The 10-Q Rarely Breaks Earnings News. So Why Keep It?

Based on research by K. Ramesh (Rice Business), Donal Byard (Baruch College, CUNY), Edward Li (Baruch College, CUNY) and Min Shen (George Mason University)

Key takeaways:

• The SEC has proposed letting public companies file a semiannual Form 10-S instead of three quarterly 10-Qs, the first major change to the reporting calendar since 1970.
• For most companies, the quarterly filing isn’t where earnings news breaks: across 240,000 filings, the market barely reacted to most 10-Qs except when they coincided with the release of earnings.
• The 10-Q still provides the standardized, reviewed record that keeps companies comparable and accountable, which is why the research favors optional reporting over eliminating it.
   

For more than half a century, the quarterly report has been a fixture of U.S. capital markets. Since 1970, the Securities and Exchange Commission (SEC) has required public companies to file a Form 10-Q three times a year (as well as an annual Form 10-K), and generations of investors have treated the ritual as a load-bearing wall of market stability.

This May, the SEC proposed loosening that requirement. Under a rule change championed by President Donald Trump and fast-tracked by SEC Chairman Paul Atkins, companies could elect to file a new semiannual Form 10-S in lieu of their standard quarterly reports on Form 10-Q. Supporters of the change argue quarterly reporting feeds a corrosive short-termism, while critics warn it lets companies bury bad news and chips away at accountability.

K. Ramesh, the Herbert S. Autrey Professor of Accounting at Rice Business, took a different approach to the debate. Drawing on decades of research, Ramesh and academic colleagues from Baruch College and George Mason wrote a comment letter to the SEC that complicates the binary of for and against. Although 10-Qs are no longer the primary vehicle for delivering breaking news to investors, a complete retreat from standardized reporting could weaken the information infrastructure that the market depends on.

Picked up by the Harvard Law School Forum on Corporate Governance blog, Ramesh’s SEC comment letter supports the proposal’s aim to give firms the option of reporting either quarterly or semiannually.

“Given that firms are heterogeneous across multiple dimensions, such as size, industry, age, complexity, and investor base, the optimal reporting frequency is likely to vary across firms,” the authors write. “Firm management is also well positioned to evaluate the costs and benefits of reporting more or less frequently.”

Several findings from the authors’ research speak directly to the proposal:

• The 10-Q rarely breaks the news. In a study of more than 240,000 SEC filings, the market barely moved for most 10-Qs. The earnings news typically arrived earlier, through a press release, and was already priced in.
• Analysts key on the release, not the filing. Their forecast revisions cluster around a company’s earnings announcement, not its formal SEC filing date.
• Voluntary disclosures are tailored, and telling. Companies disclose what their investors value, ranging from EBITDA to balance-sheet detail depending on the business. But the authors caution that firms that intervene most in their own earnings disclose the least.
• Standardized filings feed the whole system. Newswires and data aggregators pull value from periodic filings and redistribute it. The 10-Q draws a muted reaction on filing day but remains a critical input for the intermediaries investors rely on.

Taken together, the findings weaken the argument for treating the 10-Q as either indispensable or obsolete.

“Given that firms are heterogeneous across multiple dimensions, such as size, industry, age, complexity, and investor base, the optimal reporting frequency is likely to vary across firms,” the authors write.

If the filing rarely breaks earnings news, why keep mandating it three times a year? That question drives the SEC’s proposal. But the scholars do not see it as grounds for eliminating the 10-Q, which still delivers a standardized, legally disciplined record that every company files the same way. It’s the baseline that under securities regulations makes firms comparable, filings searchable, and executives accountable. Killing the 10-Q entirely would weaken the system’s infrastructure.

The authors therefore favor the SEC’s middle ground: letting firms choose the reporting cadence that best fits their investors — while preserving the safeguards that keep voluntary disclosure honest, chiefly Regulation Fair Disclosure, or Reg FD, which bars companies from sharing material information with favored insiders before disclosing to the public.

Ramesh points to research by his Rice Business colleagues Alan Crane, Kevin Crotty and Tarik Umar to sharpen the distinction between disseminating information and processing it:

“Research from my Rice Business colleagues shows that making information public does not eliminate differences in how quickly and effectively investors process it,” Ramesh says. 

“Hedge funds that acquire public filings — and especially those that do so promptly — subsequently earn higher abnormal returns. For the debate about reporting frequency, the lesson is that disclosure rules can broaden and equalize access, but they cannot eliminate the incentives or advantages associated with faster information processing and price discovery.”

The comment letter also argues that many companies will keep issuing quarterly updates no matter what the SEC allows, simply because their investors demand it. A firm whose shareholders rely on quarterly numbers to price the stock will provide them or else pay a higher cost of capital. The letter writers note that market demand for interim reporting predates the SEC mandate. The NYSE was pushing listed companies to report as far back as the 1920s.

The letter does identify a practical problem with semiannual reporting. If a company reports its first six months in a 10-S and its full-year results in a 10-K, investors would have to calculate second-half performance themselves by subtracting the six-month figures from the annual totals. Because that calculation invites errors, the authors recommend requiring semiannual filers to report second-half results separately in their annual reports.

 “There is a delicate balance to preserve,” the authors write, “allowing for firm-level flexibility, while maintaining across-firm comparability.” Optional semiannual reporting can strike that balance, they argue, but only if the SEC preserves the shared rules and infrastructure that make corporate disclosures useful, fair and trustworthy.

Written by Scott Pett

“Comment Letter on the SEC’s Proposal to Replace Quarterly Reporting with Semiannual Reporting,” posted on Harvard Law School Forum on Corporate Governance blog (2026).

Crane, Crotty & Umar. “Hedge Funds and Public Information Acquisition,” Management Science (2023).