In recent years, quarterly earnings conference calls have undergone a transformation, with companies embracing new approaches to engage with investors. Traditional formats have given way to more interactive sessions, where retail investors are given the opportunity to ask questions and have their voices heard. This shift in communication dynamics has been led by pioneering companies like Tesla, Reddit, and Robinhood.

It all began in January 2019, when Elon Musk, the CEO of Tesla, made headlines by opening the company's earnings call to questions from retail investors. This move was a departure from the norm, as these calls were typically limited to analysts and institutional investors. Musk's decision to include retail investors signaled a more inclusive approach to corporate communication.

Fast forward to the present day, and Reddit is following in Tesla's footsteps. The popular social media platform, known for its role in the meme stock rally of 2021, is set to report its first quarterly results since going public. In a unique twist, Reddit will be taking questions from the investing public, which will be posted on its own platform. This innovative move allows the company to directly engage with its user base and tap into their insights and concerns.

Another trailblazer in this realm is Robinhood, the commission-free trading app. Notorious for its disruption of the traditional brokerage model, Robinhood has also been at the forefront of reshaping quarterly updates. The company has been conducting its own calls with questions from retail investors, providing a space for individuals to have their queries answered directly by company executives. Robinhood's commitment to democratizing finance is evident in its efforts to amplify the voices of retail investors.

In 2021, Robinhood further solidified its commitment to retail investors by acquiring Say Technologies, the company behind say.com, which facilitated shareholder-submitted calls during Tesla's groundbreaking move. This acquisition enables Robinhood to enhance its communication channels and continue to foster a deeper connection with its user base.

Companies like Coinbase, a popular cryptocurrency exchange, and AMC, a key player in the meme stock craze, have also acknowledged the importance of engaging with retail investors. Both companies have integrated questions from shareholders into their quarterly earnings calls. While Coinbase has a strong focus on its retail users and investors, AMC has embraced shareholder participation by incorporating various questions from them during its calls. In contrast, GameStop, another significant figure in the meme stock phenomenon, has refrained from taking questions from analysts or shareholders since December 2020.

The evolution of earnings calls is not only about interacting with investors but also about altering the dynamics between company management and analysts. Streaming giant Netflix, for example, started a trend years before Tesla's shareholder question inclusion, by introducing "earnings interviews." These interviews involve a single analyst or investor relations executive hosting a dialogue about the company's financial performance. This approach continues to be practiced by Netflix to this day.

The rise of retail investors and the meme stock movement have played a substantial role in reshaping this quarterly ritual. With more individuals having access to information and platforms that enable them to voice their opinions, companies are recognizing the value of engaging directly with their retail investors. As a result, the corporate communications landscape has witnessed significant changes, with sell-side research dwindling, and financial firms adopting communication strategies akin to media companies, complete with newsletters, podcasts, and distinct personalities.

Elon Musk, the driving force behind Tesla's interactive earnings calls, has become known for his colorful and unorthodox approach to these events. Musk has elevated the concept of an earnings call into an art form, capturing the attention and imagination of the investing public.

In a fitting conclusion, Tesla's recent earnings call marked the announcement that Martin Viecha, the head of Investor Relations at the company, would be stepping down. Viecha had been an integral part of the innovative move to include shareholder questions, illustrating the lasting impact this communication shift has had on the corporate world.

As companies continue to adapt and evolve their earnings calls, it remains clear that engaging with retail investors and embracing a more inclusive approach has become an essential part of modern corporate communication. The empowerment of individual investors and the democratization of financial information herald a new era for quarterly updates, where the voices of all stakeholders are heard and valued.