diff --git a/NEWS.md b/NEWS.md
index 021ddbbb6..04f49960c 100644
--- a/NEWS.md
+++ b/NEWS.md
@@ -50,6 +50,8 @@
 
 9. `fread()` no longer replaces a literal header column name `"NA"` with an auto-generated `Vn` name when `na.strings` includes `"NA"`, [#5124](https://github.com/Rdatatable/data.table/issues/5124). Data rows still continue to parse `"NA"` as missing. Thanks @Mashin6 for the report and @shrektan for the fix.
 
+10. `yearqtr()` gains an optional `format` argument [#7694](https://github.com/Rdatatable/data.table/issues/7694). 'numeric' is the default and preserves the original behavior, while 'character' formats the date as YYYYQ# (e.g., 2025Q2). Thanks to @jan-swissre for the report and @LunaticSage218 for the implementation.
+
 ### Notes
 
 1. {data.table} now depends on R 3.5.0 (2018).
diff --git a/R/IDateTime.R b/R/IDateTime.R
index 49fa5abda..45248611d 100644
--- a/R/IDateTime.R
+++ b/R/IDateTime.R
@@ -366,7 +366,17 @@ month   = function(x) convertDate(as.IDate(x), "month")
 quarter = function(x) convertDate(as.IDate(x), "quarter")
 year    = function(x) convertDate(as.IDate(x), "year")
 yearmon = function(x) convertDate(as.IDate(x), "yearmon")
-yearqtr = function(x) convertDate(as.IDate(x), "yearqtr")
+yearqtr = function(x, format=c("numeric", "character")) {
+  format = match.arg(format)
+  x_as_idate = as.IDate(x)
+  yqtr = convertDate(x_as_idate, "yearqtr")
+  if (format == "numeric") return(yqtr)
+  yr = floor(yqtr)
+  qtr = round((yqtr - yr) * 4) + 1L
+  ans = paste0(yr, "Q", qtr)
+  ans[is.na(x_as_idate)] = NA_character_
+  ans
+}
 
 convertDate = function(x, type) {
   type = match.arg(type, c("yday", "wday", "mday", "week", "month", "quarter", "year", "yearmon", "yearqtr"))
diff --git a/inst/tests/tests.Rraw b/inst/tests/tests.Rraw
index 443487c6a..af18b0d2b 100644
--- a/inst/tests/tests.Rraw
+++ b/inst/tests/tests.Rraw
@@ -21585,3 +21585,12 @@ close(con)
 file.create(f <- tempfile())
 test(2367.6, fread(file(f)), data.table(), warning="Connection has size 0.")
 unlink(f)
+
+# yearqtr() could optionally output 2025Q4 format #7694
+x = c("1111-11-11", "2019-01-01", "2019-02-28", "2019-03-01", "2019-12-31", "2020-02-29", "2020-03-01", "2020-12-31", "2040-01-01", "2040-12-31", "2100-03-01", NA)
+test(2368.1, yearqtr(x, format="numeric"), c(1111.75, 2019, 2019, 2019, 2019.75, 2020, 2020, 2020.75, 2040, 2040.75, 2100, NA))
+test(2368.2, yearqtr(x, format="numeric"), yearqtr(x))  # numeric is the default, preserves backwards compatibility
+test(2368.3, yearqtr(x, format="character"), c("1111Q4", "2019Q1", "2019Q1", "2019Q1", "2019Q4", "2020Q1", "2020Q1", "2020Q4", "2040Q1", "2040Q4", "2100Q1", NA_character_))
+test(2368.4, yearqtr("2016-08-03 01:02:03.45", format="character"), "2016Q3")
+test(2368.5, yearqtr(NA, format="character"), NA_character_)
+test(2368.6, yearqtr(x, format="invalid"), error="should be one of")
diff --git a/man/IDateTime.Rd b/man/IDateTime.Rd
index cf762337e..41e36d267 100644
--- a/man/IDateTime.Rd
+++ b/man/IDateTime.Rd
@@ -98,8 +98,7 @@ month(x)
 quarter(x)
 year(x)
 yearmon(x)
-yearqtr(x)
-
+yearqtr(x, format = c("numeric", "character"))
 }
 
 \arguments{
@@ -115,6 +114,7 @@ yearqtr(x)
   the S3 generic.}
   \item{units}{one of the units listed for truncating. May be abbreviated.}
   \item{ms}{ For \code{as.ITime} methods, what should be done with sub-second fractions of input? Valid values are \code{'truncate'} (floor), \code{'nearest'} (round), and \code{'ceil'} (ceiling). See Details. }
+  \item{format}{format is either \code{"numeric"} (default) or \code{"character"}. \code{"character"} formats the result as \code{"2025Q4"}.}
 }
 \details{
 \code{IDate} is a date class derived from \code{Date}. It has the same