Quality over quantity: The case for semi-annual reporting

In North America and other jurisdictions globally, publicly listed companies are required to report their results every 90 days. Frequently, however, the question has come up whether it is the best use of resources in today’s environment. Would investors be better served by companies focused on driving value over the long term?

The conversation resurfaced this past September, when President Trump suggested that companies should report their financials only twice a year. The U.S. Securities and Exchange Commission (SEC) responded by announcing that it would prioritize the President’s request. Recently, the head of the Toronto Stock Exchange said he expects semi-annual reporting to be available for some Canadian companies within the next 12 to 24 months.

This is not a new concept—semi-annual reporting is the norm in Europe, the UK, Australia, Singapore and Hong Kong. It has been under consideration by the Canadian Securities Administrators (CSA) for several years, with the organization issuing a request for comment in 2017.

Quarterly reporting no longer fits the times

For the Canadian market, it may be time for a change. Quarterly reports are from the days when companies printed and mailed reports, and for investors, these were among the few ways they were informed about a company’s progress. Today, information travels instantly, and companies operate in an environment where they must report material events as soon as they occur. If there is a failed drug trial, disappointing drilling results or a liquidity crisis, securities laws compel immediate disclosure.

In a quarterly earnings environment, management is forced to deliver fulsome reports that communicate their short-term financial progress, account for the alignment of actual results with published analyst estimates and provide commentary in conference calls and meetings that describe the results in detail. The result is often a “pass/fail” test on company performance. The 90-day cadence is a distraction from time better spent building the company's longer-term success for investors and other stakeholders. At its extreme, management is managing its market listing rather than the business.

The pressure to deliver quarterly results that meet market expectations can lead to the abuse of the system. Nortel is a famous example where the executives were accused of manipulating reserves to improve quarterly financial results. Biovail, another Canadian issuer, initially claimed that a truck accident was the reason for a poor quarter, but later had to backtrack and admit that the accident was not material to its financial results. While fewer reports won’t stop bad actors, reducing the pressure can lower the incentive to cut corners.

Shifting to a semi-annual reporting requirement, supported by strict continuous disclosure rules, would strike a better balance. Management would have more time to focus on delivering long-term value than on short-term reporting. Investors should have access to more substantive financial information, complemented by ongoing material disclosures – quality over quantity.

But what about retail investors?

A key consideration is that retail investors are the most significantly impacted by the absence of Q1 and Q3 reports. These are individuals who often make their own stock-picking decisions and are the strongest supporters of venture issuers. These are the companies listed on the TSX Venture Exchange and the Canadian Securities Exchange, which will be the first to report semi-annually. Without access to management or analyst research, these investors rely on quarterly reports to identify emerging risks, such as increasing cash burn or slowing revenue growth. A six-month gap for news will not be sufficient to keep them engaged.

A key strategy is to align with companies that have semi-annual reporting in place and to continue communicating with investors outside of compliance-driven filings. These typically include voluntary financial and operational updates. These don’t need to be full IFRS financials, but can highlight sales and production volumes, or other key metrics that retail investors use to track progress. This also serves a very practical purpose: if you achieved solid results in the second half of 2025, you don’t want to wait until mid-year 2026 to discuss them.

Moving toward semi-annual reporting, when paired with timely and transparent disclosures, presents a strong opportunity to refocus companies on long-term value creation rather than the constant demands of short-term performance. This change could help reduce the pressure on management teams to meet quarterly expectations and allow them to dedicate more energy to strategic growth.

However, it is important to recognize that not all investors access information in the same way. Retail investors, in particular, often rely heavily on quarterly updates to stay informed and make decisions. To make this transition work for everyone, companies will need to go beyond regulatory filings and adopt more proactive communication practices. This might include regular business updates, accessible performance highlights, or other forms of engagement that keep all shareholders informed.

Ultimately, this isn’t just about regulation. It’s about evolving how companies engage with the markets and redefining what it means to keep investors truly informed.

Wondering how your organization can navigate the shift to semi-annual reporting while maintaining investor trust? Let’s talk. Reach out to explore tailored communication strategies that align with evolving disclosure practices.