NTM Revenue: Meaning, Formula and a Worked Example

NTM revenue means next twelve months revenue: the revenue a business is forecast to recognise over the coming twelve months, measured from a stated date. It is a forecast, not revenue already earned and not necessarily the same period as the next calendar or financial year.

The basic calculation is:

NTM revenue = the sum of forecast revenue for each of the next twelve months.

At a quarter-end, four consecutive quarterly forecasts covering that same period can be added instead. Wall Street Prep’s explanation of LTM and NTM multiples distinguishes these forward estimates from historical results.

A worked NTM revenue example

Assume an analyst is preparing a forecast as of September 30, 2026. The next twelve months run from October 1, 2026 to September 30, 2027.

These are illustrative assumptions, not data for a real company. The calculation is $2.2M + $2.4M + $2.6M + $2.8M = $10M.

Notice that the forecast crosses two calendar years. Substituting the company’s full-year 2027 budget would answer a different question. At a date between quarter-ends, use monthly forecasts or a clearly disclosed calendarisation method rather than accidentally including more or less than twelve months.

NTM revenue vs LTM revenue vs ARR

ARR is not automatically a complete forecast of recognised revenue. A common subscription calculation is monthly recurring revenue multiplied by twelve, as described in Stripe’s ARR guide. A revenue forecast may separately reflect expected customer additions, cancellations, usage, implementation timing and non-recurring work.

Always read the definition. A business describing next year’s expected year-end ARR is not reporting the same measure as revenue expected throughout the next twelve months. Our ARR and MRR guide explains the recurring-revenue measures in more detail.

How to calculate EV/NTM revenue

EV/NTM revenue = enterprise value ÷ NTM revenue.

Using the hypothetical forecast above, assume enterprise value is $60 million and historical LTM revenue is $8 million:

• EV/NTM revenue = $60M ÷ $10M = 6.0×.
• EV/LTM revenue = $60M ÷ $8M = 7.5×.

Enterprise value has not changed between those calculations. The forward multiple is lower because its revenue denominator is larger. That arithmetic does not prove the company has become cheaper or that its forecast will be achieved.

A financing’s post-money equity valuation is also not automatically enterprise value. Avoid comparing one company’s equity-value multiple with another’s enterprise-value multiple as though they were identical.

What happens when the forecast changes?

Here is a separate valuation sensitivity using an assumed, constant 6.0× multiple:

The 6.0× figure is a teaching assumption, not a recommended multiple or a market benchmark. In a real valuation, a weaker outlook may affect both revenue expectations and the multiple an investor is willing to use. Holding the multiple constant isolates one input; it is not a complete valuation model.

How to assess the forecast behind the number

Ask for a bridge from the existing customer base to expected revenue. Separate contracted business from unsigned pipeline, show when new customers start paying, and account for expected losses or reductions. Then compare earlier forecasts with the actual results for those same periods.

A useful review also checks customer concentration and timing. One large deal scheduled for the final month can materially change the total if it slips. Presenting a base case alongside a delayed-sale or higher-churn case makes that dependency visible.

Use the same currency, reporting basis and forecast date across peer comparisons. For broader context, see revenue multiples in startup valuation.

A current example: OpenAI’s proposed pre-IPO financing

The OpenAI pre-IPO valuation analysis compares a reported equity valuation with annualized revenue and explicitly distinguishes that calculation from EV/NTM revenue. It is a practical example of why the numerator, revenue period and forecast status must all be stated.

Visual reference

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Open the full NTM, LTM and ARR graphic.

Reviewed September 27, 2026. Examples are hypothetical and for financial education; they are not an investment recommendation or an appraisal of any company.