Key Takeaways
- Press releases are marketing; SEC filings are legal records. Treat PR as a headline, not proof.
- Always verify key claims in primary documents: 10-Q, 10-K, Form 8-K and footnotes on EDGAR.
- Non-GAAP or adjusted metrics can differ materially from GAAP numbers, so find the reconciliation in the filing.
- Form 8-K must be filed within four business days for material events, so use it to confirm breaking news.
- Use a short verification checklist: source, reconciliation, risk disclosures, timing and auditor notes.
Introduction
Press releases announce news and shape perception, while SEC filings disclose legally required facts and risks. If you follow companies, you see both every quarter. Which one should you trust when a claim matters to your money?
This article explains the difference between press releases and filings in plain language, shows what to check in each document, and gives a simple rule you can use today. You will learn how to verify adjusted metrics, where to find the reconciliations, and how to read the parts of filings that matter most.
Why the Difference Matters to You
Press releases are written to highlight positives and attract attention. Filings are legal documents that must include risks and raw accounting results. If you act only on a press release, you might miss important caveats that change the picture.
How often have you seen headlines that sound great but then the stock falls after the filing? That happens because the filing revealed details the press release did not. By the end of this article you will have a practical checklist to verify claims and protect yourself from misleading headlines.
How Press Releases and Filings Differ
Press releases are crafted for clarity and impact. They use plain language and highlight metrics that make the company look strong. That often means using non-GAAP terms like adjusted earnings, adjusted EBITDA, or core revenue.
Filings such as the 10-Q, 10-K and Form 8-K include detailed accounting, footnotes, management commentary and risk factors. Filings must follow reporting rules and usually include reconciliations for non-GAAP metrics. You should treat filings as the primary source when making decisions.
What press releases typically emphasize
- Growth rates, milestone events, and headline metrics optimized for clarity.
- Non-GAAP measures that exclude items management views as one-time or non-core.
- Positive forward-looking statements and quotes from executives.
What filings typically include
- GAAP financial statements, footnotes, and audit opinion where required.
- Risk factors, legal proceedings, and detailed explanations of accounting choices.
- Reconciliations between non-GAAP measures and GAAP results.
Practical Rule: Verify Claims in Primary Documents
Here is a single rule you can follow every time you see a company headline: if a claim could change your view of value or risk, verify it in the filing. That rule is especially important for adjusted metrics.
Adjusted metrics can remove stock-based compensation, acquisition-related costs, restructuring charges, and other items. Those exclusions can make results look better. The filing will show what was removed, why, and whether the items are recurring.
Step-by-step verification checklist
- Identify the claim in the press release. Note the metric, period, and any “adjusted” language.
- Find the related filing: look for the 8-K for breaking news, the 10-Q for quarterly results, or the 10-K for full-year detail.
- Locate the non-GAAP reconciliation table in the filing. Confirm the adjustments and their amounts.
- Read the footnotes, MD&A and risk factors for explanations that affect the metric.
- Check the audit opinion and any auditor comments if available. Look for similar adjustments in past filings.
Real-World Examples: What to Watch For
Examples help make abstract ideas tangible. Below are realistic, practical examples that show how a press release and a filing can tell different stories. You can apply the same checks to any company you follow.
Example 1, headline versus filing
Imagine a company issues a press release claiming "adjusted EPS of $1.20, up 60% year over year." You check the 10-Q and find GAAP EPS is $0.55 for the same quarter. The reconciliation in the filing shows management excluded $0.65 per share for stock-based compensation and amortization related to an acquisition.
Why this matters to you: excluding stock-based compensation masks true shareholder dilution. The filing shows the size and nature of the adjustments so you can judge if they are legitimately one-time or likely to recur.
Example 2, a real company flow of information
When $TSLA reports delivery numbers in a press release, the headline focuses on unit growth. The 10-Q and 10-K reveal how revenue is recognized for leased vehicles and regulatory credits, and what warranty and recall provisions exist. That additional context often explains future margins and cash flow.
Why this matters to you: deliveries are useful, but the filing explains the economics and risks tied to those deliveries. You should check the filing before drawing conclusions about profitability.
Example 3, non-GAAP reconciliations are required
Many companies use terms like adjusted EBITDA or core operating income in releases. The SEC requires companies to present a reconciliation to the most directly comparable GAAP metric. In the filing you can see exactly what was excluded and any management commentary on why.
Why this matters to you: reconciliations let you compare the company’s adjustments across periods. If management repeatedly excludes the same items, treat them as part of ongoing operations instead of one-time events.
How to Read the Relevant Sections of a Filing
Not all parts of a filing are equally useful for verification. Focus your attention where it counts and move fast when news is fresh.
Management's Discussion and Analysis (MD&A)
MD&A explains results, trends and uncertainties in plain language. It often describes why adjustments were made and whether similar items may appear going forward.
Financial statements and footnotes
These are the source of truth for GAAP numbers. Footnotes disclose accounting policies, contingencies, and significant judgments. Read them when a press release mentions revenue recognition, impairments, or unusual expenses.
Non-GAAP reconciliation tables
Look for tables that reconcile adjusted metrics to GAAP. Confirm the math and add up the adjustments. If the company excludes recurring items, adjust your view accordingly.
Risk factors and legal proceedings
Risk factors may explain limitations and potential future costs that a press release ignores. Legal proceedings often end up in filings before they affect headlines, so review these sections for downside scenarios.
Quick Checklist You Can Use Today
- See the press release. Note any non-GAAP terms and headline numbers.
- Open EDGAR or the company’s investor relations page and find the relevant filing.
- Confirm GAAP metrics, and find the reconciliation for non-GAAP figures.
- Read the MD&A and footnotes for explanations and recurring items.
- Decide if the adjustments are legitimate, frequent, or masking operating issues.
Common Mistakes to Avoid
- Relying only on headlines: Press releases are summaries. Always check the filing to confirm numbers and caveats.
- Accepting adjusted metrics without reconciliation: If you cannot find the reconciliation in the filing, treat the adjusted number with skepticism.
- Ignoring recurring exclusions: Companies sometimes label recurring costs as one-time. Check several quarters to see if exclusions repeat.
- Skipping footnotes and MD&A: Important accounting details live in footnotes and MD&A, not the press release. Read them for context.
- Waiting too long to check Form 8-Ks: Material news is often filed on Form 8-K within four business days. If you wait, you might miss key details or a corrected story.
FAQ
Q: When should I trust a press release?
A: Trust press releases as a starting point for information and for timing. Use them to identify claims you need to verify, but always confirm with the related SEC filing before acting.
Q: What is a non-GAAP metric and why should I care?
A: Non-GAAP metrics adjust GAAP results to show what management thinks reflects ongoing performance. You should care because adjustments can materially change results. Verify reconciliations in the filing to see what was excluded.
Q: Where do I find filings quickly?
A: Use the SEC EDGAR database or the company’s investor relations website. Look for Form 8-K for breaking news, 10-Q for quarterly results, and 10-K for annual detail.
Q: How do I tell if an adjustment is one-time or recurring?
A: Check prior filings and the MD&A. If the same adjustment appears repeatedly, treat it as recurring. Footnotes often explain the nature and expected frequency of the adjustment.
Bottom Line
At the end of the day, press releases tell you what a company wants you to hear, while filings tell you what you legally need to know. If a claim matters to your evaluation, verify it in the primary document before you decide.
Your practical rule is simple: always verify headline claims in the related SEC filing, and pay special attention to reconciliations for adjusted metrics. Use the checklists in this article the next time you see a big headline and you will be better prepared to separate signal from noise.
Next steps: the next time you read a press release, pause, find the filing on EDGAR, and run the verification checklist. With practice you will scan filings faster and make more informed decisions.
