What is Average Revenue Per User (ARPU)?

ARPU measures how much revenue, on average, each user generates over a specific period — typically daily, weekly, or monthly.

For example, if your app generates $10,000 in a month and has 2,000 active users, your monthly ARPU is $5.

It’s a core monetization metric that helps you understand how valuable your user base is.

How does it work?

The formula is simple:

ARPU = Total revenue ÷ Number of active users

"Active users" usually refers to Daily Active Users (DAU) or Monthly Active Users (MAU), depending on the time frame.

Revenue can include:

• In-app purchases
  
  

• Subscriptions
  
  

• Ad revenue
  
  

• One-time payments
  
  

Some teams also track ARPPU (Average Revenue Per Paying User), which excludes users who didn’t generate revenue, giving you a sense of spending behavior among actual buyers.

ARPU can be segmented by:

• Channel (organic vs paid)
  
  

• Country or region
  
  

• Platform (iOS vs Android)
  
  

• User cohort (e.g., trial users vs long-term subscribers
  
  

Why it matters

ARPU is a key lever for unit economics. It helps you:

• Compare monetization performance across segments
  
  

• Set realistic acquisition budgets (e.g., if ARPU is $3, your CAC must stay under that)
  
  

• Model LTV and payback periods
  

• Benchmark against competitors or past periods
  
  

Even small improvements in ARPU — like better upsells or optimized pricing — can lead to significant growth when scaled across thousands of users.

ARPU tells you how well your app turns users into revenue.