KPI information acquisition by analysts: Evidence from conference calls

Investors are increasingly placing reliance on alternative performance measures (APMs). Key performance indicators (KPIs) are a subset of these APMs that illustrate industry‐specific firm financial and operational performance. In this study, we investigate analysts’ demand for KPI‐related information in earnings conference calls and whether managers adjust their decisions about voluntary KPI disclosure in subsequent earnings calls. Using 51 KPIs for six industries, we find that after analysts request KPI‐related information, managers increase both the likelihood and intensity of their KPI disclosure in subsequent earnings conference calls. This effect is more pronounced when the firm has less relevant earnings and lower proprietary costs, and when analysts are connected to management. Analyst KPI demand leads to a higher coverage of KPIs in subsequent news and generates benefits in analyst forecast dispersion, cost of capital and stock liquidity. Our study highlights the role that analysts play in voluntary KPI disclosure when there is an absence of mandatory integrated reporting.