer runway for bad actors within publicly traded companies. Fraudulent acts and statements would remain concealed for longer periods of time. And with less frequent bars on trading on material nonpublic information, bad actors could more freely trade on that information for longer periods of time, at the expense of shareholders.  A quarterly cadence of reporting encourages companies to timely disclose material information and discourages self-dealing.

Proponents of semi-annual reporting raise two main points in support of their argument—short-termism and costs. Both are too speculative, and neither seems to outweigh the potential downsides to investors of less frequent reporting.

The views expressed here are those of the authors and do not reflect the views of any organizations or committees the authors are associated with.

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