The long-running debate over how often U.S. companies should disclose financial results was reignited yesterday after former President Donald Trump called for an end to quarterly earnings reports, suggesting that firms should instead report only twice a year.

Trump argued on Truth Social that moving to a six-month reporting schedule would save companies money and “allow managers to focus on properly running their companies.” His remarks echoed a fresh push from the Long-Term Stock Exchange (LTSE), which last week said it plans to formally petition the Securities and Exchange Commission (SEC) to eliminate the quarterly reporting mandate.

Donald Trump (Truth Social)

This isn’t the first time Trump has floated the idea. Back in 2018, he asked regulators to study semiannual reporting after speaking with corporate leaders. The effort went nowhere, but support from figures like Jamie Dimon and Warren Buffett kept the issue alive.

The Case for Semiannual Reporting

Supporters argue that quarterly reports burden public companies with unnecessary costs. Preparing, auditing, and filing reports, alongside the guidance and investor relations work accompanying them, can consume millions of dollars annually. Cutting the number of reports in half would free up capital and management attention.

Proponents also say quarterly reporting fuels “short-termism.” Companies often defer hiring, R&D, or long-term investment to avoid missing near-term earnings targets. They argue that reducing the cadence of required disclosure would give management more breathing room to focus on strategy.

Another argument is competitiveness. The number of U.S.-listed companies has fallen to about 3,700, roughly half its 1997 peak. Many large private companies, from Databricks to SpaceX, have partly avoided public markets due to regulatory costs and scrutiny tied to quarterly disclosure. Backers contend that looser requirements could encourage more IPOs and reverse the decline.

Number of U.S. Listed Companies (Blue Trust)

Finally, advocates point out that the U.S. is an outlier. In Europe and the U.K., regulators eliminated mandatory quarterly reporting years ago. Australia requires semiannual financials, with companies free to publish additional updates. Aligning with these systems, they argue, would modernize U.S. practices and ease the burden of global compliance.

The Critics’ View

Opponents warn the move could erode transparency. Quarterly reports give investors, analysts, and regulators timely insight into corporate performance. Without them, adverse developments could remain hidden for months, increasing the risk of sudden market shocks when information is finally released.

Skeptics also highlight the danger of widening information gaps. Large institutional investors might still get access to interim updates via conferences or private channels, but retail investors would have fewer touchpoints to assess companies. That could create information asymmetry and undermine confidence in public markets.

There are also concerns about volatility. With fewer data points, each reporting cycle could trigger outsized reactions as investors adjust to half a year of news all at once. Analysts argue this could make markets less efficient, not more.

What Comes Next

The SEC is expected to review LTSE’s petition and open it up for public comment. Analysts say any rule change would take months or years to materialize, requiring cost-benefit analysis and debate over balancing investor protections with corporate flexibility.

Trump’s backing gives the push political momentum, but the outcome is uncertain. Previous attempts, including his own in 2018, stalled amid pushback from investors and governance experts.

Still, with IPO activity sluggish and the population of public companies shrinking, the pressure to rethink reporting rules is mounting. Whether semiannual reporting will revive U.S. capital markets or weaken them by reducing transparency remains one of the most consequential regulatory debates in years.

 

Notes to Lit:

  • “People think earnings calls are the only time CEO’s talk about tariffs? We live in the real time Information Age, it’s not like information about performance, guidance, etc. can’t be talked about at all times. I think the 6 month model is hardly different from the quarterly model. It might make a slight impact.”
  • “Europe been doing this. And it’s fine. Companies just go to investor conferences, talk about the biz, answer questions. All posted on their websites.”
  • “If this happens, companies should voluntarily release quarterly earnings. Would immediately create significant trust.”
  • “I’ve been beating the drum on a shift towards reporting 3x/yr. Four months rather than 3 or 6 balances everything.”
  • “As a friendly IR guy, l am a big fan of quarterly sales reports (Europe material CO’s do this) followed by a half year and FY report. The quarterly earnings process is important, but often takes a village (especially at smaller CO’s)”
  • “People think earnings calls are the only time CEOs talk about tariffs? In the real-time Information Age, performance and guidance can be discussed anytime.”
  • “Well, we see plenty of big tech companies like databricks etc staying private because there’s way too much scrutiny and compliance around quarterly reporting. This might incentivize for more IPOs in my opinion”