How to Calculate Trailing Twelve Months (TTM)

Trailing twelve months (TTM) is a financial analysis concept that evaluates a company’s performance over the most recent 12-month period, regardless of fiscal year start or end dates. It provides a rolling view of financial data, offering a more current snapshot than annual reports and smoothing out short-term fluctuations to help investors and analysts observe trends and make informed decisions.

Gathering Necessary Financial Data

Gathering accurate financial data is the first step in calculating any trailing twelve months metric. Companies that are publicly traded generally file periodic financial statements with regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States. These filings include annual reports on Form 10-K and quarterly reports on Form 10-Q, which are publicly accessible documents.

The 10-K report provides comprehensive financial details for a full fiscal year, including the income statement, balance sheet, and statement of cash flows. Quarterly 10-Q reports provide financial information for each of the first three fiscal quarters, offering a snapshot of performance throughout the year. To calculate TTM figures, you will need the most recent 10-K and several 10-Q reports to cover the full 12-month span.

Calculating Trailing Twelve Months Revenue

Calculating trailing twelve months revenue provides a current view of a company’s sales performance over the past year.

One straightforward method involves summing the revenue from the four most recent consecutive quarterly reports. For example, if you are calculating TTM revenue as of the end of Q1 2025, you would add the revenue from Q1 2025, Q4 2024, Q3 2024, and Q2 2024. This summation provides a direct measure of sales activity over the specified 12-month period.

An alternative formula-based approach is often used when only year-to-date and full fiscal year data are readily available. This method calculates TTM revenue by taking the latest year-to-date revenue, adding the last full fiscal year’s revenue, and then subtracting the prior-year year-to-date revenue. For instance, if a company’s latest reported period is Q3 2024, you would take the revenue for the nine months ended September 30, 2024. Then, you would add the total revenue for the full fiscal year ended December 31, 2023. Finally, you would subtract the revenue for the nine months ended September 30, 2023.

To illustrate with hypothetical numbers, assume a company reported $1,000 million in revenue for the nine months ended September 30, 2024. Its full fiscal year 2023 revenue was $1,200 million, and its revenue for the nine months ended September 30, 2023, was $900 million. Using the formula, the TTM revenue would be $1,000 million (latest year-to-date) + $1,200 million (last full fiscal year) – $900 million (prior-year year-to-date), resulting in $1,300 million.

Calculating Trailing Twelve Months Earnings Per Share

Calculating trailing twelve months earnings per share (TTM EPS) begins by determining the TTM Net Income. This can be achieved by summing the net income reported in the four most recent consecutive quarterly reports. Alternatively, the formula-based method for net income involves taking the latest year-to-date net income, adding the last full fiscal year’s net income, and then subtracting the prior-year year-to-date net income. For example, if a company’s net income for the nine months ended September 30, 2024, was $150 million, its full fiscal year 2023 net income was $180 million, and its net income for the nine months ended September 30, 2023, was $130 million, the TTM net income would be $150M + $180M – $130M = $200M.

Once the TTM Net Income is determined, it is divided by the weighted average shares outstanding over the same trailing twelve-month period to arrive at TTM EPS. Weighted average shares outstanding represent the average number of shares that were outstanding during a period, accounting for any new shares issued or shares repurchased. This figure is typically found on a company’s income statement.

For instance, if the calculated TTM Net Income is $200 million and the weighted average shares outstanding for that TTM period are 100 million shares, then the TTM EPS would be $2.00 ($200 million / 100 million shares). This metric offers a more current and smoothed view of a company’s profitability on a per-share basis compared to a single annual or quarterly EPS figure.

Applying TTM to Other Key Ratios

Trailing twelve months figures are frequently used as inputs for various financial ratios, providing a more current and relevant analysis.

For instance, the price-to-earnings (P/E) ratio often incorporates TTM EPS. This widely used valuation metric is calculated by dividing the current share price by the TTM Earnings Per Share, offering insight into how much investors are willing to pay for each dollar of earnings over the most recent year.

Similarly, TTM data is applied when evaluating dividend yield. The annual dividends per share, often aggregated on a TTM basis, are divided by the current share price to determine the percentage return an investor receives from dividends. This provides a more accurate representation of the current yield, especially for companies with fluctuating dividend payments.

Enterprise Value to TTM Revenue (EV/Revenue) is another ratio that utilizes TTM figures. This metric compares a company’s total value, including debt, to its sales over the past year. Using TTM revenue in this calculation provides a current snapshot of a company’s valuation relative to its recent top-line performance, which is particularly useful for growth companies.