ARPU — Average Revenue Per User
Definition: Total revenue divided by total active users over a period. ARPU shows how much each customer is worth on average.
Example
A SaaS with $200K MRR and 1,000 paying customers has an ARPU of $200/mo. Doubling ARPU usually beats doubling user count.
When you'll hear it
ARPU shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to average revenue per user — and they expect the room to already know what that means.
FAQs
ARPU vs LTV?
ARPU is per period. LTV is over the customer's lifetime. LTV ≈ ARPU × average customer lifespan.
What does ARPU stand for?
ARPU stands for Average Revenue Per User.
What does ARPU mean in business and finance?
Total revenue divided by total active users over a period. ARPU shows how much each customer is worth on average.
Where will I hear ARPU used at work?
ARPU comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for average revenue per user, so people assume you already know the term.
Related terms
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