What is a 10-Q?
A 10-Q is a quarterly financial report that publicly traded companies must file with the U.S. Securities and Exchange Commission (SEC). It provides unaudited financial statements and a summary of operations for the company’s most recent quarter.
Key takeaway: The 10-Q keeps investors informed between annual 10-K filings, offering insights into short-term performance, liquidity, and market trends.
Definition
The 10-Q is a standardized SEC filing that presents a company’s quarterly financial performance. It includes condensed financial statements, management commentary, and disclosures about market risk and internal controls. Unlike the 10-K, it is unaudited but remains a critical document for investors assessing ongoing company performance.
Why it matters: Investors and analysts rely on the 10-Q to identify emerging trends, assess profitability, and detect warning signs before the year-end audit.
Key Features
- Filed three times per fiscal year (first three quarters).
- Contains unaudited financial statements and comparative data.
- Includes a Management Discussion and Analysis (MD&A) section explaining quarterly results.
- Reports significant changes in capital, risk, and operations.
- Filed through the SEC’s EDGAR system.
How It Works
- Preparation: The company compiles quarterly results and management updates.
- Filing: Submitted electronically to the SEC within 40–45 days after the quarter ends.
- Disclosure: Published publicly on the EDGAR database and investor relations websites.
- Review: Investors and analysts review it to monitor business momentum and sector performance.
- Comparison: Compared against previous quarters and peer companies.
Types
- Form 10-Q: Standard filing for most publicly traded companies.
- Form 10-QSB: Former version for small business issuers (now merged into 10-Q).
Comparison Table
| Feature or Aspect | 10-Q | 10-K |
|---|---|---|
| Filing Frequency | Quarterly | Annually |
| Audit Requirement | Unaudited | Audited |
| Level of Detail | Summary | Comprehensive |
| Purpose | Provide interim updates | Provide full-year performance |
| Filing Deadline | 40–45 days after quarter-end | 60–90 days after year-end |
Examples
- Microsoft uses its 10-Q to outline revenue growth across its business segments and report quarterly earnings.
- Netflix discloses subscriber changes, content spending, and cash flow details.
- Alphabet (Google) reports digital ad revenues, operating expenses, and capital investments.
Benefits and Challenges
Benefits
- Keeps investors updated on company progress throughout the year.
- Highlights short-term trends and operational shifts.
- Encourages market transparency and accountability.
- Enables faster reaction to financial changes.
Challenges
- Unaudited data may include minor revisions later.
- Limited narrative compared to 10-K filings.
- Frequent filings can cause short-term focus among investors.
Related Concepts
- 10-K: Annual audited financial report.
- 8-K: Filed to disclose major company events between quarterly or annual filings.
- Earnings Report: Simplified version of the 10-Q for press and investors.
FAQ
What is the difference between a 10-Q and a 10-K?
A 10-Q is filed quarterly and contains unaudited information, while a 10-K is an annual, audited report with deeper analysis.
Why do companies file 10-Qs?
To keep shareholders and regulators informed of financial and operational performance between annual filings.
Are 10-Qs audited?
No, they are unaudited, though companies often use internal review processes to ensure accuracy.
Where can I access 10-Q filings?
All filings are available on the SEC’s EDGAR database (sec.gov).
Sources and Further Reading
- SEC EDGAR: https://www.sec.gov/edgar.shtml
- Investopedia: https://www.investopedia.com/terms/1/10-q.asp
- Microsoft Investor Relations
Quick Reference
- EDGAR: Electronic Data Gathering, Analysis, and Retrieval system used by the SEC.
- MD&A: Management Discussion and Analysis section summarizing performance.
- SEC: U.S. government agency overseeing securities regulation.
