TCV (Total Contract Value)

TCV (Total Contract Value) is the full revenue a single contract represents across its entire term. Unlike a per-year figure, TCV counts every recurring charge for the length of the deal plus any one-time fees, giving the largest headline number for what a customer has committed to pay.

How it's calculated

Multiply the recurring value per period by the number of periods in the contract, then add any one-time or setup fees.

For example, a three-year deal at $12,000 per year with a $3,000 onboarding fee has a TCV of (3 × $12,000) + $3,000 = $39,000. Its ACV would be $12,000, since ACV ignores one-time fees and looks at a single year.

TCV vs ACV

The difference is time span and scope:

• TCV is the whole contract, one-time fees included — the total dollar commitment.
• [ACV](/glossary/acv) is the annualized recurring slice of that same contract.

A long contract inflates TCV without changing ACV, so a large TCV can hide a modest yearly run rate. Always read the two together.

Why it matters

TCV is useful for measuring the total value of your sales pipeline and comparing the weight of individual deals. It's closely tied to bookings, which record the value of contracts as they're signed. But because TCV bundles one-time fees and multi-year terms, it isn't a substitute for recurring metrics like ARR or MRR when you're gauging predictable revenue.