ARPU Calculation Tool

What is ARPU?

ARPU stands for “Average Revenue Per User.” It’s a metric used to measure the average revenue generated from each user or customer over a given period of time. It’s calculated by dividing the total revenue by the number of users.

The ARPU metric is an important indicator of a company’s overall business performance and the effectiveness of its marketing and customer retention strategies. A higher ARPU can indicate that the company is effectively monetizing its user base and generating more revenue from each customer.

How to calculate ARPU?

To calculate ARPU, simply divide the total revenue by the number of users. Here’s an example:

Let’s say a company generates $100,000 in total revenue from 1,000 users. The ARPU for that company would be:

ARPU = $100,000 / 1,000 = $100

This means that the average revenue per user for the company is $100.

It’s important to track ARPU over time and compare it to industry benchmarks to get a clear picture of the company’s performance and identify areas for improvement. ARPU can also be segmented by user demographic, such as by age, location, or customer type, to better understand the company’s target audience and identify potential growth opportunities.