ARPU Calculator
Calculate average revenue per user (ARPU) from total revenue and active users — with the annualized figure for monthly ARPU.
How it works
ARPU = total revenue ÷ active users · Annualized = monthly ARPU × 12
Average revenue per user is the mean revenue each active user generates over a period — total revenue divided by the number of active users. It tells you how effectively you monetize your base, independent of how large that base is, which makes it useful for comparing plans, cohorts or time periods. Raising ARPU through upsells, higher-tier plans or add-ons grows revenue without acquiring a single new user, and because acquisition costs are largely fixed per user, a higher ARPU also improves the return on what you spend to win each one. Always state ARPU’s period — a monthly figure times twelve is the annual run rate.
Worked example
A product with $50,000 in monthly revenue and 2,500 active users has an ARPU of 50,000 ÷ 2,500 = $20 per user per month. Annualized, that is $20 × 12 = $240 of revenue per user per year.
Frequently asked questions
What is the difference between ARPU and LTV?
ARPU is revenue per user over a single period, typically a month. Lifetime value (LTV) is the total revenue or profit a user generates across their entire relationship with you. LTV builds on ARPU: multiply ARPU by how long a user stays (and apply your margin) to approximate LTV.
Should ARPU use all users or paying users?
Both are used, and they answer different questions. ARPU across all active users shows how well you monetize the whole base, including free users. ARPPU — average revenue per paying user — divides revenue by paying users only, and is higher. Pick one and label it clearly so comparisons stay consistent.
How do I raise ARPU?
Move users to higher-priced tiers, add paid add-ons or usage-based charges, cross-sell complementary products, and reduce discounting. Because these lift revenue from users you already have, they grow the top line without any increase in acquisition spend.
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Educational estimate, not financial advice.