Revenue

What is ARPU (Average Revenue Per User)?

Average revenue generated per active user.

Definition

Average Revenue Per User (ARPU) calculates the mean revenue each active user generates over a specific period (usually monthly). It is a foundational unit economics metric that directly impacts LTV calculations, pricing strategy decisions, and growth investment thresholds. ARPU trending upward indicates successful upselling, price optimization, or higher-value user acquisition. ARPU trending downward may signal plan downgrades, discounting erosion, or shifting user mix.

Formula

Total revenue in period ÷ Active users in period

How to measure

Divide total revenue in the period by the number of active users (or paying users — specify which). Report both ARPU (all users, including free) and ARPPU (paying users only) for a complete picture. Segment by plan tier, geography, and user tenure.

Industry benchmarks

B2B SaaS: $50–500/month ARPU depending on market segment. Consumer subscriptions: $5–15/month. Fintech: varies widely ($1–50/month). The trend matters more than the absolute number — consistent ARPU growth signals pricing power.

Used in feature types

Monetization

Related metrics

Conversion to Paid Rate

Percentage of free users who convert to a paid plan.

Revenue per Feature

Incremental revenue directly attributable to a specific feature.

Churn Rate

Percentage of active users who stop using the product within a given period.

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