New Total Contract Value
The full lifetime value of newly signed customer contracts over the whole term, including recurring and one-time components.
◆ Currency
Formula
Built from
What it measures
New TCV totals the full economic value your newly acquired customers commit to over their contract lifetimes — recurring subscription value plus any one-time fees. It captures not just whether deals are closing, but at what scale and for how long. Renewals, expansion on existing accounts, and forecasted usage you haven't contracted are excluded; only the committed value of net-new logos counts.
Why it matters
New TCV is what tells sales and finance whether your new deals are actually getting bigger. ACV alone hides duration — a two-year deal at $50K ACV is worth half of a four-year deal at the same ACV, yet they look identical on an ACV report. New TCV forces you to see the full committed value you've earned. It drives bookings forecasts, sizes sales compensation, and validates whether your land-and-expand strategy is producing larger, longer commitments over time.
How to read it
Read New TCV as a trend, not a single number, and always alongside new logo count. A quarter with $2M of new TCV means you booked deals worth $2M to recognize across their lifetimes. Rising New TCV with flat logos means you're landing bigger or longer deals — pricing power. Flat New TCV while logos grow means deals are shrinking, a signal that term length or packaging has drifted. Decompose it into ACV × duration to see whether a move came from price, term, or one-time fees.
What good looks like
Good
New TCV trending up with stable or rising deal size — bigger or longer commitments per logo, signaling pricing power and a healthy land-and-expand motion.
Watch
New TCV flat or declining while new logos grow — deals are shrinking on price or term; investigate packaging, discounting, or competitive pressure.
Bad
New TCV falling while churn rises — a leaky funnel and weakening retention at once, often pointing to product-market-fit erosion or go-to-market misalignment.
Watch-outs
- Forgetting contract duration. Bare ACV is not TCV — if your deal terms are shrinking, an ACV-only view will mask the decline and overstate bookings momentum.
- Inconsistent one-time fee treatment. Decide once whether setup, implementation, and other non-recurring charges are in or out, and apply it every period — flip-flopping breaks period-over-period comparability.
- Applying a blended term instead of multiplying deal by deal. Averaging your cohort to 2.5 years and multiplying once hides shifts in term mix that are the whole reason you track TCV.
- Mixing new logos with expansion or renewal. Only first-deal value for net-new customers counts as New TCV; keep upsell, renewal, and churn separate or use net measures explicitly.
Worked example
Hypothetical
In Q2 you close 15 new customers: 10 at $50K ACV for 3 years, and 5 at $100K ACV for 2 years, with no one-time fees. The first group contributes $50K × 3 × 10 = $1.5M; the second contributes $100K × 2 × 5 = $1M. New TCV for the quarter is $2.5M.