Average Revenue Per User (ARPU)

What is Average Revenue Per User (ARPU)?

Average Revenue Per User (ARPU) is a key performance metric for subscription and platform businesses that measures the average revenue generated per customer or user over a specific period.

How It’s Calculated

ARPU = Total Revenue ÷ Number of Active Users

Example

A SaaS company earns $500,000 in revenue from 1,000 subscribers in a month. ARPU = $500,000 ÷ 1,000 = $500

Why It’s Important

Tracks customer value trends over time.
Useful for benchmarking against competitors.
Informs pricing and upselling strategies.