How to calculate ARPU
Choose a period first. Most apps use a month.
- Revenue. Add up everything users paid you or earned you in the period.
- Active users. For a month, use monthly active users (MAU). For a quarter, count distinct users active in that quarter.
- ARPU. Divide revenue by active users.
Use distinct active users across the same period as revenue. For average monthly ARPU across a quarter, divide total quarterly revenue by the sum of the three monthly active-user counts. Label that result as monthly ARPU.
Worked example
A photo editing app has a subscription, a few paid filter packs, and banner ads for free users. Here is September:
| September | Value |
|---|---|
| Subscriptions | $18,400 |
| In-app purchases | $6,200 |
| Ad revenue | $5,400 |
| Total revenue | $30,000 |
| Monthly active users | 50,000 |
| Paying users | 1,500 |
| ARPU: $30,000 ÷ 50,000 | $0.60 |
| ARPPU: $24,600 ÷ 1,500 | $16.40 |
ARPU is low because 97% of users pay nothing. ARPPU is high because the 3% who pay carry most of the revenue. You need both numbers to see that.
ARPU calculator
Enter one month of revenue, active users, and paying users.
Which revenue counts in apps
For an app, total revenue has three parts:
Leave out any part and ARPU tells a different story. An app with ads that counts only purchases makes its free users look worthless, even though their ad views earn money.
Decide whether you use gross revenue (what users paid) or net revenue (after the App Store, Google Play, and ad network take their share). Net is closer to the money you can spend. Gross is easier to compare with prices. Either works if you never mix them.
ARPPU: average revenue per paying user
ARPPU shows how much a paying user spends. It moves when you change prices or add higher tiers. ARPU moves when either spending or the share of paying users changes. When revenue comes only from purchases, ARPU = ARPPU × share of users who pay. In the example, $16.40 × 3% = $0.49.
ARPDAU: average revenue per daily active user
Games and ad-supported apps use ARPDAU because it reacts within a day to a new ad placement or an in-game offer. Monthly ARPU would take weeks to show the same change. Look at a 7-day average, because weekends and paydays move daily revenue. Subscription revenue makes ARPDAU jumpy, since renewals land on some days and not others.
Common mistakes
- Mismatched periods. Quarterly revenue divided by monthly active users is not monthly ARPU. Match the revenue period to the user period.
- End-of-period users. An end-of-period snapshot misses users active earlier. Count distinct active users across the whole period.
- Mixing gross and net. Store proceeds are net, while web checkout and ad dashboards often show gross. Put them on one basis first.
- Counting installs instead of active users. Installs include people who deleted the app months ago.
ARPU in apps
One ARPU number for the whole app hides the differences that matter. Split it by platform, country, and acquisition source. Users from one campaign may pay twice as often as users from another, at the same install cost. ARPU by cohort is also the input for customer lifetime value.
In DataDad, subscriptions, in-app purchases, and ad revenue add up per user, so revenue per user includes all three. See app revenue.
Questions
Is ARPU the same as lifetime value?
No. ARPU covers one period, such as a month. Lifetime value adds up revenue over the whole time a customer stays.
Which users count as active?
Users who opened the app at least once in the period. Write down your definition and keep it, or ARPU changes when the definition does.
Should ARPU include refunds?
Subtract refunds from revenue in the period they happen. Otherwise ARPU looks higher than the money you kept.