Trailing twelve months (TTM)
Definition
Trailing twelve months is the most recent twelve completed months of actual results. Not the best twelve months, not a forecast, not a strong quarter annualised. Every multiple used at a $50,000–$150,000 exit applies to TTM figures, because that is the only performance a buyer can check.
Trailing twelve months (TTM) is the most recent twelve completed months of actual revenue, costs and profit, used as the performance record a business is valued on.
What TTM means at this size
At a $50,000–$150,000 close, TTM is the whole conversation. The buyer is acquiring an income, and the only honest evidence of that income is what the business earned while nobody was trying to impress anyone. Projections carry no weight here. A growth curve is read as a reason to sit at the upper end of a range, never as revenue.
Twelve months also smooths out the things a founder stops noticing: a good December, a quiet August, the month a large annual plan renewed.
Where it bites
Sellers annualise. A business at $3,000 MRR in the current month is described as a $36,000-a-year business, even though it spent most of the year well below that. Buyers rebuild the figure from statements and get a different answer, which turns a pricing discussion into a credibility discussion.
Under six months of history there is no clean multiple available at all. Wait for six to twelve months of consistent data, or price on asset value at a discount and accept that buyers mark youth down hard.
Worked example
A micro-SaaS grew from $1,900 MRR to $3,000 MRR over the year. TTM revenue is $29,400, not $36,000. After $8,400 of direct costs, SDE is $21,000, so 3× trailing annual profit puts the business near $63,000.
Annualising the latest month would have implied $36,000 of revenue, around $27,600 of SDE, and an ask near $83,000. The $20,000 gap is not a negotiating position. It is one number being measured and the other being assumed.
Why it matters when you exit
TTM is the frame every serious buyer reads your business through, so build your figures in it from the start. Twelve months, month by month, with the bank and payment processor behind each row. A seller who presents TTM without being asked has already answered the first three questions of diligence.
Related: profit-multiple, sde, revenue-multiple, mrr-and-arr
See what a business at this level is listed at.
Everything on sale between $50,000 and $150,000, on the same fields.