Joomla! is developed using a fixed release cycle. Every six months, the Joomla! Project releases a new minor or major version of Joomla!. (Joomla!'s version format is [major].[minor].[maintenance].)
Each version of Joomla! is supported by the Joomla! Project for a limited amount of time. There are two classifications for suppport: standard support (STS) and long term support (LTS). Every third release will be assigned long term support.
Please note that both STS and LTS releases, once they have reached the GA (General Availability) status, are fully functional and ready to be used in production environment. The disadvantage of using STS releases is that you will need to update your installation of Joomla! every six months, while the advantage is that you will have access to new features and extensions earlier.
Generally, STS releases introduce fundamentally new features and changes that break compatibility with the previous LTS, while LTS releases can be seen as the finalization of the work of the previous two STS releases. Therefore STS releases will usually be numbered [major].0 and [major].1 and LTS releases will be numbered [major].5. For example, the STS release 3.0 will include breaking changes from 2.5, and 3.5 will include matured versions of the changes in 3.0 and 3.1.
Usually, there will be a migration path (an officially supported way of migrating to the next version) between two LTS releases (from 1.5 to 2.5, for example) and between an LTS release and its previous STS releases (from 1.7 to 2.5, for example), but not to the following STS releases (from 2.5 to 3.0, for example).
For more information, see the official Development Strategy.