We sat down with John Nunziati, IR partner at Q4, to talk about the trends we see emerging related to quarterly earnings releases
The investor relations profession can be a bit inconsistent. As a function, we always strive for perfection: error-free press releases, every slide formatted precisely, every number verified and every investor interaction flawless.
This often leads to sticking with processes, vendors and practices that are safe and reliable. IR teams should also be aware of emerging trends and proven best practices, which forces us to look at making changes. Unfortunately, changes can come with risk-taking.
The earnings preparation, announcement and follow-up process is a great example of this inconsistency. If no one ever took the risk of changing, we’d still be sharing dial-in details for webcasts – wait, many IR teams still do this! There are new practices emerging that are worth noting as we believe they are likely to become the standard, most widely adopted best practice. Here are a few examples we’ve seen.
John Nunziati, IR partner at Q4
Expected earnings release dates Many companies choose to announce their earnings release date using a consistent and predictable interval before the date of the actual release. This is thought to minimize investor speculation about results based on the timing of the sharing of the release date.
We are seeing companies adopt a new approach that provides more visibility while acknowledging the quarterly cyclicality of a release date, particularly when there is a long company history of consistent timing. These companies are putting their ‘expected’ or ‘planned’ dates out on their website, showing a schedule that maintains a rolling four quarters. Then they confirm the actual date, relying on the same consistent and predictable interval they’ve always used.
We’ve actually seen one very progressive IRO who includes the projected upcoming event dates (earnings and investor events such as sell-side conferences) in her email signature. New approaches to enhance results publication Press releases have always been the official reference document for results, comments and financials. They’re backed up with SEC filings. Companies leading the innovation efforts in this area have added capabilities to their websites such as historical results viewers, downloadable spreadsheets and – of course – quarterly earnings decks.
The latest trends we see include new presentations of results in ‘earnings infographics’, with data formats tailored to analysts’ needs. We have also seen companies adopt the use of QR codes in their press releases to allow rapid online access to specific financial statements or supporting materials available on their website.
Earnings call format Covid put pressure on IR teams to adopt capabilities for delivering their earnings calls with management participants in various locations. Some companies also used it as an opportunity to implement pre-recorded prepared remarks. They found that the deadline to record helped stop last-minute script editing and shifted management’s attention to more thorough Q&A preparation, both resulting in a less stressful call day.
Some IR professionals have also convinced management teams that concurrent with the time of the public release, they can make the prepared remarks and/or the actual recording available on the website. This allows them to focus the actual earnings call on Q&A only, resulting in a more thorough discussion of the results.
Covid further raised people's comfort level with video to the point that some management teams were willing to implement it for their prepared remarks. A few brave IR leaders have even engaged their participants to ‘look management in the eyes’ by joining with their cameras on for live Q&A through a video platform.
Someone has to be the trailblazer, the pioneer willing to try something no one else has done. The good news for investor relations professionals is that everything mentioned above has been done.
The de-risking has occurred so consider how you might improve your outreach to investors by implementing some of the techniques outlined here. We’re available to help with any of them – just reach out to your Q4 contact and we’ll set up some time to discuss them with you in more detail.
