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Learn About SEC Form 10-Q

TL;DR

  • What it is: Quarterly report filed 40-45 days after each quarter end (except Q4 which is covered by the 10-K).
  • Why it matters: Your quarterly pulse check on company performance with more detail than earnings releases.
  • Key difference: Unaudited but comprehensive — shows GAAP numbers vs. the adjusted metrics in earnings calls.
  • Investor edge: 10-Qs often reveal trends and issues that management downplays on earnings calls.

What Is Form 10-Q?

The 10-Q is the quarterly report card for public companies. Filed three times per year (Q4 is covered by the annual 10-K), it provides unaudited financial statements and updates on the business since the last filing.

Think of it as the detailed version of the earnings release. While earnings calls focus on adjusted numbers and positive spin, the 10-Q must present GAAP financials and disclose material changes — good or bad.

⚠️ Important Note:

Companies file 10-Qs for Q1, Q2, and Q3 only. Q4 results are included in the annual 10-K, which is why you'll see three 10-Qs and one 10-K per year.

10-Q vs. 10-K: Key Differences

Understanding when to use each report:

Aspect10-Q (Quarterly)10-K (Annual)
FrequencyQuarterly (3 times/year)Annual (once/year)
Audit StatusUnauditedAudited
Filing Deadline40-45 days after quarter end60-90 days after year end
Length40-80 pages typically100-300 pages typically
Detail LevelCondensed financialsComplete financials
Risk FactorsUpdates only if material changesFull risk factor discussion
Business DescriptionUsually omittedComprehensive overview

10-Q Structure

The 10-Q has two main parts:

Part I: Financial Information

Financial Statements: Unaudited income statement, balance sheet, cash flows
MD&A: Management's quarterly performance discussion
Quantitative/Qualitative Disclosures: Market risk updates (usually brief)
Controls and Procedures: Any changes to internal controls

Part II: Other Information

Legal Proceedings: Updates on lawsuits and regulatory matters
Risk Factors: Only if material changes from 10-K
Share Transactions: Buybacks and insider sales
Material Changes: Anything else investors should know

What to Look For in Every 10-Q

Smart investors scan these areas first:

Revenue Trends

  • • Quarter-over-quarter growth rates
  • • Year-over-year comparisons
  • • Seasonal patterns
  • • Geographic/segment performance

Margin Analysis

  • • Gross margin changes
  • • Operating leverage
  • • Cost inflation impacts
  • • Pricing power indicators

Balance Sheet Changes

  • • Cash burn rate
  • • Inventory build-up
  • • Accounts receivable aging
  • • Debt levels and covenants

Forward Indicators

  • • Backlog/deferred revenue
  • • Customer concentration shifts
  • • Guidance updates
  • • Management tone changes

Earnings Release vs. 10-Q

Why you need both:

AspectEarnings Release10-Q Filing
TimingSame day or weeks before 10-QWithin 40-45 days of quarter end
FormatPress release + callSEC filing
NumbersOften non-GAAP/adjustedGAAP required
DetailHighlights onlyComplete quarterly data
Legal WeightLess liabilityFull legal disclosure

Key Insight: Companies often announce "record earnings" but the 10-Q might reveal declining cash flow, rising debt, or aggressive revenue recognition. Always read both.

Quarter-Specific Considerations

Q1 (Jan-Mar for calendar year companies)

• Often weakest quarter (post-holiday slowdown)

• New year guidance updates

• Tax rate changes visible

Q2 (Apr-Jun)

• Mid-year checkpoint

• Summer seasonality impacts

• First half vs. second half momentum

Q3 (Jul-Sep)

• Back-to-school/pre-holiday buildup

• Full-year visibility improves

• Year-end guidance refinement

Q4 (Oct-Dec)

• No separate 10-Q (see 10-K instead)

• Holiday season for retail

• Year-end adjustments and "kitchen sink" charges

Pro Tips for Reading 10-Qs

Read Notes First

Financial statement notes often contain the most important updates - new customers, contract wins, accounting changes

Compare Sequential Quarters

Q2 vs Q1 tells you momentum; Q2 this year vs Q2 last year shows growth

Track Subsequent Events

Note disclosures about events after quarter-end but before filing - often material

Watch Share Count

Dilution from stock comp or offerings shows up here before anywhere else

Monitor Working Capital

Changes in days sales outstanding (DSO) or inventory turns signal business health

Red Flags in 10-Qs

Warning Signs That Often Precede Problems:

  • ⚠️Declining gross margins with no explanation
  • ⚠️Rising days sales outstanding (DSO) — customers paying slower
  • ⚠️Inventory buildup faster than sales growth
  • ⚠️Increased customer concentration — single customer >10% of revenue
  • ⚠️Changes in revenue recognition or accounting policies
  • ⚠️Missing estimates but maintaining guidance (suggests Q4 miracle needed)

Investor Takeaways

  • •10-Qs provide the real numbers — GAAP financials vs. adjusted earnings metrics
  • •Read them sequentially — Q1 → Q2 → Q3 shows momentum or deterioration
  • •Focus on cash flow statements — earnings can be manipulated, cash is harder to fake
  • •Compare the MD&A tone quarter-to-quarter — optimism fading is an early warning
  • •Don't skip the subsequent events note — material post-quarter developments hide here