Operations term
Annual Contract Value (ACV)
ACV is the per-customer slice of ARR. For a SaaS with $1M ARR and 100 customers, ACV is $10,000. For B2B SaaS with multi-year contracts, ACV is calculated by normalizing contract total value to a per-year figure. ACV is the unit-economics granularity ARR misses.
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How to operationalize this
Track ACV by cohort (acquisition month) and by ICP segment. Rising ACV over time means you're moving up-market or expanding within accounts; falling ACV means you're either discounting or attracting smaller customers.
Common misuse
Reporting ACV without specifying customer cohort. Aggregated ACV across all customers can mask important segment trends — large customers' ACV staying flat while small customers' ACV drops.
What “good” looks like for indie SaaS
Indie SaaS at $50-$500/month ARPU produces $600-$6,000 ACV. ACV growth quarter-over-quarter (even modest 5-10%) is a strong unit-economics health signal.
Related
Frequently asked
- What is the difference between ACV and ARR?
- ACV is per-customer; ARR is total. ARR = ACV × customer count, roughly. ACV tells you about individual customer value; ARR tells you about company scale.
Apply the term to a live page
The free 90-second Launch Diagnostic labels which Brunson failure mode your page hits — many of these terms have direct connections to the diagnosis.