The Revived Debate to End Quarterly Reporting: Pros, Cons, and Likely Winners/Losses

The call to end quarterly earnings reports has gained momentum as more investors, regulators, and analysts recognize the potential impact on market efficiency, small investors, and reporting companies. The discussion centers around whether maintaining quarterly reporting is beneficial for actual transparency or whether it leads companies to engage in short-termism and distractions from long-term growth. As of September 2025, the debate remains contentious and complex.

The Case for Ending Quarterly Reporting

Proponents of eliminating mandatory quarterly reporting argue that it may drive companies to focus less on short-term financial performance and more on sustainable, long-term growth strategies. Recent surveys indicate that 70% of CFOs believe quarterly reporting pressures lead to suboptimal decision-making, with 60% acknowledging that their companies sometimes manipulate results to meet quarterly forecasts.

Companies like Procter & Gamble and Unilever have previously expressed a willingness to shift away from this model, believing that it would free them from the constraints imposed by quarterly reporting. The push from large institutional investors, who increasingly champion long-term stewardship, signals a growing sentiment that there is greater value to be created when management can plan and execute freely.

Impact on Small Investors

The potential end of quarterly reporting could disproportionately affect small investors, who often lack the resources to thoroughly analyze a company’s long-term potential without regular updates. Currently, small investors rely on quarterly earnings reports to gauge company performance and market trends.

While some argue that a reduction in reporting frequency could lessen market volatility, critics warn that it may lead to increased information asymmetry, disadvantaging retail investors compared to institutional players who can afford deeper research capabilities. The reality is, without timely updates, small investors risk making decisions based on outdated information, which may exacerbate market inefficiencies.

Analysts and Market Mechanics

Equity analysts play a crucial role in interpreting and forecasting company performance, primarily relying on quarterly data to inform their recommendations. According to a survey by CFA Institute in 2024, 75% of analysts indicated that quarterly reports are an essential part of their investment analysis.

If quarterly reporting were abolished, analysts would likely need to shift their focus toward more qualitative assessments and long-term indicators. While this could lead to more sophisticated analyses, it may also create a knowledge gap as analysts adapt to the new norms, prolonging the transition period during which market efficiency could be hindered.

Regulatory Hurdles and Potential Outcomes

From a regulatory perspective, the push to abolish quarterly reporting would require significant changes to existing financial regulations. The SEC has maintained that the current framework instills investor confidence and promotes timely information dissemination. However, changes are being considered, particularly following statements from SEC Chair Gary Gensler, who noted that “investor protection is our primary mission, and any potential changes to reporting should be evaluated carefully.”

As regulatory bodies dissect the feasibility of ending quarterly reporting, several outcomes may emerge. One possibility is an extended timeframe for reporting, such as semi-annual reporting decisions that would strike a middle ground, although this has its own set of implications. Another potential outcome is the introduction of alternative reporting methods focusing on certain key performance indicators that would provide ongoing insights without resulting in exhaustive reporting.

The Likely Winners and Losers

If the movement to end quarterly reporting gains traction, the landscape could dramatically change for various stakeholders. Large institutional investors, who often advocate for longer-term strategies, are likely to benefit significantly, as their investment horizon typically allows them to weather periods of market volatility better than small investors.

On the other hand, small investors may find themselves at a disadvantage, struggling for access to timely information that enables them to make informed decisions. The disparity in resources and information access could widen the existing gap between institutional and retail investors.

Moreover, companies with strong long-term growth narratives may emerge as clear winners, attracting capital from investors more focused on sustainability and future potential than on quarterly returns. However, established companies reliant on predictable quarterly earnings may face challenges in garnering investor interest if they transition to longer reporting cycles, potentially impacting their stock prices in the short term.

Ultimately, while ending quarterly reporting may bolster corporate accountability and long-term planning, the reality is that it also presents risks, especially concerning the information asymmetry and varying impacts on different classes of investors. As the discussion evolves, it will require careful consideration from all market participants and regulators to ensure that investors are protected while encouraging sustainable growth strategies.