ACV (Annual Contract Value): The annualized value of a contract, normalizing multi-year deals to a single year. Also used to describe average deal size when aggregated.
Also known as: ACV
Formula
ACV = (Total Contract Value - One-time fees) / Contract term in yearsAverage ACV = Sum of ACV for all deals / Number of dealsWhat It Tells You
Deal size and customer segment. Important for CAC analysis and go-to-market strategy.
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