Velocity and average velocity

Your team's velocity is the amount of work the team has shown it has completed in an iteration. You can use this information to help estimate how much work can be completed in future iterations.

In the planning folder summary page, you can see your team's velocity for the specific Iteration planning folder.

Note: Velocity is displayed only on the Iteration planning folder summary page.

Velocity is calculated based on the sum of points of closed artifacts in an iteration.

Note that velocity calculation takes into account the following:

Points of the parent artifacts, that is, only closed artifacts which are at the top level of the planning folder. For example, in the following illustration, only the points of the highlighted artifacts and not their child artifacts are taken into account for velocity calculation.
Autosummed points of these closed parent artifacts do count as well.

Velocity only makes sense as a relative measure. There is no specific velocity that is good or bad or standard, because no two teams take on work of exactly the same scale or complexity. However, if your team's velocity is increasing from sprint to sprint, you can surmise that you are on the right track.

Average velocity

The average velocity is calculated for completed and ongoing iterations and is displayed only on the Release planning folder summary page. Average Velocity calculation is as follows:

Average velocity = Sum of iteration velocity of all iterations within the specific Release/Total number of iterations

Note the following for velocity and average velocity calculation:

Nested iteration planning folders (child iteration planning folders or subfolders) are not included for velocity or average velocity calculation for the parent planning folder. For example, in the following illustration:
Average velocity for Release 1 = Sum of velocity of Iteration 1 and Iteration 2 / 2

In the above calculation, Iteration 1.1 (being the subfolder) is not included. Similarly, velocity calculation for Iteration 1 does not take into account its subfolder Iteration 1.1.