Definition
ARPU (Average Revenue Per User) is revenue divided by average active users in a period. It's useful for tracking monetization and pricing performance over time.
Formula
ARPU = revenue / average active users
How to segment ARPU
- By plan/tier to see packaging performance.
- By acquisition channel to understand lead quality and upsell potential.
- By geography to reflect different pricing and payment behaviors.
Pair ARPU with retention
- ARPU + churn roughly determines LTV in simple models.
- If ARPU rises but churn rises too, you may be pricing out the wrong segments.
- Look for stable ARPU growth without degrading retention cohorts.