ACV — Annual Contract Value
Definition: The annualized value of a single customer's contract, excluding one-time fees. Used to size deals and segment customers.
Example
A 3-year, $300K contract has an ACV of $100K. ACV bands often define sales motions: SMB <$10K, Mid-Market $10-100K, Enterprise $100K+.
When you'll hear it
ACV shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to annual contract value — and they expect the room to already know what that means.
FAQs
What does ACV stand for?
ACV stands for Annual Contract Value.
What does ACV mean in business and finance?
The annualized value of a single customer's contract, excluding one-time fees. Used to size deals and segment customers.
Where will I hear ACV used at work?
ACV comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for annual contract value, so people assume you already know the term.
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