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What Is Trailing 12 Months (TTM)?

By Anders Bylund – Updated Oct 10, 2025 at 3:28 PM EST

Key Points

TTM reflects a company's financial activities over the past 12 months, using four quarterly reports.
Positive TTM figures indicate profit, while negative values show a loss over the year.
Investors can use TTM to compare companies, revealing long-term performance trends.

Trailing 12 months (TTM) is a common term referring to a way to measure the performance of a company over time. It is also used to calculate financial ratios, such as the price-to-earnings (P/E) ratio and return on equity (ROE).

But what does TTM actually mean? And how can you use it to make better financial decisions?

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A hiker walking on a forest trail. — Image Source: The Motley Fool

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Operating Expenses

Costs incurred in running a business's daily activities, like rent, utilities, and salaries, excluding costs directly tied to production.

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The longer-term view of a company’s performance often carries more weight than sudden changes in a single report. Let's say a company has a great quarter, but its stock price doesn't go up. That could happen because the company's TTM figures are still negative, even though it had a good quarter. Investors will be more likely to buy the stock if they know the company's TTM figures are positive. The company is stuck in a "show-me" pattern, where analysts and investors are more interested in seeing improving long-term trends than in seeing the ins-and-outs of any particular quarter.

TTM can also be used to compare the performances of different companies. Imagine we’re looking at two companies, Acme and Beta. Acme’s free cash flows (FCFs) over the last four quarters are positive, while Beta’s TTM FCF results are negative. This means that Acme made more cash than it spent over the past four quarters, while Beta consumed cash over the last fiscal year.

You still have to take care not to make direct comparisons between apples and oranges -- a 5% net profit margin may be awesome for a retailer but terrible for a developer of enterprise software -- but TTM values make it easier to compare the results of two companies.

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Trailing 12 month visual example of Target's revenue. — Source: The Motley Fool YCharts.

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Data source: Quarterly filings. Revenues measured in billions of dollars.
Company	Q2 2021	Q3 2021	Q4 2021	Q1 2022	Q2 2022	Q3 2022
Target	$100.3	$103.4	$106.1	$107.1	$107.9	$108.7
Altria	$26.4	$26.1	$26.0	$25.9	$25.5	$25.2

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As you can see, Target’s revenue rose steadily in this period, while Altria’s top-line sales declined. This view smooths out any short-term fluctuations in revenue that might be caused by seasonal factors or one-time items. With TTM figures, we can get a more accurate picture of a company's ability to perform over a longer period, across various market conditions and economic environments.

This is especially useful for comparing two companies in different industries. For example, a company in the retail industry might see a lot of seasonal effects in its revenue development, while a company in the tobacco industry might not. Target’s single-quarter sales are frequently larger in the holiday-flavored fourth quarter, while Altria customers don’t tend to change their buying habits very often.

By looking at TTM data, we can avoid comparing Target’s seasonal apples to Altria’s steady oranges and instead compare the companies’ long-term performance trends on equal terms.

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About the Author

Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.

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Anders Bylund has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.