ARPU

Definition

ARPU (average revenue per user) is the average revenue attributed to a user over a period. It is computed over the whole active base, including non-payers. Its sibling ARPPU divides revenue only by payers, so it is always higher and describes a different audience.

How to compute

$\text{ARPU} = \text{revenue over the period} / \text{active users over the period}$. The denominator is active users, not all registered ones, or the metric is understated and incomparable across periods. Compute it separately by currency and by product line.

Pitfalls

ARPU shifts with the composition of the base (mix-shift): a rising ARPU may reflect the churn of cheap users rather than better monetisation. Fix the period — daily and monthly ARPU are not comparable. Never present ARPPU as ARPU. As a ratio metric it needs a correct standard error, usually via the delta method.

Related

• LTV
• DAU / MAU and stickiness
• NPS