ARPU (Average Revenue Per User)

Definition

ARPU (Average Revenue Per User) measures monetization by dividing revenue by the average number of active users in the same period. Use it to track pricing, packaging, and monetization changes over time.

Formula

ARPU = revenue / average active users

How to calculate

• Pick a time window (month/quarter) and define "active user".
• Use revenue and users from the same window (gross vs net consistently).
• Compute average active users (for example (start + end) / 2).

ARPU vs ARPA

• ARPU is per active user; ARPA is per paying account.
• B2B SaaS often uses ARPA because pricing is per company.
• Label the denominator clearly to avoid confusion.

Data QA checklist

• Keep the same revenue definition each period (gross vs net).
• Use the same active user definition over time.
• Segment ARPU when pricing changes or mix shifts.

Common mistakes

• Using total signups instead of active users.
• Comparing ARPU across periods with different 'active' definitions.
• Using ARPU when pricing is per account (ARPA fits better).

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 "ARPU (Average Revenue Per User)" 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., ARPU Calculator) to sanity-check assumptions.
• Read the related guide (e.g., How to calculate ARPU (Average Revenue Per User)) for context and common pitfalls.

Where to use this on MetricKit