The average recurring revenue generated by each active customer over a period.
ARPU = total MRR ÷ number of active customers
£30,000 MRR across 250 active customers.
£30,000 ÷ 250 = £120 ARPU per month
ARPU divides recurring revenue by the number of active customers, giving you the average value of a single account. It is usually measured monthly (sometimes written ARPA, average revenue per account).
ARPU is a quick read on monetisation and pricing power. A rising ARPU means you are selling higher tiers, adding upsells, or attracting bigger customers. A falling ARPU can signal discounting or a shift toward smaller accounts.
ARPU is also an input to other metrics. It feeds directly into LTV and CAC payback calculations, so a clean ARPU figure keeps the rest of your unit economics honest.
ARPU shows whether you are growing by adding more customers, charging existing ones more, or both. Lifting ARPU through better pricing and expansion is often cheaper than acquiring new logos, and it directly increases lifetime value.
ARPU varies hugely by segment — single-digit pounds for consumer apps, thousands for enterprise. Judge it by its trend and by how it compares to your CAC, not against an absolute target.
They are usually the same idea. ARPU is average revenue per user; ARPA is average revenue per account. ARPA is preferred when one account can have many seats or users.
ARPU is a direct input to LTV. The simplest LTV formula is ARPU divided by churn rate, so a higher ARPU raises lifetime value proportionally.
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