The total value of a customer contract over its entire term, including recurring and one-off charges.
TCV = (ACV × contract length in years) + one-off fees
A two-year contract at £40,000 per year plus a one-off £10,000 implementation fee.
(£40,000 × 2) + £10,000 = £90,000 TCV
TCV is the full lifetime value of a single contract as written. It sums every pound the customer has committed to pay across the whole term — recurring subscription fees plus any one-off charges like setup, onboarding, or professional services. A two-year deal at £40,000 a year with a £10,000 setup fee has a TCV of £90,000.
Where ACV normalises a deal to one year, TCV captures the headline commitment in full. It is the natural figure for understanding the size of a signed deal, the total cash a contract will generate, and the scale of multi-year enterprise agreements.
TCV can flatter if read carelessly. A large TCV driven by a long term tells you little about annual run-rate, and long contracts carry their own risk if the customer can exit early. Pair TCV with ACV and contract length to see both the total commitment and the yearly pace.
TCV shows the full financial weight of a contract, which matters for revenue planning, commission structures, and judging the importance of an account. A handful of large-TCV deals can dominate your book, so knowing them helps you weigh concentration risk and prioritise retention effort.
There is no universal TCV benchmark — it scales with deal size and contract length. The useful read is the ratio of TCV to ACV, which reveals your average contract length: a TCV roughly three times ACV implies three-year terms.
TCV is the total value of a contract across its full term, including one-off fees. ACV normalises that to a single year of recurring value. Dividing TCV (less one-off fees) by the term in years gives ACV.
Yes. Unlike ACV, TCV typically includes one-off charges such as setup, implementation, and professional services alongside the recurring contract value.
They are related. Bookings is the total value of contracts signed in a period, which is effectively the sum of the TCV of those deals.
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