What Is SEC Form 10-Q?

What Is SEC Form 10-Q?

Let me explain SEC Form 10-Q directly: it's a comprehensive unaudited report of financial performance that all public companies must submit quarterly to the Securities and Exchange Commission (SEC). You should know it contrasts with SEC Form 10-K, which is filed annually and is audited.

In the 10-Q, companies disclose relevant financial information about their business operations. You need to file a 10-Q for each of the first three quarters of the company's fiscal year.

Key Takeaways

SEC Form 10-Q is your go-to comprehensive quarterly report of financial performance that public companies submit to the SEC. It contains financial statements, management discussion and analysis, disclosures, and internal controls for the previous quarter.

Companies must file their 10-Qs 40 or 45 days after the end of their quarters, depending on the size of their public float. As a snapshot of a company's financial position, Form 10-Q gives you information to compare to previous periods and evaluate the outlook for the stock's performance.

Remember, Form 10-Q is not an audited statement, unlike the annual Form 10-K that companies also file.

Important Note

While 10-K reports are due annually and must include audited financial statements, 10-Q reports are due quarterly and are generally unaudited financial statements.

Understanding SEC Form 10-Q

Federal securities laws require publicly traded companies to provide certain information to shareholders and the general public. These disclosures happen periodically or as specific events occur.

A company uses Form 10-Q—one of many required by the SEC—at the end of each quarter to release unaudited financial statements and overview the company’s financial situation.

The exact filing dates depend on the organization’s fiscal year, but you must file three 10-Q reports each year. For the final quarter, no 10-Q is required: instead, the company files Form 10-K, an annual report. This report, unlike the 10-Q, is audited and tends to contain more details.

Accessing Form 10-Q

A company's Form 10-Q is public information. If you want to examine a company's quarterly report, go to the SEC's EDGAR database. You can search by company name, ticker symbol, or SEC Central Index Key (CIK). Many companies also post their 10-Qs on their websites, in an 'Investor Relations' section.

SEC Form 10-Q Filing Deadlines

The deadline for filing a 10-Q varies and depends on the number of outstanding shares a company has. A company filing a 10-Q is classified in one of three categories, determined by its public float—that is, the portion of outstanding stock in the hands of the public, not held by officers, owners, or the government. Essentially, the float consists of all of a company’s freely traded common stock shares.

The largest companies are classified as large accelerated filers, with at least $700 million in public float. They have 40 days after the close of the quarter to file a 10-Q.

Accelerated filers are companies with at least $75 million in public float but less than $700 million. They also have 40 days to file the 10-Q (they get a bit more time for the 10-K).

Finally, non-accelerated filers are companies with less than $75 million of public float. These companies have 45 days from the end of the quarter to file a 10-Q.

Failure to Meet the Form 10-Q Filing Deadline

When a company fails to file a 10-Q by the deadline, it must make a non-timely (NT) filing of SEC Form NT 10-Q. An NT filing must explain why the deadline wasn't met and includes a request for an additional five days to file.

As long as a company has a reasonable explanation, the SEC allows late filings within a specified time period. Common reasons include mergers and acquisitions (M&A), corporate litigation, ongoing review by corporate auditors, or lingering effects from bankruptcy.

A 10-Q filing is considered timely if filed within this extension period. Failure to comply with this extended deadline results in consequences, including potential loss of SEC registration, removal from stock exchanges, and legal ramifications.

Components of SEC Form 10-Q

There are two parts to a 10-Q filing. The first part contains relevant financial information covering the period, including condensed financial statements, management discussion, analysis of the financial condition of the entity, disclosures regarding market risk, and internal controls.

The second part contains all other pertinent information, including legal proceedings, unregistered sales of equity securities, the use of proceeds from the sale of unregistered sales of equity securities, and defaults upon senior securities. The company discloses any other information—and includes exhibits—in this section.

Historical Note

Form 10-Q, and the requirement for filing it, was established by the Securities and Exchange Act of 1934. The aim was to promote transparency in public companies' operations by providing investors with the financial position of companies on an ongoing basis.

Importance of SEC Form 10-Q

The 10-Q provides a window into the financial health of a company. You can use the form to get a sense of its quarterly earnings and other elements of its operations and compare them to previous quarters. Thus, it is a dependable performance-tracking tool.

Some areas of interest to investors that are commonly visible in the 10-Q include changes to working capital and/or accounts receivables, factors affecting a company's inventory, share buybacks, and even any legal risks that a company faces.

You can compare a close competitor's 10-Q to that of a company in which you are invested, or considering whether to invest, to see how its performance stacks up. This will give you an idea of whether it's a strong choice, where its weaknesses are, and how it could improve.

Other Important SEC Filings

The 10-Q is one of many reports that public companies must file with the SEC. Other important and mandated filings include Form 10-K, which must be filed once per year and includes the final quarter of the company's performance (replacing a fourth-quarter 10-Q). The 10-K summarizes the year, often contains more detailed information than an annual report, and must be filed within 90 days of the end of a company's fiscal year. It generally includes a summary of the company's operations, management's financial outlook, financial statements, and any legal or administrative issues involving the company.

Form 8-K is filed if there are any changes or developments to a business that didn't make the 10-Q or 10-K reports. The 8-K is an unscheduled document and may contain information such as press releases. If a company disposes of or acquires assets, has announcements of executive hiring or departures, or goes into receivership, this information is filed with an 8-K.

The annual report is filed every year and contains a wealth of company news including general information about the company, a letter to shareholders from the CEO, financial statements, and an auditors report. This report is submitted a few months after the end of a company's fiscal year. You can get the report through a company's website or investor relations team, and also from the SEC.

Frequently Asked Questions

Are public companies required to file Form 10-Q? Yes, all U.S. public companies issuing common shares of stock that trade on exchanges must file Form 10-Q. The filing date varies according to the number of shares, expressed in terms of dollar worth, that they have outstanding.

Who signs Form 10-Q? According to the SEC, at least one complete copy of the report filed with the Commission and one such copy filed with each exchange must be manually signed on the registrant’s behalf by a duly authorized officer of the registrant and by the principal financial or chief accounting officer of the registrant. More information is available in the instructions for Form 10-Q.

Must review reports accompany financial statements in a 10-Q? 10-Qs generally are not audited or accompanied by accountants' reports. SEC regulations prohibit companies from making materially false or misleading statements or omitting material information to make disclosures not misleading. The SEC staff reviews 10-Qs and may provide comments to a company where disclosures appear inconsistent with requirements or deficient in explanation or clarity.

The Bottom Line

SEC Form 10-Q is a report filed by public companies and sent to the SEC after the close of each of the first three quarters of every year. The final quarter is covered by SEC Form 10-K, an annual report.

Form 10-Q can be a valuable research tool for you as an investor because it contains a substantial amount of financial data about a company's quarterly performance, as well as information regarding business operations, management discussions, pertinent market risks, and disclosures.