Three New Ways to Approach Your Earnings Call
We’re often asked by clients and others for ideas on how to liven up their earnings calls. And that’s understandable. Nobody loves earnings calls. They’re tedious, repetitive, and (if things in your business are going as they should) they offer few surprises.
So the desire to make your earnings calls more compelling is certainly reasonable. Still, we always recommend that companies think carefully before they change any aspect of their usual call process just for the sake of change.
After all, the purpose of the call is definitely not to entertain your listeners or yourself. Your mission is simply to inform investors and analysts about the progress your company is making on key financial metrics and other important milestones.
The most important goals are to communicate that information clearly, transparently, and credibly. Beyond that, you want to be as brief as you can be in your prepared remarks as to leave as much time as possible for questions.
Therefore any changes you make to your earnings call should be made with those imperatives in mind; don’t change anything that harms your ability to meet those objectives.
But there are some things you can try, while staying within those parameters, to breathe a little life into your earnings calls – or at least make them less painful for your presenters. Here are three ideas:
- Prerecord your prepared remarks. There’s no reason you can’t prerecord the portion of your call that’s mostly scripted (or should be) anyway. Doing so might help you provide a more polished delivery while taking some of the stress out of the call itself. And it offers management the chance to focus more of their time preparing for the Q&A portion of the call. On the downside, you’ll have to have the script ready to record about two days before the call, which compresses your time to prepare it.
- Streamline the financials. Remember that you’ll be issuing an earnings press release in conjunction with your call. There’s no reason that your CFO needs to read every detail of the financial results when those details are written in black and white in the release. Your audience is perfectly capable of reading it for themselves. Instead, just focus your presentation on the key highlights you want to listeners to take note of.
- Bring on guest experts. It isn’t always necessary to restrict your list of presenters to the exact same individuals for every call. You can, occasionally, showcase the depth of your management team by allowing senior leaders to do a deep dive on an important topic. Of course, it’s vital that you cover topics that are of interest to investors or have recently become issues of interest for your analysts.
Never forget that an earnings call is nothing more or less than a quarterly update on your company’s progress. Although you need to prepare for it carefully (because you have more to lose from a call gone wrong than you have to gain from a flawless call), there’s nothing gained by imagining it as more complicated than it is. Just pick the three or four things that happened in the business over the past 90 days that you most want to highlight to the Street, and be prepared to discuss them.
None of the three ideas above will alter the nature of your earnings calls dramatically – nor should you want that. But each could lighten your call up some, or at least reduce the preparation load a little.
Do you have your own ideas but want to run them past an expert? Are you concerned your calls are falling short but not sure what to do about it? Let’s talk.
Asher Dewhurst is a Managing Director on ICR Westwicke's healthcare services and healthcare technology teams. He has extensive experience in equity research with a focus on all aspects of healthcare services. He has a BS in finance from the Warrington College of Business at the University of Florida.
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