The Securities and Exchange Commission is drafting a proposal that would let public companies shift from quarterly earnings reports to twice-yearly disclosures, according to The Wall Street Journal. The move could fundamentally reshape how investors track tech giants like Apple, Microsoft, and Google while relieving administrative burdens on newly public startups. If approved, it would mark the biggest change to U.S. financial reporting requirements in decades, potentially ending the intense quarterly scrutiny that CEOs have long complained forces short-term thinking over long-term strategy.
The Securities and Exchange Commission is working on a proposal that could end the quarterly earnings ritual that's defined Wall Street for generations. According to The Wall Street Journal, regulators are exploring letting public companies move to semi-annual reporting, a shift that would have massive implications for how investors track everything from Apple iPhone sales to Microsoft cloud revenue.
The timing isn't random. For years, CEOs across the tech industry have complained that quarterly earnings cycles force them to optimize for three-month windows instead of multi-year bets. Amazon founder Jeff Bezos famously railed against short-term thinking in his annual shareholder letters, while Tesla CEO Elon Musk has openly feuded with analysts over quarterly guidance expectations.
But the pressure isn't just philosophical. Preparing quarterly 10-Q filings costs public companies an average of $1.2 million annually in compliance expenses, according to financial research firm Audit Analytics. For recently public companies still finding their footing, that's capital that could go toward R&D or hiring. The administrative burden has become one more reason startups delay IPOs or opt for private funding rounds instead.
The U.S. would be catching up to international norms if this goes through. European markets already operate on semi-annual reporting cycles, and the U.K. shifted away from mandatory quarterly reports back in 2014. Proponents argue the change hasn't hurt investor protections there, while companies gained breathing room to execute longer-term strategies without constant earnings call interruptions.
