Metrics
TCV (Total Contract Value)
Quick definition
Total dollar value of a customer contract over its entire term, including all renewals and upgrades committed at signing.
TCV is the gross dollar commitment a customer makes. A 3-year, $24K/yr contract has TCV = $72K. TCV minus discounts and adjustments = net TCV. TCV is meaningful in bookings reports (especially for sales credit and quotas) but less meaningful in revenue or ARR — for those, you'd use the annualized recurring portion only. Don't confuse TCV with revenue or ARR.
Related metrics terms
ARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
MRR (Monthly Recurring Revenue)
Monthly equivalent of ARR, useful for month-over-month tracking.
Net Revenue Retention (NRR)
Revenue from your existing customer base 12 months later, including expansion and churn.
Gross Revenue Retention (GRR)
NRR without upsell — what you keep before expansion.
Frequently asked questions
- What is TCV (Total Contract Value)?
- TCV is the gross dollar commitment a customer makes. A 3-year, $24K/yr contract has TCV = $72K. TCV minus discounts and adjustments = net TCV. TCV is meaningful in bookings reports (especially for sales credit and quotas) but less meaningful in revenue or ARR — for those, you'd use the annualized recurring portion only. Don't confuse TCV with revenue or ARR.
- Why is TCV (Total Contract Value) important for startups?
- TCV (Total Contract Value) is a metrics concept that matters for startup founders because it directly affects fundraising readiness, financial decision-making, or operational discipline at the stage where mistakes are expensive to undo. Founders who understand it have a meaningfully easier time in diligence, board meetings, and investor conversations.
- What category does TCV (Total Contract Value) belong to?
- TCV (Total Contract Value) is a Metrics term in the StartupCFO finance glossary — alongside other metrics concepts that founders, CFOs, and accountants use in daily startup operations and reporting.
- Where can I learn more about TCV (Total Contract Value)?
- Beyond this definition, see the related metrics terms below, or explore StartupCFO's insights and tools that put TCV (Total Contract Value) in context. For specific situations, talk to a fractional CFO who can walk through your numbers.
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