What is TTM?
The Trailing Twelve Months (TTM) portrays a company’s financial performance across the past four quarters, i.e. the most recent 12-month period.
How to Calculate TTM Revenue (Step-by-Step)
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 latest four reporting quarters.
In effect, a metric on a trailing twelve months 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 revenue on a TTM basis, the following three steps can be followed.
- Step 1 → Compile Annual Report (10-K) and Latest Quarterly Reports (10-Q)
- Step 2 → Add the Year-to-Date (YTD) Data to the Fiscal Year Data
- Step 3 → 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.