In finance, LTM means Last Twelve Months, a rolling measurement of a company’s most recent twelve months of financial performance. It is also called Trailing Twelve Months, or TTM, and the two terms are interchangeable. Rather than waiting for the next annual report, analysts recalculate LTM figures each quarter so the numbers always reflect the latest four quarters of activity.
What the Twelve Months Actually Cover
An LTM period is not the same as a fiscal year. A fiscal year sits on a fixed calendar, such as January through December. The LTM window slides forward every quarter. If a company just reported results through June 30, its LTM period runs from the previous July 1 through June 30 of the current year. Three months later, after the next quarterly report, the window shifts again.
Public companies in the United States file quarterly reports on Form 10-Q for the first three quarters of their fiscal year and an annual report on Form 10-K at year-end.1eCFR. 17 CFR 240.13a-1 – Requirements of Annual Reports Those filings are the raw material for any LTM calculation, and they are freely available through the SEC’s EDGAR database.2SEC.gov. Search Filings
How to Calculate an LTM Figure
The same formula works for any income-statement line, whether you want LTM revenue, LTM net income, or LTM EBITDA:
LTM = Full fiscal year (from the 10-K) + current year-to-date (from the latest 10-Q) − prior year same period (from the prior year’s 10-Q)
Subtracting the prior year’s year-to-date figure strips out the overlapping months between the annual report and the current quarterly data. What is left is exactly twelve months of the most recent activity.
A Quick Example
Take a company with a December 31 fiscal year-end that reports the following revenue:
- Full-year 2025 revenue (10-K): $800 million
- January–June 2026 year-to-date revenue (latest 10-Q): $450 million
- January–June 2025 year-to-date revenue (prior year 10-Q): $380 million
The LTM revenue is $800M + $450M − $380M = $870 million. That $870 million covers July 2025 through June 2026. Running the same calculation after each new 10-Q keeps the figure current.
Why a Rolling Twelve Months Is So Widely Used
Two features of the LTM window explain its popularity. The first is seasonality. Many businesses earn revenue unevenly across the year. Retailers lean on the holiday quarter, agricultural companies depend on harvest timing, and tourism operators peak in summer. A single quarter looked at in isolation can make a holiday-focused retailer appear wildly profitable or a summer ski resort appear close to failure. Because an LTM period always spans a full twelve months, it captures one complete cycle of every season, letting genuine growth trends stand out from predictable swings.
The second is reliability. LTM figures come from numbers the company has already reported to regulators. There is no forecasting involved. That makes them verifiable in a way projections cannot be.
Where LTM Shows Up in Practice
LTM figures sit inside most of the ratios used to value companies, price acquisitions, and set loan terms.
Valuation Ratios
The trailing price-to-earnings ratio divides the current share price by LTM earnings per share. A stock at $50 with LTM earnings per share of $5 trades at a P/E of 10, meaning investors are paying $10 for every $1 of recent annual profit.
EV/EBITDA divides a company’s enterprise value (market capitalization plus debt, minus cash) by LTM EBITDA. Because EBITDA strips out financing and depreciation choices, this ratio works well for comparing companies with different capital structures or tax situations.
For early-stage or high-growth companies that have not yet turned a profit, earnings-based ratios lose their meaning. Analysts fall back on EV/Revenue, with LTM revenue in the denominator. This is routine among venture-backed technology companies.
Debt-to-EBITDA, calculated as total debt over LTM EBITDA, shows how many years of current earnings would be needed to pay off the debt. A ratio of 3.0x implies three years at current earnings levels.
Mergers and Acquisitions
LTM EBITDA is usually the number buyers and sellers negotiate around. The standard approach applies a purchase multiple to the target’s LTM EBITDA to arrive at an enterprise value. A buyer paying 10 times LTM EBITDA for a company earning $100 million is agreeing to an enterprise value of $1 billion, which then gets adjusted for debt and cash to produce the equity price paid to shareholders.
The multiple itself varies by industry, size, growth rate, and market conditions. What stays constant is that LTM EBITDA is the starting point. Because the LTM window shifts each quarter, timing matters: a seller coming off a strong quarter may find the trailing numbers more favorable than they were three months earlier.
Loan Covenants
Lenders routinely write LTM-based tests into credit agreements. The most common is a maximum leverage ratio, usually total debt divided by LTM EBITDA, that the borrower has to stay below for the life of the loan. These maintenance covenants get tested on a recurring basis, typically every quarter.
Say a company borrows at a debt-to-EBITDA ratio of 5x with a covenant that caps the ratio at 8.25x. Each quarter the lender recalculates using the latest LTM EBITDA. If earnings fall enough to push the ratio over the limit, the borrower is in technical default even if no payment has been missed. From there the lender can renegotiate terms, raise the interest rate, or in some cases demand accelerated repayment of the full balance.
LTM vs. NTM
LTM is backward-looking by design. Its forward-looking counterpart is NTM, or Next Twelve Months, which uses analyst projections of future earnings or revenue instead of reported history. For a growing company, NTM multiples usually come out lower than LTM multiples because the projected denominator is larger. A fast-growing business might trade at 42x LTM EV/EBITDA but 23x NTM EV/EBITDA if earnings are expected to roughly double.
Neither measure is universally better. LTM gives certainty at the cost of timeliness. NTM gives relevance at the cost of relying on estimates that may prove wrong. Stable businesses with predictable results tend to be analyzed with LTM; rapidly changing or cyclical ones more often with NTM.
Adjusted LTM and the Reconciliation Rule
Raw LTM figures pulled from SEC filings follow Generally Accepted Accounting Principles. Analysts and companies frequently present “adjusted” versions that remove items considered non-recurring or unrelated to core operations. The most common is Adjusted EBITDA, which takes LTM EBITDA and adds back things like one-time lawsuit settlements, restructuring costs, large severance payments, or, in privately held businesses, owner-specific expenses. Common add-backs also include above-market rent paid to a related party, personal expenses run through the business, and costs tied to non-essential assets.
When a publicly traded company discloses an adjusted figure, Regulation G requires it to present the most directly comparable GAAP measure alongside it and to provide a quantitative reconciliation showing how the two numbers differ. Regulation G also prohibits presenting a non-GAAP measure in a way that contains an untrue statement of material fact or omits information needed to keep it from being misleading.3eCFR. 17 CFR Part 244 – Regulation G When you see an adjusted LTM number, the reconciliation table is where you can check which items were removed and judge whether the adjustments look reasonable.
Where LTM Falls Short
The backward-looking quality that makes LTM reliable also creates blind spots.
- LTM cannot reflect future changes. A major contract just signed, a product launch next quarter, or a coming regulatory shift will not appear in the trailing numbers. For companies at an inflection point, LTM may significantly understate or overstate what comes next.
- One-time events distort the picture. A large settlement, asset sale, or insurance recovery inside the twelve-month window inflates or deflates LTM earnings even though it is unlikely to repeat. Adjusted figures try to correct for this, but the adjustments are judgment calls.
- LTM lags deterioration. If a business suddenly weakens, say by losing a major customer, the trailing figure still includes months of stronger performance that partly mask the decline. The full impact may take several quarters to show up.
- Cross-company comparability has limits. Two companies with different fiscal year-ends produce LTM figures covering different calendar periods, which matters when the economic environment is shifting quickly.
None of this makes LTM unreliable. It works best read alongside NTM projections, industry benchmarks, and the qualitative disclosures in a company’s filings.