Tackling your board's next big question

Finance teams might be about to get their Aprils and Octobers back after the SEC proposed to allow semi-annual public filings. But fewer financial reports risk leaving investors in the dark. It might not mean less work, just a different kind, with sharper IR, storytelling, and tighter disclosure disciplines.

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The SEC has proposed to allow companies to move from quarterly to semi-annual reporting, and Canadian regulators plan to follow suit. The thought of eliminating two filings a year may elicit tears of relief from many CFOs. Two fewer 3 a.m. panics a year. Less pressure to ‘smooth results’. Sounds nice, huh?

But say you shift to half-yearly reports, business performance weakens, and then you have to sit on the news for five months. On one hand, you have more time to work out a solution before the bare gaze of the public markets. On the other hand, your investor relations inbox lights up with rumors of trouble, and you need to tread carefully to manage your way through MNPI (Material Non-Public Information) and Regulation Fair Disclosure. Suddenly, it leaves a vacuum for scheming Reddit speculators to put their case forward.

While there is plenty to think about, evidence from other countries that have allowed the switch to half-yearly reporting shows it is popular, particularly with small and mid-sized companies. 

The SEC move will bring the US in line with semi-annual reporting regimes in other countries, including the EU and UK, which abolished mandatory quarterly reports in 2013 and 2014, respectively. By 2016, only 40% of German companies continued to report quarterly, said IR Impact. And by 2017, over 60% of the UK’s FTSE 250 companies no longer issued four reports a year, said the Investment Association.

One obstacle to switching is that many audit committees are used to, or insist on, quarterly reviews. Michael Perica is CFO at enterprise software support provider Rimini Street, where he‘s responsible for SEC reporting and investor relations. He said most US companies will continue with a quarterly close to maintain these internal controls. 

This rigor helps firms manage longer dark periods, mitigate insider dealing risk, and respond quickly to unexpected events.

“Also, markets reward transparency. Even if reduced reporting was mandatory, most of my peers would continue with a similar quarterly cadence to maintain that visibility,” said Perica.

David Khalil is a partner and CFO at saas.group, which is considering going public in the future, so could be affected by the change. Khalil has also previously been on the boards of public companies. He said: “High-quality management teams update progress to investors frequently to earn market trust. Maintaining quarterly reports keeps their cost of capital low.

“With a semi-annual model, you end up doing fewer standardized reports and more bespoke investor relations – one-off calls, managing rumors. I would much rather have one disciplined, regulated quarterly earnings process than fragmented, ad-hoc firefighting with analysts.”

But the decision to switch will depend on the type of company. Brian Unruh is CFO at document processing provider Abbyy, a private company, but has worked in public environments and with UK firms. He said that, in the very liquid US market, large, fast-growing, institutionally-traded companies will need to keep meeting analyst and other stakeholder expectations for quarterly information, regardless of regulation.

“If those companies aren’t feeding the beast, the analysts won't pick them up or recommend their stock,” said Unruh.

But he said there will be measurable benefits to switching for companies with less dependence on constant external market validation or financing pressure. These include smaller companies and those with:

But those making the switch will still need to provide quarterly decision-grade information to fill the void, especially after material changes.

“For example, in the UK, [companies that switched to half-yearly reporting] needed to get investors comfortable with it by providing information such as interim scorecards and other documents published on their websites,” said Unruh.

Under the SEC proposal, mandatory disclosures will be the same for companies choosing to report quarterly or twice a year. Many firms won’t consider switching because they are tied to investor expectations or debt covenants that require quarterly reporting, which are unlikely to change. But SEC filers without those restrictions will review their current cadence.

The SEC estimated that companies would save an average of $198,000 per year in direct compliance costs by moving to half-yearly reporting. And a 2024 study published by Columbia Law School showed that small-cap Israeli firms making that switch cut external audit fees by 16% per year. It came with the gut punch of a 2% share drop as mentioned above, driven by investor concerns over information asymmetry and transparency.

However, 2025 analysis by Forbes suggests little difference between quarterly and semiannual reporters in the EU and the UK in terms of valuation and performance.

One reason the SEC proposed the change is to reduce short-termism. But opinions differ on whether it could achieve this.

Mark Schwartz, EY’s IPO and SPAC advisory leader, said managerial incentives and investor expectations drive most near-term decision-making, not quarterly reporting. So the impact on short-termism “may be limited”.

But Angel Lange sees it differently. She’s CFO at contract management software provider Agiloft, a private firm, but has spent much of her career in public companies. “For CFOs, anything that reduces the pressure of short-termism is worth considering. In regulated environments, I’ve seen quarterly reporting drive ‘managing to the next 90 days’ first-hand. It feels like you’re constantly in reporting mode. Semi-annual reporting could shift the mindset toward longer-term decision-making,” said Lange.

Communicate proactively with your analysts to avoid any adverse reactions, says Unruh. Demonstrate the savings from reduced quarterly reporting, and show how you can put them back into the business. Make sure they’re satisfied with your plans.

Replace the two formal reports with carefully planned updates and investor calls. The operational burden shifts from formal filing to:

“Where formal reporting is reduced, you still need strong forecasting, real-time performance visibility, and clean, reliable data. And you need more dynamic, ongoing communication with clear, consistent storytelling between disclosures," said Lange.

Once you get this communication regime sorted, the savings (and better sleep patterns) are there for you. Go get them.

Answering your board’s next big question.

Last week’s Playbook got into how to fund working capital (while avoiding the killer ‘crack debt’).

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