Revenue Metrics

Annual Contract Value (ACV)

The average annualised revenue of a single customer contract, normalised to a one-year period.

ACV normalises contracts of different lengths into a single comparable annual value. A three-year contract worth $90,000 has an ACV of $30,000. This makes it easier to compare deals won across quarters regardless of contract length, and it feeds cleanly into ARR calculations. ACV is a primary segmentation tool — businesses divide their customer base into SMB, mid-market, and enterprise tiers based on ACV bands. High ACV indicates enterprise-grade deals with longer sales cycles, more stakeholders, and heavier onboarding requirements. Low ACV suggests a product-led or self-serve motion where volume matters more than deal size. Sales team quotas, commission structures, and support resources are typically designed around ACV thresholds.