Total contract value is the complete revenue a contract represents over its entire term, including recurring and one-time fees. It reflects the full commitment a customer has made, which matters for cash planning and for understanding the true value of a signed deal.

TCV is the number that tells you what a signed deal is really worth in total, which matters for cash and for prioritizing which accounts to protect. But do not let a large TCV on a long contract disguise a small annual figure. For comparing deals and planning acquisition, ACV is the truer lens. TCV is for understanding commitment; ACV is for running the business.

Example:

A five-year deal at $20,000 per year has a TCV of $100,000. Impressive in total, but the ACV of $20,000 is what governs how much you can spend to win it.

When should you use TCV instead of ACV?

TCV is useful for understanding total commitment and cash planning. ACV is better for comparing deals and setting acquisition economics.

Does TCV include one-time fees?

Yes. TCV captures all revenue over the contract term, both recurring and one-time, unlike ACV, which annualizes the recurring portion.