TCV FAQ
Quick answers to the most common questions about TCV. For the full definition, formula, and benchmarks, see the TCV glossary page.
What is TCV?
TCV is total contract value: everything a customer has committed to pay over the full contract term — recurring subscription fees for all years plus one-time charges like implementation. A 3-year contract at $12K per year with $2K setup has a TCV of $38K.
What is the difference between TCV and ACV?
ACV annualizes the recurring value of a contract (one year's worth); TCV sums the whole term plus one-time fees. TCV is always greater than or equal to ACV for multi-year deals.
When should I use TCV instead of ARR?
TCV is most useful for bookings and sales compensation on multi-year or services-heavy deals. ARR remains the standard for measuring the recurring revenue base of the business.
Keep exploring 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. Read the full TCV definition for formulas, benchmarks, and common mistakes.