[SaaS 筆記 39] ACV vs. ARR

Customer A

Customer A agrees to a $1000 / year, 1 year agreement, and pays monthly.

Metrics calculated for Customer A Only:

  • ARR = $1000
  • ACV = $1000

Customer B

Customer B agrees to a $750 / year, 2 year agreement, and pays yearly.

Metrics calculated for Customer B Only:

  • ARR = $750
  • ACV = $750

Customer C

Customer C agrees to a $500 / year, 3 year agreement, and pays yearly.

Metrics calculated for Customer C Only:

  • ARR = $500
  • ACV = $500

——————–

Metrics calculated with all three customers A, B & C combined:

  • ARR = $2,250
  • ACV =
    • Year 1 = $750
    • Year 2 = $625
    • Year 3 = $500

——————–

Here are the calculations broken down:

  • ARR: $1000 + $750 + $500 = $2,250
  • ACV:
    • Year 1: $1000 + $750 + $500 / 3 = $750
    • Year 2: $750 + $500 / 2 = $625
    • Year 3: $500 / 1 = $500 

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