What Are the Best Practices When Conducting an Earnings Call?

There’s more to an earnings call than just a conference call of company executives discussing the company’s quarterly goals and how the business is faring so far. It is also a means of letting your shareholders know how their investments are growing with you and a way to attract or keep the support of investors. You also want to relay how well the business is strategically working its way around roadblocks or challenges.

Earnings calls are conducted to publicly deliver the company’s results conveniently to geographically-dispersed shareholders, potential investors, and analysts, all of which can participate in the Q&A session after the presentation. An earnings call recording is then uploaded and distributed online to make it accessible for all relevant individuals. Apart from earnings call recordings, many companies often get earnings calls transcribed and then publish transcripts of their earnings calls. This way, people can choose whether to read the whole document, skim quickly for specific information, or search using specific keywords only. 

Like all types of conference calls, preparation is of key importance for an earnings call to be successful. Nothing beats a well-organized preparation for earnings calls. 

To get a better understanding of how you can go about preparing for an earnings call, take a look at these best practices:

• Establish a timeline of deliverables

Create and send out invites ahead of time. Map out critical items such as the preparing earnings press release, requisite SEC filings, data, tables, and statistics, the earnings call script, and other needed supporting documents. 

• Coordinate with your conference call service provider

This includes making sure that you conduct tech checks days before the call. Don’t forget to reach out to your moderator for any specific instructions as well. At the same time, be prepared with possible technology glitches and have a back-up just in case something happens.

• List down expected questions

Assemble a document with a list of expected questions. Stay updated with current topics and issues that investors, shareholders, and analysts care about so you can be more prepared to address such concerns. You can also research what your competitors are discussing and reporting so you’d have an idea about the kind of questions thrown at them as well. 

• Start your earnings call preparation period with thorough results analysis

Analyze and compare trends from the previous quarter to the recent one. Evaluate results and identify notable key points such as revenues, milestones, EPS, and other relevant metrics. When you discuss with the company, remember to be straightforward and avoid sugarcoating the results. You should keep in mind these questions when discussing with the team:

1. Considering all internal or external challenges, was this a good quarter?
2. Did we fall short of internal expectations?
3. Was this a solid quarter? 
4. Are we confident about moving forward for the rest of the year?
5. In what areas could we have done better? 

• Don’t be afraid to experiment with the Q&A portion

Apart from the press release, you can also distribute discussion points or specific information that you wish to go through during the call. This way, you can encourage more people to send in their questions. Should you receive a massive amount of questions, you can also create an online voting portal wherein people can pick out which questions they think are the most relevant. Seek assistance from your conference call moderator or operator for a more organized Q&A portion.  

• Strike a balance between being transparent and too conservative

Clarify where growth opportunities are by also discussing full operating income statements and balance-sheet items. Try to be as transparent as you can without giving away any strategic plans your competitors have not heard of yet. If you’re unable to disclose more detailed information, investors may feel skeptical about the performance of the company. 

• Monitor your shared earnings call recording online & manage its results

It’s important to measure how the earnings call went internally by going through how prepared the management team was, and externally in terms of how well the call was received. After the call and once you’ve uploaded and distributed the earnings call recording and the earnings call transcript, your next action plan should focus on monitoring how these are being picked up online. You can create Boolean strings to specifically track keywords. However, you should also make sure that you have a reliable earnings call transcription service with efficient features like flexible turnaround time and customizable transcripts. 

After monitoring how well received your earnings call online was, you can better identify what worked and what wasn’t as effective. You can also try to identify which news outlet generated the most engagement. From there, you can tweak your strategic plans moving forward accordingly.