ACV Calculator (Annual Contract Value)
Calculate annual contract value (ACV) and total contract value (TCV) for a SaaS or service contract, with or without one-time setup fees, plus the monthly recurring value and first-year billings.
How it works
Contract years = months ÷ 12 · Recurring ACV = total recurring fees ÷ contract years · ACV including one-time fees = (recurring fees + one-time fees) ÷ years · TCV = recurring fees + one-time fees · Monthly recurring value = recurring fees ÷ months
Annual contract value normalises a customer contract to one year so deals of different lengths can be compared, while total contract value is everything the customer is committed to pay over the whole term. Most SaaS companies report ACV on recurring subscription fees only, because setup and professional-services fees do not repeat; some include them spread over the term — whichever you choose, use it consistently. ACV is a contract metric: unlike ARR it can be used for multi-year deals and does not depend on how the contract is invoiced.
Worked example
A three-year (36-month) contract worth $36,000 in subscription fees plus a $3,000 onboarding fee has an ACV of $36,000 ÷ 3 = $12,000.00 excluding the one-time fee ($13,000.00 if it is spread over the term). TCV is $39,000.00, the monthly recurring value is $1,000.00, and first-year billings are $15,000.00.
Sources: Wall Street Prep — Annual contract value (ACV) · Klipfolio — Annual contract value formula
Frequently asked questions
How do you calculate ACV?
Divide the total recurring value of the contract by its length in years. A $36,000 three-year contract has an ACV of $12,000. For a contract shorter than a year, ACV annualises it: a 6-month $5,000 contract is $10,000 ACV.
What is the difference between ACV and TCV?
TCV is the total committed value over the whole contract, including one-time fees. ACV is the average value per year. A 3-year deal with $12,000 per year and a $3,000 setup fee has TCV $39,000 and ACV $12,000.
Should one-time fees be included in ACV?
Usually not: most SaaS teams use recurring ACV so the metric tracks repeatable revenue. If you include setup fees, spread them over the contract years and label the metric clearly.
Is ACV the same as ARR?
Not quite. ARR is the annualised recurring revenue of all active subscriptions at a point in time, used for the whole business. ACV describes individual contracts or average deal size; for a one-year contract with no one-time fees they are equal.
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Planning estimate only. Real results depend on your actual costs, prices, taxes and market — check the figures with your accountant or adviser before making business decisions.