# Annual Contract Value (ACV)

> Annual Contract Value (ACV) is the average annualized revenue amount from a single customer contract.

- **URL**: https://dodopayments.com/glossary/annual-contract-value

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## What is Annual Contract Value (ACV)?

Annual Contract Value (ACV) is the average annualized revenue amount from a single customer contract. It excludes one-time fees and focuses on the recurring revenue generated by the agreement over a twelve-month period.

### Why It Matters

- It helps sales teams prioritize high-value accounts and set appropriate quotas.

- ACV is a key input for calculating the payback period and overall sales efficiency.

- Comparing ACV across different customer segments can reveal which markets are the most lucrative.

## Learn More

- [SaaS metrics and KPI guide](https://dodopayments.com/blogs/saas-metrics-kpi)
- [How to build predictable recurring revenue](https://dodopayments.com/blogs/build-predictable-revenue)
- [Recurring revenue models and benchmarks](https://dodopayments.com/blogs/recurring-revenue)