TCV
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.
Also known as: Total Contract Value
TCV Formula
TCV = (ACV × Contract Years) + One-Time Fees | Variable | Meaning |
|---|---|
ACV | Annual contract value of the recurring portion. |
Contract Years | Length of the contract term in years. |
One-Time Fees | Non-recurring charges such as setup, implementation, or training. |
How to Calculate TCV
Worked example
- ACV
- $12,000
- Contract Length (years)
- 3
- One-Time Fees
- $2,000
- → TCV
- $38,000
TCV Calculator
TCV = (ACV × Contract Years) + One-Time Fees | Variable | Meaning |
|---|---|
ACV | Annual contract value of the recurring portion. |
Contract Years | Length of the contract term in years. |
One-Time Fees | Non-recurring charges such as setup, implementation, or training. |
Worked example
- ACV
- $12,000
- Contract Length (years)
- 3
- One-Time Fees
- $2,000
- → TCV
- $38,000
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Prefer a dedicated page? Use the TCV calculator.
Common Mistakes with TCV
TCV vs Related Metrics
- TCV vs ACV — how the two differ and when each matters.
TCV FAQ
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.
More questions? See the full TCV FAQ.