What Is Average Deal Size (ACV)?
Average contract value (ACV) is the average annualized revenue per customer contract, normalizing deals to a yearly figure. It helps compare deal sizes, segment customers and size your go-to-market — and is often confused with TCV (total contract value) and ARR, which it's distinct from.
Key takeaways
- ACV is the average annualized value of a contract.
- TCV is the total over the whole term; ACV normalizes it to one year.
- Use ACV to compare deal sizes and shape your GTM motion.
ACV vs TCV vs ARR
| Metric | What it measures |
|---|---|
| ACV | Average annualized value per contract |
| TCV | Total value over the entire contract term |
| ARR | Annual recurring revenue across all customers |
Worked example
A €60,000 deal signed over three years has a TCV of €60,000 and an ACV of €20,000 (€60k ÷ 3). Mixing the two is a classic reporting error — TCV flatters deal size, ACV reflects the annual run-rate the deal contributes.
Frequently asked questions
What is ACV?
Average contract value — the average annualized revenue per customer contract, used to compare deal sizes and plan go-to-market.
What's the difference between ACV and TCV?
TCV is the total value over a contract's full term; ACV normalizes that to a single year. A €60k three-year deal is €60k TCV and €20k ACV.
What's the difference between ACV and ARR?
ACV is per-contract average annual value; ARR is the total annual recurring revenue across your whole customer base.
Related service: Track deal economics in HubSpot