What Is ARPU (Average Revenue Per User)? Formula and Pitfalls
ARPU (Average Revenue Per User) is the total revenue from users in a given period divided by the number of users in that period. It shows how much each user is worth to you on average, typically per month.
The formula is ARPU = revenue in the period ÷ number of users in the period. If a subscription app earned $20,000 in a month from 1,000 active paying subscribers, ARPU is $20. Decide first whether the denominator is paying users or all users, including free ones. Both are valid, but they answer different questions and are very different numbers. Label which you use.
ARPU differs from related terms. AOV (see what-is-aov) measures the value of one order, while ARPU measures revenue across all of a user's activity in a period. LTV (see what-is-ltv-in-saas) estimates total revenue over a customer's whole relationship. ARPU is a snapshot, which makes it useful for tracking trends in apps, subscriptions and newsletters with paid tiers.
An average hides the spread. If a few heavy spenders drive most of the revenue, as in many freemium apps, the average describes almost no actual user. Look at ARPU by segment, such as plan, channel or signup month. Compared with cost to acquire a user (see what-is-cac), it tells you how quickly acquisition spend is recovered.
Why it matters
Infinall AI turns a product URL into competitor research, strategy, ad copy and creative that land in an Approval Queue for you to review before export. It does not connect to your payments or analytics, so it cannot calculate your ARPU: that number comes from your billing system. Knowing it helps you decide what you can afford to pay to acquire a user and which plan to lead with. Infinall can draft ad angles for that plan, and you review them before export. It does not buy media or manage ad spend.
Related terms
Frequently asked questions
Should ARPU include free users?
Either can be correct, but they answer different questions. ARPU across all users shows the average monetization of your whole base, including free users. Revenue per paying user shows what a customer is worth once they convert. State which one you are reporting so that numbers are not compared by mistake.
What is the difference between ARPU and LTV?
ARPU is revenue per user in a single period, such as one month. LTV estimates the total revenue a customer brings over their whole time with you, so it depends on how long they stay. Multiplying ARPU by expected lifetime gives a rough LTV, but only if retention is stable.