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.
See this in action
Insights and tools where TCV (Total Contract Value) shows up.
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.
Got a finance question that needs more than a definition?
Talk to a real CFO. 30 minutes, no contract, free.
