In finance, LTM (Last Twelve Months) is a rolling figure that captures a company’s most recent four quarters of performance for any income statement or cash flow line, refreshed each time a new quarterly report is filed. It gives you an annualized read on revenue, EBITDA, earnings, or cash flow that stays current between annual reports, and it is the denominator behind most of the valuation multiples and credit ratios you will see quoted. The identical term Trailing Twelve Months (TTM) is used interchangeably.
How to Calculate LTM
Two methods exist, and both produce the same answer when the inputs match.
The straightforward one is to add the four most recent consecutive quarters. For LTM Revenue as of the end of Q2 2025, sum Q3 2024, Q4 2024, Q1 2025, and Q2 2025. Four quarters, one number.
The second method is faster when you have the prior fiscal year total in front of you but not every quarterly breakdown. Take the previous fiscal year figure, subtract the year-ago quarter you are replacing, and add the most recent quarter. Suppose a company reported $100 million of revenue for 2024. Q1 2024 was $20 million, and Q1 2025 just came in at $25 million. LTM Revenue through Q1 2025 is $100 million minus $20 million plus $25 million, or $105 million.
The figure updates four times a year. Companies file Form 10-Q for each of the first three fiscal quarters, and the fourth quarter’s data arrives inside the annual Form 10-K rather than a separate 10-Q.1Securities and Exchange Commission. Form 10-Q General Instructions LTM recalculations follow that cadence.
Where to Find the Quarterly Data
The most reliable free source is the SEC’s EDGAR database. Full-text search at sec.gov/edgar lets you pull any public company’s filings by name, ticker, or CIK and filter to annual and quarterly reports.2U.S. Securities and Exchange Commission. EDGAR Full Text Search The income statement and cash flow statement in the latest 10-Q and 10-K supply everything you need.
Bloomberg, Capital IQ, and FactSet automate the calculation and refresh it as soon as new filings post. Free financial sites also display TTM figures for common metrics like revenue and EPS, drawing on the same SEC filings underneath. Whatever the source, confirm the quarter-end dates line up. A misaligned quarter breaks the entire number.
Why LTM Instead of Last Fiscal Year
Fiscal year data is a fixed snapshot that only updates once a year, when the 10-K is filed. Depending on filer status, that filing lands 60, 75, or 90 days after fiscal year end.3Securities and Exchange Commission. Form 10-K General Instructions A company with a December year end may not file until early March, and by late summer those numbers are eight months old. An LTM figure calculated at the end of September for the same company already incorporates nine months of current-year performance.
LTM also lets you compare companies with different fiscal year ends. If one closes its books in December and another in June, the most recent annual reports cover entirely different stretches of the economy. Running LTM through the same quarter-end date for both puts them on equal footing.
The Valuation Multiples That Depend on LTM
Most real-time valuation work sits on top of LTM figures. Using stale annual data when fresher quarterly results exist can distort how expensive or cheap a stock looks.
Trailing P/E
Current share price divided by LTM earnings per share. This is the most widely quoted multiple for individual stocks. Because the denominator rolls forward, recent earnings growth or decline shows up in the ratio immediately instead of waiting for the next annual report.
EV / LTM EBITDA
Enterprise value (market cap plus net debt) divided by trailing twelve months EBITDA. This is the workhorse of M&A analysis and leveraged buyout modeling. It is preferred to P/E for cross-company comparisons because enterprise value adjusts for capital structure, and EBITDA strips out differences in tax rates, depreciation methods, and financing choices. Two companies generating the same operating cash flow can carry very different debt loads and still look equivalent on this multiple.
Debt-to-EBITDA and Interest Coverage
Lenders and rating agencies lean on LTM EBITDA in leverage ratios. Total debt divided by LTM EBITDA measures how many years of current earnings it would take to pay off outstanding debt; lower is stronger. Interest coverage flips the ratio: LTM EBITDA (or EBIT) divided by annual interest expense, with higher meaning more cushion. Both lose their diagnostic value if you plug in a stale annual figure instead of a current LTM one.
EV / LTM Revenue
Common for companies that aren’t yet profitable, especially in technology and biotech. With no earnings to work with, the multiple compares enterprise value against the trailing sales base. The LTM denominator prices today’s revenue run rate rather than a number from a fiscal year that ended months ago.
Free Cash Flow Yield
LTM free cash flow (operating cash flow minus capital expenditures) divided by market capitalization. This tells you what share of the stock price the company is generating in actual spendable cash. Capital expenditures move around quarter to quarter, and a trailing twelve months smooths those swings better than any single quarter can.
LTM vs. Forward (NTM) Multiples
LTM multiples look backward at actual results. NTM (Next Twelve Months) multiples look forward at projected results, typically based on consensus analyst estimates. Most equity research reports show both.
LTM’s advantage is objectivity. The numbers come from audited or reviewed financial statements. Nobody argues about what actually happened. The weakness is that backward-looking data can misrepresent a company whose trajectory is changing quickly. A business that just lost a major customer or just signed a transformational contract still looks the same in LTM figures for several more quarters.
NTM multiples capture expected growth or decline, which is why they dominate for high-growth companies and cyclical businesses where next year will look different from last year. The tradeoff is subjectivity: analyst forecasts involve judgment, and if consensus is wrong, the NTM multiple is wrong too. During earnings season, NTM denominators can shift meaningfully on a single guidance revision.
In practice, LTM multiples dominate in leveraged buyout analysis and credit work because lenders want to underwrite against demonstrated performance. NTM multiples dominate in growth equity and sectors like software where a company’s current run rate barely resembles its trajectory. A wide gap between LTM and NTM multiples for the same company is itself a signal worth investigating: it means the market expects material change ahead.
LTM in Debt Covenants
Outside of equity valuation, LTM figures carry real compliance weight. Most leveraged loans and private credit facilities include maintenance covenants tested quarterly against LTM data. A typical requirement is that funded Debt-to-EBITDA stay below a specified ceiling, tested every quarter using the trailing twelve months.
The “LTM EBITDA” defined in a credit agreement is rarely raw GAAP net income with standard add-backs. Borrowers negotiate specific adjustments: restructuring charges, transaction fees, non-cash compensation, and sometimes projected cost savings from recent acquisitions. These negotiated definitions can inflate the EBITDA figure and create cushion against covenant thresholds. If you’re analyzing a company’s leverage, reading the actual credit agreement’s EBITDA definition matters as much as running the numbers.
Breaching a maintenance covenant, even when the company hasn’t missed a payment, gives the lender the right to accelerate the loan and demand immediate repayment. Lenders often grant a waiver instead, but waivers typically come with fees, higher interest rates, tighter future covenants, or additional collateral. A covenant breach also commonly triggers cross-default provisions in other debt agreements, which can escalate into a much larger problem. Quarterly LTM calculations are a compliance obligation for leveraged companies, not just an analytical exercise.
Adjustments That Make LTM Usable
Raw LTM data straight off the financial statements usually needs cleaning before it’s useful for valuation. The point is to isolate sustainable, recurring earning power and strip out anything that distorts the picture.
Removing One-Time Items
Scan all four quarters in the LTM window for non-recurring events: large legal settlements, restructuring charges, gains or losses from selling a division, or the impact of a major tax law change. Reversing the after-tax impact of these items produces a normalized LTM number that better represents what the business earns in a typical year. Sell-side reports label these adjustments explicitly, and disagreements about what qualifies as non-recurring are one of the most common sources of valuation disputes.
Pro Forma Adjustments for Acquisitions
When a company completes a significant acquisition partway through the LTM period, the raw data only picks up the target’s results from the closing date forward. If the deal closed six months ago, LTM captures half a year of the combined entity and half a year of the standalone company. That’s not a usable baseline.
The fix is a pro forma adjustment: add the acquired company’s historical results for the portion of the LTM window before the deal closed, treating the combination as if it had been in place for the full twelve months. SEC Regulation S-X requires pro forma financial statements for significant acquisitions, which gives you a starting point.4eCFR. 17 CFR 210.11-01 – Presentation Requirements The same logic runs in reverse for divestitures: subtract the sold business’s contribution from the quarters before the sale closed.
Seasonality
Because LTM covers a full annual cycle, it automatically captures seasonal patterns that would skew a single-quarter analysis. A retailer’s LTM revenue always includes the holiday quarter, whether you calculate it in March or September. The subtler issue is that comparing an LTM figure to a single quarter’s annualized run rate can badly mislead for businesses with pronounced seasonal swings. LTM-to-LTM comparisons work; LTM against an annualized quarter often does not.
When LTM Misleads
LTM is the default for most valuation work, but there are situations where it actively distorts rather than informs.
High-growth companies are the classic case. A software business growing revenue at 60 percent annually will look far more expensive on LTM multiples than on forward estimates, because last year’s revenue barely resembles next year’s. An LTM screen flags most fast-growing stocks as overvalued.
Turnarounds present the opposite problem. A company that just replaced management, cut costs, and restructured may carry terrible LTM figures reflecting quarters of poor performance under the old regime. The trailing numbers don’t reflect the new operating reality, and leaning on them would undervalue the business.
Cyclical businesses near a peak or trough also distort LTM analysis. Calculate LTM EBITDA for an oil company when crude prices sit at multi-year highs and Debt-to-EBITDA looks artificially healthy. The same company’s leverage looks dramatically worse when commodity prices drop, even if nothing about the business itself has changed. Experienced credit analysts in these industries use mid-cycle or normalized EBITDA rather than raw LTM.
Finally, any company that completed a major acquisition or divestiture within the trailing twelve months needs pro forma treatment. Using the raw LTM figure without adjustment compares an entity that existed for only part of the period against its full enterprise value, which produces a meaningless multiple.
One last caveat on freshness: LTM only helps if the underlying filings actually arrived. A company that repeatedly files Form 12b-25 to extend its 10-Q or 10-K deadlines is running your LTM on stale inputs at best, and at worst signaling accounting problems that could lead to restatements changing the quarterly figures your LTM was built on.5U.S. Securities and Exchange Commission. SEC Charges Eight Companies for Failure to Disclose Complete Information on Form NT Track actual filing dates rather than assuming filings arrive on the deadline.