Should Earnings Be Reported Semiannually Instead of Quarterly?

Quarterly earnings reports provide an essential data set for every equity investor, offering access to a steady cadence of results to help with decision-making.

They may be going away.

Now, the Long-Term Stock Exchange (LTSE) is petitioning regulators to make quarterly earnings reports optional, allowing firms to report only twice a year if they choose.¹

On the surface, the idea sounds like a major shake-up that could create dislocations and mispricing across markets. But a closer analysis reveals a more benign set of possibilities.

On the plus side, with semi-annual reporting, companies could save time and money, executives might focus more on long-term projects, and perhaps the reduced burden would encourage more firms to go public. Indeed, the proposal arrives against a backdrop of concern about the shrinking pool of U.S.-listed companies. In the late 1990s, the Wilshire 5000 index tracked more than 7,500 firms. Today, the number is closer to 3,500.

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It follows that ‘compliance costs’ are often cited as a major reason companies avoid going public. Beyond quarterly reporting, there are extensive disclosure requirements, corporate governance rules, and, since the early 2000s, the strict provisions of the Sarbanes-Oxley Act. All of this makes staying private, selling to a larger firm, or raising capital from private equity seem more attractive. That context helps explain why quarterly reporting requirements are back in the spotlight. Reducing them is framed as one way to ease the burden.

But history and evidence suggest it may not move the needle much.

The United Kingdom scrapped its quarterly reporting requirement in 2014. Europe did something similar around the same time. Yet neither saw an uptick in public listings as a result. Nor did companies suddenly embark on longer-term investment projects once freed from quarterly disclosure. In fact, most large companies in the U.K. still report results every quarter because investors expect it. Markets value transparency, and firms know that regular disclosure helps reduce uncertainty, lowers their cost of capital, and maintains investor confidence. If anything, the main beneficiaries of easing requirements are likely to be smaller firms, which can save a modest amount on audit fees and executive time. But for large, established public companies, the cost savings are a rounding error.

This gets at the heart of why moving from quarterly to semiannual reporting is unlikely to change much. Proponents argue that frequent disclosure encourages executives to focus too much on short-term results, which in turn holds back long-term investment. But the evidence doesn’t support that narrative. Big Tech firms are spending hundreds of billions of dollars on artificial intelligence projects. Energy companies continue to explore and develop long-lived oil and gas fields. Pharmaceutical firms are pouring money into drug pipelines that may not bear fruit for a decade or more. Corporate America already invests heavily for the long run, all while reporting quarterly results. If quarterly disclosure were such a huge impediment, we wouldn’t see this level of commitment to multi-year projects.

If there is a case to be made about short-term pressures, it may have less to do with reporting frequency and more to do with earnings guidance. When companies publish quarterly forecasts, they create strong incentives to meet those targets at all costs, sometimes by cutting spending or making accounting maneuvers. Eliminating guidance, rather than reports themselves, might do more to alleviate the supposed short-termism in markets.

There are also potential downsides to less frequent reporting that are often overlooked. The longer the gap between updates, the greater the opportunity for insiders to exploit information advantages, leaving everyday investors at a disadvantage. Reduced disclosure can also raise uncertainty, which tends to translate into a higher cost of capital. Investors are generally willing to pay more for a stock when they feel they have a clear picture of a company’s performance and prospects. Dialing back transparency could have the opposite effect.

Bottom Line for Investors

For investors, the bigger takeaway is that strong long-term returns don’t depend on how often companies report results. What matters more is maintaining a disciplined strategy, diversifying across sectors and asset classes, and staying invested through market cycles. Quarterly reporting has been a fixture of U.S. markets for decades, and while it carries some costs, those costs are relatively small in the grand scheme of things. Making reports semiannual instead of quarterly may sound like a major reform, but the evidence suggests it wouldn’t fundamentally change how companies invest or reverse the decline in public listings.

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¹ Wall Street Journal. September 8, 2025.

² Zacks Investment Management may amend or rescind the A Better Way Forward: Actively Managing Passive Index Funds guide offer for any reason and at Zacks Investment Management’s discretion.

³ Zacks Investment Management may amend or rescind the A Better Way Forward: Actively Managing Passive Index Funds guide offer for any reason and at Zacks Investment Management’s discretion.

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