Glossary term
Trailing 12 Months (TTM)
Trailing 12 months is a rolling one-year period used to measure recent financial results, usually by combining the latest four quarters.
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What Are Trailing 12 Months?
Trailing 12 months, often abbreviated TTM, is a rolling one-year period used to measure recent financial results. In company analysis, TTM figures are usually built from the latest four quarters rather than the most recent fiscal year.
TTM data helps investors compare companies using a more current 12-month view. It can be especially useful when the latest annual report is several months old or when a company's results have changed materially since the last fiscal year-end.
Key Takeaways
- Trailing 12 months means the most recent 12-month period available.
- TTM results are often calculated from the latest four quarterly periods.
- Common TTM metrics include revenue, EBITDA, earnings per share, free cash flow, and valuation ratios.
- TTM is more current than the last fiscal year but can still include one-time or seasonal effects.
- Investors should check whether a data provider's TTM calculation is adjusted or unadjusted.
How TTM Is Calculated
The simplest approach adds the latest four quarters. If a company reports quarterly revenue of $100 million, $110 million, $120 million, and $130 million, TTM revenue is $460 million.
Another common method starts with the latest annual figure, adds the current year-to-date figure, and subtracts the comparable year-to-date figure from the prior year. This approach is useful when quarterly data is not presented in the same format.
Common TTM Uses
Metric | Why TTM Is Used |
|---|---|
TTM revenue | Shows the latest 12 months of sales activity. |
TTM EPS | Supports valuation ratios such as trailing P/E. |
TTM EBITDA | Used in enterprise-value comparisons and credit analysis. |
TTM free cash flow | Helps assess recent cash generation. |
TTM margins | Shows recent profitability trends over a full-year period. |
What to Watch
TTM data is current, but it is not automatically clean. It may include acquisitions, divestitures, unusual gains, restructuring charges, or seasonal patterns. A retailer's TTM results, for example, may look different depending on whether the holiday quarter is unusually strong or weak.
Investors should also distinguish between reported TTM figures and adjusted TTM figures. Adjustments can make comparisons easier, but they can also remove costs that are economically real.
The Bottom Line
Trailing 12 months is a rolling one-year view of recent financial performance. It is useful for timely comparison, but the calculation should be checked for seasonality, one-time items, and adjustments.