ACV vs TCV
What is the difference between ACV and TCV? Side-by-side definitions, formulas, and benchmarks for two of the most-watched SaaS metrics.
Definitions
What is ACV?
ACV is annual contract value, the annualized revenue value of a customer contract.
What is TCV?
TCV is total contract value, the full revenue value of a customer contract over its entire term, including recurring fees for all years plus one-time charges.
ACV vs TCV at a Glance
| ACV | TCV | |
|---|---|---|
| Category | Metrics | Metrics |
| Formula | — | TCV = (ACV × Contract Years) + One-Time Fees |
| Benchmarks | — | — |
| Calculator | — | TCV calculator |
When Each Matters
ACV and TCV answer different questions. ACV is annual contract value, the annualized revenue value of a customer contract. TCV is total contract value, the full revenue value of a customer contract over its entire term, including recurring fees for all years plus one-time charges. In practice, healthy SaaS operators watch both, because each one catches failure modes the other misses.