In finance, LTM stands for Last Twelve Months, a rolling measurement window that captures a company’s most recent four quarters of financial performance. It is also called Trailing Twelve Months, or TTM, and the two terms are interchangeable. The window slides forward each time a company files new quarterly results, so LTM figures stay more current than the numbers in the last annual report. You will see LTM used in valuation ratios, acquisition pricing, and loan agreements, which is why it is one of the most common timeframes in corporate finance.
What LTM Stands For and How the Window Works
LTM refers to the most recent twelve-month period ending with a company’s latest available quarterly filing. Unlike a fiscal year, which covers a fixed calendar such as January through December, the LTM window moves. 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, once the next quarter closes, the window shifts again.
Public companies in the United States file quarterly reports on Form 10-Q for each of the first three quarters and an annual report on Form 10-K at year-end.1eCFR. 17 CFR 240.13a-1 – Requirements of Annual Reports Those filings are free to access through the SEC’s EDGAR database,2SEC.gov. Search Filings and they contain the raw numbers you need to build an LTM figure.
How to Calculate LTM
The calculation combines data from the most recent 10-K with the latest 10-Q. The formula is the same whether you are working with revenue, net income, EBITDA, or any other income-statement line:
LTM = Full Fiscal Year (10-K) + Current Year-to-Date (latest 10-Q) − Prior Year Same Period (prior year 10-Q)
Subtracting the prior-year year-to-date figure removes the months that would otherwise be double-counted. What remains is exactly twelve months of the most recent activity.
A Quick Example
Say a company with a December 31 fiscal year-end 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 math: $800M + $450M − $380M = $870M. That $870 million is the company’s revenue for the twelve months running from July 2025 through June 2026. Redo the calculation each quarter and the LTM figure stays fresh without waiting for another annual filing.
Why LTM Beats a Single Quarter
Many businesses do not earn revenue evenly through the year. Retailers lean on the holiday season, agricultural companies depend on harvest timing, and tourism operators peak in the summer. Judging a holiday-quarter retailer by its December results alone would make it look extraordinarily profitable; judging a ski resort by its slowest summer quarter would make it look close to failing.
Because LTM always covers a full twelve months, it captures one complete cycle of every season. A strong quarter is balanced by a slower one, and the resulting figure reflects what the company earns across all conditions. That makes LTM data especially useful for spotting real growth trends rather than reacting to predictable swings.
Where LTM Shows Up in Practice
LTM figures do most of their work as the denominator in valuation ratios and as the earnings benchmark in deals and loan agreements.
Valuation Ratios
The trailing price-to-earnings (P/E) ratio divides the current share price by LTM earnings per share. A company trading at $50 with LTM earnings of $5 per share has a trailing P/E of 10, meaning investors are paying $10 for every $1 of recent annual profit.
Enterprise value to EBITDA, or EV/EBITDA, divides total enterprise value (market capitalization plus debt, minus cash) by LTM EBITDA. Because EBITDA strips out financing and depreciation choices, this ratio is useful for comparing companies with different capital structures or tax situations.
For early-stage or high-growth companies that are not yet profitable, earnings-based ratios do not work because there are no earnings to divide by. Analysts substitute LTM revenue in the denominator, producing an EV/Revenue multiple. This is common with venture-backed technology companies.
Finally, the debt-to-EBITDA leverage ratio divides total debt by LTM EBITDA to show how many years of current earnings a company would need to pay off its debt. A ratio of 3.0x means three years of EBITDA would cover all outstanding debt.
Mergers and Acquisitions
LTM EBITDA is the starting point for most acquisition pricing. Buyers and sellers agree on a multiple, apply it to LTM EBITDA, and arrive at an enterprise value. A buyer paying 10 times LTM EBITDA for a company earning $100 million implies an enterprise value of $1 billion, which is then adjusted for the target’s debt and cash to determine the actual equity price. The multiple varies by industry, size, growth, and market conditions, but LTM EBITDA is almost always the base.
Loan Covenants
Lenders often build LTM-based tests into loan agreements. The most common is a maximum leverage ratio, calculated as total debt divided by LTM EBITDA, that the borrower must stay below throughout the life of the loan. These are maintenance covenants, tested on a recurring basis (typically quarterly) rather than only when the borrower does something specific.
A borrower that closes at 5x debt-to-EBITDA might have a covenant capping the ratio at 8.25x. Each quarter the lender recalculates using updated LTM EBITDA. If earnings decline enough to push the ratio above the threshold, the borrower is in technical default even without missing a payment. Consequences can range from repricing and renegotiation to acceleration of the full balance. Because a single weak quarter can drag the LTM figure down, treasury teams watch this number closely.
LTM vs. NTM
LTM is backward-looking. Its counterpart is NTM, Next Twelve Months, which uses analyst projections of future earnings or revenue. For a growing company, NTM multiples tend to look lower than LTM multiples because the denominator (expected earnings) is larger. A fast-growing company might carry an LTM EV/EBITDA of 42x while its NTM EV/EBITDA is only 23x, if analysts expect earnings to roughly double.
NTM tends to be preferred for companies with rapidly changing growth or cyclical businesses where past results may not reflect what is coming. LTM works best for stable companies where recent history is a reasonable guide to the near future. The tradeoff: LTM gives you certainty at the cost of timeliness; NTM gives you relevance at the cost of relying on estimates that may prove wrong.
Adjusted LTM and What to Watch For
Raw LTM figures taken straight from SEC filings follow Generally Accepted Accounting Principles (GAAP). Companies and analysts often present “adjusted” versions that strip out items considered non-recurring or unrelated to core operations. The most common is Adjusted EBITDA, which takes LTM EBITDA and adds back one-time lawsuit settlements, restructuring costs, large severance payments, or owner-specific expenses in privately held businesses. The purpose is to show earnings on a normalized, ongoing basis.
When a publicly traded company discloses a non-GAAP figure, Regulation G requires it to also present the most directly comparable GAAP measure and provide a quantitative reconciliation showing how the two numbers differ.3eCFR. 17 CFR Part 244 – Regulation G When you see an adjusted LTM number, look for the reconciliation table. It tells you exactly what was added back and lets you decide whether those adjustments seem reasonable.
Limitations Worth Knowing
LTM figures are useful because they are based on actual reported results, but the same backward-looking quality creates blind spots.
- LTM cannot reflect a contract just signed, a product launching next quarter, or a coming regulatory change. For companies at an inflection point, it may significantly understate or overstate future performance.
- One-time events distort the picture. A large lawsuit 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 company loses a major customer, the LTM figure still includes months of stronger performance that partially mask the decline. It can take several quarters for the full impact to show up.
- Fiscal year-ends differ. Two companies’ LTM figures may cover different calendar periods, and comparing them assumes the economic environment was similar during both windows.
None of this makes LTM unreliable. It just means the figure works best alongside NTM projections, industry benchmarks, and a careful read of the qualitative disclosures in the underlying filings.