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    Metrics & KPIs
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    Global · Global

    ACV

    Also called: Annual Contract Value

    TL;DR

    Annual Contract Value, the recurring revenue value of a single customer contract on a per-year basis, a standard B2B SaaS deal-size metric.

    ACV is the average annualized value of a customer contract. It's the granular dimension of ARR, total ARR is roughly customers × ACV. SMB SaaS often runs $1 to 10K ACV, mid-market $10 to 50K, enterprise $50K+. The ACV band determines which sales motion makes sense (PLG, inside sales, field sales).

    New-deal ACV is the most-watched ACV; expansion ACV per existing customer is a leading indicator of NRR.

    Formula

    ACV = TCV ÷ Contract Length in Years
    • TCV , Total contract value over the entire term, including ramps but excluding one-time fees
    • Contract Length in Years , Length of the contract in years

    For non-ramping contracts, ACV equals annualized subscription value. For ramping contracts, ACV is the average annual value across the term.

    Worked example

    A 3-year contract: $80k year 1, $100k year 2, $120k year 3. TCV = $300k; ACV = $300k ÷ 3 = $100k. Sales reps are usually comp'd on year-1 ACV ($80k), not blended ACV.

    Common pitfalls

    • •Reporting blended ACV when SMB and enterprise customers behave very differently.
    • •Confusing ACV with TCV (total contract value across the full term).
    • •Tracking ACV without tracking ACV growth, a flat ACV means the company isn't moving upmarket.

    When this shows up in a pitch deck

    ACV appears on the Sales Model slide and is used to size pipeline coverage.

    Related terms

    Total Contract Value

    The total value of a customer contract over its full term, including recurring fees, one-time fees, and committed expansion.

    ARR

    Annual Recurring Revenue, the value of subscription contracts on a normalized 12-month basis, the headline SaaS revenue metric.

    MRR

    Monthly Recurring Revenue, the normalized monthly value of all subscriptions in force, often used by month-to-month subscription businesses.

    Win Rate

    The percentage of qualified sales opportunities that result in closed-won deals over a given period.

    Sales Velocity

    A composite measure of how quickly a sales team converts pipeline into closed revenue, derived from deals × win rate × ACV ÷ cycle length.

    Pitch deck pillar pages

    Long-form deep dives on the slides ACV most often shows up on.

    Pitch Deck Traction Slide

    Build a traction slide that proves the business is working: stage-appropriate metrics, the chart shape investors expect, and three failure patterns to avoid.

    Use ACV in your next pitch deck

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