What is TTM?
The Trailing Twelve Months (TTM) portrays a company’s financial performance across the past four quarters, or last twelve months.
In the context of financial modeling, TTM financial data measures the operating performance of a company in the most recent 12-month period.
How to Calculate TTM Revenue?
The trailing twelve months (TTM) refers to a company’s financial performance in the most recent 12-month period.
TTM stands for “trailing twelve months” and is a backward-looking metric that captures the financial performance of a company in its last four reporting quarters.
In effect, a metric on a trailing twelve month basis, such as TTM revenue, is meant to show the current state of a company’s growth trajectory.
The process of adjusting a financial metric like revenue by adding the most recent period past the latest reported fiscal year and subsequently deducting the matching period is referred to as the “stub period”.
The required financial filings to perform such a calculation are the company’s latest 10-K, most recent quarterly filing(s), and the corresponding filings from the year prior.
To calculate a company’s TTM revenue, the following three steps can be followed.
- Compile Annual Report (10-K) and Latest Quarterly Reports (10-Q)
- Add the Year-to-Date (YTD) Data to the Fiscal Year Data
- Subtract the YTD Data from the Prior Year
Trailing Twelve Months Formula (TTM)
The formula for calculating a financial metric on a trailing twelve-month basis is as follows.
For example, if two quarters have passed since the latest fiscal year, the quarterly data that we would deduct is the first two quarters from the prior year.
Trailing Twelve Months Calculator (TTM)
We’ll now move on to a modeling exercise, which you can access by filling out the form below.
TTM Revenue Calculation Example
Suppose you’re tasked with calculating the revenue of a company on a trailing twelve-month basis.
In the recent quarters leading up to the end of fiscal year 2022, the company’s revenue has grown significantly.
- Q1, 2022 = $20 million
- Q2, 2022 = $25 million
- Q3, 2022 = $40 million
- Q4, 2022 = $60 million
The company brought in $145 million in revenue to wrap up the fiscal year.
- FY, 2022 = $145 million
In the most recent quarter, Q-1 of 2023, the company reported $75 million in quarterly revenue.
- Q1, 2023 = $75 million
In order to calculate the TTM revenue of our company, we’ll start with our fiscal year 2022 revenue, add the Q1 2023 revenue, and subtract the Q4 2022 revenue.
- TTM Revenue = FY-22 Revenue + Q1-23 Revenue – Q1-22 Revenue
- TTM Revenue = $145 million + $75 million – $20 million = $200 million
Our company’s trailing twelve months (TTM) revenue amounts to $200 million, which reflects its financial performance and growth profile far more accurately than its fiscal year 2022 revenue of $145 million.