Key Points
- The U.S. Securities and Exchange Commission proposed allowing companies to report earnings semiannually instead of quarterly.
- Officials say the change could reduce compliance burdens and support more long-term business planning.
- Companies would still disclose major events through Form 8-K filings and other communication channels.
The U.S. Securities and Exchange Commission has formalized a proposal that would allow publicly-traded companies to disclose their financial earnings twice a year instead of on a quarterly basis.
The proposal would permit companies to satisfy interim reporting obligations under the Securities Exchange Act of 1934 by filing semiannual reports on a new Form 10-S, rather than quarterly reports on Form 10-Q. The SEC is also proposing related changes to Regulation S-X to accommodate the shift, according to a statement from Commissioner Mark T. Uyeda.
Uyeda framed the proposal as an effort to give companies and investors more flexibility in determining the cadence of corporate disclosures, arguing that the current quarterly reporting framework was developed for a different market environment. Quarterly reporting, he noted, traces its roots to the post-World War II era, when public companies were more likely to be manufacturers and institutional investors and asset managers played different roles in the market.
“A framework built nearly 75 years ago…should not be presumed to serve all companies optimally in 2026,” Uyeda said in the statement.
The proposal does not eliminate quarterly reporting outright. Instead, it would create an alternative path for companies that choose to report on a semiannual basis. Uyeda said companies and investors would be able to determine whether a particular reporting schedule fits a company’s business model, with investors signaling approval or dissatisfaction through buying and selling decisions.
Uyeda pointed to differences between mature companies and early-stage companies as one rationale for the change. A large pharmaceutical company with a trillion-dollar market capitalization may produce meaningful quarterly financial developments, he said, while a pre-revenue biotech company focused on a single drug candidate may be better evaluated through scientific milestones and regulatory progress.
The commissioner also emphasized that companies would still be able to communicate important developments through other channels, including press releases, blog posts and social media. Public companies would also remain subject to Form 8-K requirements for certain material events, including material definitive agreements, de-listing notices, unregistered sales of equity securities and Regulation FD disclosures.
Supporters of reduced reporting frequency have long argued that mandatory quarterly disclosures can encourage short-term thinking by executives and investors. Uyeda cited former SEC Chairman Arthur Levitt, who warned in 1998 that Wall Street should focus less on quarterly earnings and more on the long-term health of companies.
Uyeda said reducing reporting burdens could allow management teams to spend less time on regulatory obligations that may not provide commensurate benefits to investors.
During an interview with Bloomberg Radio on Tuesday, former U.S. Treasury Secretary Steve Mnuchin said a switch to semiannual reporting is a benefit for stable, publicly-traded companies who are executing long-term financial strategies.
“If you’re a growth company, you have every reason to want to show the growth every quarter; if you’re a company that’s in turnaround, and things are improving, you’re going to want to show it,” Mnuchin said. “On the other hand, there are plenty of companies where they are focused on a long-term transition, and I think giving them an option is a good thing.”
Still, the proposal from the SEC is expected to draw scrutiny from investors, analysts and governance advocates who rely on quarterly financial disclosures to monitor public companies. Uyeda said he looked forward to comments on whether the approach would reduce compliance costs, promote long-term thinking and increase flexibility for companies.
