Average Revenue Per User (ARPU) is a key performance metric that calculates how much revenue a business generates form each user over a specific period of time. It is mainly used in subscription-based businesses, telecom enterprises, SaaS companies, and digital product companies. It helps measure customer value and revenue efficiency.
ARPU can be calculated by dividing the total revenue generated during a specific period by the number of active users during the same period.
Decide the time frame for which you want to calculate ARPU.
Common periods: Monthly (Monthly ARPU), Quarterly (Quarterly ARPU), Annually (Annual ARPU)
Add up all the revenue generated during the chosen period.
Count how many unique, paying customers (users) were active during the same period.
Use the ARPU Formula
ARPU = Total Revenue / Number of Active Users
ARPU= Total revenue in a given period/ Number of active users in the same period.
Although there is no standard benchmark for ARPU. However, a high ARPU means you are monetizing your active users well. This chart will help you get an idea about the ideal ARPU benchmark for different industries:
| Industry | Average Monthly ARPU |
|---|---|
| Telecom | $30–$50 |
| SaaS (B2B) | $50–$500+ |
| Streaming Services | $8–$15 |
| Mobile Apps (freemium) | <$5 |
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ARPU typically includes all active users, whether they’re paying or not. This provides a more realistic view of the overall revenue the business generates per user. However, businesses sometimes calculate a separate ARPPU (Average Revenue Per Paying User) for deeper insights into monetization efficiency.
ARPU can vary widely by industry and pricing model. In telecom, ARPU might reflect monthly billing rates; in SaaS, it's tied to subscription tiers; in mobile gaming or apps, it may depend on in-app purchases. Understanding ARPU in context helps businesses benchmark accurately within their vertical.
Both views are valuable. Monthly ARPU helps monitor short-term changes in pricing, churn, or promotions. Annual ARPU smooths out volatility and is useful for strategic planning. High-growth businesses often analyze both to balance day-to-day agility with long-term vision.