Categories
Marketing Acronyms

Average Revenue Per User (ARPU)

AKA:
Average Revenue Per Paying User (ARPPU), Average Revenue Per Unit (ARPU)

What does it mean:
As the name suggests, it’s the average revenue each user gives you. This revenue could be generated in several ways such as subscription payments, advertising revenue, or other transaction fees. ARPU offers insights into the profitability and revenue-generation capability of a company.

The Formula:

Total Revenue / Users or Customers = ARPU

The Formula (Subscription Business):

Monthly Recurring Revenue (MRR) ÷ Active Subscribers = ARPU

Use it in a sentence:

To colleagues:

“We’re never going to build a big business on $1 ARPU, let’s reconsider our business model.”

To investors:

“We doubled our ARPU by adding a new team’s plan to our product offering.”


At a party:

“Oh, man do you know where the bathroom is? I’ve really got to ARPU”

Example of Facebook’s ARPU

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