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What is the average revenue per user?

av - er - age  rev - e - nue  per user
noun

The average revenue per user represents the average amount of revenue a business receives from a user within a specified timeframe, typically on a monthly basis. For businesses in the subscription service vertical, this metric is particularly insightful, aiding in the evaluation of revenue generation and user expansion.

By quantifying the revenue contributed by an individual user over a specific time interval, ARPU provides a comprehensive overview of the customer base and provides valuable insights to guide future business enhancements.

How do you calculate ARPU?

Take your overall monthly recurring revenue and divide it by the number of active customers. It's prudent to monitor ARPU across customer segments or cohorts, segregating data for new and existing customers. This breakdown will help in obtaining a deeper understanding of fluctuations in ARPU and paves the way for informed decisions to address such variations.