ACV Calculator
Work out the average annual value of your customer contracts, normalised across different contract lengths.
Annual contract value
What it measures
ACV normalises a contract to its yearly value: total contract value divided by contract length. A 36,000 deal over three years is 12,000 ACV.
Why it matters
ACV sets your motion. Sub 5,000 ACV needs self serve economics; six figure ACV supports a field sales team. Mismatched motion and ACV is a common way SaaS companies burn money.
A worked example
A three year contract worth 36,000 carries a 12,000 ACV. Ten of those is 120,000 in ACV bookings.
How to read and improve it
Raising ACV usually means selling to bigger buyers or packaging more value into higher tiers, not squeezing existing ones.
Frequently asked questions
ACV or ARR?
ACV describes contracts, ARR describes the whole base. They meet when every customer signs one year deals.
Do one time fees count?
Common practice excludes them, but be consistent. State what your ACV includes when you report it.
More in SaaS metrics: SaaS CAC Calculator · Customer Lifetime Value Calculator · Churn Rate Calculator
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