I’ve practiced investor relations for over two decades. I’ve worked for companies with a market capitalization as large as $250 billion and as small as my present employer, Cambium Networks, with a market capitalization of $250 million.
What’s the one thing each type of company has in common, regardless of market cap? The process of preparing for earnings.
Over the years, I’ve learned some great best practices for the earnings process that I’d like to share with you in this short blog. These 10 tips will position you for success!
How to Prepare for Your Next Earnings:
1. Document your earnings process in writing so the next person can do as great a job as you. I like to book my earnings call/webcast information with my service providers early, but not post the date to the wires or my IR website until two weeks prior to my call/webcast.
Calendar the date online with key participants and don’t provide the executive dial-in information to anyone except the closest inner circle. Triple check whatever dates, dial-ins or links will be displayed before publishing externally in the notice to investors. Be consistent on the timing of posting your notification of your earnings date since the Street will try to game the system.
Some larger companies go so far to post the next earnings date on their current earnings release or earnings call.
2. Once your date is published externally, get earnings callback meetings on the calendar with the sell-side and buy-side within a few days. Leave five minutes between each sell-side and buy-side callback and use a bridge number if possible.
I prefer to work off an Excel spreadsheet to track and monitor who has responded for earnings callbacks and to keep track of any changes to the schedule. Make sure if to give a copy to management and include valuable items such as shares or dollars owned.
Also, remember to run a briefing document from your database for management for the buyside callback participants.
3. Work on your high-level messaging with your public relations or corporate communications team well in advance of the call. I also attend the quarter business reviews with management. I like to prepare a one-page PowerPoint slide with key messages that the CFO and CEO come to an agreement on well in advance of preparation of the earnings call/webcast.
4. When preparing the earnings press release and script, seek out opinions and feedback from senior heads of business units and have them sign-off on their portion of the business referenced in the script. Make sure corporate marketing/PR have a look at the highlights and your messaging is consistent with your corporate brand and strategy and confirm the details for accuracy for product names.
5. The day before the call/webcast, confirm your operator’s name and pronunciation and send a call flow outline to the operator. Make sure the flow is understandable to all parties and make sure he/she can understand the pronunciation of your executive team’s names.
6. Always test the phone system in advance of the call. Have a back-up plan in case power is lost, a dial tone drops, a cable is disconnected accidentally, or you spill a glass or bottle of water on the table or script. Leave nothing to chance!
7. Make sure to send the proper PDFs (e.g. earnings release, CFO commentary, prepared remarks, or presentation slides) to the investor relations website team in advance of going live for posting and put them on a timer. A word of advice for North American IROs: Always use Eastern Time for everything as it eliminates confusion with the web team and for the wires.
8. Don’t forget to send the NYSE or NASDAQ regulatory divisions the press release or other material information at least 15 minutes ahead of time. Also, make sure to check their websites after the materials are posted for accuracy.
9. Some management teams like to pre-record their calls to avoid the stress of doing things live. I think it’s a great idea. I’ve always worked for companies that have the outlook changing until the last minute, so I’ve not been able to pre-record. Remember to read scripts out loud a few times before recording or going live. You are likely to find a few typos and other mistakes that were not apparent in the written format.
10. If you are using slides during your call/webcast, have the person who’s in charge of controlling them sit live in the room with you. This will ensure that they’re pushed during the correct moments and within the context of the call/webcast, without any lag.
These are some, but not all the processes, to think about in your earnings preparation. Good luck on your next call and remember there is no substitute for good preparation!