By: Philip MacKellar
Published: Sept 15, 2025
How often should publicly listed companies publish earnings? This debate is bubbling up again.
Earlier this month, the Long-Term Stock Exchange, a small and relatively new exchange based in California, made headlines by asking the Securities and Exchange Commission to end mandatory quarterly earnings in favour of semi-annual releases. Then this week, President Trump called for an end to quarterly reporting.
If the SEC agrees to review LTSE’s request, it will result in a public consultation process and may ultimately lead to the abolition of quarterly reporting for all U.S. exchanges, including the New York Stock Exchange and Nasdaq.
So, what are the pros and cons? Should Canadian regulators follow suit? Or trailblaze and implement reforms even if the U.S. does not?
As for pros, the most frequently cited reason to move to a semi-annual schedule is the reduction in the administrative cost and labour burden for companies. Over time, this could save businesses millions of dollars, especially larger organizations with complex structures, like conglomerates, banks and insurance companies. It would also decrease the C-suite’s focus on short-term results and beating analyst expectations.
What about shareholder benefits? As with executive teams, by moving to semi-annual earnings, investors could adopt a longer-term mindset. Ideally, such a mentality would extend to the professional analyst community.
Lowering regulatory and administrative costs may flow through to improved shareholder returns if management takes the savings and applies them to improving their business, dividends, buybacks, etc.
Stock volatility is common after an earnings release. Minimizing the number of earnings reports should cut the amount of volatility somewhat too. This could be important for investors who are skittish, or who are easily scared out of positions. New investors may benefit from semi-annually reporting as well, as it should decrease the odds that they confuse seasonal events for actual earnings trends.
As for societal benefits, in the United States, the number of publicly listed firms has dropped by almost half since 1997. The situation in Canada has been more stable, but the pace of new listings has not met GDP or population growth. Private ventures may be incentivized to list publicly instead of remain private if the earnings report burden is lowered.
A large market of publicly investable securities is important for society because it increases the sectoral diversity of the stock market. Furthermore, when enterprises remain private, they funnel the wealth they generate into the hands of founders and a handful of private investors instead of the public. In turn, this contributes to growing wealth inequities.
Given these benefits, it is little wonder many countries require semi-annual reporting. Most European Union nations, Britain, Australia, New Zealand and Switzerland all report semi-annually.
There are, of course, cons. Timely transparency will be reduced if Canada and/or the United States moves to semi-annual reporting. While companies will still be required to disclose a raft of material items from mergers and divestments to board and executive-level changes, there are many important business developments that will potentially be disclosed five to six months after the fact instead of two to three months afterward. On a related note, a delay in transparent reporting will slow the detection of issues and opportunities.
Disclosing financial results semi-annually will also mean a lot of information is dumped on the market suddenly. This may increase the odds that owners and analysts miss something important.
Semi-annual reporting may also give insiders (i.e., executives and board members) an even greater information edge over the investing public. This could lead to higher instances of misfeasance or taking advantage of distorted stock prices to gobble up shares on the cheap, or to offload stock when it is overvalued.
Finally, people dislike change– including regulators. This means the odds of change are low from the outside. Moreover, moving to a semi-annual system would require adaptation by corporate executives, investors, analysts, exchanges, and regulators. There would inevitably be missteps during a transition period, which could erode market confidence, at least temporarily.
It is also important to note that neither reporting timeframe will prevent executive teams from using earnings releases to play down risks, put a positive spin on the future, and obscure performance with unconventional metrics. Such is the nature of investing.
So, should Canadian regulators follow the United States if the SEC goes for it? Or should Canada even trailblaze and adopt semi-annual reporting without the U.S.? The answer to both is probably “yes.” If the U.S. did adopt semi-annual reporting requirements, it would be important to follow suit to maintain competitive regulations.
Moreover, going it alone may generate a regulatory edge over the Americans which, in addition to benefiting from the pros mentioned above, may woo international corporations and persuade them to list in Canadian capital markets.
On the whole, shifting from quarterly to semi-annual earnings has more pros than cons and should be considered on both sides of the border.
Philip MacKellar is the general manager at Contra the Heard Investment Newsletter.