Glossary / ARPU
ARPU(Average Revenue Per User)
Average revenue per user (ARPU) is the average revenue a business generates per active user or customer in a given period. ARPU is calculated as total revenue divided by total active users. ARPU measures monetization efficiency; for SaaS and subscription businesses, ARPU and customer count together drive total revenue.
Formula
ARPU = Total revenue / Total active users (or customers)
Example
A SaaS business has 1,000 active customers and $50,000 monthly revenue. Monthly ARPU is $50. Increasing ARPU to $60 (via upsells, new features, or pricing) lifts revenue 20% with the same customer base.
Why it matters
ARPU is the leverage point for revenue without acquisition. Raising ARPU 10% with the same customer count yields 10% more revenue at zero CAC — far more efficient than adding 10% more customers.
Frequently asked
ARPU vs AOV vs MRR — what's the difference?
AOV is per-order. ARPU is per-customer-per-period. MRR is total monthly recurring revenue across all customers. A SaaS business cares about ARPU and MRR; an e-commerce business cares about AOV and ARPU.
Related terms
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