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5 Benefits of Proper Earnings Call Preparation

Posted on September 7th, 2022. Posted by

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While quarterly earnings calls may happen routinely, they should be anything but routine. Earnings calls are your opportunity to tell your story to the world — and they’re one of the few times each year you have the chance to capture the undivided attention of your analysts and investors. So, it’s essential to make these calls count.

By spending adequate time planning and practicing for each call — we recommend starting the process about five weeks ahead of the call date — you can ensure that you are prepared for a successful call. Follow these five tips to ensure you and your team are prepared to deliver your message effectively and to an engaged audience:

Gauge Expectations Ahead of Time

Allotting enough time and effort to prepare for your call will allow you to better gauge — and deliver on — analyst and investor expectations. You may even consider a pre-quarterly call to understand exactly what they expect from you and your company. Then, you can incorporate that information into your preparation and rehearsal regimen.

Be Ready to Face Even the Toughest Questions

No matter how successful your company is, you will likely face a disappointing quarter or two somewhere along the way. And that is only made worse when you walk into your quarterly earnings call without a reasonable explanation of why you missed your numbers and a plan for how you will meet them going forward. Analysts and investors will inevitably ask tough questions about your financial performance, and if you aren’t thoroughly prepared, you risk losing trust and credibility. Create a script for potential questions investors may ask so you can deliver even bad news with confidence and optimism.

Deliver the Most Relevant Information

You might expect that you should focus on describing the past quarter’s financial results during your call. But in reality, your earnings press release contains all of that information in detail. With that knowledge, you can instead plan to deliver just key highlights of the quarter, followed by an assessment of the company’s future, upcoming milestones, and anticipated growth catalysts.

Eliminate Fluff

Without adequate preparation, it’s too easy to fall into cliches, company jargon, or consultant-speak. Prepare and rehearse your remarks ahead of time. This allows you to evaluate your content and eliminate any so you can just focus just on the facts. Analysts are looking for a clear strategy, recent achievements, and milestones. Preparing properly will allow you to give them exactly that.

Time the Call Properly

In today’s busy world, analysts and investors appreciate a concise earnings call. With the right planning ahead of time, you can ensure that your call covers all of the necessary information while conveying key themes with clarity and brevity. Plus, when you’re able to get through your prepared remarks efficiently, you will leave more time for Q&A, which investors and analysts always appreciate.

With thorough preparation, you can ensure a successful call that satisfies the questions and expectations of your investors and analysts.  Get our guide, Effective Earnings Calls From Start to Finish, for details on best practices for earnings calls, a five-week preparation timeline, and how to recover from a call gone wrong.

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ICR Westwicke is the largest healthcare focused investor relations firm in the country. We provide customized investor relations programs and independent capital markets advice to small and mid-cap healthcare companies.

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