---
title: What is ARPPU?
url: https://markin.ai/glossary/arppu
category: Revenue and ARPU metrics
aliases: Average revenue per paying user
---

# ARPPU

> ARPPU, average revenue per paying user, divides revenue only by users who paid in the period. It isolates spend depth among monetised customers, separating it from conversion of the free or inactive base, which ARPU blends together into a single number.

## How it is calculated

```
ARPPU = Total revenue in period / Paying users in period
```

ARPU = ARPPU x monetization rate. Track both, or a conversion drop can look like a spend improvement.

## Why it matters for ARPU

Splitting ARPU into depth and conversion tells a growth team which lever is actually available: sell more to payers, or turn more of the base into payers.

## Related terms

- [ARPU](https://markin.ai/glossary/arpu), ARPU, average revenue per user, is total revenue in a period divided by the average number of active users in that period.
- [Monetization rate](https://markin.ai/glossary/monetization-rate), Monetization rate is the share of active customers who pay anything in a period.
- [Expansion revenue](https://markin.ai/glossary/expansion-revenue), Expansion revenue is additional revenue from customers a business already has: upgrades, add-ons, cross-sell, higher usage or a move to a richer plan.
- [Cohort analysis](https://markin.ai/glossary/cohort-analysis), Cohort analysis groups customers by a shared starting characteristic, usually acquisition month, and follows each group over time.

## Go deeper

- [What is ARPU: definition and formula](https://markin.ai/blog/what-is-arpu-definition-formula), ARPU, ARPPU and the identity between them.
- [Gaming](https://markin.ai/industries/gaming), Where ARPPU dominates the P&L.

Source: https://markin.ai/glossary/arppu