How to Set Up an informative Earnings Conference Call for investors?
Earnings Conference Call aren’t like your regular conference call. They require more preparation as they target external stakeholders: institutional and private investors, financial analysts… Follow these few steps to organise an earnings conference call that will leave investors and financial analysts well-informed and satisfied.
The purpose of an earnings conference call is to unpack details of a public company’s already released financial statements (quarterly or annual). The investment community wants to be able to hear the CEO and CFO discuss information pertaining to the operational and financial results. Due to typically large amounts of interested parties, a remote meeting is the best tool to utilise. The panellists will also be expected to discuss predictions for future performance. The participants usually comprise buy and sell-side analysts, institutional and individual investors as well as any other interested parties. An earnings conference call is not a requirement for public companies; you only need to file a 10-K or 10-Q with the SEC. However, according to NIRI’s Earnings Call Practices Survey, 97% of respondents stated that they held quarterly earnings audio conferences or webinars.
The Role of Your IRO
The call will need to be pre-planned and a date selected for just after the release of the results. The facilitator for this call is traditionally the Investment Relations Officer (IRO) of the company who will outline the format of the session and introduce the participants. It also falls under their purview to remind the investor community that they will hear many future-looking statements that are predictions and that there is no 100% certainty that they will come to pass (also known as a boilerplate safe harbour statement). The CEO and CFO (and possibly other panellists) will start with their prepared statements and presentations. The CEO will lead the address. In the second half, the IRO will moderate the Q+A section of the call.
The Ideal Length of an Earnings Conference Call
An earnings conference call should be scheduled for an hour with the first half prepared statements running no longer than 30 minutes. In the Q&A, the IRO will hear a question from a participant and then choose the panellist who is best suited to give a concise answer. These web conference calls offer the investors a unique opportunity to find out valuable information that they would not have picked up from the results posting alone.
The investor community will join the call to be able to hear qualitative business factors that cannot be gleaned from the 10K or 10Q results. They will come prepared to ask probing questions in the Q&A session.
Once you decide on a date, you will send out both a press release and emails to make sure that the investor community will have adequate notice to make time available to join the call. There are statistically proven, better times to host a meeting. Check out our blog on the best time to host a meeting!
Checklist for Choosing Third Party Vendors
Next, you will have to engage a third party conference call services provider. You want to be sure that they offer the latest features to make your earnings conference call seamless. Features on your checklist when shopping for a suitable vendor should include:
- Being able to set up the relevant phone lines and manage the incoming callers.
- Providing an audio recording and transcript of the call after the conclusion of the session. This recording will be posted on your website under the IRO section for those unable to make the call in real time.
- Offering scalable solutions. An excellent package might include up to 100 interactive video participants for panel discussions with 100 – 10,000 view-only attendees. Do not hesitate to share this webinar to Facebook or YouTube.
- One-click HD screen sharing during your web conference where you can see the panellists and the presentation at the same time thanks to dual screen support.
Your Favourite Features
When choosing the ideal conference call service vendor, you should investigate if they have features like host controls to mute or un-mute panellists. Polling and Q&A dialogue box with live (or text) answers, registration and post-web conference reporting, closed captioning, integration with CRM and marketing automation systems are also incredible features that can enhance an earnings conference call.
You should periodically call some of the participants after the session to get feedback on how the earnings web conference was managed and if the format was useful.
A typical earnings conference call requires an intensive amount of preparation. The IRO will work on the process, setting up logistics for the web conference event. They will have to do rehearsals with the management team who will be conducting the call as well as preparing their statements and Q&A reply scripts. The IRO will also need to make the PowerPoint slide presentation to include all of the speakers support materials. This completed PowerPoint must be given to the conference call service vendor ahead of time so that the web conference runs smoothly.
Some tips for successfully conducting the web conference:
- Remind the audience that predictions discussed should not be taken for granted. Everything discussed in the call won’t happen for certain.
- Don’t let the prepared statements be too long. Leave more time for Q&A.
- Don’t recite long lists of numbers that already appear on the earnings release.
- Ensure that the legal and financial teams have gone through the prepared statements to sign off on their accuracy. They must also comply with regulatory requirements.
- Don’t ever read directly from the MD&A, instead offer the highlights along with market stats, data updates, industry trends and other key drivers.
- Review what questions were asked of your competitors so you can prepare answers to similar questions that will probably arise.
- Set up a podcast or audio archive of the conference call.
- Engage your social media team to synchronise their relevant postings to coincide with the earnings conference call.
- Definitely screen callers. Use the operator assisted feature that your vendor should provide. Participants will call in using a six-digit code. There will be a personalised welcome message, and the visitor will have to provide certain pieces of information to validate their registration. Operators can talk with the attendee to make sure they are on the pre-approved list and then dial them into the conference.
If you are looking for a third party vendor with scalable, high definition screen sharing solutions for your earnings conference call, you might be interested in our Large Event solutions for Webinars or Event Calls.
Our wide array of features will elevate your event and provide a slick, streamlined process for your investor community.