For investor relations teams, the earnings release is typically the most important story you’ll tell each quarter.
Earnings releases are report cards, yes. When done well though, they’re also a way to put aspirations and achievement in context - and to reach a large and very engaged audience with your message.
Because earnings releases arrive as predictably as the seasons, it’s easy to see them as documents that never change. But over the last few years, they’ve grown in length - sometimes quite dramatically. What was once a three-to-five-page recitation of results now often runs 10, 12 pages and sometimes even tops 25!
While there may not be much creative latitude within these documents, earnings releases do move markets. Attention to detail can help tie a story to results.
To help improve your IR strategy, keep reading to learn the best practices for making your company’s story sing.
It’s easy for IROs and senior management to get lost in the details of the ups and downs of a given quarter. Earnings releases can’t capture all these nuances, nor are they supposed to. An earnings release is a snapshot in time with a simple set-up for how quarterly numbers submitted to the regulators came about. Pare down your story to its essence and then tell it in the clearest, most straightforward way possible.
Using bullets and sometimes bold or highlighted text can help you draw the reader’s attention to what you want noticed. Remember that most readers of your earnings release will immediately jump to the bulleted items to decipher results. Bullets and bold text should therefore appear near the top of your release and should be structured so what matters most comes first.
Too often, harried IROs dash off a headline at the last moment because the deadline is approaching, and time is up. This is a mistake. Your headline is a critical opportunity to hook your reader and tell your story in miniature. Take full advantage. The best-crafted headlines unmistakably convey a message, but they also give context to how the latest quarterly earnings fit into a larger picture.
Search engine optimization, or SEO, is a science and an art. When writing your earnings release, it’s important to remember which terms investors and other stakeholders might search as they look for this document. At the same time, be sure to tell your story as best you can, rather than using phrases that might attract attention but that aren’t particularly relevant.
When your earnings release goes public, it makes a splash. Investors will be rushing to your IR website to view the release. While these documents are hot for a few minutes each quarter, they do have a less immediate legacy.
Wall Street analysts, institutional investors, and even the “mayors” of social media who command large retail followings may later analyze the past several years of your earnings releases, looking for important trends. A clear and concise earnings release should make it easy for investors and other stakeholders to get the information they need about a company, quarter by quarter and year by year.
Presenting details consistently – even down to the way that items are bulleted and tables formatted - makes achieving this goal easier.
Journalists increasingly rely upon automated news systems, designed to seek specific line items that then generate headlines. With AI on the rise, bots may also be perusing your earnings releases. These high-tech “consumers” make presenting information in clearly labeled financial tables a better idea than ever. To call attention to an important financial figure, bad or good, place that figure in a financial table that appears at the beginning of the earnings release.
As a rule of thumb, earnings releases that go public at market open should be ideally submitted to your formatting and filing service the prior evening. That said, preparation times vary according to page count. The longer the release, the more lead time an outside service will generally require. Whenever possible, companies should send finalized tables to their formatting and filing service as soon as possible. Adding commentary later is rarely a problem, and so it makes sense to let your provider start the time-consuming formatting process early.
Make sure that GAAP measures in earnings release headlines come before non-GAAP measures, according to Goodwin. What’s more, when presenting non-GAAP numbers, make sure you briefly explain why these numbers matter and what (if anything) has been excluded.
Including key performance indicators is appreciated but remember to explain how these KPIs have been calculated and why they matter. Whenever possible, also discuss how management uses a particular KPI in monitoring performance.
Tempting as it may be to give ChatGPT a crack at writing your earnings release, it’s best to resist the urge. Remember that these waters are still uncharted. Inputting material information into a publicly available AI system could mean that this information is used to train the system and is somehow seen or revealed ahead of your announcement - with unpredictable consequences.
Unlike with ChatGPT, the GlobeNewswire AI press release generator keeps all prompts and content within the secure, commercial environment of the Azure Cloud and none of the content is used to train the AI engine.
Sometimes companies submit earnings releases to their third-party providers as images. The problem? These images do not convey the underlying data that formatting providers need to construct accurate tables. The moral of the story? Make sure you know the requirements for submitting data far in advance of your deadline.
It’s not unusual for a company to submit its earnings release to its formatting and filing service only to realize that a number is missing or needs to be revised. Don’t panic. Experienced formatting services are ready for last-minute changes.
In the adrenaline rush of finishing an earnings release, mistakes can go undetected. One place where typos hide is in a company’s ticker symbol. Be sure to doublecheck these symbols carefully. Asking your formatting service for a mock-up before the earnings release hits the newswires is a smart strategy for avoiding embarrassing mistakes.
Some newswire providers (such as GlobeNewswire by Notified) offer analytic services, allowing your company to gauge the impact of an earnings release after distribution. Knowing how many people viewed your earnings release—and shared it over social media—can help you create even more engaging releases going forward.
We hope these tips help you when it comes to preparing your next earnings release!
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