What is ARPU?

ARPU = Average Revenue Per User

A key business metric that measures how much revenue a company generates from each user during a specific time period (typically per quarter or year).

How it’s calculated: Total Revenue ÷ Number of Active Users = ARPU

Why ARPU is important:

• Shows how effectively a company monetizes its user base
• Helps compare performance between different regions or time periods
• Indicates the success of pricing strategies and revenue models
• Used by investors to evaluate company growth and efficiency

Common in industries like:

• Social media platforms
• Streaming services
• SaaS companies
• Telecommunications
• Gaming companies

ARPU is particularly valuable for subscription-based businesses and platforms that rely on advertising revenue, as it helps track whether the company is generating more value from its existing users over time.