Annual Contract Value
Annual Contract Value (ACV) is the average annualized revenue per customer contract. It normalizes contract values to a yearly basis, making it easier to compare deals and forecast revenue.
A 3-year contract worth $90,000. ACV = $90,000 / 3 = $30,000 per year.
ACV helps you understand deal sizes and segment your customer base. It matters for sales planning. Knowing your average ACV tells you how many deals you need to hit revenue targets.
Velocity sales
Transactional
Enterprise
Strategic
ACV is the value of a single contract annualized. ARR is total annual recurring revenue across all customers. ACV is per-deal; ARR is company-wide.
There are two approaches: some companies exclude one-time fees to keep ACV comparable; others include first-year fees for total first-year value. Be consistent and transparent.
Depends on your sales model. If you have SDRs + AEs, you need at least $15-25K ACV to justify the cost. Self-serve can work with $1-5K ACV. Match sales motion to deal size.
We build real-time dashboards that track ACV and every other metric investors care about. Updated daily. Investor-ready.
