ARPA (Average Revenue Per Account)

Definition

ARPA (SaaS) measures average revenue per paying account/customer in a period. In B2B SaaS, ARPA often matches pricing better than ARPU.

Formula

ARPA = revenue / average paying accounts

Example

If revenue is $120k in a month and you have 60 average paying accounts, ARPA is $2,000 per account.

How to use it

• Use ARPA when you bill per company account (not per seat).
• Segment ARPA by plan, industry, and channel to understand monetization.
• Pair ARPA with CAC payback and LTV for unit economics.

Common mistakes

• Including free or trial accounts in the denominator without labeling.
• Mixing gross revenue with net revenue across periods.
• Comparing ARPA across segments without controlling for pricing or mix shifts.

Why this matters

This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.

Practical checklist

• Write a 1-line definition for "ARPA (Average Revenue Per Account)" that your team will use consistently.
• Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
• Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
• Use a calculator that references this term (e.g., ARPA Calculator) to sanity-check assumptions.
• Read the related guide (e.g., ARPA: how to calculate Average Revenue Per Account (formula + examples)) for context and common pitfalls.

Where to use this on MetricKit