Lost profits are among the most hotly contested — and most frequently excluded — categories of commercial damages. Courts do not demand mathematical certainty, but they do demand more than speculation. Here is what judges look for when deciding whether a lost-profits opinion earns its way to the jury.

Reasonable Certainty, Not Speculation

The governing standard in most jurisdictions is “reasonable certainty”: the plaintiff must show the fact of damages with reasonable certainty, and the amount with as much certainty as the nature of the case permits. A new business with no track record faces a steeper climb than an established company with years of financials — but neither is automatically barred. The expert’s job is to build the bridge from evidence to number.

The “But-For” World Must Be Credible

Lost profits measure the difference between what happened and what would have happened absent the wrongful act. Courts expect that counterfactual to be grounded in reality: the company’s own history, comparable businesses, industry data, and contemporaneous projections. A “but-for” scenario that assumes perfection — no competition, no downturns, no missteps — invites skepticism and exclusion.

Separate the Breach from the Noise

Judges look closely at causation. If revenues fell during a recession, or costs rose for reasons unrelated to the defendant’s conduct, the analysis must account for it. An expert who attributes every dollar of decline to the breach — without addressing alternative explanations — hands opposing counsel an easy cross-examination.

Methodology Must Be Reliable

Under Daubert, the method matters as much as the conclusion. Accepted approaches — before-and-after comparisons, yardstick analyses, discounted cash flow projections — are all admissible when applied reliably to sufficient facts. What fails is the black box: numbers without disclosed data, assumptions without support, and conclusions that shift with advocacy.

Proving lost profits is an exercise in disciplined storytelling: credible facts, reliable methods, and a clear explanation of how the evidence leads to the number. Do that, and the opinion stands.