Glossary · Business & Product

ARPU (Average Revenue Per User)

ARPU is the average revenue a business earns from each user or customer over a set period, found by dividing total revenue by user count.

Updated October 6, 2026

ARPU (Average Revenue Per User) is a metric that divides total revenue in a period by the number of users or accounts in that period, giving the average revenue each one produces.

Why it matters

ARPU shows whether growth comes from more users or from each user paying more. It helps compare pricing tiers, spot the effect of upgrades and feed estimates such as LTV. A flat ARPU with falling user numbers is a warning sign.

Example

A service earns 24,000 USD in a month from 800 paying users. ARPU is 24,000 divided by 800, or 30 USD. If a new plan lifts revenue to 27,200 USD with the same users, ARPU rises to 34 USD.

Common mistakes

  • Including free users in one calculation and excluding them in another, then comparing the two.
  • Reading the average as typical when a few large accounts pull it up.
  • Confusing ARPU (per user) with ARPA (per account).

Get notified when this term updates

Plus occasional practical tips on uptime and monitoring, nothing else. Unsubscribe anytime.

Keep reading

Glossary · Business & ProductActivation RateActivation rate is the percentage of new users who reach a defined milestone showing they have experienced the product's core value.Glossary · Business & ProductAgileAgile is an approach to building products in small increments, gathering feedback often and adapting plans instead of following a fixed upfront plan.Glossary · Business & ProductAOV (Average Order Value)AOV is the average amount a customer spends per order, calculated as total revenue divided by the number of orders in a period.

This page is general information written by our editorial team and updated when documentation changes. Servers and providers differ, so test changes safely first. See our editorial policy and disclaimer.