A 10-Q is shorter than a 10-K and it is meant to be read with one. It updates the annual report for the quarter that just ended, so the useful question is always the same: what changed since the 10-K? This guide covers the structure, the traps in the columns, and a quick order for reading one.

What a 10-Q is

US public companies file a 10-Q for each of the first three quarters of their fiscal year. There is no 10-Q for the fourth quarter. The 10-K covers the full year instead.

A 10-Q is due 40 days after the quarter ends for large accelerated and accelerated filers, and 45 days for everyone else. Many companies announce their results earlier, in an earnings release furnished on an 8-K under item 2.02, and file the 10-Q the same day or a few weeks later.

Its financial statements are not audited. The company's auditor reviews them, which is a narrower check than an audit. A figure in a 10-Q can still change in the 10-K.

The structure

Part I, Financial Information

Item 1, Financial Statements. Condensed versions of the income statement, balance sheet, cash flow statement and statement of shareholders' equity, with condensed notes.
Item 2, Management's Discussion and Analysis. Management's explanation of the quarter and the year to date.
Item 3, Quantitative and Qualitative Disclosures About Market Risk. Usually a short update, or a statement that nothing material has changed since the 10-K.
Item 4, Controls and Procedures. Management's conclusion on whether its disclosure controls work, and any change in internal control during the quarter.

Part II, Other Information

Item 1, Legal Proceedings. Developments in material lawsuits.
Item 1A, Risk Factors. Only material changes from the 10-K. Many companies write "no material changes". When they do add one, read it.
Item 2, Unregistered Sales of Equity Securities and Use of Proceeds. Includes the table of share buybacks for the quarter, month by month.
Item 3, Defaults Upon Senior Securities. Usually "none". When it is not, it matters.
Item 4, Mine Safety Disclosures.
Item 5, Other Information. Includes directors and officers who adopted or ended a Rule 10b5-1 plan during the quarter.
Item 6, Exhibits. Including the officers' certifications and any new material contracts.

Read the column headings

Most mistakes made with 10-Qs come from reading the wrong column.

The income statement has two sets of columns: the three months ended on the quarter date, and the year to date (six months in Q2, nine in Q3). Each is shown for this year and the same period last year.
The cash flow statement has only the year to date. There is no three-month cash flow column. To get the second quarter's operating cash flow on its own, you subtract the first quarter's figure from the six-month figure. Listed does this subtraction for you and shows each quarter separately; see operating cash flow.
The balance sheet compares with the last fiscal year end, not with the previous quarter. A change in cash "since December" in a September 10-Q covers nine months.

Compare with the same quarter a year earlier

Most businesses are seasonal. Retailers sell more in the holiday quarter; some software companies close more deals in their fourth quarter; travel companies peak in summer. Comparing a quarter with the one just before it mostly measures the season. Compare it with the same quarter a year earlier instead, which is what the 10-Q's own columns do and what Listed's year-over-year growth uses.

A quick order for reading one

If you have already read the company's 10-K, a 10-Q can be read in under an hour.

The income statement, three-month columns. Revenue, gross profit, operating income and net income against the same quarter last year. Note what moved.
MD&A, results of operations. Find management's explanation of each change you noted. Check whether the explanation adds up: if revenue grew 10% and management attributes it all to price, units were flat.
The balance sheet. Cash, receivables, inventory and debt against the fiscal year end. Receivables or inventory growing much faster than revenue are worth a question.
The cash flow statement. Year-to-date operating cash flow and capital expenditure against the same period last year.
MD&A, liquidity. Any change in credit lines, debt or covenants, and what the company says about its cash.
Part II, Item 1A. Any new risk factor.
The notes on segments, debt and subsequent events. Changes since the 10-K.
Part I, Item 4. Any change in internal control, especially one related to a previously reported material weakness.

What the fourth quarter looks like

Because there is no fourth-quarter 10-Q, and most companies stopped reporting fourth-quarter figures in the 10-K after 2021, the fourth quarter has to be derived. Listed computes Q4 flows, such as revenue and cash flow, as the fiscal year less the first three quarters:

Q4 = fiscal year − Q1 − Q2 − Q3

This does not work for per-share figures, because the share count changes during the year. Q4 diluted EPS appears on Listed only when the company reports it. See TTM for how the four quarters are combined.

Filed after the earnings release

When the 10-Q follows an earnings release, compare the two. The release often leads with adjusted, non-GAAP figures and a quarter's highlights. The 10-Q gives the full statements, the notes and the risk factors. Differences between the release and the 10-Q are rare, but a figure that changed between them deserves a look at the explanation.

How Listed helps

Listed's quarterly figures come from the 10-Q's XBRL data, usually within about five minutes of EDGAR accepting the filing. Each figure's note gives its concept, period and accession number. The filing page lists the 10-Q's documents and the sections Listed extracts, linked to the original on sec.gov. Members can set an alert for a company's next 10-Q.

In the forecast leagues, the 10-Q plays two parts. If no earnings release came first, its acceptance time locks every forecast on the company for that quarter. Its XBRL figures are the actuals the forecasts are scored against. See how Listed leagues score your calls.

How to read a 10-Q