Average Revenue Per User

Average Revenue Per User (ARPU) tells you how much revenue, on average, each user contributes during a chosen time period. It works by splitting the total revenue into equal parts across all users, so it is a simple per-user measure of monetization. This makes it easier to compare performance across different months, products, or customer groups even when the user count changes.

Use ARPU when you want to measure how effectively a business turns its user base into revenue, especially in subscription apps, telecom, streaming, and online services. It is also useful for comparing revenue quality between different user segments or time periods.

• Using the number of customers from a different time period than the revenue
• Dividing by active users when the formula is intended to use total users, or vice versa, without being consistent
• Forgetting that ARPU is a rate per user and should be written with currency units