The SEC's Shift to Semi-Annual Reporting: A Guide to the End of Quarterly Earnings

For more than half a century, the rhythm of American capitalism has been dictated by a 90-day stopwatch. Every three months, publicly traded companies release their quarterly earnings, triggering a frenzy of analyst upgrades, stock swings, and executive anxiety. But that relentless cycle may soon become optional. In May 2026, the Securities and Exchange Commission (SEC) advanced a landmark proposal that would allow domestic companies to drop their quarterly reports in favor of a semiannual schedule.[1]

The mechanics of the shift center on a new document: Form 10-S. Under the current regime, companies file three quarterly reports (Form 10-Q) and one annual report (Form 10-K). The new proposal would let companies check a box on their annual filing to opt into a six-month cadence, filing just one Form 10-S and one Form 10-K per year. The new form would require the same level of narrative and financial disclosure as a 10-Q, but cover a longer time horizon.[1]

The driving philosophy behind the proposal is the eradication of "short-termism." SEC Chairman Paul Atkins, backed by President Donald Trump, argues that the intense pressure to meet or beat 90-day Wall Street estimates forces corporate executives to make myopic decisions. Proponents claim that to hit quarterly targets, companies often slash research and development, delay capital expenditures, or engage in aggressive share buybacks, sacrificing long-term financial health for a temporary stock bump.[1][3]

The United States is actually an outlier in its rigid adherence to the 90-day cycle. The European Union and the United Kingdom already operate on a semiannual reporting standard. In those markets, companies provide full financial statements twice a year, often supplementing them with lighter, voluntary trading updates in the interim. The SEC's proposal aims to align U.S. capital markets with these global norms, theoretically giving executives the breathing room to execute multi-year strategic visions.[3][5]

Beyond strategic flexibility, the SEC points to tangible cost savings. The agency's economic analysis estimates that eliminating two quarterly reports could save an average public company roughly $198,000 per year in compliance, auditing, and legal fees. While that figure is a rounding error for mega-cap tech giants, it represents a meaningful reduction in the regulatory burden for smaller issuers who often struggle with the overhead of being a public company.[3]

However, the empirical evidence linking quarterly reporting to short-termism is fiercely debated. Analysts at the Cato Institute point out that U.S. corporate investment and research spending have grown massively since the SEC mandated quarterly reporting in 1970. Furthermore, a widely cited Goldman Sachs study analyzing the UK's shift to semiannual reporting found that the change in frequency had virtually no impact on company valuations or long-term investment behavior.[3]

Investor advocates and transparency watchdogs are raising alarms about the potential downsides of going dark for six months. They warn that less frequent reporting could exacerbate information asymmetry, giving corporate insiders a longer window to trade on material non-public information before the broader market sees the financials. If a company's sales collapse in month four, retail investors might not find out until month six, leading to sudden, violent stock corrections when the Form 10-S is finally published.[2][5]

Legal experts also caution that semiannual reporting could inadvertently increase a company's liability. Under Section 10(b) of the Securities Exchange Act, companies can be sued for omitting material facts. If a business opts for six-month reporting but experiences a massive disruption mid-cycle, executives will face agonizing decisions about whether to issue an emergency update or wait for the scheduled filing. The longer the gap between reports, the higher the risk that investors will claim they were misled by silence.[4]

Even if the SEC finalizes the rule, the biggest hurdle to adoption won't be regulatory—it will be contractual. The plumbing of the financial system is hardwired for 90-day updates. Credit agreements, bond indentures, and loan covenants routinely require corporate borrowers to deliver financial statements on a quarterly basis. To switch to a semiannual schedule, companies would have to renegotiate these financing documents with their lenders, a process that could be both expensive and highly restrictive.[4]

Market expectations present another massive barrier. As capital markets analysts note, regulation sets the floor, but investors dictate the norm. Wall Street hates a vacuum. If a company stops filing 10-Qs, institutional investors and analysts will likely demand voluntary earnings releases or frequent Form 8-K updates to fill the void. Companies that refuse to provide interim data may be penalized with an "information discount," where investors demand a higher yield or assign a lower valuation due to the perceived opacity.

For retail investors, the transition could require a fundamental shift in strategy. Without the reliable drumbeat of "earnings season," investors will need to rely more heavily on macroeconomic indicators, sector-wide trends, and alternative data to gauge a company's health. The focus will likely shift toward monitoring ad-hoc Form 8-K filings, which companies use to disclose material events like executive departures, major acquisitions, or sudden bankruptcies.[2]

The SEC is currently collecting public feedback on the proposal, with the comment period slated to close on July 6, 2026. Traders are evenly split on whether the agency can finalize the rule by early 2027. If adopted, the shift to Form 10-S won't instantly end quarterly earnings, but it will transform the 90-day sprint from a strict federal mandate into a strategic choice, fundamentally rewriting the rules of corporate disclosure for the next generation.[1][2]