ACV (annual contract value)
Sets the entire GTM motion (viable CAC, cycle, self-serve vs field).
- Formula
- Recurring contract value / term in years (excl. one-time fees)
- Unit
- $
- Models
- SaaS
| Median (2022) | $54000 | KeyBanc 2024 |
| Median (2023) | $56000 | KeyBanc 2024 |
| Median (2024E) | $62000 | KeyBanc 2024 |
What it is
ACV (annual contract value) is the annualized value of a customer contract, calculated as the recurring contract value divided by the term in years, with one-time fees excluded.
How to calculate it
Take the total contract value of recurring components only, divide by the contract length in years, and the result is the ACV. A three-year $180k contract with no one-time fees has an ACV of $60k.
Why it matters
ACV segments your customer base by deal size and drives how you model sales capacity, quota, and CAC payback. Rising median ACV across a cohort indicates upmarket movement — higher value per customer but typically longer sales cycles and more complex procurement.
Benchmarks & pitfalls
KeyBanc's annual SaaS survey (2024 edition) shows median B2B SaaS ACV at $54k in 2022, $56k in 2023, and an estimated $62k in 2024, reflecting a consistent upmarket shift as companies move toward enterprise buyers. ACV can be distorted by multi-year pre-pays or by inconsistent exclusion of professional services and implementation fees — normalize for comparability. This is a published benchmark.