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Software Contract Value Calculator

Calculate TCV, ACV, MRR and ARR from contract length, billing cadence, seats, price, setup fee, discount and annual uplift.

Use the Software Contract Value Calculator

Enter contract length, billing (monthly/annual/upfront), price per seat, seats, setup fee, discount and optional uplift. TCV, ACV, MRR and ARR are calculated.

Contract inputs

Contract length, billing cadence, price per seat, seats. Then commercial terms.

Commercial terms

Results

Total Contract Value (TCV)
$6,000
Annual Contract Value (ACV)
$6,000
MRR
$500
ARR
$6,000

MRR = (Seat price x Seats + Overage) x (1 - Discount). TCV = Setup + sum of billings over contract (with uplift). ACV = TCV ÷ Contract years.

What this metric means

TCV is the total value of the contract. ACV is that value expressed per year. MRR and ARR are the recurring revenue run rate. Together they help you compare deals and forecast revenue.

How to calculate it

Base MRR = seat price x seats + overage; apply discount to get MRR. ARR = MRR x 12. TCV = setup fee + sum of billings over the contract (with annual uplift if any). ACV = TCV / contract years.

How to improve the metric

Increase seats, price per seat, or contract length; add setup or overage; negotiate lower discount; use annual or upfront billing to improve cash flow while keeping value.

Common mistakes

Confusing billing cadence with revenue recognition; forgetting to add setup or overage; applying uplift to setup fee (usually setup is one-time); or comparing ACV across different contract lengths without context.

How to interpret your result

Use TCV for total deal size and pipeline; ACV for annualised comparison; MRR/ARR for run rate and growth metrics. Cash collection will differ if billing is annual or upfront.

FAQs

What is TCV?▾
Total Contract Value: the full value of the contract over its term, including setup fee and all recurring billings (after discount, with uplift if applied).
What is ACV?▾
Annual Contract Value: TCV divided by contract length in years. It normalises multi-year deals to an annual equivalent for comparison.
How is MRR derived?▾
MRR = (Price per seat x Seats + Overage) x (1 - Discount). If billing is annual or upfront, we still derive MRR from the monthly equivalent of the recurring value.
When do I use annual vs upfront?▾
Annual: customer is billed once per year. Upfront: customer pays the full contract value at the start. Both change the cash schedule; we still report TCV/ACV/MRR/ARR from the value of the deal.
How does annual uplift work?▾
Each year the recurring revenue is multiplied by (1 + uplift). So a 5% uplift means year 2 is 1.05 x ARR, year 3 is 1.05^2 x ARR, etc. TCV is the sum of those billings plus setup.

Related tools

Browse all calculators on NetGrow.

NetGrow

Software Contract Value Calculator

Calculate TCV, ACV, MRR and ARR from contract length, billing cadence, seats, price, setup fee, discount and annual uplift.

Use the Software Contract Value Calculator

Enter contract length, billing (monthly/annual/upfront), price per seat, seats, setup fee, discount and optional uplift. TCV, ACV, MRR and ARR are calculated.

Contract inputs

Contract length, billing cadence, price per seat, seats. Then commercial terms.

Commercial terms

Results

Total Contract Value (TCV)
$6,000
Annual Contract Value (ACV)
$6,000
MRR
$500
ARR
$6,000

MRR = (Seat price x Seats + Overage) x (1 - Discount). TCV = Setup + sum of billings over contract (with uplift). ACV = TCV ÷ Contract years.

What this metric means

TCV is the total value of the contract. ACV is that value expressed per year. MRR and ARR are the recurring revenue run rate. Together they help you compare deals and forecast revenue.

How to calculate it

Base MRR = seat price x seats + overage; apply discount to get MRR. ARR = MRR x 12. TCV = setup fee + sum of billings over the contract (with annual uplift if any). ACV = TCV / contract years.

How to improve the metric

Increase seats, price per seat, or contract length; add setup or overage; negotiate lower discount; use annual or upfront billing to improve cash flow while keeping value.

Common mistakes

Confusing billing cadence with revenue recognition; forgetting to add setup or overage; applying uplift to setup fee (usually setup is one-time); or comparing ACV across different contract lengths without context.

How to interpret your result

Use TCV for total deal size and pipeline; ACV for annualised comparison; MRR/ARR for run rate and growth metrics. Cash collection will differ if billing is annual or upfront.

FAQs

What is TCV?▾
Total Contract Value: the full value of the contract over its term, including setup fee and all recurring billings (after discount, with uplift if applied).
What is ACV?▾
Annual Contract Value: TCV divided by contract length in years. It normalises multi-year deals to an annual equivalent for comparison.
How is MRR derived?▾
MRR = (Price per seat x Seats + Overage) x (1 - Discount). If billing is annual or upfront, we still derive MRR from the monthly equivalent of the recurring value.
When do I use annual vs upfront?▾
Annual: customer is billed once per year. Upfront: customer pays the full contract value at the start. Both change the cash schedule; we still report TCV/ACV/MRR/ARR from the value of the deal.
How does annual uplift work?▾
Each year the recurring revenue is multiplied by (1 + uplift). So a 5% uplift means year 2 is 1.05 x ARR, year 3 is 1.05^2 x ARR, etc. TCV is the sum of those billings plus setup.

Related tools

Browse all calculators on NetGrow.