The Securities and Exchange Commission is preparing a proposal that would let U.S. public companies report earnings twice a year instead of quarterly, according to reporting by the Wall Street Journal. The move, if advanced, would mark the most significant shift in American periodic reporting in decades and could reshape how companies communicate with markets, manage guidance, and weigh the costs of being public.
What the SEC Is Considering for Earnings Reports
Today, domestic issuers file three Form 10-Qs and an annual Form 10-K. A semiannual regime would likely replace the 10-Q cadence with a half-year report, while preserving the 10-K. Material developments would still need prompt disclosure under Form 8-K and Regulation Fair Disclosure would continue to govern selective communications. Foreign private issuers already operate with a semiannual baseline in many jurisdictions, furnishing interim information on Form 6-K—an important practical precedent.
Any change would arrive through the standard rulemaking process: a proposed rule, a public comment period drawing input from investors, issuers, exchanges, and academics, and a Commission vote. The Journal reports the agency has begun sounding out exchanges on mechanics and market impacts, suggesting work is beyond the idea stage but still some distance from implementation.
The Push to Reduce Short-Termism in Markets
Supporters argue quarterly reporting feeds a short-term focus and imposes heavy recurring costs. In a widely cited study by McKinsey and FCLTGlobal, 87% of surveyed executives said they feel pressured to deliver results within two years or less, and 55% admitted they would potentially sacrifice value-creating projects to hit near-term targets. Fewer mandated reporting dates, they contend, could ease the fixation on “this quarter’s penny” and free time and resources for strategy, R&D, and customers.
Former President Donald Trump asked the SEC to study semiannual reporting in 2018, and former SEC Commissioner Paul Atkins has long championed the idea. Company advocates, including some members of the Business Roundtable and small-cap advisory groups, also say a lighter cadence might coax more firms to list, especially given that the number of U.S.-listed companies remains well below late-1990s peaks.
Investor Protection and Market Quality Questions
Investor groups will test the proposal against a simple standard: does market transparency suffer? The Council of Institutional Investors and the CFA Institute have previously cautioned that fewer mandated updates can elevate information asymmetries, widen spreads, and raise the cost of capital—especially for smaller issuers with thin analyst coverage. In practice, many U.S. investors and lenders build models around quarterly data; stretching intervals could challenge risk monitoring unless companies maintain robust interim disclosures via 8-Ks and investor days.
There is also the earnings guidance puzzle. Even if formal filings become semiannual, markets may still expect quarterly outlooks, operating metrics, or trading updates. If guidance persists on a three-month rhythm, some of the intended workload relief could evaporate, while the legal and communications risks remain.
Lessons from Europe on Semiannual Reporting
The European Union scrapped mandatory quarterly reporting in an update to its Transparency Directive, and the U.K. followed by removing the requirement from its rulebook. The experience is nuanced. Many large-cap companies kept to a quarterly cadence through voluntary trading updates because investors and indices demanded it. Others, notably mid-caps, shifted to semiannual filings with occasional interim KPIs to balance transparency and workload. Regulators in these markets have not flagged systemic harm to market quality, but studies have shown mixed effects by sector and size.
For U.S. markets, the takeaway is less about eliminating updates and more about flexibility. If a rule change comes, boards and audit committees will decide whether to keep quarterly communications, adopt hybrid approaches, or rely primarily on semiannual filings supplemented by event-driven 8-Ks.
Operational and Compliance Implications for Issuers
On the company side, semiannual filing could reduce the cadence of auditor review of interim statements, compress Sarbanes-Oxley control testing around two major closes instead of three, and free finance teams from a near-constant reporting cycle. That time could shift to forecasting quality, narrative clarity, and non-GAAP metric discipline—areas that often draw SEC comment letters.
On the investor side, fewer guaranteed checkpoints may elevate the value of alternative data, channel checks, and buy-side research. It could also increase the market impact of unscheduled 8-Ks, heightening volatility around material updates. Sell-side models may migrate toward half-year anchors with intra-period estimates driven by management commentary, credit card panel data, and supply chain reads.
What to Watch Next in the SEC’s Semiannual Plan
The core questions likely to dominate the comment docket: Will semiannual reporting genuinely curb short-termism or just shift it to informal updates? How will smaller issuers and first-time public companies be affected versus mega-caps with deep coverage? And what safeguards—such as standardized interim KPIs, enhanced Reg FD guidance, or disclosure triggers—might preserve transparency between filings?
The SEC’s proposal, if issued, will invite a wide range of data-driven feedback. Expect exchanges, major index providers, and long-horizon investors to play outsized roles in shaping whether semiannual reporting becomes a new baseline—or a flexible option that coexists with the American tradition of quarterly earnings.
