ARPU – Average Revenue Per User

What is ARPU?

Average revenue per user, often abbreviated to ARPU, is an important app metric.

ARPU measures the average revenue each active user generates for your app business. Said revenue includes the monies generated via in-app advertising, in-app purchases, and more.

How to Calculate ARPU

To calculate ARPU for your company, simply divide the total revenue each of your apps generates by the total number of active users each app hosts. Here’s the formula:

ARPU = (Total App Revenue) / (Number of Active Users)

Let’s illustrate ARPU with an example: if your app hosts 200,000 users and generates $100,000 in revenue every month, your ARPU for said app would be $0.50.

Importance of ARPU

Most app developers wonder, “What’s a good ARPU for my app?” The answer is, it depends on your target audience and category in the app stores. In general, though, a “good” ARPU is a number that’s higher than your cost per conversion.

In other words, if it costs your app $2 to acquire a new paying customer, your ARPU should be $2 or more. If it’s not, you’ll have a hard time scaling your app business.