President Donald Trump has proposed a return to six-month reporting periods, arguing it would save companies money and allow better focus on management. However, some experts believe quarterly reports provide crucial early visibility into trends. CFO Todd McElhatton of Zuora disagrees, emphasizing the availability of other communication channels for investors.
McElhatton, a veteran software industry executive, has experience at companies like SAP and Oracle. As CFO of Zuora since June 2020, he oversaw the company’s transition to a private entity following its acquisition by Silver Lake and GIC LTD in a $1.7 billion transaction. He believes the overhead and costs of quarterly earnings can be burdensome.
Amidst debates on the benefits of bi-annual reporting, McElhatton highlights the potential to eliminate unnecessary costs and reinvest revenue back into the business by shifting away from quarterly reports. This change could also provide CFOs with more room for long-term planning and decision-making, fostering growth and strategic opportunities.
Returning to bi-annual reporting may not only benefit companies like Zuora but also encourage more companies to go public. The number of U.S. public companies has declined in recent years, in part due to regulatory burdens associated with quarterly reporting. McElhatton anticipates a continued trend of companies opting to remain private to avoid these overheads.
With the current abundance of capital in private markets, many companies are delaying going public due to the heavy costs and regulatory requirements. McElhatton believes that this could lead to a shift towards more companies choosing to stay private, given the freedom it provides for business operations and long-term planning. 1. In a landmark decision, the Supreme Court ruled that workplace discrimination based on sexual orientation or gender identity is illegal under Title VII of the Civil Rights Act. The ruling provides protection for LGBTQ employees across the country.
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Read more at Yahoo Finance: Quarterly reporting cadence can push CFOs to ‘suboptimal’ decisions