What Is Average Revenue Per User (ARPU)?
What is average revenue per user? It is total revenue for a period divided by the number of active users in that same period, and it is one of the core metrics for understanding whether a product monetizes better or worse as it grows.
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| Customer ID |
| Plan |
| MRR |
| Status |
| Country |
| Signup Date |
| Last Active |
| Seats |
| Usage Credits |
| Segment |
What usually goes wrong with it
Free users dilute ARPU if included in the denominator
A product with 10,000 users and $50,000 MRR has an ARPU of $5 if all users are counted. If 8,000 are free-tier users, the paying ARPU is $25. Including non-paying users in the count produces a number that looks much smaller than the monetization reality.
DataMimi Datamimi filters by Status = 'active paying' (or equivalent) before calculating the denominator, so free users don't dilute the metric unless you specifically want to include them.
ARPU by segment requires joining user data with revenue data
User counts by segment live in one export; revenue by customer lives in another. Calculating ARPU by country or plan tier requires joining these two files by Customer ID and then grouping by the segment column.
DataMimi It joins the user export with the revenue export by Customer ID and calculates the metric by Country or Plan column in a single pass.
Monthly ARPU fluctuates when user count is volatile
In months with a large cohort of new free-trial users, the denominator rises sharply while revenue stays flat, making ARPU look like it dropped even though monetization hasn't changed.
DataMimi Datamimi notes when the user count in a period is unusually high due to trial signups and flags the potential denominator effect on the metric before returning the number.
Common questions
What is average revenue per user as a formula?
ARPU = Total Revenue for Period ÷ Number of Active Users in that Period. Define 'active' clearly before calculating — paying only, or all registered users — and document the definition for consistent comparisons.
What is average revenue per user vs ARPA?
ARPU counts individual users. ARPA (average revenue per account) counts accounts or organizations. For B2B products with multiple seats per account, ARPA is usually the more meaningful metric because one account can have dozens of users.
What is a good average revenue per user for a SaaS product?
ARPU varies enormously by market segment. Consumer apps often have ARPU of $5–20/month; SMB SaaS ranges from $50–500/month; enterprise products can exceed $2,000/month per account. Comparing within your own segment and tracking trend over time matters more than the absolute number.
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