What is TCV (Total Contract Value)?
Also known as: Total deal value
TCV is the full dollar value of a customer contract over its entire term — including recurring fees, one-time fees, ramps, and multi-year commitments. The headline number on the signed paper.
What is TCV?
Total Contract Value sums everything a customer is contractually obligated to pay over the life of the contract: recurring subscription fees, one-time setup, ramped pricing, professional services, anything bundled in.
How to calculate TCV
TCV = sum of all contractually committed payments over the contract term.
3-year deal at $50k/year with $20k setup and a $5k year-3 ramp: TCV = $50k × 3 + $20k + $5k = $175k.
TCV vs ACV vs ARR
TCV is total. ACV is per-year average. ARR ignores one-time fees and treats the contract as if it ran indefinitely at current run-rate. Sales celebrates TCV; investors price on ARR; CFOs reconcile both.
Why it matters
Sales teams optimize for TCV because long contracts and ramps inflate it. Investors care about ARR because it is the durable, recurring base. Reconciling TCV, ACV, and ARR is part of every Series B+ board pack.