As reported in The Wall Street Journal last week [1], President Trump stated that publicly traded companies should no longer be required to report their earnings on a quarterly basis. Instead, he argued, companies should report their earnings every six months. On Truth Social, President Trump wrote, “This will save money, and allow managers to focus on properly running their companies.” In an interview on CNBC’s Squawk Box on Friday, September 19, 2025, SEC Chairman Paul S. Atkins, who has been clear about his interest in reducing regulation, said the SEC will propose a rule change following President Trump’s call to switch quarterly reports to an optional semiannual standard.
President Trump explored ending quarterly earnings reports during his first term to address “short-termism” and, in December 2018, the SEC under then Chairman Jay Clayton formally requested public comments on earnings releases and quarterly reports. The issue of quarterly reporting has been the subject of debate since 2001 when during the George W. Bush administration, former SEC Chairman Harvey Pitt proposed a new reporting framework to modernize the SEC’s disclosure system.
With Chairman Atkins’ announcement, we can expect the staff of the SEC’s Division of Corporation Finance to commence a rule writing initiative leading to a proposing release and another request for public comment.
Arguments can be made both for and against requiring quarterly reports. Critics of quarterly reporting note the attendant costs and compliance burden, especially on smaller public companies, as well as the distraction to management and incentives for management to focus on short-term results at the expense of greater long-term value creation. These factors discourage some companies from going public and may cause others to engage in sub-optimal decision-making, such as postponing important strategic and longer-term objectives. Those in favor of maintaining the status quo (a group that includes many prominent institutional investors such as pension funds and hedge funds) argue that quarterly reporting produces greater transparency, results in a lower cost of capital and serves to discipline management.
Reducing the quarterly reporting requirement to a semiannual one would arguably be most attractive to micro-cap, small-cap and pre-commercial enterprises that do not yet have significant product revenue such as young biotech companies [2]. These companies typically have raised money in the public market to fund research and development efforts, with the understanding that they might not have a commercially viable product for a number of years. The timeline for drug development, for example, averages 10 to 15 years. As a result, investors in these types of companies are not basing their investment decisions on revenues and current earnings, but rather on material developments such as completion of clinical trials, which are typically disclosed through a press release or current report on Form 8-K rather than Form 10-Q.
As discussed by Chairman Atkins, all public companies regardless of their size, ranging from smaller reporting companies and emerging growth companies to large accelerated filers, would have the flexibility to eliminate quarterly reporting if they find it unduly burdensome from a monetary and/or time perspective, such that it outweighs the benefit to shareholders and investors. For a small public company with limited staff and no expectation of near-term recurring cash-generating revenue, compliance costs involved with an independent auditor’s review of quarterly financial statements and fees associated with external accounting consultants, internal and external lawyers, in-house finance teams and public relations firms are significant as a percentage of revenue or potential profit.
In the event the SEC ultimately shifts away from the current quarterly reporting framework to optional semiannual reporting, it is anticipated that larger, more commercially advanced registrants will opt to continue reporting on a quarterly basis for a number of business reasons, including to maintain alignment with the largest institutional investors and comply with credit agreement reporting covenants [3].
Chairman Atkins also noted that “semiannual reporting is no stranger to our markets, foreign private issuers do it right now.” Likewise, under Regulation A+, interim financial periods are reported on a semiannual basis.
The U.S. IPO market has been slower than usual during the past three years, particularly for smaller companies. Modifying the financial reporting regimen to a semiannual (rather than a quarterly) basis for these companies has the potential to improve the attractiveness of new entrants to the public markets. The reduced reporting costs along with freeing up the Board and management would allow companies to focus more on growth strategy and execution of their business plans.
[1] See C. Driebusch, “The Renewed Bid to End Quarterly Earnings Reports,” September 8, 2025; N. Andrews and C. Driebusch, “Trump Calls for Ending Quarterly Earnings Reports,” September 15, 2025; J. Weil, “What Investors Get out of Quarterly Earnings,” September 16, 2025; C. Driebusch,“Why Trump’s bid to End Quarterly Earnings Is No Short Bet,” September 16, 2025.
[2] See Letters to the Editor, M. Mulyadi, “An Earnings Report Compromise for the SEC,” September 18, 2025.
[3] See J. Mackintosh, “Ditching Quarterly Earnings Is a Mistake,” September 20-21, 2025.
PartnerArmed with more than three decades of capital market experience, Spencer represents smaller publicly traded companies, and often underwriters and investment funds, in public and private securities offerings. He focuses ...