ARPU (Average Revenue Per User) shows the average revenue from one user over a specific period. Not profit, not average order value, and not LTV. Just revenue, a period, and a clear denominator.
Updated August 11, 2026.
ARPU Formula
ARPU = revenue for the period / number of users over the same period.
If an app generated 120,000 USD in revenue over a month and had 40,000 active users, monthly ARPU is 3 USD.
The main trap is the word “user.” It can mean all monthly active accounts, the average number of active users, the starting cohort, or customers at the end of the period. Pick the definition that fits your business and do not change it halfway through a report. Comparing ARPU values with different denominators is pointless.
ARPU and ARPPU
ARPPU (Average Revenue Per Paying User) counts revenue only per paying user. If ARPPU is 50 USD and paying conversion is 6%, then:
ARPU = ARPPU x Paying Conversion = 50 x 0.06 = 3 USD.
This relationship works only for the same audience and the same period. You cannot take ARPPU for an old paying cohort, conversion for new installs, and call the result ARPU. You will get a tidy table with a number pulled out of thin air.
ARPU, ARPA, AOV, and AMPU
- ARPU measures average revenue per user.
- ARPA measures average revenue per account. In B2B, one account often includes several users.
- AOV measures average order value: revenue / number of orders. A buyer can place several orders, so AOV and ARPU are not the same thing.
- AMPU measures average margin per user. This is no longer revenue but money left after variable costs.
ARPU, Churn, and LTV
ARPU is not wrong without LTV. They are different metrics. ARPU describes one period, while LTV tries to estimate a customer’s value over their entire lifetime.
The shortcut LTV = ARPU / churn works for a stable subscription when ARPU and churn use the same period. Margin, refunds, fees, different plans, and volatile churn break this formula fast.
Rising ARPU alongside high churn is not always a win either. Cheap customers may have left while a few whales temporarily lifted the average. The chart looks pretty from the outside; the user base is shrinking underneath.
Why a Media Buyer Needs ARPU
For a media buyer, ARPU helps show how much money the acquired audience actually generates after the click, lead, or install. Calculate it by source, campaign, GEO, platform, and launch cohort. Overall project ARPU can easily hide a channel sending cheap but useless traffic.
Look at ARPU together with retention, churn, paying conversion, CAC, and margin. If revenue per user rises while acquisition costs and refunds rise faster, there is nothing to celebrate.
How to Increase ARPU
- Raise paying conversion, not only the price.
- Use upgrades, cross-sell, and repeat purchases.
- Remove plans and discounts that eat the margin.
- Work on retention if monetization takes time.
- Segment the data instead of treating the average as the patient.
ARPU is useful only when the period, currency, and denominator are stated next to it. Without them, the number is good for a pretty slide and not much else.
See the other terms in the CPA glossary.