Pre-recording prepared remarks and use of video
A quarter of companies pre-record their prepared remarks in earnings calls. Although not widely practiced in any region, North American companies are most likely to pre-record their remarks and Asian companies are the least likely to.
Similarly, there is no great enthusiasm for companies of any size to record the prepared remarks before the earnings call. Large-cap companies see 27 percent pre-record their remarks while mega-cap companies are the least likely to pre-record remarks, with just 17 percent doing so.
We asked IROs why they decided to record or not record their prepared remarks for earnings calls. Those who pre-record their remarks often mention how it reduces stress on the day. Some note that this is the management’s preference while others state that it creates smoother logistics.
The main reasons why the majority do not pre-record their remarks are time and logistics constraints, as well as the fact that the messaging may not have been drafted in time to pre-record. Often it is the preference of executives to be up to the minute and spontaneous on the day. Many respondents say it is simply that they have always done it live and some IROs actually express the desire for remarks to be pre-recorded.
A clear majority of investors do not want prepared remarks to be pre-recorded, with more than seven in 10 saying it is important for them that these statements are given live, including more than a third who say this is very important. Just 19 percent think it’s of no real importance whether these remarks are live or not.
Views differ among North American investors compared with European and Asian investors. A minority of North American investors view live remarks as particularly important in earnings calls. More than a third think it is not particularly important to have live remarks, with 28 percent saying it is not at all important.
Live remarks are more of a concern for the sell side, with more than three quarters viewing live comments as important and four in 10 considering them to be very important. This compares with less than two thirds of the buy side registering the importance of live remarks, and fewer than three in 10 viewing them as very important.
Three in 10 companies use video for their earnings calls. More than half of Asian companies use video, as do 47 percent of Europeans – but in North America using video for earnings calls is practically unheard of.
Just over a third of mid-cap companies use video for their earnings calls, while among mega-caps just 14 percent do so. This is less than half the average for all cap sizes.
More than half of investors say they consider having video with earnings calls important, with 21 percent describing it as very important. Slightly more than a quarter consider it to be of no real importance, with 18 percent indifferent to the issue.
Just over a third of North American investors think it is important to have video with prepared remarks, with more than four in 10 considering it to be of no real importance. This is in marked contrast to Asia, where seven in 10 investors view video as important, compared with just 13 percent who consider it not very or at all important.
