SaaS metrics
What is ACV (Annual Contract Value)?
ACV is the average revenue each contract generates in 12 months — different from ARPU, which averages per active user, and ARR, which sums the whole base.
ACV (Annual Contract Value) normalizes any contract (monthly, quarterly, multi-year) to its annual equivalent. It is the right metric to understand "average deal size" and segment SMB vs Mid-Market vs Enterprise.
Do not confuse: ACV is per contract, ARR is the sum of all. Two SaaS with the same ARR can have very different ACVs — one with many small contracts, the other with few large ones.
Formula
ACV = valor total do contrato ÷ anos de contratoUse it in practice
SaaS Simulator
Frequently asked questions
Does ACV include setup or one-off fees?
Generally no. ACV measures only the recurring component; one-off fees are tracked separately as TCV (Total Contract Value).
How does ACV inform an acceptable CAC?
A sustainable CAC sits at roughly 1/3 to 1/2 of first-year ACV, ensuring quick payback.